UBS AG

UBS AG, formerly known as the Union Bank of Switzerland, is a very large Swiss banking group which is the world’s second largest manager of private wealth assets.

The main headquarters are split between Zurich and Basel. Of the just under 70,000 employees, 34% are in Switzerland. Although it specialises in investment banking, asset management and private banking throughout the world, in Switzerland it also operates a very extensive retail branch network.

It has offices in 50 countries throughout the world and it also has a large presence in the United States. The American Investment Banking operation is based in New York City, the Private Wealth Management division is based in New Jersey and the Capital Markets are based in Stamford, Connecticut. 38% of its employees are in America.

Private banking has recently become a very contentious area for UBS AG. Due to its Swiss roots it is a very well known brand of private bank and is one of the largest in the world. One of the things that it advises on is how to allocate assets and income around the world in a way that will cut tax liabilities. In Switzerland there are low personal taxes and there are also very strict bank secrecy laws. As a consequence UBS AG has come under a large amount of scrutiny due to its alleged role in creating tax avoidance schemes. It has also found itself in trouble with the Swiss financial authorities for co-operating too much with investigators from the United States and the European Union as this is seen as clashing with Switzerland’s banking secrecy laws.

UBS AG is in fact a merger between the Union Bank of Switzerland and the Swiss Bank Corporation. For this reason UBS no longer stands for Union Bank of Switzerland. It was originally going to be the initials for United Bank of Switzerland but the name was dropped as it clashed with the name of a non-connected and smaller bank.

The Swiss Bank Corporation was not well known outside Switzerland, but it did have a number of famous brands such as SG Warburg in London and Dillon Read in New York.

As a result of acquisition UBS’s investment banking operations have some of the best known people in the fields in both London and New York. SG Warburg was created by two refugees from Nazi Germany in London in 1946. It was a pioneer in the mergers and acquisitions business in London in the 1950s and 1960s. It was a forerunner of a more serious working attitude in the City of London which had run quite a relaxed and gentlemanly culture. It was also a prominent asset manager through its subsidiary Mercury Asset Management. Due to an aggressive and ultimately unsuccessful expansion in America, SG Warburg was vulnerable to a takeover and ended up being acquired by the Swiss Banking Corporation.

Dillon Read was a famous name on Wall Street, particularly in the 1920s and 1930s, which has been brought back as Dillon Read Capital Management, the name of UBS’s hedge fund. This was closed down in 2007 due to “operational complexities” resulting in a large loss to UBS. Dillon Read had previously been taken over by Warburg, being renamed Warburg Dillon Read before being Warburgs was taken over by the Swiss Banking Corporation.