UBS Group AG (NYSE:UBS) did not want to buy Credit Suisse Group AG (NYSE:CS) and was rushed into purchasing the failed bank for close to US$3.5bln, according to a regulatory document.
The Swiss lender added it was given less than four days to complete due diligence, a filing to the US Securities and Exchange Commission revealed.
“The extent to which UBS was a reluctant partner in the deal to buy Credit Suisse has become clear,” said Susannah Streeter from Hargreaves Lansdown.
The bank is now expecting the deal to cost a further US$17bln, as it embarks on the process of combining the two operations.
Around US$13bln is estimated to be lost in fair value adjustments and a further US$4bln could be drawn out of UBS in litigation and regulatory expenses.
This figure could rise to US$28.3bln as other costs such as switching accounting standards occur.
“[The loss is] a heavy cost to bear and has been partly put down to the lack of time it was able to complete due diligence and assess the web of problems at Credit Suisse,” Streeter added.
Some of these costs are expected to be offset by the write-down of US$17.1bln of Credit Suisse AT1 bonds.
The write-down led to a group of investors suffering more than £4bln in losses and subsequently suing Switzerland’s financial regulator, which brokered the deal.
However, UBS did reveal that it gained almost US$35bln in 'negative goodwill' from the discounted acquisition.
The gain is predicted to boost profits in UBS’s current quarter should the deal go through before the period ends.
Shares in UBS were buoyant on Wednesday after opening at 17.17SFr but are still trading more than 8% lower compared to a month ago.