Forty per cent of all companies and every third household in Switzerland have one--a UBS bank account. The Swiss banking giant remains a leading service provider for retail and corporate banking, wealth management, investment banking and asset management in its home market. As UBS celebrates 150 years this summer, we take a walk down memory lane to celebrate this achievement.
Strong and successful
Switzerland's financial sector is one of the main pillars of the Swiss economy. In 2010, it contributed 10.7 per cent to the Swiss Gross Domestic Product, with year-end assets under management totalling around CHF 5,500 billion. At CHF 260,000 per employee, productivity was almost twice the Swiss average. The sector employed over 195,000 people (5.7 per cent of the entire Swiss workforce) and contributed a staggering CHF 14-18 billion in taxes.
No other two names are as intrinsically linked with the image of Switzerland as a financial centre than those of the country's 'Grossbanken' (big banks), UBS AG and Credit Suisse Group, both ranked amongst the ten largest wealth managers in the world. With branches and subsidiaries in more than 50 countries, together they account for half of the balance sheet of all 320 banks in Switzerland. They essentially offer every type of transaction, from investment banking to financial engineering, and from asset management to conducting mergers.
In 2006, Credit Suisse celebrated their 150th year in business; 2012 marks 150 years of UBS. To celebrate this milestone, we travel back in time to discover a fascinating story.
Innovative and inventive
The story starts just over a decade after the establishment of the Federal State of Switzerland in 1848, which saw the consolidation of 22 independent states. The Swiss Franc had been in circulation as a legal tender since 1850, replacing 13 currencies featuring 319 different coins. The main pillars of the economy were silk and watch making, but already some 170 banks existed alongside private bankers. However, these financial service providers were unable to support the increasing number of industrial projects.
The Bank in Winterthur was established to fill this gap in the market and contribute to the commercial and industrial development of the region of Zurich, where the city of Winterthur was emerging as an industrial hub and key player in the construction of the national railway system. On 25 June 1862, the bank commenced business operations with an initial share capital of CHF 5 million.
The following year, another foundation stone was laid to the southwest of Winterthur in Canton St. Gallen with the establishment of Toggenburger Bank in the small town of Lichtersteig. With an initial share capital of CHF 1.5 million, the bank focused on the domestic mortgage and savings markets, as well as supporting the local embroidery industry. In 1912, the Bank in Winterthur and the Toggenburger Bank merged to form the Union Bank of Switzerland.
Meanwhile, in the northwest of Switzerland and situated strategically at the crossroads of Germany, Switzerland and France, the city of Basel too was developing into the economic centre of its region. Here, six banking houses formed Basler Bankverein in 1872 on a joint stock basis with an initial share capital of CHF 30 million. The new bank played an instrumental role in the establishment of the Swiss chemical industry in Basel, and contributed to the success of the 'Gotthard-tunner project. Yet, its reach was far beyond the borders of Switzerland. Basler Bankverein--renamed Swiss Banking Corporation (SBC) in 1897--became in 1898 the first Swiss bank to establish an office in the City of London...