If you be wealthy then UBS is for you. UBS is one of the world's largest private banks with operations in more than 50 countries. UBS also provides asset management and investment banking, as well as traditional banking services in its home country of Switzerland. The group includes four primary segments: Wealth Management & Swiss Bank, Wealth Management Americas, Global Asset Management, and UBS Investment Bank. Investment management clients include ultra-wealthy individuals, corporations, and institutional investors. Asset classes offered include internal and external mutual bonds, money markets, stocks, and bonds. Investment banking options include securities underwriting, advisory, and foreign exchange.
After suffering billions in losses in the global recession, UBS has been restructuring itself and cutting down its portfolio of businesses. It is also looking for ways to sharpen its focus on client-focused investment operations and move away from the proprietary trading business that contributed to its losses. The company plans to focus on its global wealth management and Swiss banking operations, while utilizing its investment banking operations as a supporting partner to its core businesses. (Going forward, it will report Wealth management and Retail & Corporate as separate divisions, while its Wealth Management & Swiss Bank segment will go away.) Recent acquisitions that fall in line with that goal include Dutch wealth management firm VermogensGroep, the French asset management operations of rival Commerzbank, and ING Groep's investment management business in Australia. It also bought structured products boutique Luxembourg Financial Group, boosting its global equities activities.
The group's corporate rejiggering and fiscal discipline, along with the relative strength of the Swiss franc, helped UBS return to profitability in 2010. Its investment bank operations provided the company with its greatest boost that year, as it lessened its exposure to risky investments and turned around losses in fixed income, currencies, and commodities. However, the lingering downturn and concerns over European sovereign debt have been a drain on the company. Investment banking activity slowed down in 2011, which was the primary reason profits slipped some 45% that year. On the other hand, the company reported improved new client assets and wealth management revenues rose. UBS has a strong capital position with a core Tier 1 ratio ahead of many other European banks as they work to meet Basel III standards.
In 2011, the company reported a third-quarter loss after it discovered unauthorized trading in its London investment bank. The rogue trader was arrested under suspicion of fraud; losses from the speculative trading amounted to CHF 1.9 billion (more than $2 billion). Although UBS' risk system detected unauthorized trading, the company did not investigate and controls were not put in place. The incident led to further declines in UBS' investment banking business. – less