Credit Suisse's takeover by UBS continues to generate all sorts of interesting numbers. finews.asia takes a look at some of the more adventurous ones.

35 Trillion Swiss francs of Derivatives

This immense sum raised politicians' eyebrows in Bern after the Swiss Financial Market Supervisory Authority (Finma) recently brought the figure to the attention of the Finance Committee of the Council of States. As reported by the «NZZ» (behind paywall, in German), it's the nominal value of financial derivatives UBS will hold upon completion of its Credit Suisse takeover. To be sure, that amount doesn't necessarily correspond to the actual price if the instrument is sold at a specific time. According to the report, the fair value was somewhere between 450 billion and 500 billion Swiss francs for combined entities at the end of last year. That's massively less, but still a lot.

$5 Trillion Powerhouse

With client assets under management of five trillion dollars, the new UBS-Credit Suisse advances to become the world's largest wealth management bank, leaving even Morgan Stanley behind. Although money outflows in Credit Suisse's wealth management business haven't been stopped, analysts are highlighting the potential. JP Morgan analysts estimate the combined group will be able to collect $150 billion annually in its business with wealthy private clients starting in 2027. That's equivalent to one new Bank Julius Baer every three years if measured by client assets.

259 Billion francs Guarantee

In the rescue package devised for the takeover, the Swiss government is committing itself to guarantees of 109 billion francs, 100 billion to the SNB, and 9 billion to UBS for losses incurred by selling hard-to-value securities on Credit Suisse's books. In the worst case, the taxpayer bill could turn out to be a hefty one, the idea of which caused resentment in parliament which rejected the package. The SNB granted three liquidity assistance loans for the rescue, up to a maximum of 250 billion francs. Emergency Liquidity Assistance Plus loans (ELA+) totaling 100 billion francs were granted by the SNB at its own risk, with a further 100 billion francs guaranteed by the Swiss government. Before the takeover, the SNB granted an interest-free loan of 50 billion francs.

$44 Billion to Operate Joint Bank

UBS promised shareholders to save about $8 billion by 2027 with the integration of Credit Suisse, including $6 billion in personnel costs. Given the enormous costs resulting from the combined bank, at least on a pro forma basis, that's a drop in the bucket. The report UBS filed with SEC yesterday gave operating expenses for the new entity of just under $44 billion at the end of last year. With operating revenues of about $43.3 billion, the combined company was in the red from the start.

$34.8 Billion Profit Explosion

UBS's profits could explode by this gigantic sum in the second quarter because of a completely legal accounting provision. Credit Suisse, acquired at a bargain price, ended up with negative goodwill on its books, which can lead to write-ups when the bank's value recovers. It's a one-time gain that exists on the ledger, and for long-term success, it's more important for UBS to manage the complex and politically sensitive integration without taking on new risks.

$4 Billion for Legacy Scandals

The assumption of legacy burdens from Credit Suisse's numerous scandals in recent years was «included» in the purchase price from the outset. In the SEC filing, UBS has made additional preliminary provisions for legal risks amounting to $4 billion. UBS fears already launched class action lawsuits over the write-down of AT1 bonds to zero will also hit the combined company.

$1 Billion more Thanks to Paradeplatz 8

Credit Suisse had to sell a lot of the family silver in recent years, including the Uetlihof in Zurich and Grieder House on Bahnhofstrasse. It still owns its venerable headquarters at Paradeplatz 8 and the nearby Savoy Hotel, only to be sold to UBS. In its SEC statement, UBS revised the value of the properties by upwards of a billion dollars following a preliminary analysis of the buildings and land held by Credit Suisse. In the provisional balance sheet, the real estate is booked together with the equivalent value of proprietary software where UBS wants to make a value adjustment of $2 billion due to possibly redundant Credit Suisse IT. In total, the item comes to a provisional value of $16.2 billion.

The $3 Million Call

From this comparatively small «ticket,» Credit Suisse bankers will have to call their UBS supervisors if they want to enter into a counterparty contract. Higher limits for reporting to the new owner will apply to investments made by the company or credit facilities to companies, which also emerged from UBS's SEC disclosures. 

124,000 Employees - Still

Before the merger, the two banks had about 124,000 employees. Of UBS's 74,000 full-time employees at the end of last year, around 20,000 were Swiss-based, whereas around 16,000 of Credit Suisse's 50,000-strong workforce were in Switzerland, with many jobs likely falling victim to the jobs axe. Economists at BAK estimate the rationalization potential of the combined banks between 9,500 to 12,000 jobs. By the time the integration is complete, one in three bankers will lose their jobs. Even with such major personnel cuts, the new UBS will remain one of Switzerland's largest employers. Among Swiss companies, only Nestlé, with around 275,00 employees worldwide, outstrips the combined bank which finds itself in the company of pharma firms Roche and Novartis and the technology company ABB.

Collaboration: Fredy Greuter and Samuel Gerber