Meet UBS – The Union Bank of Switzerland

The Union Bank of Switzerland – otherwise known as UBS – are a multinational investment bank who provide financial services in over 50 countries. Established and based in Zurich, Switzerland in 1862, UBS maintains a central presence in all leading financial centres. The client services upheld by UBS are known for their strict bank to client confidentiality and cultures of banking secrecy. Alongside being a multinational investment bank, UBS is also known for providing services that adhere to the finances, asset management, wealth management, and investment banking for private, corporate, and institutional clients with domestic service; some of the largest amounts of private wealth in the world – inclusive of approximately half the world’s billionaires – are managed by UBS.

The ways in which UBS stands at the present day is a combination of UBS and SBC (Swiss Bank Corporation) which officially merged in 1998. During the 1890’s the SBC was founded and consequently formed a private banking syndicate that grew and was aided by Switzerland’s international neutrality. In the year of 1912, the collaboration of the Bank of Winterthur (formed in 1862) and Toggenburger Bank (founded in 1863) to formed UBS. The expansion of UBS was further aided by the Banking Law of 1934 – which made it illegal to disclose client information to third parties without the knowledge of the client. The combination of the Banking Law, the escorting of Switzerland’s stable currency, and international neutrality induced substantial capital to private Swiss accounts.

After years of competing for SBC and UBS eventually formed into a larger UBS, one of the main reasons behind UBS’s eventual composition was so that the firm was able to establish and expand on a global scale. With the combined longevity of both firms before collaborating, once established as a union, they were both able to benefit from the valuable insight and attain relationships with other countries.

At the beginning of the 20th century, not a single Swiss bank was ranked within the top 50 global banks. By 1967, UBS had merged with Interhandel, thus, making UBS the largest bank in Switzerland. Fast forward to the 21st century (2019), UBS is 33rd in the top 50 of global banks with an estimated $972.18 billion in assets. UBS revenue – as of 2020 – has now surpassed the figure which they had attained prior to the pandemic after having fallen 4% two years prior; going from $30.2 billion in 2018 to $28.9 billion in 2019. The fall in revenue was ultimately down to unfavourable growth in wealth management and internal & corporate banking. However, the revenue figures aforementioned are not reflective of the stock figures. UBS stocks at the current level are considered to be expensive and are also unlikely to see any significant growth as a consequence of the pandemic-driven recession.

The future of UBS’s stock is estimated to grow amid the pandemic. There has been growth in the investment banking segment (sales & trading and investment banking) and asset management business due to the pandemic. Forbes predicts a stabilisation in stocks as the economic conditions improve. However, it is worth acknowledging Forbes predictions of UBS being unlikely to maintain its revenue in the consecutive quarters, which is likely to induce panic among investors.

Conclusively, UBS has been very successful in developing and obtaining a large firm in order to be internationally impactful. They are immersed in a number of financial handlings inclusive of assets, investment banking, wealth management as well as dealing with the finances of approximately half of the world’s billionaires. After merging with pre-existing banks, UBS is now the largest bank in Switzerland and infamous for adhering to the money management of some of the world’s wealthiest individuals. As they have seen a loss in revenue in recent years, it is predicted that the 4% drop shall not affect the firm to a high degree due to the safety net of economic stability despite the pandemic. Having said that, it is worth acknowledging that UBS are unlikely to attain their revenue which is set to panic investors of the firm. Ultimately, the future of UBS remains wholly hopeful.