A year ago today, UBS said that it would buy its embattled rival under the auspices of Swiss regulators, who wanted to end a banking panic. UBS ended up paying $3.6 billion in stock for a bank with an estimated tangible book value of $33 billion — even after write-downs, expected litigation costs and accounting adjustments. The odd skeleton still lurking in the closet probably won’t stop this being remembered as the deal of the decade, according to a Wall Street Journal commentary. Shares in UBS are up 64% since. But one big question lingers, according to the commentary: How will the merger change UBS? After all, the lender already had a strategy that the market liked: a focus on wealth management. Investors see this business as the holy grail in today’s regulatory environment. It requires little capital to generate high returns, and the fees tend to be less volatile than investment-banking income. Morgan Stanley has become the highest-valued major bank in the world because 48% of its 2023 revenues came from wealth management.
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