UBS SWOT and PESTLE Analysis

Strength

1. Strong capital position: Starting from 2011 UBS has built its strategy upon a strong foundation of capital strength. During this time it has reduced its risk-weighted assets to half and also decreased the size of the balance sheet. This multinational diversified financial services company is one of the best-capitalized banks which has completely applicable Swiss SRB Basel III CET1 capital ratio of 14.3% well above the target of at least 13%. Capital quality keeps on being a key mainstay of its strategy. Their completely connected CET1 ratios are easily above the 2020 prerequisites. Since 2012, they have generously lessened hazard and asset report exposures, while expanding our aggregate loss-absorbing limit by around CHF 50 billion to nearly CHF 80 billion. The advancement and in general strength is reflected in the valuation compared with competitors, the FICO scores and, most imperatively, the trust the customers put. In the meantime, the more noteworthy deceivability on future capital necessities given by the Basel Committee toward the finish of 2017 empowered the company to refresh our capital returns strategy and plan all the more genuinely for the future.

2. Geographically diversified wealth management presence: After the financial crises of 2018 the UBS made changes to its business model by putting a limit to its investment banking division and expanding wealth management presence. Around 50% of the total value for UBS comes from wealth management. This service is a stable source of income also it has low revenue volatility as apart from performance fee which is linked to debt- and equity-market performance over a period everything else is recurring and fixed. From a geographic viewpoint, the company intends to develop in America furthermore, to strengthen initiative in their home market in Switzerland. In Europe, the Middle East and Africa, the company intends to use their capacities to develop our piece of the overall industry amid likely union. Asia Pacific, and especially China, introduces a critical development opportunity, given the financial development and rate of increment in the quantity of extremely rich people. UBS's focused position in Asia Pacific is solid and we are all around situated to catch openings in the district over our organizations.

3. High Digitization: The company intends to keep investing at least 10% of the Group's revenues in technology, adding around CHF 1 billion in tech spend over the next three years. The bank has made investments in upgrading its IT infrastructure and also improved its technology offering for its customers with m- and e-banking solutions. UBS was awarded for peer-to-peer payment app called “Paymit”. Also, it has introduced an online wealth management platform for customers in Switzerland and Europe international. Innovation Lab which operates as accelerator and incubator is exploring application blockchain and other disruptive technologies in the field of financial services. The company has innovation labs at Zurich as well as London. The company has UBS Y Think Tank. This creates a sustainable strategy for UBS by exploring the society and culture of the 21st century. Going far beyond the scope of traditional wealth management, it enables UBS to develop a deep understanding of tomorrow’s lifestyles and contexts. The Center for design excellence at Asia is focused on creating new innovative and user-centric products to meet the evolving needs of our Wealth Management clients in Asia Pacific and globally. The company has launched Client Experience 2020, a strategic digitalization program, which aims to strengthen the position as the leading universal bank in Switzerland and enhance the digital leadership position

4. Leading positions in all five business areas in Switzerland: UBS is one of the leading universal banks in Switzerland. It is the only country where the bank provides all 5 services i.e. wealth management, corporate and institutional banking, personal banking, investment banking, and asset management. The full commitment to home markets helps the bank in sustaining its global brand and profitability.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

This section is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

Political

1. Changes in regulatory frameworks: The stream of new directives have been gradually slowing and there has been a development to decrease a portion of the administrative troubles, fundamentally in the US. By and by, various post-financial emergency changes, for example, the Basel III finalization, are anticipated that would keep on increasing risk-weighted assets. Furthermore, the changed Markets in Financial Instruments Directives (MiFID II) will affect the operations of the business. The speculator assurance segment of MiFID II requires surveying reasonableness and suitability and upgrading transparency toward customers with expanded revelations, e.g., on expenses and charges, and detailing. The market structure segment of MiFID II will prompt expanded pre-and post-exchange transparency prerequisites over an expansive scope of benefit classes, counting subsidiaries and bonds, notwithstanding upgraded recordkeeping furthermore, exchange revealing commitments.

2. Tax Cut and Jobs act amendment in the US: In December 2017, the Tax Cuts and Jobs Act (TCJA) was agreed upon into law. The demonstration incorporates a decrease in the government corporate imposes rate to 21% from 35%. The rate decrease brought about a CHF 2.9 billion net record in the Group's conceded impose resources (DTAs) in the final quarter of 2017. The net reduction in DTAs negligibly affected our completely connected CET1 capital. The TCJA likewise presented another minimum tax regime, alluded to as the base erosion and anti-abuse act (BEAT), which targets US organizations profiting from deductible payments made to non-US related parties. The BEAT rate, which is 6% for banks in 2018, expanding to 11% of every 2019 and to 13.5% in 2026, applies if BEAT, computed on an adjusted assessable pay base, is higher than the general government corporate expense in the guaranteed year. For 2018, it is expected that in entire year charge rate of roughly 25%, including the impacts of BEAT, and barring the impacts from any intermittent re-measurement of DTAs also, any adjustment in the way in which DTAs are re-measured.

3. Implementation of Basel III framework: The introduction of the revised Basel III structure will probably prompt a net increment in RWA of around CHF 35 billion, preceding considering mitigation actions. These forecasts depend on the present comprehension of the important standards and may change because of new or changed administrative interpretations, usage of the Basel III benchmarks into national law, changes in business development, economic situations and different variables. Moreover, finished the following three years, because of other known administrative changes and assessed business development, the company estimates that the RWA may increment by around CHF 40 billion and LRD may rise by around CHF 85 billion. Genuine increments may shift contingent upon development openings, economic situations, and relief activities.

Economic

This section is available only in the 'Complete Report' on purchase.

Social

Technological

This section is available only in the 'Complete Report' on purchase.

Legal

1. Supervision under FINMA: UBS Group AG and its auxiliaries are liable to direct supervision by FINMA under the Swiss Federal Law on Banks and Savings Banks (Swiss Banking Act) and the related ordinances that impose, among different necessities, minimum standards for capital, liquidity, chance focus, and hierarchical structure. FINMA satisfies its statutory supervisory obligations through licensing, regulation, monitoring, and enforcement. FINMA is responsible for prudential supervision and mandates audit firms to perform for its benefit an administrative review and certain other supervisory undertakings.

2. Changes in depositor protection scheme in Switzerland: There has been changes to Swiss depositor protection scheme by Swiss Federal Council The proposed changes include introducing a target level for depositor protection, set at 1.6% of the value of the protected deposits in the Swiss financial system, using the current cap of CHF 6 billion as a floor, and significantly shortening the time within which payments to depositors must be made in the event of a bank insolvency. This would change the current law where each bank has to hold 50% of its commitment to the depositor protection scheme as high-quality liquid assets with a requirement to pledge collateral equal to 50% of its commitment. As a result, UBS would need to make adjustments to operational processes and funding.

Environmental

This section is available only in the 'Complete Report' on purchase.