Strategy

UBS Plans Major Expansion

9 March 2001

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UBS, the world’s leading private banking player, has declared ambitious plans to push ahead with a European wealth management strategy. The ...

UBS, the world’s leading private banking player, has declared ambitious plans to push ahead with a European wealth management strategy. The announcement came as the bank declared its annual results for 2000, where it stated pre-tax profits grew by 25% to CHF3.68bn. The main plank of the strategy will concentrate on Europe where UBS plans to expand its existing 170 client advisors dedicated to onshore markets to 1,200 by 2005. This new workforce will concentrate on clients with net investible assets in excess of EUR 500,000. The bank has ruled out any marketing concentration on the mass affluent sector.

To support the growth plans, the bank has unveiled a corporate restructuring programme that will reintegrate the offshore and onshore business lines. The European section of UBS Warburg’s International Private Clients business unit will be transferred to the Private Banking unit, where it will be co-headed by Richard Sipes and Raoul Weill. Sipes has 22 years experience with PaineWebber, while Weil has been with UBS Private Banking for 14 years.

The programme is virtually a volte face by the bank, returning to the strategy first mapped out by Rudi Bogni, the predecessor to current global CEO, Georges Gagnebin, according to a senior private banker formerly with UBS who declined to be named. UBS split its business into UBS Switzerland and UBS Warburg Private Clients early last year.

The integration with Painewebber has enabled UBS to leverage its business, explained Christoph Meier, a spokesman for the bank. Its European strategy will combine the brokerage model used by Painwebber and the traditional banking model used by UBS. The bank is aiming to take advantage of the industry’s fragmented marketplace, where there is a great opportunity for expansion and consolidation, said Meier. “Privately held wealth is growing at a fast pace and is concentrating in the hands of fewer people. This is a good space for a confident private bank.”

As clients are becoming more sophisticated and demanding, the time is right to develop into a comprehensive, full-service operation, said Meier. “Globalisation is also a big factor. Private clients are thinking more internationally. They are looking into opportunities abroad and are more mobile themselves, so they are looking for a bank that can serve them globally.”

Meier said the bank was hoping its well-known name will help the recruitment drive. It already employs more than 70,000 people across the group as a whole and it may look in-house for some of its European advisors.

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