OPINION OF THE WEEK: Asia A Wealth Winner As UBS Completes Merger

Tom Burroughes

3 June 2024

Last week , the second-largest Swiss bank. The conclusion of the process came just over a year after the Zurich-listed firms united, at the behest of the Swiss federal government. The country now has just one universal bank. Well, so much for avoiding the “too-big-to-fail” problem.

In the senior management changes announced also by UBS last week, one thing that caught my eye in particular was the Asia angle. (I was in Singapore last week for my publication’s annual awards for the Asian wealth sector.) Iqbal Khan, who is co-president of global wealth management, will also become president of UBS Asia-Pacific as of 1 September. Khan will move to Asia as part of the leadership of GWM – the first time this has happened at UBS.

Khan’s rise to the top of the tree at UBS has been impressive. His move from Credit Suisse in 2019 was seen in some quarters as how he is in the frame to eventually become CEO. Khan’s arrival was not without controversy – his erstwhile employer spied on him, leading eventually to the ouster of Credit Suisse’s CEO at the time, Tidjane Thiam (although Thiam was not accused of having instigated the spying). That episode, a mixture of low farce and the plot of a John Le Carré novel, seems a long time ago. Credit Suisse, with a history dating back to the mid-19th century, is now part of banking history.

By moving Khan to Asia where he will lead wealth management, UBS is making a very clear statement about the importance of the region as a generator of revenues. UBS, let’s not forget, reports its revenues and other financial figures in dollars, not Swiss francs, these days. Europe is important for UBS, but not the main game in town and that is unlikely to change. This is a sobering reminder – if you are European – about where the centre of gravity now lies.

Other senior changes testified to how important North America is to UBS these days. Again, for all its operatic politics, the US remains an economic dynamo, and UBS is determined to make the most of it. The problems UBS had as a provider of offshore accounts for US citizens, leading to a mass of problems more than a decade ago, seems rather distant.

Looking on at this merger, and the changes wrought since, I am reminded of how much wrenching change has taken place in banking since the turn of the century. The mergers – some more like rescues than warm marriages – that took place in the 2008 financial crash left the world with a more concentrated sector than ever before. It is true that we have seen the rise of “fintech” and various new models of bank services, but time will tell when or if a new player can knock UBS off its perch in Switzerland, let alone provide it with stiffer competition in the future. For one thing is sure – competition may not be an easy experience, but it is vital for the most important people in this story – the clients.