Banking giant UBS will reportedly lock in almost $35 billion in profits after the Swiss government helped it take over the dying remains of Credit Suisse.
According to a report from Bloomberg, UBS will make $34.8 billion on its Credit Suisse takeover, which was initiated earlier this year when the former Swiss behemoth became the latest domino to fall in the banking sector’s global weakening.
As per Bloomberg, UBS is currently in the process of doing due diligence on Credit Suisse and is looking to finalize a deal within the coming weeks.
UBS has reportedly found several problematic and embarrassing skeletons in Credit Suisse’s closet, including a criminal conviction for facilitating a Bulgarian cocaine trafficker’s money laundering, and a “half-a-billion dollar settlement in a bribery scandal related to a tuna fishing fleet in Mozambique.”
Throughout Credit Suisse’s lifetime, the bank has been accused of tax fraud and subprime mortgage fraud, as well as having ties to drug trafficking and money laundering.
The recent discoveries into Credit Suisse’s real character reportedly lend “further support to our more cautious stance on UBS,” according to Thomas Hallett and Andrew Stimpson, analysts at Keefe, Bruyette & Woods.
“With many unknowns and potential risks to work through, we believe investors are better served sitting on the sidelines until visibility improves.”
Shares of Credit Suisse (CS), which at one point were trading near $80, are now under a dollar at time of writing.
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