Bank for Financial Institutions: UBS
Combined force UBS’s acquisition of Credit Suisse promises to completely transform the bank. The deal is already beginning to pay dividends in its financial institutions business, where a once-strong platform has been catapulted into the next tier. UBS is IFR’s Bank for Financial Institutions.
Greece was back in the capital market headlines in March – but this time for all the right reasons. The sale of the state’s remaining €1.35bn stake in Piraeus Bank marked a watershed moment. After 15 years of crisis and turmoil, and the nationalisation of all the country’s major banks, here was the largest of them all emerging into a new, hopeful future as a purely privately owned entity.
The equity offering was also a landmark for the bank’s relationship with UBS, which has stood by its side through thick and thin. Alongside the Hellenic Financial Stability Fund, it has led the march of the Greek banking system back to capital markets. A few months after Piraeus, UBS also led the government’s selldown of a €690.6m stake in National Bank of Greece. And it advised Attica Bank on its merger with Pancreta.
“In Greece, even our competitors say that we are the undisputed number one,” said Stefanos Papapanagiotou, head of UBS's financial institutions group in the EMEA region. “Take Piraeus – we’ve been there since the very beginning of the transformation story. We’ve been on every single one of their 25 transactions – we helped plan them; we executed them; we helped design every single bit.”
Such relationships brought an impressive harvest for the bank in 2024, including from longstanding UBS and Credit Suisse clients. They helped position the new UBS at the centre of a consolidation wave that swept through Europe as clients turned to the bank as their most trusted adviser at critical moments. UBS has been on all of the region’s major banking consolidation deals this year.
BBVA appointed the bank as financial adviser for its €12.3bn takeover of Spanish rival Sabadell. UK supermarket operator J Sainsbury also chose UBS to advise on the £3.7bn sale of its banking business to NatWest. It advised Nationwide on its £2.9bn offer to buy Virgin Money and was appointed as adviser to Commerzbank after UniCredit acquired a large slug of shares.
Repeat business
Such valued advice is often rewarded with repeat business – and 2024 was no exception. When insurer Aon began considering its US$13bn acquisition of the broker NFP, it turned to UBS – appointing the firm as sole financial adviser. The bank has advised Aon on two other large acquisitions: Hewitt Associates in 2010 and Benfield in 2008, as well as the failed Willis Towers Watson deal in 2020.
“BBVA–Sabadell is just a great example of having trusted adviser status,” said Terry Sullivan, who heads the FIG group globally from New York. “It was a situation with a lot of cross currents, with regulation to deal with, different dynamics to deal with, and interloper risk. It really demonstrates the M&A expertise, the industry expertise and trusted adviser status we have with a critical client.”
“Aon–NFP is also a tremendous transaction – it really was transformative and turned some heads,” he said. “This was one of the first times a strategic [player] got involved in middle-market insurance brokerage, and we've subsequently seen a couple more. It was not only a transformative transaction for another trusted adviser relationship but also a deal that has led to some cascading.”
It isn’t just about the marquee deals. UBS remains a go-to for repeat bread-and-butter bond deals. BBVA was one of seven European banks that asked UBS to lead three transactions during the year. Credit Agricole turned to it on five transactions. The breadth of UBS’s offering makes it particularly attractive – especially in the Additional Tier 1 market, which it dominates.
“In AT1, it isn’t just about the issuance,” said Papapanagiotou. “Every deal requires deep thinking around the capital – it’s a capital structuring trade, and our success there reflects the strength of the FIG team. In order to do that, you need to have people who really understand banking, who really understand the rules, who understand the European Central Bank. Every single issuer has used UBS.”
In equity capital markets, the bank has also led the way. As well as the Greek selldowns, it was a joint bookrunner on the €2.3bn IPO of asset manager CVC Capital Partners, on the US$320.6m Nasdaq listing of London-based clearing, brokerage and market-making firm Marex, and the US$215m IPO of insurer TWFG. It was active bookrunner on a US$342.9m primary block for Rithm Capital and two accelerated bookbuilding deals for XTB.
Next level
While UBS already had a solid business in the financial institutions space, its acquisition of Credit Suisse has taken its franchise to the next level – especially in the US and the insurance sector. The acquisition has increased its headcount by 40% in the Americas and expanded its footprint into new markets. The team now boasts 140 dedicated bankers globally.
“Before the acquisition, we had a leading platform in global FIG,” said Sullivan. “But it has provided a unique opportunity for really global banking – but also, specifically in FIG, to fill some coverage gaps where we were subscale and were able to plug and play new additions to the team that brought highly complementary clients, and helped round out some of our product capabilities.”
At a senior level, Sullivan said the acquisition has led to a 50% increase in headcount across the business – particularly in ECM and leveraged finance. It has also brought new coverage areas for the firm such as South Korea, where the bank led four block trades during the year. It has also added Credit Suisse’s prowess in the insurance space, an area where UBS was already strong.
“The acquisition was just really a way to advance some of our strategies, to address some of the places that we were subscale,” said Sullivan. Last year was the first full year as a combined team. “The feedback we got from clients was that it felt seamless, and it just felt transformative in terms of the breadth that we could bring and the knowledge that we had of their business.”
Asia strength
UBS has long been one of the strongest Western banks in Asia and the bank notched up its biggest deal of the year there, as sole financial adviser to Guotai Juan Securities in its US$31.2bn merger with Haitong Securities. It was one of several big mandates in China, where UBS has a joint venture on the ground. In Taiwan, it was also financial adviser to Taishin Financial Holding on its US$14.5bn merger with Shin Kong Financial Holding.
“It demonstrates the relationships that we have in China – but also the ability to do M&A,” said Petter Sternby, who heads the FIG business in Asia. “A lot of Chinese institutions are now starting to think: do we need to consolidate with interest rates having moved down so much in China? They're now feeling the pressure that European banks have. So suddenly this is really coming back.”
“Likewise, the Taishin and Shin Kong merger, which was the big domestic consolidation in Taiwan, is now also having spill-on effects. Everybody else is saying: 'Well, if Shin Kong thinks they're too small to survive, what do I do?' Those transactions have shown how the domestic setting is changing, which is interesting.”
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