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
Two Swiss banks with origins in the 1860s and 1870s operated separately for over a century before Marcel Ospel engineered their combination in 1998. Union Bank of Switzerland had been founded in 1862. Swiss Bank Corporation followed in 1872. Both built retail and commercial banking businesses serving the Swiss domestic market while also developing international operations, particularly in private banking and asset management.
The 1998 merger created UBS Group AG at a scale that made it one of the largest financial institutions in Europe. The 2000 acquisition of PaineWebber added a major US wealth management and brokerage operation, extending UBS's reach into the American high-net-worth client market that was increasingly important to private banking economics.
The 2007-2008 financial crisis exposed UBS to massive losses on structured credit products and subprime mortgage securities — losses large enough that the Swiss government and Swiss National Bank provided emergency capital support. The crisis damaged UBS's reputation among wealth management clients who expected a conservative institution and found instead a bank that had taken enormous speculative positions in US mortgage securities. The subsequent decade was spent rebuilding client trust and restructuring the Investment Bank to reduce the risk profile that had produced the crisis losses.
The 2023 Credit Suisse acquisition was the defining event of UBS's modern history. Credit Suisse had spent years managing its own series of crises — the Archegos Capital Management collapse in 2021, the Greensill Capital exposure in 2021, persistent management turnover — before its liquidity position deteriorated irrecoverably in March 2023. The Swiss government chose UBS as the acquirer because it was the only Swiss institution large enough to absorb Credit Suisse, and because the alternative — a disorderly Credit Suisse collapse — was worse for the Swiss financial system than forcing UBS to integrate a troubled competitor.
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.
UBS in its modern form was created on June 29, 1998 through the merger of two of Switzerland's largest banks, Union Bank of Switzerland and Swiss Bank Corporation, in what was at the time the largest bank merger in history. Union Bank of Switzerland traced its origins to 1862 when Bank in Winterthur was founded, while Swiss Bank Corporation dated to 1872 when the Basler Bankverein was established. The merger was engineered by Marcel Ospel, then CEO of Swiss Bank Corporation, who became the first chairman of the combined UBS AG, with Mathis Cabiallavetta of Union Bank serving briefly as the first CEO before being replaced in 1998 amid Long-Term Capital Management losses. The combined bank chose to retain the UBS acronym, which originally stood for Union Bank of Switzerland but was redefined to no longer be an acronym after the merger. Headquarters were established jointly in Zurich and Basel, reflecting the two predecessor cities, and the bank immediately ranked among the world's largest by assets under management at roughly $1 trillion. The merger consolidated Swiss banking and set up UBS to become a global wealth management leader.
UBS acquired American brokerage PaineWebber Group in November 2000 for approximately $11.8 billion in cash and stock, transforming UBS from a primarily Swiss and European institution into a major US wealth management force. PaineWebber, founded in Boston in 1880, brought roughly 8,500 financial advisors, $452 billion in client assets, and deep relationships with affluent American households. The acquisition was led by then UBS CEO Marcel Ospel, who saw US wealth management as essential to global scale ahead of the rising Morgan Stanley and Merrill Lynch competition. PaineWebber was rebranded UBS PaineWebber and later simply UBS Wealth Management Americas. The acquisition gave UBS the foundation that, combined with the Swiss private banking franchise and post-2008 international wealth franchise, made it the world's largest wealth manager by invested assets, a position the bank still holds in 2024 with roughly $4.5 trillion of invested assets across global wealth management. The PaineWebber deal also gave UBS its New York investment banking footprint that would later become problematic during the 2008 financial crisis subprime losses.
UBS was among the European banks most severely damaged by the 2008 global financial crisis. The bank reported approximately $50 billion in subprime mortgage related writedowns between 2007 and 2009, the worst losses of any European bank, after aggressively building a US mortgage backed securities trading position under its investment bank head Huw Jenkins and CEO Peter Wuffli. In October 2008 the Swiss government and Swiss National Bank stepped in with an emergency rescue package worth approximately CHF 60 billion, including CHF 6 billion in fresh equity from the government in exchange for mandatory convertible notes and a CHF 54 billion SNB facility to absorb toxic US assets into a special purpose vehicle called the StabFund. The crisis forced the resignations of Marcel Ospel as chairman in April 2008 and CEO Peter Wuffli earlier in 2007. UBS reported a CHF 21 billion loss for 2008. The government exited its UBS equity stake at a profit in August 2009, and the StabFund was unwound profitably by 2013, but the crisis fundamentally reset UBS's strategy toward wealth management primacy and significantly reduced investment banking ambition under successor leadership.
In September 2011 UBS revealed that a London-based trader on its Delta One desk had caused unauthorized trading losses of approximately $2.3 billion. The trader, Kweku Adoboli, a 31-year-old Ghana-born British citizen who had joined UBS in 2003, had hidden losses through fake hedges and forward-settling trades that bypassed UBS controls. Adoboli was arrested at his desk in the early hours of September 15, 2011 after voluntarily emailing his manager admitting the losses. He was convicted of fraud at Southwark Crown Court in November 2012 and sentenced to seven years in prison, serving roughly half before deportation to Ghana in 2018. The incident triggered immediate consequences. CEO Oswald Grubel resigned on September 24, 2011, replaced on an interim basis by Sergio Ermotti, who would later be confirmed as permanent CEO in November 2011. UBS paid a $47.5 million fine to UK and Swiss regulators in November 2012 for failures in supervision. Combined with the LIBOR scandal that broke in 2012, the Adoboli affair accelerated UBS's decision under Ermotti to dramatically shrink the investment bank, cut 10,000 jobs by 2015, and refocus on wealth management.
UBS agreed to acquire Credit Suisse on March 19, 2023 in an emergency weekend transaction engineered by the Swiss Federal Council, the Swiss National Bank, and FINMA after Credit Suisse experienced massive deposit outflows and a collapsing share price. UBS paid CHF 3 billion, approximately $3.25 billion at the time, in UBS stock, valuing Credit Suisse at CHF 0.76 per share, well below the prior Friday close of CHF 1.86. The Swiss National Bank extended liquidity facilities of up to CHF 200 billion, and the Swiss government provided CHF 9 billion in loss protection on a specific portfolio. The transaction wiped out CHF 16 billion of Credit Suisse Additional Tier 1 capital instruments, a controversial move that was later challenged in court. The deal closed on June 12, 2023, creating a combined Swiss banking giant with roughly CHF 5 trillion of invested assets, dominant Swiss universal banking, and a wealth management business with no peer outside North America. UBS recognized a one-time gain of approximately $29 billion in the second quarter of 2023 from negative goodwill on the bargain purchase price relative to Credit Suisse's net asset value.