UBS is preparing to expand its presence in the United States by introducing everyday banking services, a move aimed at improving profitability and broadening its client base beyond high-net-worth individuals. Currently, the Swiss bank’s U.S. operations primarily focus on investment advice, but the planned shift seeks to enhance revenue streams and solidify client relationships through a fuller array of financial products.
In 2023, UBS’s Americas region, which is predominantly the U.S., contributed nearly half of the bank’s wealth management revenues, yet accounted for only approximately 30 percent of pre-tax profits. The division’s pre-tax profit margin stood at 13 percent—an improvement of over three percentage points from 2024—but remains less than half of the margins achieved by Morgan Stanley’s wealth management unit, where UBS Chair Colm Kelleher previously held a leadership role.
Several factors have weighed on UBS’s margins in the U.S., including a limited product offering, challenges related to an IT system upgrade, and comparatively high staff compensation. Efforts to adjust pay structures have led to internal discontent, prompting some employee departures along with associated client outflows.
By incorporating deposit gathering and lending services, UBS anticipates not only direct revenue increases but also stronger client retention through more integrated relationships. The enhancement of its service portfolio is expected to attract clients with slightly lower net worth, diversifying the bank’s U.S. customer base.
UBS has set a target of achieving an 18 percent pre-tax profit margin in its U.S. wealth management business by 2028, aligning it with peers such as Wells Fargo and Citigroup. This goal is considered attainable, given the division’s performance was higher as recently as 2021. However, consensus analyst forecasts suggest even more optimistic outcomes, projecting margins closer to 20 percent by the same year.
To further narrow the gap with industry leaders like Morgan Stanley and Bank of America, UBS may need to leverage its global network more effectively. Achieving full parity, though, could require more significant strategic actions beyond current initiatives.
A major acquisition in the U.S. appears unlikely in the near term, partly due to ongoing legal challenges by UBS’s board against Swiss regulatory proposals that the bank argues would hinder international expansion. Still, UBS expects regulatory uncertainties to resolve by the time it completes its current phase of internal improvements. At that point, the bank could pursue more ambitious growth strategies aimed at elevating its standing among the top-tier U.S. wealth managers.