UBS reports a $29 billion second quarter profit after Credit Suisse takeover

After acquiring Credit Suisse, the biggest bank in Switzerland, earlier this year, UBS Group AG reported its first quarterly earnings on Thursday, reporting a profit of $28.88 billion for the second quarter of this fiscal year, according to a report by Business Today. In March, UBS purchased Credit Suisse for just 3 billion Swiss francs ($3.4 billion), saving it from bankruptcy.

Due to the deal’s recent closure in June, the results for UBS as a whole only contain earnings for one month of Credit Suisse.

According to UBS, the $28.93 billion in negative goodwill on the Credit Suisse acquisition was the main factor in the result. Underlying earnings before tax, which excludes acquisition costs, negative goodwill, and integration-related expenditures, was $1.1 billion.

Negative goodwill indicates the fair market value of assets acquired as part of a merger that is higher than the purchase price.

“Two and a half months since closing the Credit Suisse acquisition, we are wasting no time in delivering value for all our stakeholders from one of the biggest and most complex bank mergers in history,” Business Today quoted UBS CEO Sergio Ermotti as saying.

When it agreed to acquire Credit Suisse in March, the Swiss government imposed two agreements on UBS that it said it had terminated: a 9 billion Swiss franc ($10.24 billion) loss protection agreement and a 100 billion Swiss franc public liquidity backstop.