The $29 billion profit is the result of the accounting difference between the $3.8 billion price UBS paid for Credit Suisse and the value of the acquired lender’s balance sheet. Underlying earnings for the first combined UBS-Credit Suisse quarter were $1.1 billion.
UBS CEO Sergio Ermotti is now working to realize one of the largest mergers in global financial practice. The deal was hastily arranged in March when Credit Suisse was on the verge of bankruptcy after customers lost confidence in the 167-year-old bank.
Ermotti confirmed that the merger would result in 3,000 job cuts in Switzerland alone. The task of integration is likely to entail thousands more layoffs around the world and will come with legal risks and potential cost increases.
Nevertheless, UBS currently has more than $5 trillion in assets and is valued by investors at the highest level of any major European bank.