UBS
UBS Group AG[nb 1] is a multinational investment bank and financial services company founded and based in Switzerland. Headquartered in Zürich, it maintains a presence in all major financial centres as the largest Swiss banking institution and the largest private bank in the world. UBS client services are known for their strict bank–client confidentiality and culture of banking secrecy.[nb 2] Because of the bank's large positions in the Americas, EMEA, and Asia Pacific markets, the Financial Stability Board considers it a global systemically important bank.
This article is about the investment bank and financial services company. For other uses, see UBS (disambiguation).Formerly
Union Bank of Switzerland (1862–1998)
29 June 1998 (through the merger of Union Bank of Switzerland and Swiss Bank Corporation)
Zürich, Switzerland
- Colm Kelleher (chairman)
- Sergio Ermotti (CEO)
- Sarah Youngwood (CFO)[1]
US$40.8 billion (2023)
US$28.7 billion (2023)
US$27.8 billion (2023)
US$5.71 trillion (2023)
US$1.72 trillion (2023)
US$86.1 billion (2023)
115,038 (end 2023)
Tier 1 14.4% (2023)
Apart from private banking, UBS provides wealth management, asset management, and investment banking services for private, corporate, and institutional clients with international service. UBS manages the largest amount of private wealth in the world, counting approximately half of The World's Billionaires among its clients. UBS also maintains a global investment bank and is considered a primary market maker. The bank also maintains numerous underground bank vaults, bunkers, and storage facilities for gold bars around the Swiss Alps and internationally. Partly due to its banking secrecy, it has been at the centre of numerous tax avoidance investigations undertaken by U.S., French, German, Israeli, and Belgian authorities. UBS operations in Switzerland and the United States were respectively ranked first and second on the 2018 Financial Secrecy Index.
As of May 2022, UBS is the fifth largest bank in Europe with total assets worth over €1.5 trillion.[15] It is one of the eight global "Bulge Bracket" banks. It has over CHF 3.2 trillion in assets under management (AUM), approximately CHF 2.8 trillion of which are invested assets.[16] In June 2017, its return on invested capital was 11.1%, followed by Goldman Sachs' 9.35%, and JPMorgan Chase's 9.456%.[17] UBS acquired rival Credit Suisse in an emergency rescue deal brokered by the Swiss government and its Central bank in 2023, following which UBS's AUM increased to over $5 trillion along with an increased balanced sheet of $1.6 trillion.[18] In late 2016, UBS established a blockchain technology research lab in London to advance its cyber security and encryption of client activities. Based on regional deal flow and political influence, UBS is considered one of the "biggest, most powerful financial institutions in the world".[19][20] The company's capital strength, security protocols, and reputation for discretion have yielded a substantial market share in banking and a high level of brand loyalty. Alternatively, it receives routine criticism for facilitating tax noncompliance and off-shore financing. UBS is a primary dealer and Forex counterparty of the U.S. Federal Reserve.
History[edit]
UBS was founded in 1862 as the Bank in Winterthur.[21] This development came with the formation of the series of modern Swiss Grossbanken (big banks) in the latter part of the 19th century.[22] The name of the bank was derived from the town of Winterthur, which served as Switzerland's industrial hub in the 19th century.[23] By 1854, six private bankers in Basel founded the Swiss Bank Corporation (SBC) to cater to the increasing credit needs of Swiss railroad and manufacturing companies.[24] It formed a private banking syndicate that expanded, aided by Switzerland's international neutrality.
In 1912, the Bank of Winterthur merged with Toggenburger Bank to form the Union Bank of Switzerland (UBS)[21] and grew rapidly after the Banking Law of 1934 codified Swiss banking secrecy. Following decades of market competition between Union Bank of Switzerland and the Swiss Bank Corporation (SBC), the two merged in 1998 to create a single company known solely as "UBS".[nb 3] The agreement to merge had been made the previous year at a meeting of the Institut International d’Etudes Bancaires, a secretive club for European banking CEOs.[26]
UBS does not stand for Union Bank of Switzerland. The name 'UBS' came from one of its predecessor firms - the Union Bank of Switzerland. However, just like other prominent brands which used to be an abbreviation of a company name, UBS is no longer considered an acronym. In fact, that was one of the more than 370 financial firms that have, since 1862, become part of today's UBS. During the 2007–2008 financial crisis, UBS managed heavy losses with an asset relief recovery programme. In 2011, the company was hit by the 2011 rogue trader scandal resulting in a US$2 billion trading loss.[27] In 2012, the bank reoriented itself around wealth management advisory services and limited its sell side operations.
On a global scale, UBS competes with the largest global investment banks,[74][75] particularly within the Bulge Bracket.[74][72] and until acquiring Credit Suisse in 2023 was regularly compared against it.[76][77] According to a 2018 study published by Coalition Research Institute, UBS was among the top 10 of the world's investment banks.[78]
Corporate social responsibility[edit]
In January 2010, UBS issued a new code of conduct and business ethics which all employees were encouraged to sign. The code addressed issues such as financial crime, competition, confidentiality, as well as human rights and environmental issues. The eight-page code also lays out potential sanctions against employees who violate it, including warnings, demotions, or dismissal.[257] According to Kaspar Villiger, former chairman of the board, and Oswald J. Grübel, former Group CEO, the code is "an integral part of changing the way UBS conducts business".[258]
In 2011, UBS expanded its global compliance database to include information on environmental and social issues provided by RepRisk,[259] a global research firm specialized in environmental, social and corporate governance (e.g., ESG) risk analytics and metrics.[260] This was done in an effort to mitigate environmental and social risks that could impact the bank's reputation or financial performance and to simultaneously help globally standardize and systematically implement the firm's due diligence processes.[261] RepRisk data is used in the on-boarding process to screen potential new clients and sourcing partners,[262] alongside periodic client reviews and, also, to evaluate the risks related to transactions in investment banking and institutional lending.[263]
In 2018, UBS held 0.72% of shares in HikVision[264] (surveillance cameras), a subsidiary of the Chinese military conglomerate CETC.
In October 2019, UBS joined UN's Global Investors for Sustainable Development Alliance (GISD).[265] UBS has committed to raise US$5 billion (~$5.55 billion in 2023) of SDG-related impact investments by the end of 2021, which aim to create a measurable positive social or environmental impact.[265]
Research and development[edit]
Blockchain[edit]
UBS has been an early adopter regarding the use of blockchain technology in financial services. In April 2015, UBS opened an innovation lab at the Level39 technology accelerator space in London.[266]
In August 2016, UBS announced that it will team up with BNY Mellon, Deutsche Bank, Banco Santander, brokerage company ICAP and the fintech company Clearmatics, to promote UBS's "Utility Settlement Coin" (USC). The USC is a blockchain-based digital currency that financial institutions could use to transact securities with each other, bypassing the traditional settlement processes which is ongoing.[267]
IMECL[edit]
In 2021, UBS buys 31% ICO Markets Exchange Clearing Limited, Digital Asset Exchange, Regulator Company in the European Digital Asset Market which financial institutions and private clients they will use to trade securities among themselves, bypassing the traditional ongoing settlement processes.[268]
Artificial intelligence[edit]
In 2018, UBS digitally cloned Daniel Kalt, one of its chief economists. Artificial intelligence expert FaceMe was hired to create an interactive avatar of Kalt that can meet with clients via television screen. The clients will be able to ask questions and receive answers, made possible by IBM's Watson AI technology.[269][270]
