Investment and Banking Case Study

Union Bank Of Switzerland: The Banking Way

OR

Abstract:
In 2005, Union Bank of Switzerland (UBS), the world’s fifth largest and the largest bank of Switzerland, took over Saubern Trust for U$160 million (mn). Saubern Trust managed a portfolio of $8 billion (bn) for 100 wealthy German families. Along with its regular banking operations, UBS offered customized alternative investment services including hedge fund style plans, private equity and portfolio planning. These products and services had the potential to earn much higher than the regular banking businesses. In 2005, these alternative investment products and services accounted for 12% of UBS’s revenue, an increase from 3% of that of 2000. Although private banking remained its primary focus, UBS had diversified into investment banking and corporate trading where other European banks like HSBC and CITI Bank, failed to deliver the expected results. During the first half of 2005, UBS was the leader in global equity dealings. Switzerland remained the key market for UBS, accounting for 40% of its revenue. By reinventing the art of Swiss Banking, UBS had quietly become one of the world’s most profitable financial institutions. The case deals with the strategies adopted by UBS, to become a leader in the global banking system.

Pedagogical Objectives:

• The segmentation-targeting-positioning strategy adopted by Union Bank of Switzerland
• The key differentiator in service parameters in banking industry
• The unique selling proposition of bank and financial institutions
• The product portfolio and different service offerings of a bank and financial institutions
• The concept of niche marketing
• The different product in banking industry.

Keywords : Union Bank of Switzerland, Investment & Banking Case Study, Citi Bank, Private banking, Investment banking, Deutsche Bank, Financial management, Portfolio management, Financial risk management, Risk management, Saubert Trust, Derivative market, Equity analysis, Business analysis, Portfolio market