UBS Group AG (SIX:UBSG) has said it could stand to lose around $17 billion from its planned merger with smaller rival Credit Suisse (SIX:CSGN), but noted that the tie-up will provide other benefits.
In a regulatory filing, the Swiss bank, which agreed to absorb Credit Suisse following a hastily-arranged round of government-sponsored negotiations in March, said it would incur a hit of $13B from fair value adjustments on financial assets and liabilities. Litigation and regulatory matters would also lead to an additional $4B charge, UBS added.
However, these losses would be offset by a one-time $34.8B gain from pro forma negative goodwill, which occurs when the price paid for an asset is lower than its actual market value.
Read More : UBS Forecasts $17 Billion Expense from Proposed Credit Suisse Merger