Why did UBS and UBS merge? In Switzerland, Credit Suisse Group, a century-old competitor of UBS, merged with National Bank. UBS lost its position as the leading bank in Switzerland, and the Swiss banking company lost more market share. Only when the two banks take the initiative to unite can they regain the lost dominance. Internationally, the acquisition of Midland Bank by HSBC has been completed, and HSBC Holdings has been established. The merger of Bank of Tokyo and Bank of Mitsubishi has already ended, and the new Tokyo Mitsubishi Financial Group has been established. Deutsche Bank's acquisition of American Trust Bank is drawing to a close. Citibank, Morgan Bank and Bank of America are all in full swing to discuss the acquisition of other American banks. A new round of global banking mergers and acquisitions is coming. Facing the pressure of internal and external competition, it is inevitable for UBS and UBS to choose suitable mergers and acquisitions.
1998, after the merger of the two major banks was completed, the board of directors of UBS first completed the reorganization of its business department. The business departments of banks are divided into private and corporate customers, asset management, private banks and investment banks. And private property rights (UBS), giving up the SBC brand and using the UBS brand in a unified way, and successfully passing the running-in period in a short time.
However, UBS was born at the wrong time, and the American high-tech bubble burst. The former Swiss banking company suffered heavy losses in hedge fund investment in the US market, especially the bankruptcy of Long Term Capital Management, which held a large number of positions in the US, resulting in a huge loss of more than $ 1 billion in UBS Group AG. However, UBS is a bank that is good at learning lessons. This failure has brought great changes to its investment decision, and it has been a great success since then.
1999, UBS continued to rectify its original business, making progress and retreat in the financial market. In view of the meager profits and uncertain prospects of the insurance industry, it first suspended its cooperation agreement with Swiss Re for as long as 10, sold its Swiss Re shares and its joint venture with Swiss Re, and then voluntarily withdrew from the insurance industry. In order to avoid internal conflicts and efficiency losses caused by overlapping business, it sold the former international trade financing business in UBS Group AG to Standard Chartered Bank and sold 75% of the shares already held by Argor Hershey Co., Ltd.. In order to give full play to its comparative advantages, it increased its investment in private banking and asset management, acquired the European and Asian private banking business of Bank of America, expanded the trading building of its ubs warburg Tommy Tam Bank, making it the largest securities trading place in Europe, and acquired Bermuda's famous Global Asset Management and merged it into its private bank. In order to gain a firm foothold in the American financial market, UBS Group AG replaced the original shares issued by UBS and SBC on the NYSE, and reissued UBS Group AG's shares in the form of American Depositary Bonds (ADR), which was a great success, making UBS Group AG the first non-American financial group to be listed on the NYSE.
UBS in 2000. Continue to adjust its business in two aspects: first, shrink its local business in Switzerland, expand its business in the US market, sell several institutions whose business focus is in Switzerland, acquire several American companies, and improve the group's business layout in the US; Second, continue to shrink the insurance business, sell the shares of several insurance companies again, and increase investment in electronic networks and related businesses, becoming the first Swiss bank to provide comprehensive online banking services.
In 200 1 year, UBS's biggest move was to complete the acquisition of PaineWebber, a famous American investment bank, for12 billion dollars and reorganize it into UBS PaineWebber. Pratt & Whitney is an established investment bank, following Goldman Sachs, Merrill Lynch, Morgan Stanley and JPMorgan Chase. It is recognized as a primary dealer in the American securities market and enjoys a high reputation in the fields of asset management and securities brokerage. This move by UBS undoubtedly further expands and consolidates its position in the lucrative US investment banking field. On the day the acquisition was announced, Pratt & Whitney's stock rose by 40% due to its optimistic outlook for UBS. Of course, this merger has also brought a big problem to UBS Group AG's management, that is, how to effectively integrate its two investment banks, ubs warburg and UBS Pratt & Whitney, so as to reduce internal conflicts and frictions.
In 2003 and 2004, UBS did not make any major acquisitions. Its main task is to make use of its own comparative advantages, increase investment in private banks and asset management, and at the same time expand the market share of foreign exchange transactions and bond transactions. The perfection of risk management mechanism and the establishment of banks around their products and services have also been the focus of management in recent two years. Facts have proved that the adjustment in the past two years has been fruitful.
In June 2005, UBS Group AG officially announced that all businesses including UBS Pratt & Whitney and ubs warburg would use a single UBS brand name. The original four business brands: ubs warburg (investment bank), PaineWebber (investment bank), UBS Private Bank (private banking and asset management) and UBS Global Asset Management. (International business) will be reorganized into three major businesses named after UBS: UBS Wealth Management, UBS Global Asset Management and UBS Investment Bank. UBS Group AG launched a corporate image advertisement called "Four Ones" around the world. Officially announced the abandonment of Warburg and Pratt & Whitney. This decision reflects the company's determination to build a global financial services brand comparable to Citigroup and HSBC.
According to the data, from 200 1 year to 2005, UBS ranked among the top 10 assets in the world. In the past four years, its ranking has been developing forward, and finally it took the top spot in the global banking industry in 2005. The expansion of UBS is fundamentally different from that of other banks. The expansion of other banks basically depends on bank mergers and acquisitions. Although UBS also has mergers and acquisitions, compared with other banks, its expansion mainly depends on business growth. As a result, its core tier 1 capital grew slowly, while its asset ranking rose rapidly. UBS is famous in the world because of its high and stable profit return. Compared with American banks such as Citigroup, the annual pre-tax profit of $6 billion, the capital profit rate of 20% and the return on assets of less than 1% may be somewhat low, but it is a European bank, and its profits and returns are second to none among the major European banks. Only HSBC Holdings is basically at the same level as it is. Due to the influence of some non-performing assets before the merger, the initial non-performing loan ratio is indeed a bit high. After preliminary rectification and disposal, its non-performing loan ratio is only below 3%, which reflects UBS's high ability to digest and manage non-performing loans.
This paper makes a dynamic comparison between UBS and Credit Suisse, the only other "big bank" in Switzerland. 1998, when UBS was founded, UBS and Credit Suisse were basically at the same level, with business income of about 22 billion Swiss francs. By 2000, the two major banks began to distance themselves. UBS's business income exceeds 37 billion Swiss francs, while Credit Suisse only has 33 billion Swiss francs, a difference of 4 billion Swiss francs. Especially in 200 1 year, the American stock market bubble burst, and the Swiss Credit Suisse Group, which invested heavily in American hedge funds, suffered huge losses, its business scale shrank seriously, and its business income dropped to only 25 billion Swiss francs. However, due to the failure of hedge fund investment in 1998, UBS Group AG withdrew from hedge funds in time, and then strictly restricted investment in hedge funds and industries with excessive bubbles such as electronics, communications and internet, which basically escaped the crisis in the US stock market. Although the business of UBS Group AG AG declined in 2002 and 2003, it was mainly caused by the global economic recession, especially in the United States, and the rapid decline in the scale of investment banking business in recent two years. As of the first quarter of 2005, UBS Group AG's annual income reached 38 billion Swiss francs, while Credit Suisse Group's annual income was less than 33 billion Swiss francs.