Credit Suisse was acquired at a bargain price by UBS, according to JPMorgan, which could result in potentially «very attractive» returns for the enlarged Swiss wealth manager.
At $3.3 billion, UBS acquired Credit Suisse at an enticing price even when factoring potential losses from the latter’s assets, litigation and restructuring costs, according to a research note by JPMorgan analysts led by Kian Abouhossein.
«The transaction has potential to be very attractive on an economic return-on-investment basis,» the note said, adding that the deal is set to turn UBS into a wealth management «powerhouse» with «one of the most attractive business models in global banking».
Profit Forecast
Following the acquisition, UBS could generate up to $7 billion in wealth management pre-tax profits by 2027, according to JPMorgan.
Execution risks could also force UBS to sell or float Credit Suisse’s domestic universal bank and fetch at least $10 billion which would «more than offset» acquisition costs.
