UBS Group AG
Diversified Financial ServicesFounded 1998- Updated July 2025
Reviewed by Swet Parvadiya
Last reviewed: July 2025
CorpDigest
UBS Group AG
Company History
Founded 1998 in Zurich and Basel, Switzerland
Last reviewed: 2025-07-15 · By Swet Parvadiya
$47.69 billion in FY2025 revenue and $6.99 trillion in assets under management make UBS the world's largest private bank, but the bank's 90.2% cost/income ratio and $5.05 billion in annual integration expenses reveal that the emergency acquisition of Credit Suisse is still consuming profitability two years after the deal. The legal merger was completed on May 31, 2024, but UBS does not expect to finish operational integration until the end of 2026, with $13 billion in targeted annual cost savings still unrealized. Net profit attributable to shareholders was $3.54 billion in FY2025, a 139% improvement from $1.48 billion in FY2024, but the return on CET1 capital of 5.0% remains far below the bank's 10-12% target. The market values UBS at $155 billion, pricing in successful execution of the integration, but the risks are substantial: 13,000 job cuts, ongoing regulatory investigations, the wind-down of Credit Suisse's toxic legacy assets, and the cultural assimilation of two banks with fundamentally different risk appetites. The bank's CET1 ratio of 14.9% provides a capital cushion that few competitors can match, but this capital intensity comes at the cost of lower returns. The question for investors is whether UBS can drive the cost/income ratio below 80% by 2027 and restore returns to target levels — or whether the integration will prove to be a permanent drag on profitability.
Marcel Ospel (born 1944) was a Swiss banker who served as CEO of UBS Group AG from 1998 to 2001 and as chairman from 2001 to 2008. He began his career at Swiss Bank Corporation in 1977 and rose to become CEO in 1996. Ospel was the driving force behind the 1998 merger of Swiss Bank Corporation and Union Bank of Switzerland, which created the world's largest bank at the time. He pursued an aggressive growth strategy, acquiring PaineWebber in 2000 for $12 billion to expand UBS's US wealth management presence. However, his expansion into investment banking and structured products led to massive losses during the 2008 financial crisis, with UBS writing down $37.5 billion in toxic assets. Ospel resigned in April 2008 under pressure from shareholders and the Swiss government, which had injected CHF 6 billion to rescue the bank. His legacy is mixed: he created the modern UBS but also presided over the risk-taking culture that nearly destroyed it.
Bank in Winterthur was founded in 1862, which would later become part of Union Bank of Switzerland through the 1912 merger with Toggenburger Bank.
Swiss Bank Corporation was established in Basel by a consortium of local businessmen and bankers, focusing on international trade finance.
On June 29, 1998, Union Bank of Switzerland and Swiss Bank Corporation merged to form UBS Group AG, creating the world's largest bank by assets with a combined balance sheet of approximately CHF 1.1 trillion.
UBS acquired PaineWebber, a US brokerage firm, for $12 billion, significantly expanding its US wealth management presence and adding thousands of financial advisors.
UBS began reporting massive losses from exposure to US subprime mortgage-backed securities, with total write-downs eventually reaching $37.5 billion and forcing a Swiss government bailout of CHF 6 billion.
Following $37.5 billion in subprime losses, CEO Marcel Ospel resigned and the Swiss government injected CHF 6 billion in capital, with UBS transferring toxic assets to a state-backed bad bank.
Sergio Ermotti was appointed CEO on an interim basis following the $2.3 billion unauthorized trading loss by Kweku Adoboli, and later confirmed as permanent CEO. Ermotti initiated a strategy to shrink the investment bank and focus on wealth management.
UBS was fined $1.5 billion by regulators including the FCA and CFTC for its role in attempting to rig benchmark interest rates, one of the largest penalties in the scandal.
Regulators including the FCA and CFTC fined UBS along with other major banks for foreign exchange market manipulation, adding to the bank's regulatory penalties.
Sergio Ermotti stepped down as CEO after nine years, during which he eliminated 10,000 jobs and transformed UBS into the world's largest wealth manager. Ralph Hamers from ING Group succeeded him.
On March 19, 2023, UBS agreed to acquire Credit Suisse for CHF 3 billion ($3.2 billion) in an all-stock government-brokered deal, with the Swiss National Bank providing over CHF 100 billion in liquidity and FINMA ordering the write-down of $17.2 billion in AT1 bonds to zero.
On April 5, 2023, Sergio Ermotti returned as CEO for a second tenure, replacing Ralph Hamers specifically to manage the Credit Suisse integration.
On May 31, 2024, the legal merger of UBS AG and Credit Suisse AG was completed, creating a single banking entity under UBS AG.
In May 2025, UBS agreed to pay $511 million to settle a US Department of Justice investigation into Credit Suisse's assistance to wealthy Americans in hiding over $4 billion in offshore accounts.
To expand UBS's presence in US wealth management and brokerage services. PaineWebber was a major US brokerage firm with thousands of financial advisors and a strong retail client base. The acquisition was part of Marcel Ospel's strategy to build a global wealth management platform.
Emergency government-brokered acquisition to prevent Credit Suisse's collapse and protect Swiss financial stability. UBS was ordered by the Swiss Federal Council, Swiss National Bank, and FINMA to acquire Credit Suisse over a single weekend in March 2023.