UBS Seeks US Banking License to Enhance Wealth Management Strategy

UBS's Strategic Move for Growth in the US

By Oliver Hirt and Ariane Luthi

Background on UBS and Credit Suisse

ZURICH (Reuters) -UBS has applied for a banking licence in the United States, the Swiss bank said on Monday, underlining its desire to ramp up wealth management in the world's biggest economy even as regulators at home seek to limit its ambitions abroad.

Implications of New Regulations

Since taking over Credit Suisse after its former rival's collapse in 2023, UBS has faced new regulations in Switzerland that it views as so extreme that it has examined the possibility of moving its headquarters abroad, insiders say.

Expected Services and Timeline

While senior UBS executives insist the Zurich-based bank has no intention of leaving Switzerland, establishing a more solid U.S. bridgehead could help it grow its business as it seeks to satisfy investor demands for greater returns.

Market Context and Competitors

DRIVING GROWTH IN THE UNITED STATES

In a memo to staff seen by Reuters, Rob Karofsky, the president of UBS Americas, and Michael Camacho, head of UBS Global Wealth Management US, said the bank had filed its application for a National Bank Charter for UBS Bank USA.

"This step is part of our long-term goal to build on UBS's status as a premier global wealth manager in the U.S. and invest in areas that will drive growth," the memo said.

Aiming to prevent a repeat of the Credit Suisse meltdown, the Swiss government has proposed stricter capital rules to back UBS's foreign units, a step Finance Minister Karin Keller-Sutter said will make growing abroad "more expensive" for the bank.

UBS is concerned the rules will put it at a disadvantage to competitors and hopes it can thrash out a compromise.

BANK LOOKING FOR APPROVAL IN 2026

If granted, the licence would allow UBS to match the full range of services offered by U.S. banks, including checking accounts, savings accounts and mortgages.

UBS said it anticipated approval in 2026, subject to regulators. If granted, UBS would be the first Swiss bank to obtain such a licence in the United States.

The memo said the application did not signal immediate product launches, but paved the way for future steps. New product and service development is a complex process lasting years that will roll out in phases, UBS said.

The United States, where more than 1,000 people became millionaires every day in 2024, is the most important growth market in UBS's core wealth management business. One media report in September said UBS was mulling a move to the U.S.

UBS is less profitable than leading U.S. banks such as Morgan Stanley, a gap which it aims to narrow.

Sergio Ermotti, the UBS CEO, said in 2024 that the bank has the cost base of a much larger organisation but lacks the product offering to fully exploit its potential.

Wealth management in the U.S. is a scale business, UBS Chairman Colm Kelleher said late last year, noting that Morgan Stanley managed to double its profitability after it bought U.S. financial services firm Smith Barney. 

(Reporting by Oliver Hirt and Ariane LuthiEditing by Dave Graham, Mark Potter and Alexander Smith)