- UBS reported a second-quarter profit of $28.88 billion, marking its first quarterly earnings after the completion of its takeover of troubled rival Credit Suisse. This profit figure largely stemmed from negative goodwill of $28.93 billion related to the Credit Suisse acquisition. Excluding negative goodwill, integration-related expenses, and acquisition costs, the underlying profit before tax was $1.1 billion.
- In a separate filing, Credit Suisse's subsidiary posted a net loss of 9.3 billion Swiss francs in the second quarter. UBS shares surged to their highest level since late 2008 following the announcement of a significant profit beat and plans for extensive layoffs as it intends to fully integrate Credit Suisse's Swiss bank.
Why it matters
The takeover and subsequent profit reflect UBS's strategic move to expand its reach and operations by integrating a major rival. The substantial negative goodwill resulting from the acquisition is a noteworthy accounting aspect, demonstrating the financial dynamics involved in mergers of this scale. Additionally, UBS's decision to fully absorb Credit Suisse's Swiss bank and announce layoffs underscores reshaping the landscape of Swiss banking.
