According to www.writepass.
comfollowing is a SWOT analysis and 5 Forces of Porter analysis that was conductedfor UBS AG. UBS is a worldwidefinancial institution which is the second largest in Europe and the largestprivate wealth asset manager in the world. They also have branches in 50countries all around the world. Strengths 1) Geographically diversified operations 2) Strong market position. 3) Strong Capital Adequacy Ratio Weaknesses 1) Decrease in net income interest 2) Waning profits and returns 3) Poor performance in Switzerland Opportunities 1) Lucrative asset management industry 2) Growing investment banking industry Threats 1) Consolidation of the financial services industry 2) Changes in regulations Table 1 – SWOT AnalysisStrengths1) As mentioned above UBS is operatingin fifty countries within America, Europe and Asia. Over 40% of the group’sannual revenues are derived from its branches abroad (UBS, 2012). This isindicative of the group’s global diversification in terms of operations.
2) UBS is the world’s largestwealth manager and also the second largest bank within Europe. In addition, itis the leading retail and commercial bank in Switzerland. These among manyother market factors enable UBS to gain a competitive advantage over its competitorsin various markets by leveraging its leading position. 3) The bank has a CET1 capital adequacy ratio of more than 11% as compared to that observed intheir competitors.
In addition, this ratio exceeds the global average that wasset at 8%. This is a desirable ratio since it shows the group’s ability to meettheir goals whenever a crisis occurs. Weaknesses1) The net income interest ofthe group has been decreasing for the past few years.
This shows that there isa declination in the profitability of the group’s assets, which earn interest.In addition, this also indicates that some operations are curbed byinefficiencies. 2) Since 2006 UBS has alsonoticed a significant decline in their net profits. This is due to the fall inthe interest margins and reduced revenues. The returns on average assets havealso declined below the industry’s average, which currently is at 1.21%. 3) UBS has also noticed andrecorded poor performances the past few years in Switzerland which is theirhome country and that could have worse effects in the future.
Opportunities1) In 2010, the assetmanagement industry manage to grow by 7.8% globally which is equivalent to 52,706 billion dollars. This figure is expected to continue rising. By investingin this sector, UBS will be able to expand its profitability and operations. 2) The investment bankingindustry has also been on an upward trend for the past decade. Considering thatUBS AG has a division of investment banking that contributes over 43% of itstotal revenue just to this segment, it is likely to enjoy some significantbenefits if they handle this opportunity right.
Threats1) The past few years many financialinstitutions especially smaller ones tend to consolidate and merge and this canslowly lead in the formation of very strong competitors.