UBS Group AG (UBS): history, ownership, mission, how it works & makes money

A Brief History of UBS Group AG (UBS)

Foundation and Early Years

UBS Group AG, originally founded as the Bank in Winterthur in 1862, underwent significant transformations. In 1917, the merger of the Bank in Winterthur and the Toggenburger Bank founded the Swiss Bank Corporation (SBC). The organization's primary focus was on retail banking and private banking services.

Merger with Swiss Bank Corporation

In 1998, the Swiss Bank Corporation merged with Union Bank of Switzerland, rebranding as UBS. The merger created one of the largest financial institutions globally, with over 70,000 employees and a presence in more than 50 countries.

Growth and Expansion

By 2001, UBS had expanded its operations significantly, leading to its ranking among the top wealth management firms worldwide. The total revenue for the year was approximately CHF 33 billion.

Financial Crisis and Restructuring

During the 2008 financial crisis, UBS faced significant losses, particularly from its exposure to U.S. mortgage-backed securities. The bank reported a loss of CHF 20 billion in 2008 and required a capital injection from the Swiss government totaling CHF 6 billion. This prompted a restructuring plan, including cost-cutting measures and divestitures.

Recent Developments

In 2020, UBS announced a net profit of CHF 6.0 billion, with a return on equity of 10.0%. Its total assets were reported at CHF 1,113 billion as of December 31, 2020.

Acquisition of Credit Suisse

In March 2023, UBS agreed to acquire Credit Suisse for CHF 3 billion. The acquisition was facilitated by the Swiss government to ensure financial stability within the country and globally. It represented a significant consolidation within the banking sector.

Financial Statistics Overview

Global Presence

As of 2023, UBS operates in over 50 countries with approximately 72,000 employees. The company continues to maintain a strong presence in wealth management, investment banking, and asset management sectors.

Market Position

UBS ranks among the leading banks worldwide, with a focus on providing wealth management services. As of 2023, it has approximately CHF 4.1 trillion in total assets under management.

Strategic Initiatives and Future Outlook

UBS is focusing on sustainable finance and digital transformation as part of its strategic initiatives. The investment in technology, particularly in fintech partnerships, is expected to drive future growth and innovation.

A Who Owns UBS Group AG (UBS)

Shareholder Composition

As of the latest available data, the shareholders of UBS Group AG consist of a mix of institutional investors and private shareholders. Below are the details of the significant shareholders:

Top Institutional Investors

Major institutional investors play a crucial role in the ownership structure of UBS. The following table lists the top institutional investors as of the last reporting period:

Recent Financial Performance

UBS Group AG reported robust financial performance in its most recent fiscal year. Key figures include:

• Net Profit: CHF 7.61 billion
• Total Revenue: CHF 32.43 billion
• Total Assets: CHF 1,243 billion
• Return on Equity (ROE): 15.2%

Market Capitalization

The market capitalization of UBS Group AG as of October 2023 stands at approximately CHF 52 billion. This indicates a strong position within the financial services sector.

Geographical Distribution of Ownership

Ownership of UBS is also geographically diverse. The following table summarizes the distribution of ownership by region:

UBS Group AG (UBS) Mission Statement

Company Overview

UBS Group AG, headquartered in Zurich, Switzerland, is a multinational investment bank and financial services company. It operates in various sectors such as wealth management, investment banking, and asset management. As of 2023, UBS boasts a global workforce of approximately 73,000 employees, serving clients across 50 countries.

Mission Statement

UBS aims to be the world's best private bank and a key player in the investment banking and asset management sectors. The mission statement underscores client-centricity, integrity, and excellence in service delivery.

Core Values

• Client First: Prioritizing the needs and interests of clients.
• Excellence: Striving for the highest standards in all endeavors.
• Integrity: Conducting business in a transparent and ethical manner.
• Collaboration: Promoting teamwork across all levels.
• Innovation: Emphasizing creativity and forward-thinking solutions.

Financial Performance

UBS reported a total revenue of CHF 34.65 billion in 2022, an increase of 8% from CHF 32.15 billion in 2021. The net profit attributable to shareholders for the financial year 2022 stood at CHF 7.58 billion, reflecting a robust growth trajectory.

Wealth Management

The wealth management division of UBS manages client assets totaling approximately CHF 4 trillion. This division significantly contributes to the company's mission, focusing on delivering tailored investment strategies and financial advice.

Investment Banking

UBS's investment banking segment generated revenue of CHF 10.5 billion in 2022, comprising advisory services, capital markets, and financing. The firm played a critical role in over 300 merger and acquisition transactions, showcasing its strength in this domain.

Key Financial Metrics

Global Reach

UBS has a significant presence in key financial markets including Europe, Asia-Pacific, and the Americas. The company operates more than 100 offices worldwide, enhancing its capability to serve a diverse clientele.

Sustainability Commitment

UBS emphasizes sustainable finance and responsible investing, committing to allocating USD 200 billion in sustainable investments by 2025. This strategy underpins their mission to integrate sustainability into the core business model.

Recent Developments

In 2023, UBS made headlines by acquiring Credit Suisse for approximately CHF 3 billion. This strategic move is poised to enhance UBS's market share and broaden its service capabilities.

Conclusion

The mission and values of UBS Group AG reflect its commitment to excellence and client service in the global financial landscape. As the company progresses, it strives to maintain its position as a premier financial institution while adapting to the evolving market demands.

How UBS Group AG (UBS) Works

Overview of UBS Group AG

UBS Group AG is a Swiss multinational investment bank and financial services company founded in 1862. It operates in over 50 countries and has a global workforce of approximately 74,000 employees as of 2023.

Business Segments

UBS operates through several key business segments:

• Wealth Management
• Investment Bank
• Personal & Corporate Banking
• Asset Management

Wealth Management

UBS is one of the largest wealth managers globally, managing assets worth approximately CHF 4.1 trillion as of Q3 2023. The wealth management division accounts for around 36% of the bank's total revenue.

Investment Bank

The investment bank focuses on capital markets, advisory, and financing solutions. As of Q3 2023, the investment banking division generated roughly CHF 2.5 billion in revenue, representing about 30% of UBS’s overall income.

Personal & Corporate Banking

This division provides services such as savings accounts, loans, and payment services, primarily in Switzerland. As of Q3 2023, the division’s income was CHF 1.3 billion, contributing 20% to the overall revenue of UBS.

Asset Management

UBS Asset Management provides investment solutions across various asset classes. As of Q3 2023, it managed around CHF 1.1 trillion in assets, contributing 14% of total revenue.

Financial Performance

For the first nine months of 2023, UBS reported a net profit of CHF 6.5 billion, a 12% increase compared to the same period in 2022. The return on equity (ROE) stood at 15.6%.

Global Presence and Strategy

UBS maintains a strong global presence with significant operations in key financial centers, including New York, London, and Hong Kong. The company’s strategic focus includes enhancing digital banking services, expanding its wealth management business in Asia, and adapting to market changes driven by technology and regulatory reforms.

How UBS Group AG (UBS) Makes Money

Wealth Management

UBS operates a robust Wealth Management division that contributes significantly to its revenue stream. In 2022, this segment generated approximately $5.49 billion in pre-tax profit. The division primarily serves high-net-worth individuals and institutional clients.

Investment Banking

The Investment Bank segment provides advisory services, capital markets solutions, and market-making activities. For the full year 2022, UBS's Investment Bank reported revenue of approximately $8.68 billion.

Asset Management

UBS Asset Management focuses on managing assets for institutional and retail clients. In 2022, the Asset Management segment reported net fee income of approximately $2.5 billion.

Net Interest Income

UBS earns net interest income predominantly from its lending activities. In 2022, UBS reported a net interest income of approximately $2.9 billion.

Transaction-based Income

UBS benefits from transaction-based income which includes commissions and fees from trading activities. In 2022, the firm reported transaction-based income of approximately $2.3 billion.

Geographical Distribution of Revenue

The revenue generated by UBS is distributed across various geographical locations. The following table illustrates the revenue contribution by region for the year 2022:

Client Segments

UBS serves various client segments, which can be categorized as follows:

• Private Clients
• Institutional Clients
• Corporate Clients

Revenue Mix

In 2022, UBS's revenue mix was divided as follows:

Cost Structure

To assess how UBS generates profit, understanding its cost structure is essential. In 2022, UBS reported total operating expenses of approximately $16 billion which included:

• Compensation and Benefits: $8.5 billion
• Technology and Marketing: $3.1 billion
• General and Administrative Expenses: $4.4 billion

Risk Management and Compliance Costs

UBS also incurs costs related to risk management and compliance. In 2022, the estimated expenditures in this area totaled around $1.2 billion.

Shareholder Returns

UBS is committed to returning capital to its shareholders. In 2022, the company announced a share buyback program amounting to $5 billion and paid dividends totaling $3 billion.

Future Outlook

UBS aims for continued growth in its core businesses, expecting a return on equity of greater than 12% by 2024, driven by performance improvement in Wealth Management and Investment Banking.