UBS AG

From MarketsWiki

UBS AG
Founded	1872
Headquarters	Zurich, Switzerland
Key People	Chairman Peter Kurer
Employees	80,000
Products	Capital-markets investment products and services; UBS PIN ATS
Web site	www.ubs.com

Century-old UBS, formerly Union Bank of Switzerland, has become a global financial-markets giant with CHF 3.2 trillion in invested assets. UBS has a worldwide business serving mostly wealthy customers and their corporations through acquisitions at home and abroad. UBS has been particularly hard hit by the recent U.S. sub-prime mortgage market meltdown and took a big loss on its 2007 results.

History

Union Bank of Switzerland was formed originally in 1912 by the merger of two Swiss regional banks. The modern-day version was formed in 1998 when the original UBS merged with arch-rival Swiss Bank Corporation (SBC) to form UBS AG, which two years later acquired U.S. brokerage PaineWebber. Today it employs more than 80,000 people in over 50 countries.^[1]

UBS is divided into three business segments: UBS Global Asset Management, UBS Global Wealth Management, and UBS Investment and Business Banking.^[2] The Investment Banking unit has been largely to blame for UBS's approximately $50 billion in credit-investment writedowns in 2007-08 and has recently seen its management shaken up.^[3] Jerker Johansson, the head of the unit, stepped down on April 27, 2009 -- the fourth time the business had changed bosses in the past 18 months.^[4]

Bad Year

After several years of double-digit profit growth, UBS suffered a loss of over $5.5 billion in 2007 and another loss of $12 billion just for the first quarter of 2008,^[5] largely due to its failed subprime mortgage-backed investments. In April 2008 UBS announced another writedown of $19 billion on subprime mortgage-backed securities,^[6] making UBS officially that market's biggest victim so far. UBS began building its mortgage-backed securities portfolio in 2005 that would eventually top $100 million in value.

In August of 2009 the U.S. Internal Revenue Service lodged a request to its Swiss counterpart for data from UBS, stemming from a settlement to a suit between the IRS and UBS. The request began an administrative process aimed at getting information on more than 4,000 UBS clients.^[7]

UBS paid $780 million in 2009 to settle a criminal tax probe.

Key People

The recent financial turmoil at UBS toppled both top office-holders inside 12 months: Chief Executive Peter Wuffli in July 2007 and Chairman Marcel Ospel in April 2008. New UBS CEO Marcel Rohner (top) has been a member of the UBS Group executive board since 2002 and had been Wuffli's deputy since January 2006.^[8] He was also appointed CEO of Investment Banking in October 2007 after previously serving as CEO of UBS's Wealth Management & Business Banking unit. He joined UBS AG predecessor SBC in 1992 and since 1999 has served as group chief risk officer. New UBS Chairman Peter Kurer served his seventh year as group general counsel until April of 2008^[9] when he received the call following previous Chairman Ospel's sudden departure after another bad earnings month. The sudden appointment of 58-year-old Kurer, a company insider with no experience as a banker, to the UBS chair has been sharply criticized by some shareholders.^[10] Kurer joined UBS as group general counsel in 2001 after 10 years as a partner at Zurich law firm Homburger and another 10 years at Baker & McKenzie, also in Zurich.

Registration

• UBS FINANCIAL SERVICES INC - NFA ID: 0001366

References

1. ↑ UBS AG: a short history. UBS. Retrieved on June 11, 2008.
2. ↑ Our company. UBS. Retrieved on June 11, 2008.
3. ↑ UBS Shuffles European Mergers Team. Wall Street Journal. Retrieved on June 11, 2008.
4. ↑ Head of UBS Investment Bank Unit Steps Down. New York Times Dealbook. Retrieved on April 28, 2009.
5. ↑ Key facts. UBS. Retrieved on June 11, 2008.
6. ↑ UBS to Write Down Another $19 Billion. New York Times. Retrieved on June 11, 2008.
7. ↑ U.S. Makes Formal Request for UBS Data. The Wall Street Journal. Retrieved on August 31, 2009.
8. ↑ Marcel Rohner. BusinessWeek. Retrieved on June 12, 2008.
9. ↑ Peter Kurer. Forbes. Retrieved on June 12, 2008.
10. ↑ Kurer replaces Ospel as UBS chairman. SwissInfo.com. Retrieved on June 12, 2008.