Christopher Whittall<\/a><\/p>\nUBS\u2019s emergency takeover of Credit Suisse in 2023 was a transformational moment for the Swiss lender, cementing its place as a wealth management behemoth.<\/p>\n
It looked to be a more low-key event for UBS\u2019s trading division, which became an industry byword for conservative capital management over the previous decade following a dramatic restructuring in 2012. Consensus held there was just too much overlap between the two Swiss giants to move the dial in global markets.<\/p>\n
Fast forward to the present day and UBS has registered the quickest growth in trading revenues among the largest global investment banks over the past 18 months, comfortably outpacing bigger rivals like JP Morgan, Goldman Sachs and Morgan Stanley.<\/p>\n
UBS\u2019s capital-light trading model remains intact. But the Credit Suisse acquisition has nonetheless allowed it to flesh out businesses and regions where it lagged competitors, while helping it reinforce mainstay activities like equities and foreign exchange trading.<\/p>\n
\u201cThe strategy remains the same, but the Credit Suisse acquisition has really turbocharged our growth while making us better, broader and more diversified,\u201d said Jason Barron, head of global markets at UBS. \u201cIt\u2019s helped us gain share in champion businesses like equities, financing and FX, and allowed us to accelerate in areas where we were underweight, like the US and in fixed income trading.\u201d<\/p>\n
There\u2019s no doubt that 2025\u2019s volatile market backdrop has played to UBS\u2019s strengths. US president Donald Trump\u2019s erratic trade policies forced investors to rethink their exposure to the US dollar and ignited a flurry of stock-trading activity, delivering a bumper payday for equities and currency traders.<\/p>\n
UBS posted a record US$4.8bn of markets revenues in the first half of the year after growing at roughly twice the pace of its main rivals, buoyed by record results in equities and a significant bump in FX trading.<\/p>\n
\u201c[Tariffs were] a surprise for the market that forced clients to hedge or reposition their books,\u201d said Paolo Croce, head of global markets for EMEA at UBS. \u201cVolatility increased together with clients\u2019 activity, creating a more conducive environment for the market business overall.\u201d<\/p>\n
Material gains<\/p>\n
UBS\u2019s 2024 earnings show the upturn wasn’t a flash in the pan. The bank reported a 20% annual rise in markets revenues last year, roughly double the industry average, with a record US$7.5bn haul as the Credit Suisse acquisition started providing a meaningful tailwind.<\/p>\n
\u201cWe were adamant from the start that markets wouldn’t take CS systems and infrastructure because otherwise you’re not servicing clients properly through that period,\u201d said Barron. \u201cThis integration was very much about people, clients and positions, which is really as it should be.\u201d<\/p>\n
UBS has increased headcount in global markets by 15% since the integration. It also\u00a0retained an even higher proportion of senior Credit Suisse investment bankers to increase its presence in dealmaking. Many of those were in North America where Credit Suisse\u2019s 1988 takeover of First Boston had given it a formidable outpost.<\/p>\n
The boost to UBS\u2019s stalwart equities and FX businesses was almost instantaneous. As well as enjoying a material uptick in FX trading volumes,\u00a0UBS said it broke into the top three banks in cash equities trading in late 2024 after bringing on board Credit Suisse programmers to upgrade its algorithmic trading technology, which complemented a push on \u201chigh-touch\u201d trades involving human salespeople.<\/p>\n
Elsewhere, notable Credit Suisse additions included roughly US$13bn of equity derivative positions and US$18bn of assets from quantitative investment strategies \u2013 a fast-growing business where banks sell off-the-shelf products replicating complex hedge fund trading strategies.<\/p>\n
\u201cWe assumed a lot of the [Credit Suisse] business had tailed off as clients departed after they shut down prime brokerage. What we actually found when we reached out to clients was a huge amount of goodwill and lots of them actually wanted to come back,\u201d said Barron.<\/p>\n
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Fixed income heft<\/p>\n
Cherry-picking parts of Credit Suisse’s operations upped UBS\u2019s presence across other regions such as the Middle East. Perhaps the most notable shift, though, came in the business that bore the brunt of UBS\u2019s 2012 overhaul: fixed income. That retreat from trading bonds and derivatives linked to interest rates and corporate credit released vast sums of capital.<\/p>\n
There was, however, a notable downside: UBS’s markets division became increasingly lopsided. Fixed income accounted for around 30% of UBS\u2019s total trading revenues in recent years, about half the industry average. \u00a0\u00a0<\/p>\n
\u201cWe identified in 2021 that we were underweight in certain areas of fixed income that aligned with our strategy, and we needed to diversify our revenue streams, but it was nearly impossible to grow organically because of the war for talent,” said Barron.<\/p>\n
The Credit Suisse takeover allowed UBS to add heft almost overnight. The bank carved out Credit Suisse\u2019s highly regarded US loan trading team \u2013 and part of its loan book \u2013 to turbocharge a broader rebuild of UBS’s global credit trading franchise.<\/p>\n
Importing a significant chunk of Credit Suisse\u2019s fixed income solutions business provided further ballast to that effort, helping UBS become one of the top issuers on the multi-dealer SPIRE structured notes platform.<\/p>\n
\u201cOur risk appetite hasn\u2019t changed, but we did already have risk appetite for more than we were doing before the Credit Suisse integration,\u201d said Barron.<\/p>\n
\u201cOnce we looked under the hood, it became clear that CS derived a lot of their success in very different ways to us … [and] they had very high-ranking businesses in areas we were still looking to grow.”<\/p>\n
Pragmatic approach<\/p>\n
UBS hasn\u2019t strayed from its long-held obsession with financial resources. The investment bank\u2019s risk-weighted assets remain capped at 25% of the wider UBS Group\u2019s total RWAs \u2013 a ratio that stood at 22% in the second quarter. Contrast that with Barclays \u2013 which is on a mission to slash RWAs \u2013 where the investment bank accounts for 56% of RWAs.<\/p>\n
“We don\u2019t have unlimited resources, so we have to pick the areas where we can be relevant for our clients,” said Croce. “If we want to remain a top player in areas like cash equities, FX and equity derivatives, then there\u2019s a certain amount of capital resources that need to be allocated to these businesses.”<\/p>\n
There is certainly a pragmatism in UBS\u2019s approach that many competitors are still reluctant to advocate publicly \u2013 even if they practise it privately. Take its view on nonbank trading firms, which have grown in prominence as the likes of Citadel Securities and Jane Street have expanded rapidly in recent years.\u00a0<\/p>\n
Barron said UBS has been \u201cleaning in quite heavily\u201d to some of these trading firms since about 2015 and has invested significantly in controls and infrastructure to work with them.<\/p>\n
\u201cOur view is this has been inevitable since the [2008] financial crisis because of the changes to how banks are regulated from a trading and capital point of view,\u201d he said. “We don\u2019t see them as competitors; we very much see them as partners.\u201d<\/p>\n
This willingness to look for outside help is not just confined to markets where UBS has a smaller presence. Barron said part of UBS\u2019s success in cash equities has come from partnering with these firms. \u201cOur business model is about liquidity provision to all our clients and these trading firms are part of that liquidity stack,\u201d he said.<\/p>\n
Looking ahead, UBS still sees room for growth in its markets business. Barron expects FX trading to remain busy as clients reassess their exposure to the US dollar \u2013 a \u201chuge change\u201d in behaviour. He also sees more gains coming from the bank\u2019s extended footprint in dealmaking and research, particularly in the US.<\/p>\n
\u201cThere are still huge amounts of upside,\u201d he said. “Banking is an important part of markets: primary business helps to attract secondary business.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
\u00a0|\u00a0 IFR 2598 – 30 Aug 2025 – 5 Sep 2025 \u00a0|\u00a0 Christopher Whittall UBS\u2019s…\n","protected":false},"author":2,"featured_media":102082,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[84,467,56,54,55],"class_list":["post-102081","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-business","tag-markets","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/102081","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=102081"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/102081\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/102082"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=102081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=102081"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=102081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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