UBS sets aside $4 billion for potential lawsuits on Credit Suisse deal

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(Reuters) -Swiss bank UBS Group AG has set aside $4 billion in provisions for potential litigation and regulatory issues stemming from its takeover of Credit Suisse, the bank said in a filing on Tuesday, as it prepared to complete the rescue of its Swiss rival.

UBS estimated a “negative goodwill” of $34.8 billion from its acquisition of Credit Suisse.

The transaction’s massive one-off gain, a result of “negative goodwill” attached to the 167-year-old bank that has struggled for years with scandals and losses, will allow UBS to absorb one-off losses related to the takeover.

Analysts at Jefferies had said restructuring costs, litigation provisions and the planned winding down of the non-core unit could add up to $28 billion, but only some of that might be booked upfront.

Since UBS has yet to gain full insight in Credit Suisse’s books, the numbers may change in coming months.

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The deal – the first rescue of a global bank since the financial crisis of 2008 – will create a global wealth manager with more than $5 trillion in invested assets with more than 120,000 employees worldwide.

(Reporting by John Revill, Noele Illien, Nupur Anand and Manya Saini; Editing by Elisa Martinuzzi, Lananh Nguyen, Tomasz Janowski and Lisa Shumaker)

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