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121-570: UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland . Headquartered simultaneously in Zürich and Basel , it maintains a presence in all major financial centres as the largest Swiss banking institution and the largest private bank in the world. UBS investment bankers and private bankers are known for their strict bank–client confidentiality and culture of banking secrecy . Because of

242-531: A 1% decrease in AUM compared to the equivalent data of 2014. As of 2018, UBS manages the largest amount of private wealth in the world, counting approximately half of The World's Billionaires among its clients. More than 60% of total invested assets in UBS Wealth Management belong to individuals with a net worth of CHF 10 million or more. Of the remaining 40% of total invested assets, 30% of

363-464: A 2018 study published by Coalition Research Institute, UBS was among the top 10 of the world's investment banks. UBS traces its history to 1862, the year when Bank in Winterthur , forerunner of Union Bank of Switzerland , was founded. When Union Bank and SBC merged, officials originally wanted to name the merged company the "United Bank of Switzerland," but opted to call it simply UBS because of

484-461: A U.S. bulge bracket investment bank. Dillon, Read & Co., which traced its roots to the 1830s, was among the powerhouse firms on Wall Street in the 1920s and 1930s, and by the 1990s had a particularly strong mergers and acquisitions advisory group. Dillon Read had been in negotiations to sell itself to ING , which owned 25% of the firm already, but Dillon Read partners balked at ING 's integration plans. After its acquisition by SBC, Dillon Read

605-686: A branch office network in Eastern Switzerland. In 1882, Toggenburger Bank opened a branch in St. Gallen in eastern Switzerland and began to shift its operations there through the end of the 19th century. The Union Bank of Switzerland was formed in 1912 when the Bank in Winterthur merged with the Toggenburger Bank. The combined bank had total assets of 202 million CHF and a total shareholders' equity of 46 million CHF. This combination

726-460: A broad range of securities and savings products that are supported by the firm's underwriting and research activities as well as clients' orders management and execution and also clearing services for transactions originated by individual investors. The business is further divided geographically with separate businesses focused on the U.S. and other international markets. Two-thirds of the total invested assets come from Europe and Switzerland, with

847-861: A central building block of UBS's universal bank delivery model in Switzerland and it supports other divisions, such as Investment Bank, by referring clients to them and by assisting them to build their wealth to a level at which they can be transferred to UBS Wealth Management. The retail and corporate distribution network comprises not only 279 branches in Switzerland, but 1,250 teller machines and self-service terminals, as well as digital banking services, serving 2.5 million personal banking clients. UBS Asset Management offers equity, fixed income , currency , hedge fund , global real estate , infrastructure and private equity investment capabilities that can also be combined in multi-asset strategies. The 1998 UBS-SBC merger and subsequent restructuring resulted in

968-573: 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. In 2012, the bank reoriented itself around wealth management advisory services and limited its sell side operations. Capital ownership of UBS by country of origin as of 2014: UBS

1089-554: A former bond trader and co-head of Fixed income at Credit Suisse First Boston and head of Fixed Income Trading at Union Bank of Switzerland in 1998, was appointed CEO of UBS's investment banking division, which originated in SBC's Warburg Dillon Read division and was renamed UBS Warburg in December 2001. In an attempt to break into the elite bulge bracket of investment banks, in which UBS then had little success while rival Credit Suisse

1210-603: A full branch office in Tokyo in 1970. In 1992, SBC acquired O'Connor & Associates , a Chicago-based options trading firm and the largest market maker in the financial options exchanges in the U.S. O'Connor was combined with SBC's money market , capital market , and currency market activities to form a globally integrated capital markets and treasury operation . In 1994, SBC acquired Brinson Partners , an asset management firm focused on providing access for U.S. institutions to global markets, for US$ 750 million. Following

1331-566: A hub of European M&A activity, often facilitating the most capital movement and corporate restructuring in the area. Meanwhile, Asian cities are receiving a growing share of M&A activity. According to estimates published by the International Financial Services London , for the decade prior to the financial crisis in 2008, M&A was a primary source of investment banking revenue, often accounting for 40% of such revenue, but dropped during and after

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1452-720: A key part of capital market transactions, involving debt structuring , exit financing, loan amendment, project finance , leveraged buy-outs , and sometimes portfolio hedging. The "Market Risk Team" provides services to investors via derivative solutions, portfolio management , portfolio consulting, and risk advisory. Well-known "Risk Groups" are at JPMorgan Chase , Morgan Stanley , Goldman Sachs and Barclays . J.P. Morgan IB Risk works with investment banking to execute transactions and advise investors, although its Finance & Operation risk groups focus on middle office functions involving internal, non-revenue generating, operational risk controls. The credit default swap , for instance,

1573-456: A key service in terms of advisory and strategy. While the research division may or may not generate revenue (based on the specific compliance policies at different banks), its resources are used to assist traders in trading, the sales force in suggesting ideas to customers, and investment bankers by covering their clients. Research also serves outside clients with investment advice (such as institutional investors and high-net-worth individuals) in

1694-507: A major coup for Costas. Moelis joined UBS from Donaldson Lufkin & Jenrette in 2001 shortly after its acquisition by Credit Suisse First Boston (although Huw Jenkins claimed he had hired Moelis to the UK Parliamentary Banking commission while under oath, which is patently false). In his six years at UBS, Moelis ultimately assumed the role of president of UBS Investment Bank and was credited, along with Costas, with

1815-402: A major issue for UBS in the mid-1990s, and a series of revelations in 1997 brought the issue to the forefront of national attention in 1996 and 1997. UBS confirmed that a large number of accounts had gone unclaimed as a result of the bank's policy of requiring death certificates from family members to claim the contents of the account. UBS's handling of these revelations were largely criticized and

1936-582: A name clash with the separate Swiss company United Bank Switzerland – a part of the United Bank Limited 's Swiss subsidiary. Therefore, UBS is no longer an acronym but is the company's brand. Its logo of three keys, carried over from SBC, stands for the company's values of confidence, security, and discretion. UBS' earliest corporate ancestor was formed in 1854, when six private banking firms in Basel , Switzerland pooled their resources to form

2057-524: A reputation as a daring merchant bank that grew to be one of the most respected investment banks in London . However, a Warburg expansion into the U.S. had turned out flawed and costly, and talks in 1994 with Morgan Stanley about a merger had collapsed. SBC merged the firm with its own existing investment banking unit to create SBC Warburg. Two years later, in 1997, SBC paid US$ 600 million (~$ 1.06 billion in 2023) to acquire Dillon, Read & Co. ,

2178-516: A result of selling complex derivatives contracts to local municipalities in Europe and the US. Strategists advise external as well as internal clients on the strategies that can be adopted in various markets. Ranging from derivatives to specific industries, strategists place companies and industries in a quantitative framework with full consideration of the macroeconomic scene. This strategy often affects

2299-535: A safe place to store assets in the case of an invasion. During the war, the banks' traditional business fell off and the Swiss government became their largest client. In 1945, SBC acquired the Basler Handelsbank (Commercial Bank of Basel), which was one of the largest banks in Switzerland, but became insolvent by the end of the war. SBC remained among the Swiss government's leading underwriters of debt in

2420-566: A third from 2009, as companies pursued less deals and traded less. Differences in total revenue are likely due to different ways of classifying investment banking revenue, such as subtracting proprietary trading revenue. In terms of total revenue, SEC filings of the major independent investment banks in the United States show that investment banking (defined as M&A advisory services and security underwriting) made up only about 15–20% of total revenue for these banks from 1996 to 2006, with

2541-642: A track record of 20 consecutive quarters of rising profits. In 2006, UBS set up a joint venture in China (see UBS Securities, China branch ). However, by the end of 2006, UBS began to experience changing fortunes. In late 2005, Costas headed a new hedge fund unit within UBS known as Dillon Read Capital Management . His former position was taken over by Huw Jenkins , a long-time legacy UBS investment banker. In 2006, UBS bankers Blair Effron and Michael Martin announced their departures. In March 2007, Moelis announced that he

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2662-1318: A trader after he buys or sells a product to a client and does not hedge his total exposure. Here, and in general, banks seek to maximize profitability for a given amount of risk on their balance sheet. Note here that the FRTB framework has underscored the distinction between the " Trading book " and the " Banking book " - i.e. assets intended for active trading, as opposed to assets expected to be held to maturity - and market risk capital requirements will differ accordingly. The necessity for numerical ability in sales and trading has created jobs for physics , computer science , mathematics , and engineering PhDs who act as "front office" quantitative analysts . The securities research division reviews companies and writes reports about their prospects, often with "buy", "hold", or "sell" ratings. Investment banks typically have sell-side analysts which cover various industries. Their sponsored funds or proprietary trading offices will also have buy-side research. Research also covers credit risk , fixed income , macroeconomics , and quantitative analysis , all of which are used internally and externally to advise clients; alongside "Equity", these may be separate "groups". The research group(s) typically provide

2783-471: A year after rebuffing Credit Suisse's merger overtures. The merger resulted in the creation of UBS AG, a new bank with total assets of more than US$ 590 billion (~$ 1.04 trillion in 2023), the largest of its kind. During the merger, UBS chairman Marcel Ospel originally wanted to call the company "United Bank of Switzerland", but settled on simply using "UBS" following the acquisition of American brokerage firm, Paine Webber . Colloquially referred to as

2904-610: Is a joint-stock company ( Aktiengesellschaft ) pursuant to Swiss laws. Its shares are listed at the SIX Swiss Exchange and the New York Stock Exchange (NYSE). As of December 2020, UBS is present in all major financial centres worldwide, having offices in 50 countries, with about 30% of its approx. 73,000 employees working in the Americas, 30% in Switzerland, 19% in Europe (excluding Switzerland),

3025-498: Is a commodity business, but structuring and trading derivatives have higher margins because each over-the-counter contract has to be uniquely structured and could involve complex pay-off and risk profiles. One growth area is private investment in public equity (PIPEs, otherwise known as Regulation D or Regulation S). Such transactions are privately negotiated between companies and accredited investors . Banks also earned revenue by securitizing debt, particularly mortgage debt prior to

3146-685: Is a famous credit risk hedging solution for clients invented by J.P. Morgan's Blythe Masters during the 1990s. The Loan Risk Solutions group within Barclays' investment banking division and Risk Management and Financing group housed in Goldman Sach's securities division are client-driven franchises. Risk management groups such as credit risk, operational risk, internal risk control, and legal risk are restrained to internal business functions — including firm balance-sheet risk analysis and assigning

3267-578: Is buying and selling products. Sales is the term for the investment bank's sales force, whose primary job is to call on institutional and high-net-worth investors to suggest trading ideas (on a caveat emptor basis) and take orders. Sales desks then communicate their clients' orders to the appropriate trading rooms , which can price and execute trades, or structure new products that fit a specific need. Sales make deals tailored to their corporate customers' needs, that is, their terms are often specific. Focusing on their customer relationship, they may deal on

3388-444: Is classed as either "sell side" or "buy side". The " sell side " involves trading securities for cash or for other securities (e.g. facilitating transactions, market-making), or the promotion of securities (e.g. underwriting, research, etc.). The " buy side " involves the provision of advice to institutions that buy investment services. Private equity funds, mutual funds , life insurance companies, unit trusts , and hedge funds are

3509-417: Is considered one of the "biggest, most powerful financial institutions in the world". 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

3630-406: Is famous for the unique kinebar holographic technology it uses to provide enhanced protection against bank gold bar counterfeiting . By 1962, Union Bank of Switzerland reached CHF 6.96 billion of assets, narrowly edging ahead of Swiss Bank Corporation to become the largest bank in Switzerland. The rapid growth was punctuated by the 1967 acquisition of Interhandel , which made UBS one of

3751-486: Is not a comprehensive summary of all middle-office functions within an investment bank, as specific desks within front and back offices may participate in internal functions. The back office data-checks trades that have been conducted, ensuring that they are not wrong, and transacts the required transfers. Many banks have outsourced operations. It is, however, a critical part of the bank. Every major investment bank has considerable amounts of in-house software , created by

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3872-621: Is one of the original predecessor banks to the Union Bank of Switzerland and ultimately UBS . Established in 1863, the bank merged with the Bank in Winterthur in 1912 to form the Union Bank of Switzerland . In 1863, the Toggenburger Bank was founded in Lichtensteig, Switzerland ( canton of St. Gallen ), with an initial share capital of 1.5 million CHF. The Toggenburger Bank was a savings and mortgage bank for individual customers with

3993-408: Is raised for the corporation include those listed aside. This work may involve, i.a., subscribing investors to a security issuance, coordinating with bidders, or negotiating with a merger target. A pitch book , also called a confidential information memorandum (CIM), is a document that highlights the relevant financial information, past transaction experience, and background of the deal team to market

4114-646: Is the control function for the Markets' business and conducts review of sales and trading activities utilizing the VaR model . Other Middle office "Risk Groups" include country risk, operational risk, and counterparty risks which may or may not exist on a bank to bank basis. Front office risk teams, on the other hand, engage in revenue-generating activities involving debt structuring, restructuring, syndicated loans , and securitization for clients such as corporates, governments, and hedge funds. Here "Credit Risk Solutions", are

4235-461: Is the leading provider of retail banking and commercial banking services in Switzerland, as established already in 2009. Overall invested assets are $ 3.101 billion, shareholders' equity is $ 52.928 billion and market capitalization is $ 45.907 billion by the end of 2018. In November 2014, the shares in UBS Group AG were listed and started trading as a new holding company at

4356-542: The Americas consists of U.S. and Canadian wealth management businesses, as well as international business booked in the U.S. UBS Wealth Management in the U.S. is an outgrowth of the former Paine Webber brokerage business. The business was initially renamed UBS Paine Webber in March 2001, after it was acquired by UBS. The division offers wealth management advice for ultra-high net worth and high net worth clients. UBS

4477-551: The Bank in Winterthur fused with the Toggenburger Bank . The Bank in Winterthur, founded in 1862 with an initial share capital of CHF 5 million, focused on providing financing for industry and other companies, and had profited considerably from its close railroad connections and large warehousing facilities during the American Civil War when cotton prices rose dramatically. The Toggenburger Bank

4598-844: The Bankverein , a consortium that acted as an underwriting syndicate for its member banks. In 1871, the Bankverein coordinated with the German Frankfurter Bankverein to form the Basler Bankverein , a joint-stock company replacing the original Bankverein consortium. After the new bank started with an initial commitment of CHF 30 million and CHF 6 million of share capital, it soon experienced growing pains when heavy losses in Germany caused it to suspend its dividend until 1879. Following

4719-482: The Bulge Bracket , particularly Goldman Sachs , JPMorgan Chase , and Bank of America . The American division also offers its own credit card not sponsored by another bank unlike many of its competitors. On a global scale, UBS competes with the largest global investment banks , particularly within the Bulge Bracket . and until acquiring Credit Suisse in 2023 was regularly compared against it. According to

4840-673: The Northern Trust Corporation , an American international financial services company, announced an agreement for the acquisition of UBS Asset Management's fund administration servicing units in Luxembourg and Switzerland . This acquisition will facilitate the expansion of the Northern Trust Corporation into these two countries, turning the American company into the major fund administrator in

4961-603: The Securities Association of China is a self-regulatory organization whose members are largely investment banks. Global investment banking revenue increased for the fifth year running in 2007, to a record US$ 84 billion, which was up 22% on the previous year and more than double the level in 2003. Subsequent to their exposure to United States sub-prime securities investments, many investment banks have experienced losses. As of late 2012, global revenues for investment banks were estimated at $ 240 billion, down about

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5082-704: The Troubled Asset Relief Program (TARP). Surviving U.S. investment banks such as Goldman Sachs and Morgan Stanley converted to traditional bank holding companies to accept TARP relief. Similar situations have occurred across the globe with countries rescuing their banking industry. Initially, banks received part of a $ 700 billion TARP intended to stabilize the economy and thaw the frozen credit markets. Eventually, taxpayer assistance to banks reached nearly $ 13 trillion—most without much scrutiny— lending did not increase, and credit markets remained frozen. Toggenburger Bank Toggenburger Bank

5203-654: The United States maintained a separation between investment banking and commercial banks. Other industrialized countries, including G7 countries, have historically not maintained such a separation. As part of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 ( Dodd–Frank Act of 2010 ), the Volcker Rule asserts some institutional separation of investment banking services from commercial banking. All investment banking activity

5324-634: The financial crisis of 2007–08 and the subsequent passage of the Dodd-Frank Act of 2010 , regulations have limited certain investment banking operations, notably with the Volcker Rule's restrictions on proprietary trading. The traditional service of underwriting security issues has declined as a percentage of revenue. As far back as 1960, 70% of Merrill Lynch 's revenue was derived from transaction commissions while "traditional investment banking" services accounted for 5%. However, Merrill Lynch

5445-625: The private placement of equity , debt , and derivatives . The Sales & Trading division comprises equities ( brokering , dealing , market making and engaging in proprietary trading in equities , equity-related products, equity derivatives , and structured products ) and FX, Rates and Credit (FRC) ( brokering , dealing , market making and engaging in proprietary trading in interest rate products, credit products, mortgage-backed securities , leveraged loans , investment grade and high-yield debt , currencies , structured products , and derivative products ). Following an expansion in 2002,

5566-462: The "New UBS" to distinguish itself from the former Union Bank of Switzerland, the combined bank became the second largest in the world at the time, behind only the Bank of Tokyo-Mitsubishi . Additionally, the merger pulled together the banks' various asset management businesses to create the world's largest money manager, with approximately US$ 910 billion in assets under management . Union Bank of Switzerland's Mathis Cabiallavetta became chairman of

5687-609: The German investment banking and private wealth management markets. During the mid-1990s, Union Bank of Switzerland came under fire from dissident shareholders critical of its conservative management and lower return on equity. Martin Ebner, through his investment trust, BK Vision, became the largest shareholder in Union Bank of Switzerland and attempted to force a major restructuring of the bank's operations. Looking to take advantage of

5808-820: The Group and revenue opportunities for businesses within the bank. UBS maintains a leading position in the retail and corporate loan market in Switzerland; in fact, it serves one in three pension funds , more than 85% of the 1,000 largest Swiss corporations and 85% of banks that resides within the nation. In 2015, 2017 and 2018, the international financial magazine Euromoney named UBS "Best Domestic Cash Manager Switzerland". As of 31 December 2018, its lending portfolio reached US$ 131 billion (~$ 157 billion in 2023). The products that this UBS division offers range from cash accounts , payments, savings and retirement plans to investment fund products, residential mortgages and advisory services. This business division constitutes

5929-813: The Middle East and Africa and 21% in the Asia Pacific region. The bank has its major presence in the United States . Its American headquarters for investment banking are located in New York City , for private wealth management advisory in Weehawken, New Jersey . They have sales & trading and private wealth management offices in Stamford, Connecticut . The company's global business groups are global wealth management , investment bank , asset management and personal & corporate banking. UBS

6050-598: The NYSE and SIX Swiss Exchange. Upon application and with effect as of 14 January 2015, the shares of UBS AG, the subsidiary of the UBS Group AG, were delisted from the NYSE. As of September 2019, the largest institutional shareholders are: As of 30 June 2018, the geographical distribution of the shareholders presents itself as follows: As of June 2018, UBS's corporate structure includes four divisions in total, namely: Starting on 9 June 2003, all UBS business groups, including UBS Paine Webber and UBS Warburg, were rebranded under

6171-864: The National Investment Banking Association (NIBA). In Europe, the European Forum of Securities Associations was formed in 2007 by various European trade associations. Several European trade associations (principally the London Investment Banking Association and the European SIFMA affiliate) combined in November 2009 to form the Association for Financial Markets in Europe (AFME). In the securities industry in China ,

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6292-636: The Swiss Bank Corporation (SBC), the two merged in 1998 to create a single company known solely as "UBS". 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. 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

6413-518: The U.S. Federal Reserve . UBS was founded in 1862 as the Bank in Winterthur . This development came with the formation of the series of modern Swiss Grossbanken (big banks) in the latter part of the 19th century. The name of the bank was derived from the town of Winterthur , which served as Switzerland's industrial hub in the 19th century. By 1854, six private bankers in Basel founded the Swiss Bank Corporation (SBC) to cater to

6534-452: The UBS moniker following company's start of operations as a unified global entity. UBS's global wealth management advisory division offers high-net-worth individuals around the world a range of advisory and investment products and services. As of the end of 2016, UBS Wealth Management's invested assets totalled CHF 977billion. The whole companies assets under management (AUM) amounted to US$ 1,737.5 billion in 2015, representing

6655-462: The United States must be a licensed broker-dealer and subject to U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) regulation. The Dutch East India Company was the first company to issue bonds and shares of stock to the general public. It was also the first publicly traded company , being the first company to be listed on an official stock exchange . Investment banking has changed over

6776-466: The United States were respectively ranked first and second on the 2018 Financial Secrecy Index . As of December 2023, UBS is the seventh largest bank in Europe with total assets worth over €1.554 trillion. 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. In June 2017, its return on invested capital

6897-618: The United States, commercial banking and investment banking were separated by the Glass–Steagall Act , which was repealed in 1999. The repeal led to more " universal banks " offering an even greater range of services. Many large commercial banks have therefore developed investment banking divisions through acquisitions and hiring. Notable full-service investment banks with a significant investment banking division (IBD) include JPMorgan Chase , Bank of America , Citigroup , Deutsche Bank , UBS (Acquired Credit Suisse ), and Barclays . After

7018-425: The acquisition, founder Gary P. Brinson ran SBC's asset management business and later when SBC merged with UBS was named chief investment officer of UBS Asset Management. The acquisition of S.G. Warburg & Co. , a leading British investment banking firm, in 1995 for the price of US$ 1.4 billion (~$ 2.56 billion in 2023) signified a major push into investment banking. S.G. Warburg & Co. had established

7139-403: The aim to generate systematic products and services for clients, in 2017, UBS integrated Equities, Fixed Income and Solutions capabilities and hedge funds business within a new area named Investments. UBS also formed a new area of business named Real Estate and Private Markets by combining their Global Real Estate and Infrastructure and Private Equity businesses. In February 2017, UBS Group AG and

7260-469: The assets under administration were US$ 413 billion. With around 2,300 employees in 23 countries, UBS Asset Management is the largest mutual fund manager in Switzerland, a leading fund house in Europe, and one of the largest hedge funds and real estate investment managers in the world. It has main offices in Chicago , Hong Kong , London , New York , Singapore , Sydney , Tokyo , and Zürich . With

7381-775: The bank lost investments in a number of large industrial companies. By the end of 1918, the bank had recovered and surpassed CHF 1 billion in total assets and grew to 2,000 employees by 1920. The impact of the stock market crash of 1929 and the Great Depression was severe, particularly as the Swiss franc suffered major devaluation in 1936. The bank saw its assets fall from a 1929 peak of CHF 1.6 billion to its 1918 levels of CHF 1 billion by 1936. In 1937, SBC adopted its three-keys logo , designed by Warja Honegger-Lavater , symbolizing confidence, security, and discretion, which remains an integral part in

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7502-473: The bank received significant negative attention in the U.S. UBS came under significant pressure, particularly from American politicians, to compensate Holocaust survivors who were making claims against the bank. Shortly after the end of World War II, Union Bank of Switzerland completed the acquisition of the Eidgenössische Bank , a large Zürich-based bank that became insolvent . As a result of

7623-580: The bank suffered in the aftermath of World War I and the Great Depression , it was able to make several smaller acquisitions ; in 1937 it established Intrag AG, an asset management business responsible for investment trusts , (i.e. mutual funds ). The activities of the Union Bank of Switzerland during World War II were not publicly known until decades after the war, when it was demonstrated that UBS likely took active roles in trading stolen gold, securities , and other assets during World War II. The issue of "unclaimed property" of Holocaust victims became

7744-407: The bank to a potential M&A client; if the pitch is successful, the bank arranges the deal for the client. Recent legal and regulatory developments in the U.S. will likely alter the makeup of the group of arrangers and financiers willing to arrange and provide financing for certain highly leveraged transactions. On behalf of the bank and its clients, a large investment bank's primary function

7865-606: The bank was known as the Schweizerische Bankgesellschaft (SBG). The combined bank had total assets of CHF 202 million and a total shareholders' equity of CHF 46 million. In 1917, UBS completed the construction of a new headquarters in Zurich on Bahnhofstrasse , considered to be the Wall Street of Switzerland. By 1923, offices were established throughout Switzerland. Although

7986-487: The bank's large positions in the Americas , EMEA and Asia Pacific markets, the Financial Stability Board considers it a global systemically important bank . 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

8107-477: The bank's other major recruits during this period were Olivier Sarkozy , Ben Lorello, Blair Effron , and Jeff McDermott. By 2003, UBS had risen to fourth place from seventh in global investment banking fees, earning US$ 2.1 billion of the US$ 39 ;billion paid to investment banks that year, increasing 33%. Over the next four years, UBS consistently ranked in the top 4 in the global fee pool and established

8228-444: The bank's profitability. See also Chinese wall § Finance . This area of the bank includes treasury management , internal controls (such as Risk), and internal corporate strategy. Corporate treasury is responsible for an investment bank's funding, capital structure management, and liquidity risk monitoring; it is (co)responsible for the bank's funds transfer pricing (FTP) framework. Internal control tracks and analyzes

8349-413: The build-out of UBS's investment banking operation in the United States. Within weeks of joining, Moelis brought over a team of 70 bankers from Donaldson, Lufkin & Jenrette. Costas and Moelis hired more than 30 senior U.S. bankers from 2001 through 2004. It was estimated that UBS spent as much as US$ 600 million to US$ 700 million hiring top bankers in the U.S. during this three-year period. Among

8470-413: The capital flows of the firm, the finance division is the principal adviser to senior management on essential areas such as controlling the firm's global risk exposure and the profitability and structure of the firm's various businesses via dedicated trading desk product control teams. In the United States and United Kingdom, a comptroller (or financial controller) is a senior position, often reporting to

8591-512: The chief financial officer. Risk management involves analyzing the market and credit risk that an investment bank or its clients take onto their balance sheet during transactions or trades. Middle office "Credit Risk" focuses around capital markets activities, such as syndicated loans , bond issuance, restructuring , and leveraged finance. These are not considered "front office" as they tend not to be client-facing and rather 'control' banking functions from taking too much risk. "Market Risk"

8712-691: The closure of its Dillon Read Capital Management (DRCM) division. Although in 2006, DCRM had generated a profit for the bank of US$ 720 million, after UBS took over DRCM's positions in May 2007, losses grew from the US$ 124 ;million recorded by DRCM, ultimately to "16% of the US$ 19 billion in losses UBS recorded." The UBS investment bank continued to expand subprime risk in the second quarter of 2007 while most market participants were reducing risk, resulting in not only expanding DRCM losses but creating 84% of

8833-431: The collapse of several notable investment banks, such as the bankruptcy of Lehman Brothers (one of the largest investment banks in the world) and the hurried fire sale of Merrill Lynch and the much smaller Bear Stearns to much larger banks, which effectively rescued them from bankruptcy. The entire financial services industry, including numerous investment banks, was bailed out by government taxpayer funded loans through

8954-420: The combination of three major asset management operations: UBS Asset Management, Phillips & Drew (owned by Union Bank of Switzerland ), and Brinson Partners (owned by SBC). The investment teams were merged in 2000 and in 2002 the brands were consolidated to become UBS Global Asset Management . At the end of December 2018, UBS Asset Management was responsible for US$ 781 billion of invested assets and

9075-529: The continuous transformation of their platform is due to a major efficiency, effectiveness and geographical dislocation of the services offered by the bank. UBS's main competitors in this division are BlackRock , Vanguard Group , State Street Global Advisers (SSGA), Fidelity Investments and Allianz Asset Management (AAM). UBS Investment Bank provides services covering securities, other financial products, and research in equities , rates, credit , foreign exchange , precious metals and derivatives . As of

9196-540: The current-day logo of UBS. On the eve of World War II in 1939, SBC, like other Swiss banks, was the recipient of large influxes of foreign funds for safekeeping. Just prior to the outbreak of the war, SBC made the timely decision to open an office in New York City. The office, located in the Equitable Building , was able to begin operations a few weeks after the outbreak of the war and was intended as

9317-480: The early 1990s. The acquisition propelled Credit Suisse ahead of Union Bank of Switzerland as the largest bank in Switzerland for the first time. Prior to the merger with Swiss Bank Corporation, UBS purchased a group of smaller Swiss banks in 1994 including the Cantonal Bank of Appenzell-Ausserrhoden in 1996, and in 1997 Schröder, Münchmeyer, Hengst & Co. from Lloyds Bank was acquired to improve access to

9438-508: The end of December 2018, the personnel employed at UBS Investment Bank totalled 5,205, present in 33 countries (with principal offices in Chicago, Frankfurt, Hong Kong, London, New York, Shanghai, Singapore, Tokyo and Zurich). This business division also advises and provides access to capital markets for corporate and institutional clients, governments, financial intermediaries, alternative asset managers, and private investors. UBS Investment Bank

9559-791: The final third coming mainly from the Asia-Pacific region. With its headquarters in Switzerland, UBS Wealth Management is present in more than 40 countries with approximately 190 offices (100 of which are in Switzerland). As of the end of 2018, around 23,600 people worldwide were employed by Global Wealth Management. In Switzerland, UBS Swiss Bank provides a complete set of retail banking services that includes chequing , savings , credit cards , and mortgage products for individuals. They offer cash management and commercial banking services for small businesses and corporate clients as well. UBS global wealth management advisory operations in

9680-497: The financial crisis set in, other high-profile bankers such as Oliver Sarkozy in early 2008 and Ben Lorello in 2009. UBS was fined $ 100 million by the FED in 2004 for trading in dollars with Iran and other sanctioned countries. At the beginning of 2007, UBS became the first Wall Street firm to announce a heavy loss in the subprime mortgage sector as the subprime mortgage crisis began to develop. In May 2007, UBS announced

9801-399: The financial crisis. Equity underwriting revenue ranged from 30% to 38%, and fixed-income underwriting accounted for the remaining revenue. Revenues have been affected by the introduction of new products with higher margins ; however, these innovations are often copied quickly by competing banks, pushing down trading margins. For example, brokerages commissions for bond and equity trading

9922-495: The financial crisis. Investment banks have become concerned that lenders are securitizing in-house, driving the investment banks to pursue vertical integration by becoming lenders, which has been allowed in the United States since the repeal of the Glass–Steagall Act in 1999. According to The Wall Street Journal , in terms of total M&A advisory fees for the whole of 2020, the top ten investment banks were as listed in

10043-416: The hopes that these clients will execute suggested trade ideas through the sales and trading division of the bank, and thereby generate revenue for the firm. With MiFID II requiring sell-side research teams in banks to charge for research, the business model for research is increasingly becoming revenue-generating. External rankings of researchers are becoming increasingly important, and banks have started

10164-510: The increasing credit needs of Swiss railroad and manufacturing companies. 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) and grew rapidly after the Banking Law of 1934 codified Swiss banking secrecy. Following decades of market competition between Union Bank of Switzerland and

10285-399: The key architects of the merger with Swiss Bank Corporation . On 8 December 1997, Union Bank of Switzerland and Swiss Bank Corporation announced an all-stock merger. At the time of the merger, Union Bank of Switzerland and Swiss Bank Corporation were the second and third largest banks in Switzerland, respectively. Discussions between the two banks had begun several months earlier, less than

10406-543: The local markets and into one of the ten global leaders in the sector. At the end of the transaction, completed in October 2017, the American company will administrate a total of CHF 420 billion in assets. UBS Asset Management will continue anyway to offer Management Company, White Labelling and Representative Services to its clients. Ulrich Körner , president of the UBS Asset Management, affirms that

10527-400: The majority of revenue (60+% in some years) brought in by "trading" which includes brokerage commissions and proprietary trading; the proprietary trading is estimated to provide a significant portion of this revenue. The United States generated 46% of global revenue in 2009, down from 56% in 1999. Europe (with Middle East and Africa ) generated about a third, while Asian countries generated

10648-531: The merger, Union Bank of Switzerland exceeded CHF 1 billion in assets and moved its operations to Zürich. UBS opened branches and acquired a series of banks in Switzerland in the following years, growing from 31 offices in 1950 to 81 offices by the early 1960s. In 1960, Union Bank of Switzerland acquired an 80% stake in Argor SA, a Swiss precious metals refinery founded in 1951 in the canton of Ticino . UBS continues to issue gold bars via Argor-Heraeus which

10769-404: The merger. On 3 November 2000, UBS merged with Paine Webber , an American stock brokerage and asset management firm led by chairman and CEO Donald Marron . At the time of its merger with UBS, Paine Webber had emerged as the fourth largest private client firm in the United States with 385 offices employing 8,554 brokers . The acquisition pushed UBS to the top wealth and asset management firm in

10890-430: The most common types of buy-side entities . An investment bank can also be split into private and public functions with a screen separating the two to prevent information from crossing. The private areas of the bank deal with private insider information that may not be publicly disclosed, while the public areas, such as stock analysis, deal with public information. An advisor who provides investment banking services in

11011-428: The new bank while Swiss Bank's Marcel Ospel was named chief executive officer . Nearly 80% of the top management positions were filled by legacy Swiss Bank professionals. Prior to the merger, Swiss Bank Corporation was considered to be further along than Union Bank of Switzerland in developing its international investment banking business, particularly in the higher margin advisory businesses where Warburg Dillon Read

11132-611: The open market, a highly regulated process by the SEC to ensure transparency is provided to investors. Therefore, investment bankers play a very important role in issuing new security offerings. Front office is generally described as a revenue -generating role. There are two main areas within front office: investment banking and markets. Corporate finance is the aspect of investment banks which involves helping customers raise funds in capital markets and giving advice on mergers and acquisitions (M&A); transactions in which capital

11253-483: The other losses experienced by the bank. Investment banking Unlike commercial banks and retail banks , investment banks do not take deposits . The revenue model of an investment bank comes mostly from the collection of fees for advising on a transaction, contrary to a commercial or retail bank. From the passage of Glass–Steagall Act in 1933 until its repeal in 1999 by the Gramm–Leach–Bliley Act ,

11374-552: The post-war years. SBC, which had entered the 1950s with 31 branch offices in Switzerland and three abroad, more than doubled its assets from the end of the war to CHF 4 billion by the end of the 1950s and doubled assets again in the mid-1960s, exceeding CHF 10 billion by 1965. In 1961, SBC acquired Banque Populaire Valaisanne , based in Sion, Switzerland , and the Banque Populaire de Sierre . The bank opened

11495-477: The process of monetizing research publications, client interaction times, meetings with clients etc. There is a potential conflict of interest between the investment bank and its analysis, in that published analysis can impact the performance of a security (in the secondary markets or an initial public offering) or influence the relationship between the banker and its corporate clients, and vice versa regarding material non-public information (MNPI), thereby affecting

11616-498: The remaining 21%. The industry is heavily concentrated in a small number of major financial centers, including New York City , City of London , Frankfurt , Hong Kong , Singapore , and Tokyo . The majority of the world's largest Bulge Bracket investment banks and their investment managers are headquartered in New York and are also important participants in other financial centers. The city of London has historically served as

11737-433: The situation, Credit Suisse approached Union Bank of Switzerland about a merger that would have created the second largest bank in the world in 1996. Union Bank of Switzerland's management and board unanimously rebuffed the proposed merger. Ebner, who supported the idea of a merger, led a shareholder revolt that resulted in the replacement of Union Bank of Switzerland's chairman, Robert Studer with Mathis Cabiallavetta, one of

11858-401: The strongest banks in Europe. By the 1980s, Union Bank of Switzerland established a position as a leading European underwriter of Eurobonds . Following two major acquisitions in 1986 ( Phillips & Drew and Deutsche Länderbank ), UBS made its first purchase in the United States in 1991 with Chase Investors Management Corporation, the asset management business of Chase Manhattan Bank . At

11979-646: The table below. Many of these firms belong either to the Bulge Bracket (upper tier), Middle Market (mid-level businesses), or are elite boutique investment banks (independent advisory investment banks). The above list is just a ranking of the advisory arm (M&A advisory, syndicated loans, equity capital markets, and debt capital markets) of each bank and does not include the generally much larger portion of revenues from sales & trading and asset management . Mergers and acquisitions and capital markets are also often covered by The Wall Street Journal and Bloomberg . The financial crisis of 2007–2008 led to

12100-614: The technology team, who are also responsible for technical support . Technology has changed considerably in the last few years as more sales and trading desks are using electronic processing. Some trades are initiated by complex algorithms for hedging purposes. Firms are responsible for compliance with local and foreign government regulations and internal regulations. The investment banking industry can be broken up into Bulge Bracket (upper tier), Middle Market (mid-level businesses), and boutique market (specialized businesses) categories. There are various trade associations throughout

12221-470: The time of the acquisition, the business managed in excess of US$ 30 billion in assets. The bank's investments had been in the conservative asset management and life insurance businesses; further, 60% of the bank's profits came from its even more conservative Swiss banking operations. In 1993, Credit Suisse outbid Union Bank of Switzerland for Switzerland's Swiss Volksbank , the fifth largest bank in Switzerland which had run into financial difficulties in

12342-399: The total belong to individuals with net worth between CHF 1 million and CHF 10 million and the last 10% of total assets belong to individuals with a net worth of less than CHF 1 million. UBS offers brokerage services and products as well as asset management and other investment advisory and portfolio management products and services. Additionally, UBS provides

12463-465: The trading cap — that are independent of client needs, even though these groups may be responsible for deal approval that directly affects capital market activities. Similarly, the Internal corporate strategy group, tackling firm management and profit strategy, unlike corporate strategy groups that advise clients, is non-revenue regenerating yet a key functional role within investment banks. This list

12584-519: The trading floor covers 9,600-square-metre (103,000 sq ft) with 12-metre (40 ft) arched ceilings. Over US$ 1 trillion in assets are traded here every trading day. In June 2011, it was announced that UBS was considering moving its North American headquarters back to New York City, and that the bank was looking for office spaces in Midtown and in the rebuilt World Trade Center . UBS's main competitors in this division are fellow members of

12705-408: The way the firm will operate in the market, the direction it would like to take in terms of its proprietary and flow positions, the suggestions salespersons give to clients, as well as the way structurers create new products. Banks also undertake risk through proprietary trading , performed by a special set of traders who do not interface with clients and through "principal risk"—risk undertaken by

12826-605: The whole range of asset types. (In distinction, trades negotiated by market-makers usually bear standard terms; in market making , traders will buy and sell financial products with the goal of making money on each trade. See under trading desk .) Structuring has been a relatively recent activity as derivatives have come into play, with highly technical and numerate employees working on creating complex structured products which typically offer much greater margins and returns than underlying cash securities, so-called "yield enhancement". In 2010, investment banks came under pressure as

12947-689: The world which represent the industry in lobbying , facilitate industry standards, and publish statistics. The International Council of Securities Associations (ICSA) is a global group of trade associations. In the United States, the Securities Industry and Financial Markets Association (SIFMA) is likely the most significant; however, several of the large investment banks are members of the American Bankers Association Securities Association (ABASA), while small investment banks are members of

13068-592: 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

13189-468: The world. Initially, the business was given the divisional name UBS PaineWebber but in 2003 the 123-year-old name Paine Webber disappeared when it was renamed UBS Wealth Management USA . UBS took a CHF 1 billion write-down for the loss of goodwill associated with the retirement of the Paine Webber brand when it integrated its brands under the unified UBS name in 2003. John P. Costas ,

13310-653: The years 1885 and 1886, when the bank merged with the Zürcher Bankverein and acquired the Basler Depositenbank and the Schweizerische Unionbank, it changed its name to Schweizerischer Bankverein . The English name of the bank was originally Swiss Bankverein, but was changed to Swiss Bank Corporation (SBC) in 1917. SBC subsequently experienced a period of growth, which was only interrupted by the onset of World War I , in which

13431-489: The years, beginning as a partnership firm focused on underwriting security issuance, i.e. initial public offerings (IPOs) and secondary market offerings , brokerage , and mergers and acquisitions, and evolving into a "full-service" range including securities research , proprietary trading , and investment management . In the 21st century, the SEC filings of the major independent investment banks such as Goldman Sachs and Morgan Stanley reflect three product segments: In

13552-532: Was 11.1%, followed by Goldman Sachs ' 9.35%, and JPMorgan Chase 's 9.456%. UBS acquired rival Credit Suisse in an emergency rescue deal brokered by the Swiss government and its Central bank in 2023, following which UBS' AUM increased to over $ 5 trillion along with an increased balanced sheet of $ 1.6 trillion. 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

13673-837: Was a relatively "retail-focused" firm with a large brokerage network. Investment banking is split into front office , middle office , and back office activities. While large service investment banks offer all lines of business, both "sell side" and "buy side", smaller sell-side advisory firms such as boutique investment banks and small broker-dealers focus on niche segments within investment banking and sales/trading/research, respectively. For example, Evercore (NYSE:EVR) acquired ISI International Strategy & Investment (ISI) in 2014 to expand their revenue into research-driven equity sales and trading. Investment banks offer services to both corporations issuing securities and investors buying securities. For corporations, investment bankers offer information on when and how to place their securities on

13794-412: Was considered to be the more established platform. Union Bank of Switzerland had a stronger retail and commercial banking business in Switzerland, while both banks had strong asset management capabilities. After the merger was completed, it was speculated that a series of losses suffered by UBS on its equity derivative positions in late 1997 was a contributing factor in pushing UBS management to consummate

13915-578: Was establishing itself as a major player on Wall Street with the acquisition of Donaldson, Lufkin & Jenrette in 2000, Costas shifted the growth strategy from acquiring entire firms to hiring individual investment bankers or teams of bankers from rival firms. Costas had followed a similar approach in building out the UBS fixed income business, hiring over 500 sales and trading personnel and increasing revenues from US$ 300 million in 1998 to over US$ 3 billion by 2001. The arrival of former Drexel Burnham Lambert investment banker Ken Moelis marked

14036-630: Was formerly known as UBS Warburg and as Warburg Dillon Read , before the merger of the Union Bank of Switzerland and the Swiss Bank Corporation (SBC). Within the UBS Investment Bank division, the Investment Banking Department (IBD) provides a range of advisory and underwriting services including mergers and acquisitions , restructuring , equity offerings , investment grade and high yield debt offerings, leveraged finance and leveraged loan structuring, and

14157-488: Was founded in 1863 with an initial share capital of CHF 1.5 million, and specialized as a savings and mortgage bank for individual customers, maintaining a branch office network in eastern Switzerland. The new company was initially traded under the English name Swiss Banking Association , but in 1921 it was changed to Union Bank of Switzerland (UBS) to mirror its French name, Union de Banques Suisses . In German,

14278-678: Was leaving the company, and shortly thereafter founded a new business, Moelis & Company . As he had when joining UBS, Moelis took a large team of senior UBS investment bankers. Moelis's departure was caused primarily by repeated conflict over the availability of capital from the bank's balance sheet to pursue large transactions , particularly leveraged buyouts . The bank's apparent conservatism would be turned on its head when large losses were reported in various mortgage securities rather than corporate loans that generated investment banking fees. After Moelis, other notable departures included investment banking co-head Jeff McDermott in early 2007 and, as

14399-467: Was merged with SBC-Warburg to create SBC-Warburg Dillon Read. Following SBC's later merger with Union Bank of Switzerland , the SBC part was dropped from the name; in 2000 when the new UBS got restructured the Dillon Read name was dropped, although it was brought back in 2005 as Dillon Read Capital Management , UBS's ill-fated hedge fund operations. The Union Bank of Switzerland emerged in 1912 when

14520-580: Was named "Best Bank for Wealth Management in North America" at the Euromoney Awards for Excellence 2017. UBS's main competitors in this division are Bank of America , Morgan Stanley , JP Morgan Chase , Wells Fargo and Charles Schwab . UBS's Personal & Corporate Banking division delivers financial products and services to retail, corporate and institutional clients in Switzerland. It also provides stable and substantial profits for

14641-575: Was part of a larger trend toward concentration in the banking sector in Switzerland at the time. Through the next few years, the bank would begin to shift its operations to Zurich from its historical headquarters in the cities of Winterthur and St. Gallen, Switzerland . In 1917, UBS completed construction of a new headquarters in Zurich on Bahnhofstrasse , considered to be the Wall Street of Switzerland. The new bank used different names in its three core languages: German, French and English. In German,

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