10. Fuji Bank

The Fuji Bank, Limited was one of Japan's major banks during the post-World War II era. It combined with Dai-Ichi Kangyo Bank and the Industrial Bank of Japan in 2000 to form Mizuho Financial Group.

In 2002, Fuji Bank's corporate & investment banking division was transferred to Mizuho Corporate Bank and retail banking division to Mizuho Bank severally.

History

Foundation and Development

Fuji Bank traces its history as far back as the old Yasuda zaibatsu.

In 1864, twenty-one year old Zenjiro Yasuda migrated from Toyama to Edo, settling in Nihonbashi, where he opened a dry goods store, simply titled Yasuda-ya (lit. Yasuda & Company). After the Meiji Restoration in 1869, the company positively underwrote bonds for Japanese government, whose credit standing was low then, and restore large treasury surplus. The company also financed many public works such as railroads, harbor constructions, and so forth.

The company became incorporated in 1880, with a solid capital of 10 million yen accumulated in Yasuda-ya period, and changed its name to Yasuda Bank. In Taishō period, the Japanese banking community were thrown into financial difficulties because of World War I and 1923 Great Kanto earthquake. Yasuda Bank aided many minor, small or medium banks, 11 of which were merged into Yasuda Bank in 1923. This merger helped Yasuda Bank become the largest Japanese bank in terms of deposits.

After World War II

Following World War II, Yasuda zaibatsu were dissolved by the SCAP. On October 1, 1948, Yasuda Bank changed its name to The Fuji Bank, Limited. “Fuji” was named after Mount Fuji, which is a world-famous symbol of Japan, Fuji Bank aiming to be a world-famous Japanese bank. Fuji Bank formed Fuyo Group, one of the largest keiretsus, together with former Yasuda zaibatsu companies.

As the Japanese economy developed, Fuji Bank expanded its business, with leadership positions in syndicated lending, corporate banking, public money management, mortgages, and retail financial services.

Decline and Merger

In 1970s, Sumitomo Bank began to gain market share at Fuji Bank's expense in the retail banking. Fuji impatiently entered into rivalry with Sumitomo. In the later 1980s, however, the Japanese asset price bubble comes, and the Japanese banks granted increasingly risky loans. After the bubble's collapse, Fuji's progressive plan also backfired. Fuji lost a great deal of money, swamped by non-performing loan.

In order to find a way out of the difficulties, Fuji Bank attempted to diversify its services, establishing Fuji Securities and Fuji Trust & Banking Co. in 1994. These subsidiaries, however, didn't make so large a profit. Meanwhile, Fuji Bank had to restructure, lay off thousands of employees and sold its 52% stake in Heller Financial to GE Capital.

A very successful derivatives sub company, Fuji Capital Markets Corp was founded in New York in 1990 going on to become one of the lead players in the swaps market. FCMC went on to open an offices in London in 1992 and Hong Kong in 1994 which still exist as Mizuho Capital Markets Corp. FCMC was noted at the time for its relatively advanced technology, and was one of the first Japanese Banks to connect to the internet, registering the fcmc.com domain in 1993.

On November 24, 1997, Yamaichi, Fuji Bank's affiliated securities firm, announced it would cease operations and was declared bankrupt by the Tokyo District Court. In addition, Yasuda Trust & Banking, Fuji Bank's affiliated trust company, ran into problems with earnings and credit quality in 1999. Fuji Bank bought a controlling stake in Yasuda Trust, but Fuji couldn't reconstruct Yasuda for itself any longer .

Just in time, Dai-Ichi Kangyo Bank proposed to Fuji its becoming a “white knight” for Fuji. Dai-Ichi Kangyo held superior assets, but was left behind the current of the Japanese banks mergers. Fuji Bank weakened by its non-performing loan had no choice but to merge with Dai-Ichi Kangyo, along with the Industrial Bank of Japan, creating Mizuho Financial Group in 2000.

During the September 11, 2001 attacks on New York, Fuji Bank's United States offices were located at the impact zone of United Airlines Flight 175 in Tower 2. Fifteen Fuji Bank employees died in the attack.

9. ABN AMRO

ABN AMRO is one of the largest banks in Europe and has operations all over the world. With its history going back to 1824, ABN AMRO is the result of the merger in 1991 of Algemene Bank Nederland (ABN) and the Amsterdamsche-Rotterdamsche Bank (AMRO).

ABN AMRO Holding N.V. is the name of the holding company, which is listed on Euronext Amsterdam as part of the AEX index and the New York Stock Exchange, among other exchanges. Its main subsidiary is ABN AMRO Bank N.V.

On April 23, 2007, Barclays announced an agreement to buy ABN AMRO in an all-share €67 billion deal,[1] according to Barclays' John Varley "the largest merger ever in the global financial services and the biggest cross-border transaction". In the Barclays offer, ABN AMRO would also sell its US division, Chicago-based LaSalle Bank, to Bank of America in a €16 billion deal, giving the Bank of America, the largest bank of the US an increased presence in the Upper Midwest of the United States. Three other banks, Royal Bank of Scotland, Fortis and Banco Santander, acting as a consortium had put forth a competing offer of €74 billion for the bank.[2]

Build up to Acquisition

ABN AMRO had come to a crossroads in the beginning of 2007. The bank had still not come close to their own target of being in the top 5 of their peer group measured on ROE, a target that was set in 2000 by the then just appointed CEO Rijkman Groenink. From 2000 till 2006, the ABN AMRO stock price had remained more or less stagnant.

The financial results for the FY 06 added to concerns about the bank's future. Operating expenses increased at a greater rate than operating revenue reflecting greater operating results difficulties. The efficiency ratio deteriorated further to 69.9%. Non performing loans increased considerably year on year by 192%. Net profits were only boosted by sustained asset sales.

There had been some calls over the last couple of years for ABN AMRO to merge or to be acquired. On February 21, 2007, these calls became very concrete, when the TCI hedge fund asked the Chairman of the Supervisory Board to actively investigate a merger, acquisition or break up of ABN AMRO, stating that the current stock price didn't reflect the true value of the underlying assets. TCI asked the chairman to put their request on the agenda of the annual shareholders meeting of April 2007.

Events accelerated when on March 20, 2007, Barclays and ABN AMRO both confirmed they were in exclusive talks about a possible merger. On March 28, 2007, ABN AMRO published the agenda for the shareholding meeting of 2007. It included all items requested by TCI, but with the recommendation not to follow the request for a break up of the company.[3]

However, on April 13, 2007, Royal Bank of Scotland contacted ABN AMRO to propose a deal in which a consortium of banks including RBS, Fortis and Banco Santander Central Hispano will jointly bid for ABN AMRO and thereafter, break up the different divisions of the company. According to the proposed deal, RBS would takeover ABN's Chicago operations, LaSalle, and possibly ABN's wholesale operations while Banco Santander would take the Brazilian operations and Fortis, the Dutch operations.

On April 23, 2007, ABN AMRO and Barclays announced their proposed merger. The deal was valued at €67 billion. Part of the deal was the sell of the LaSalle Bank to Bank of America for €21 billion.[4]

On April 25, 2007 the RBS led consortium brought out their indicative offer worth €72 Billion, if ABN AMRO would abandon its sale of LaSalle Bank to Bank of America. During the Shareholders meeting the next day a majority of about 68% of the shareholders voted in favour of the break up as requested by TCI.[5]

The sale of LaSalle was seen by many as a way of blocking the RBS bid which hinges on further access to the US markets to expand on the success of the groups existing American brand, Citizens Bank. On May 3, 2007 the Dutch investor group VEB, with the support of shareholders representing up to 20 percent of ABN's shares, took its case to the Dutch commercial court in Amsterdam, asking for an injunction against the LaSalle sale. The court ruled on May 3, 2007, that the sale of LaSalle could not be viewed apart from the current merger talks of Barclays with ABN AMRO, and that the ABN AMRO shareholders should be able to approve other possible merger/acquisition candidates in a general shareholder meeting. However, In July 2007, the Dutch Supreme Court ruled that Bank of America's acquisition of LaSalle Bank Corporation could proceed.[1]

On July 23, 2007, Barclays raised its offer for ABN Amro to EUR 67.5bn after securing investments from the governments of China and Singapore, reports Bloomberg. The UK bank’s revised bid is worth EUR 35.73 a share, it said today, 4.3% more than its previous offer. The offer, which includes 37% cash, remains below the EUR 38.40-a-share offer made the week before by Royal Bank of Scotland Group Plc, Banco Santander SA, and Fortis. Their revised offer didn´t include an offer for La Salle bank, since ABN AMRO could proceed with the sale of that subsidiary to Banc of America. RBS would now settle for ABN´s investment banking division and its Asian Network. China Development Bank will invest EUR 2.2bn in Barclays, and a further EUR 7.6bn if the bid for ABN Amro succeeds. Singapore's Temasek Holdings Pte, the city-state's investment arm, will invest EUR 1.4bn initially, and an additional EUR 2.2bn upon the purchase of ABN Amro. The RBS offer is still financially the better of the two but the long term growth potential of the Chinese backed Barclays offer may yield more for investors in the future. The final outcome will be decided in the coming months.

Business units

The business units of ABN AMRO are currently organised by regions:

* The Netherlands
* Europe (excluding the Netherlands)
* North America
* Latin America
* Asia Pacific

Some of the specialty products and clients of ABN AMRO Bank have a global presence:

* Private Clients
* Global Clients
* Global Markets
* Transaction Banking
* Consumer Banking
* Asset Management

Further, the support functions of ABN AMRO are divided into two global business units:

* Group Functions
* Services

ABN AMRO ranks eighth in Europe and 13th in the world based on total assets, with more than 4,500 branches in 53 countries, a staff of over 110,000 full-time equivalents and total assets of €999 billion (as of September 30, 2006).

The bank has developed a strategy of having three home markets: The Netherlands, the United States, and Brazil. The U.S. commercial banking operations of ABN AMRO consist of LaSalle Bank in Chicago, Illinois and LaSalle Bank Midwest in Detroit, Michigan which operate under the name LaSalle Bank Corporation. LaSalle Bank Midwest is the former Standard Federal Bank, which changed its name on September 12, 2005. ABN AMRO also used to operate ABN AMRO Mortgage Group, one of the leading mortgage servicing companies in the US, but in January 2007 it sold this business to Citigroup.[6] In Brazil, ABN AMRO's subsidiary is Banco Real. Banco Real recently completed an acquisition of Sudameris, a peer bank in the Brazilian market.

In 2005 ABN AMRO acquired Banca Antonveneta of Italy, this effectively gave it a fourth home market. Antonveneta had been a cooperation partner for some years and has a similar client base to ABN AMRO.

In March 2007 ABN AMRO announced that it was bidding US$227mn for a 93.4% stake in Pakistan's Prime Bank, and would tender for the remainder. Prime Bank is Pakistan's 19th largest bank and has 52 billion rupees worth of assets and 41 billion rupees in deposits. It has a network of 69 branches in 25 Pakistani cities. The acquisition, when combined with ABN AMRO's existing operations, would make ABN AMRO the second largest foreign bank in Pakistan (after the Standard Chartered Bank, and put it among the 10 largest banks in the country.

Trivia

* ABN AMRO sponsors AFC Ajax.
* In 2005, ABN AMRO entered into a major IT outsourcing contract involving five vendors. This was notable for two reasons: It involved several vendors competing with each other, deviating from the usual exclusivity arrangements prevalent in most outsourcing contracts. Also, it was the largest contract that Indian firms Tata Consultancy Services and Infosys had signed with any Western company at the time.
* ABN AMRO sponsors a number of racing sailboats including two entries in the Volvo Ocean Race. On May 18, 2006 one of the crew Hans Horrevoets, 32, died after being swept overboard in high seas. Although the boat turned around and picked him up he never regained consciousness, and died.
* The ABN AMRO-sponsored "ABN AMRO ONE" won the Volvo Ocean Race 2006
* ABN AMRO is the founding partner of NEWS, the platform for Dutch students abroad.

8. The Sakura Bank

The Sakura Bank, Limited was a Japanese bank based in Tokyo and Kobe.

It merged with Sumitomo Bank on April 1, 2001, forming the Sumitomo Mitsui Banking Corporation.

7. Dai-Ichi Kangyo Bank

The Dai-Ichi Kangyo Bank, Limited, abbreviated as DKB (第一勧銀, Dai'ichi Kangin?), was one of the largest banks in the world during the latter half of the 20th century. It combined with Fuji Bank and the Industrial Bank of Japan in 2000 to form Mizuho Financial Group.

In 2002, DKB's corporate & investment banking division was transferred to Mizuho Corporate Bank and retail banking division to Mizuho Bank severally.

History

Dai-Ichi Bank

The Dai-Ichi Bank, Ltd., originally Dai-Ichi Kokuritsu Bank (lit. First National Bank) was literally the first bank and the first joint stock company ever to be established in Japan. Established by an industrialist Shibusawa Eiichi in 1873, it was originally empowered to issue banknotes, until the Bank of Japan assumed this function in 1883. Subsequently, it became a purely commercial bank based in Tokyo.

In 1884 Dai-Ichi Bank made a deal with the Joseon Dynasty to make Dai-Ichi Bank Korea Branch the monopoly agent of tariff management for Choson. In subsequent years Dai-Ichi began issuing banknotes called “Dai-Ichi Bank Token” in Korea, and became the central bank of Korea virtually. Following the Japan-Korea Protectorate Treaty of 1904, however, Dai-Ichi was deprived of its central banking in Korea by Japanese government, because the government official made an issue of Dai-ichi, mere commercial bank, being the central bank.

In 1943 Dai-Ichi Bank and Mitsui Bank, a Mitsui zaibatsu company, merged to form Teikoku Bank (lit. Imperial Bank of Japan). Teikoku Bank was the largest bank in Japan in terms of assets when it was inaugurated. Teikoku Bank, however, couldn't expand its business freely owing to Japan being at World War II. Furthermore, former Dai-Ichi employees and Mitsui employees didn't get along well together because of the difference of the two banks' cororate culture. As a result, worsening its business performance, Teikoku Bank were divided into two banks, the new Dai-Ichi Bank and the new Teikoku Bank in 1948.

The new Teikoku Bank was renamed Mitsui Bank in 1954, merged with Taiyo Kobe Bank to form Sakura Bank in 1990. Sakura Bank merged with The Sumitomo Bank in 2001 and is now Sumitomo Mitsui Banking Corporation.

Nippon Kangyo Bank

The Nippon Kangyo Bank, Ltd. was founded in 1897 as a governmental institution providing long-term light industrial and agricultural loans under the Nippon Kangyo Bank Act of 1896. The Industrial Bank of Japan was also founded in 1902, providing long-term heavy industrial loans. Nippon Kangyo Bank had offices only in Tokyo and Osaka, leaving nationwide local services in the charge of its subsidiary Noko Bank (lit. Agricultural and Industrial Bank). Noko Banks were established in each prefecture, except for Hokkaidō (see Hokkaido Takushoku Bank).

In order to provide long-term loans, the bank's source of funds was not deposits but debt securities. The bank was also authorized to issue premium-bearing debentures. The bank financed, however, landlords and partnerships, and there were little money to go around individual farmers. In 1911 the Nippon Kangyo Bank act was amended so that Nippon Kangyo Bank could handle deposit accounts and offer short-term finance. In the latter of Taishō period the bank embarked on real estate investments, while Noko Banks were absorbed into Nippon Kangyo Bank one after another. The bank dramatically increased its scale of operations.

During World War II, Nippon Kangyo Bank was the lead management underwriter of war bonds for Japanese government. In reality, the war bond by Nippon Kangyo Bank was a lottery rather than a bond. Today's Japanese lottery Takarakuji has its origin in this war bond.

After World War II, Nippon Kangyo Bank was privatized and became a commercial bank following the Nippon Kangyo Bank Repeal Act of 1950. The long-term banking division of Nippon Kangyo Bank was transferred to newly-established Long-Term Credit Bank of Japan. The bank became popular among the public with the new rose logo, mascot named Nobara-chan (lit. Rose-chan) and advertising slogan “Rose's NKB” (「ばらの勧銀」, Bara no Kangin?).

Merger

In 1971 Dai-ichi Bank and Nippon Kangyo Bank merged to form the Dai-Ichi Kangyo Bank, Limited (“DKB”). DKB surpassed longtime leader the Fuji Bank as the Japanese largest bank measured by assets and deposit market share. DKB formed DKB Group (also known as Dai-Ichi Kangyo Group), the largest Japanese keiretsu in terms of the number of associated companies, and became the central bank of DKB Group.

Taking over Nippon Kangyo and Noko's operation, DKB was the sole trustee of Takarakuji lottery and was the only bank to have branches in every prefecture in Japan.

DKB executives worried about recurrence of the problem in Teikoku Bank period that former two banks' employees were on bad terms each other. Therefore they were particular about “a merger of equals”. DKB's board of directors, for example, was always composed half-and-half of former Dai-Ichi members and former NKB members. The board of directors installed the former two banks members alternately as the next chairman and president.

These practices, however, backfired, but only caused difficulty among the employees that was similar to Teikoku's case. Irrational personnel affairs prevented DKB from growing profitable revenue. Although DKB had higher assets than any other Japanese banks, its capability was inferior to that of high-ranking banks such as Fuji, Sumitomo, Sanwa or Mitsubishi.

Scandal

In the later 1980s, the Japanese asset price bubble comes, and Japanese banks granted increasingly risky loans, not excepting DKB. What was worse, DKB financed not only risky companies but also Yakuza, crime organizations, in order to invest in capital resources much more easily than its competitors. Above all, loans to sōkaiya amounted to 30 billion JPY.

After the bubble's collapse, the bad loans were judged to be poor value for money. A raid by Tokyo prosecutors in 1997 impeaching of the loans to sōkaiya laid DKB open to public criticism. Kuniji Miyazaki (宮崎 邦次, Miyazaki Kuniji?, 1930 - 1997), former president and the then chairman of DKB, who faced severe pressure over a series of alleged misdeeds, committed suicide by hanging himself at his home.

DKB combined with Fuji Bank and the Industrial Bank of Japan in 2000 to form Mizuho Financial Group. In 2002, DKB's corporate & investment banking division was transferred to Mizuho Corporate Bank and retail banking division to Mizuho Bank severally.

6. Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Banking Corporation is a Japanese bank based in Tokyo, Japan. It is a member of the Sumitomo Group and Mitsui Group.

History

* July, 1876 Mitsui Bank is established as a private bank. (Capital stock: ¥2 million)
* June, 1893 Mitsui Bank reorganizes itself as an unlimited partnership.
* November, 1895 Sumitomo Bank is established as a private enterprise.
* November, 1909 Mitsui Bank reorganizes into a limited company. (Capital stock: ¥20 million)
* March, 1912 Sumitomo Bank reorganizes into a limited company. (Capital stock: ¥15 million)
* December, 1936 The seven major banks of Hyogo Prefecture are merged into Kobe Bank.
* December, 1940 Dai Nihon Mujin is established.
* April, 1943 Mitsui Bank merges with Dai-Ichi Bank to form Teikoku Bank.
* August, 1944 Teikoku Bank merges with Jugo Bank.
* July, 1945 Sumitomo Bank merges with Hannan and Ikeda Jitsugyo Banks.

Kobe Bank begins trust business.

* April, 1948 Dai Nihon Mujin is renamed Nihon Mujin.
* October, 1948 Teikoku Bank is re-established by Dai-Ichi Bank's separation.

Sumitomo Bank is renamed Osaka Bank.

* May, 1949 Teikoku Bank's shares become listed on the Tokyo and Osaka stock exchanges.

Osaka Bank's shares become listed on the Tokyo and Osaka stock exchanges. (Listed on Sapporo Securities Exchange in April 1950 and Nagoya Stock Exchange in March 1989 thereafter.)

* October, 1951 Nihon Mujin is renamed Nihon Sogo Bank.
* December, 1952 Osaka Bank's name is restored to Sumitomo Bank.
* January, 1954 Teikoku Bank's name is restored to Mitsui Bank.
* April, 1960 Kobe Bank's trust division is transferred to Toyo Trust and Banking.
* April, 1965 Sumitomo Bank merges with Kawachi Bank.
* April, 1968 Mitsui Bank merges with Toto Bank.
* December, 1968 Nihon Sogo Bank converts to an ordinary bank and is renamed Taiyo Bank.
* October, 1973 Kobe Bank and Taiyo Bank merge to form Taiyo Kobe Bank.
* October, 1986 Sumitomo Bank merges with Heiwa Sogo Bank.
* January, 1989 Sumitomo Bank's shares become listed on London Stock Exchange.
* April, 1990 Mitsui Bank and Taiyo Kobe Bank merge to form Mitsui Taiyo Kobe Bank.
* April, 1992 Mitsui Taiyo Kobe Bank is renamed Sakura Bank.
* June, 1996 The Wakashio Bank, Ltd. is established, and starts operation in September.
* April, 2001 Sakura Bank and Sumitomo Bank merge to form Sumitomo Mitsui Banking Corporation. (Capital stock: ¥1,276,7 billion)
* December, 2002 Sumitomo Mitsui Banking Corporation (SMBC) establishes a holding company named Sumitomo Mitsui Financial Group, Inc. (SMFG) through a share transfer, and SMBC then becomes a wholly-owned subsidiary of SMFG.

March, 2003 SMBC merges with Wakashio Bank (merged bank's name : Sumitomo Mitsui Banking Corporation )

Capitalization

As of the year 2006, SMBC was the third largest bank in Japan and the eighth largest bank in the world.

Shareholders

Sumitomo Mitsui Financial Group, Inc. (100%)

5. Bank of America

Bank of America is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world.[3][4] Bank of America is the largest American company (by market capitalization) that is not part of the Dow Jones Industrial Average. On July 19, 2006, Bank of America reported second quarter 2006 net income of $5.48 billion,[5] surpassing that of Citigroup for the first time.

Corporate history

Before 1993, the Bank of America that exists today was known as NationsBank, based in Charlotte, NC. In 1998, NationsBank merged with San Francisco-based BankAmerica and assumed the Bank of America name.

Pre-1998 history

Bank of Italy

The roots of the pre-1998 Bank of America lie in the American Bank of Italy, founded in San Francisco by Amadeo Giannini in 1904. When the 1906 San Francisco earthquake struck, Giannini was able to get all of the deposits out of the bank building and away from the fires. Thus, unlike many other banks, he retained the confidence of the depositors and also had money to loan to those struck by the disaster.

In the late 1920s, Giannini approached Orra E. Monnette, President and founder of the Los Angeles based Bank of America, Los Angeles about a potential merger between the two entities. The Los Angeles based bank had exhibited strong growth throughout the 1920s, due in part to its success in developing an advanced bank branching system. The merger of the two institutions was completed in early 1929 and took the name Bank of America. The combined company was headed by Giannini with Monnette serving as co-Chair.

While the names of many nationally chartered banks end with the initials 'N.A.' (National Association), Giannini picked a unique ending, National Trust and Savings Association, or 'NT&SA', because he wanted the name to highlight the different functions of the bank. Bank of America was the only NT&SA in the country. Thanks to good management, but also to aggressive development of the branch banking concept, the bank was soon the largest in California.

Growth in California

Giannini also sought to build a national bank, expanding into most of the western states as well as into the insurance industry, under the aegis of his holding company, Transamerica Corporation. Bank of America NT&SA also had banking relationships in international financial markets. Largely out of fear that Giannini would succeed in his efforts to create a nationwide bank, federal legislation prohibited banks from accepting deposits in states where they were not headquartered. This led to the creation of the bank holding company which could own a separate bank in each state.

The passage of the Bank Holding Company Act of 1956, prohibited banks from owning non-banking subsidiaries such as insurance companies. Bank of America and Transamerica were separated, with the latter company continuing in the insurance business. However, federal banking regulators prohibited Bank of America's interstate banking activity, and Bank of America's domestic banks outside of California were forced into a separate company that eventually became First Interstate Bancorp, which was acquired by Wells Fargo and Company in 1996. It was not until the 1980s with a change in federal banking legislation and regulation that Bank of America was again able to expand its domestic consumer banking activity outside of California.

California was the nation's fastest growing state during the post-World War II boom, with the highest use of checking accounts (partially driven by many soldiers being paid via bank accounts during World War II), resulting in Bank of America being swamped by checks. By 1949 , the branches had to close at 2:00pm in order to process the bookkeeping by 5:00 p.m. To cope with the transaction volume, the bank invested heavily in information technology and is generally credited, together with General Electric and SRI International, with inventing modern centralized bank operations, along with a number of financial transaction processing technologies such as automatic check processing, account numbers, and Magnetic Ink Character Recognition. Because of the efficiency of these technologies, the bank had significantly lower administrative costs than other banks and was able to expand until it became the world's largest bank in the early 1970s.

These technologies also enabled credit cards to be linked directly to individual bank accounts. In 1958, the bank invented the bank credit card, the BankAmericard, which changed its name to VISA in 1977. A consortium of other California banks came up with Master Charge (now MasterCard) in order to compete with BankAmericard.

Expansion outside of California

Following passage of the Bank Holding Company Act of 1967, BankAmerica Corporation was established for the purpose of owning Bank of America and its subsidiaries.

BankAmerica expanded outside California in 1983 with its acquisition of Seafirst Corporation of Seattle, Washington, and its wholly owned banking subsidiary, Seattle-First National Bank. Seafirst was at risk of seizure by the federal government after becoming insolvent due to a series of bad loans to the oil industry. BankAmerica continued to operate its new subsidiary as Seafirst rather than Bank of America until the 1998 merger with NationsBank.

BankAmerica was dealt huge losses in 1986 and 1987 due to the placement of a series of bad loans in the Third World, particularly in Latin America. The company fired its CEO, Sam Armacost, although Armacost blamed the problems on his predecessor, A.W. (Tom) Clausen, who was then appointed to replace Armacost. The losses resulted in a huge decline of BankAmerica stock, making it vulnerable to a hostile takeover. First Interstate Bancorp of Los Angeles (which had originated from banks once owned by BankAmerica), launched such a bid in the fall of 1986, although BankAmerica rebuffed it, mostly by selling its FinanceAmerica subsidiary to Chrysler, and by selling the brokerage firm Charles Schwab and Co. back to Mr. Schwab. On the day of the 1987 stock market crash, BankAmerica was trading at $8 per share, although by 1992 it had rebounded mightily to become one of the biggest gainers of that half-decade. The selling of the corporate headquarters building in downtown San Francisco to raise capital was a symbolic blow to the bank.[citation needed]

BankAmerica's next big acquisition came in 1992. The company acquired its California rival, Security Pacific Corporation and its subsidiary Security Pacific National Bank in California and other banks in Arizona, Idaho, Oregon and Washington (which Security Pacific had acquired in a series of acquisitions in the late 1980s). This was, at the time, the biggest bank acquisition in history. Federal regulators nevertheless forced the sale of Security Pacific's Washington subsidiary, Rainier Bank, because the combination of Seafirst and Rainier would have given BankAmerica too large a share of the market in that state. Later that year, BankAmerica expanded into Nevada by acquiring Valley Bank of Nevada.

In 1994 , BankAmerica acquired the Continental Illinois National Bank and Trust Co. of Chicago, which had become federally owned as part of the same oil industry debacle that had brought down Seafirst. At the time, no bank had the resources to bail out Continental, so the federal government operated the bank for nearly a decade. Illinois at that time regulated branch banking extremely heavily, so Bank of America Illinois was a single-unit bank until the 21st century. BankAmerica moved its national lending department to Chicago in an effort to establish a financial beachhead in the region.

These mergers helped BankAmerica Corporation once again become the largest U.S. bank holding company in terms of deposits, but the company fell to second place in 1997 behind fast-growing NationsBank Corporation, and to third in 1998 behind North Carolina's First Union Corp. In 1998, BankAmerica and NationsBank executed a merger-of-equals and changed the headquarters to Charlotte, North Carolina.

Merger of NationsBank and BankAmerica

In 1997, BankAmerica lent D.E. Shaw & Co., a large hedge fund, $1.4bn so that the hedge fund would run various businesses for the bank. However, D.E. Shaw suffered significant loss after 1998 Russia bond default. BankAmerica was later acquired by NationsBank that year.

The purchase of BankAmerica Corp. by the NationsBank Corporation was the largest bank acquisition in history at that time. While the deal was technically a purchase of BankAmerica Corporation by NationsBank, the deal was structured as merger with NationsBank renamed to Bank of America Corporation, and Bank of America NT&SA, changing its name to Bank of America, N.A. as the remaining legal bank entity. The bank still operates under Federal Charter 13044 which was granted to Giannini's Bank of Italy on March 1, 1927. However, SEC filings before 1998 are listed under NationsBank, not BankAmerica.

Following the US$64.8 billion acquisition of BankAmerica by NationsBank, the resulting Bank of America had combined assets of US$570 billion, as well as 4,800 branches in 22 states. Despite the mammoth size of the two companies, federal regulators insisted only upon the divestiture of 13 branches in New Mexico, in towns that would be left with only a single bank following the combination. This is because branch divestitures are only required if the combined company will have a larger than 25 percent FDIC deposit market share in a particular state or 10 percent deposit market share overall.

History since 1998

In 2001 , Bank of America CEO and chairman Hugh McColl stepped down and named Ken Lewis as his successor. Lewis's greater focus on financial discipline and efficiency contrasted greatly with the expansionary mergers and acquisition strategy of his predecessor.

Acquisition of National Processing Company

In 2004 , Bank of America purchased Louisville, Kentucky-based National Processing Company for $1.4 billion from National City Corp. The renamed company—BA Merchant Services—has been processing one in every five VISA and MasterCard transactions. The company also has been providing financial solutions for travel and healthcare companies. BA Merchant Services has been headquartered in Louisville.

FleetBoston Financial merger

Also in 2004, Bank of America acquired Boston, Massachusetts-based FleetBoston Financial for $47 billion in an all-stock deal to solidify Bank of America's position as the bank with the largest FDIC-rated deposit market share in the United States with $513 billion in deposits, well ahead of the number two bank holding company, newly-merged JPMorgan Chase-Bank One with $353 billion in deposits and number three Wells Fargo & Co. with $228 billion (as of 30 June 2003). This acquisition gave Bank of America access to the northeastern market.

Purchase of MBNA

On 30 June 2005, Bank of America announced it would purchase credit card giant MBNA for $35 billion in cash and stock. The Federal Reserve Board gave final approval to the merger on 15 December 2005, and the merger closed on 1 January 2006. The acquisition of MBNA provided Bank of America a leading credit card issuer at home and abroad. The combined Bank of America Card Services organization, FIA Card Services—including the former MBNA—will have more than 40 million U.S. accounts and nearly $140 billion in outstanding balances.

Divestiture of Brazil operations

In May 2006, the Bank of America and Banco Itau (Investimentos Ita S.A.) entered into an acquisition agreement through which the Banco agreed to acquire BankBoston's operations in Brazil. BankBoston's Brazil includes asset management, private banking, a credit card portfolio, and small, middle-market, and large corporate segments. It has 66 branches and 203,000 clients in Brazil. BankBoston in Chile has 44 branches and 58,000 clients and in Uruguay it has 15 branches. In addition, there is also a credit card Company, OCA, in Uruguay, which has 23 branches. BankBoston N.A. in Uruguay, together with OCA, jointly serve 372,000 clients. After the merger The BankBoston name and trademarks were not part of the transaction and, as part of the sale agreement, cannot be used by Bank of America. That, in practical terms, deemed the definite extinction of the BankBoston brand. Itaú also received exclusive rights to purchase BankBoston's operations in Chile and Uruguay. In return, Bank of America has taken about a 6% stake in Itaú. Banco Boston do Brazil had been founded in 1947 . With the purchase, the BankBoston name will disappear from Brazil as Bank of America has retained the rights to the name and in which they can't use the name due to the merger agreements.

Purchase of US Trust

On 20 November 2006, Bank of America announced the purchase of The United States Trust Company for $3.3 Billion, from the Charles Schwab Corporation. US Trust had about $100 Billion of AUM and over 150 years of experience. The deal closed 1 July 2007.

Plans to acquire LaSalle Bank

On April 23, 2007, Bank of America announced plans to acquire LaSalle Bank Corporation from ABN AMRO for $21 billion.[7] However, on May 3, 2007 a Dutch court blocked the sale until it can be approved by shareholders of ABN AMRO as part of a larger merger discussion involving Barclays Bank and Royal Bank of Scotland(RBS). RBS has made a competing $24.5 billion bid for LaSalle Bank.[8] Both ABN AMRO and Bank of America appealed to the decision of the Dutch court.

On June 26, the Advocate-General advised to the highest Dutch court to destroy the regulation which blocked the sale, saying approval of the shareholders isn't necessary. On Friday, July 13, 2007, the Dutch Supreme Court overturned the lower-court ruling that ABN could not sale LaSalle Bank without first obtaining shareholder approval.[9] The sale is expected to close in late 2007 or early 2008.[10] The LaSalle acquisition would put Bank of America just above the 10% mandated limit imposed by the Federal government of the total bank deposits in the country.[11] The deal will result in an increase in Bank of America's presence in Illinois, Michigan, and Indiana by 411 branches, 17,000 commercial bank clients, 1.4 million retail customers and 1,500 ATMs. Bank of America is also expected to thereby become the largest bank in the Chicago market with 197 offices and 14% of the deposit share, passing up JPMorgan Chase.

Bank of America today

Bank of America generates 90% of its revenues in its domestic market and continues to buy businesses in the US. The core of Bank of America’s strategy is to be the number one bank in its domestic market. It has achieved this through key acquisitions. [12] As a result of its mergers and acquisitions, Bank of America is now the largest issuer of credit, debit and prepaid cards in the world based on total purchase volume, as well as the largest consumer and small business bank in the United States.

Bank of America today comprises three main divisions.

Consumer

Global Consumer and Small Business Banking is the largest division in the company, and deals primarily with consumer banking and credit card issuance. The acquisition of FleetBoston and MBNA significantly expanded its size and range of services, resulting in about 51% of the company's total revenue in 2005. It competes directly with the retail banking divisions of Citigroup and JPMorgan Chase. The GC&SBB organization includes over 5,700 retail branches and over 17,000 ATMs across the United States.

Bank of America is a member of the Global ATM Alliance, a joint venture of several major international banks that allows customers of the banks to use their ATM card or check card at another bank within the Global ATM Alliance with no fees when traveling internationally. Other participating banks are Barclays (United Kingdom), BNP Paribas (France), China Construction Bank (China), Deutsche Bank (Germany), Santander Serfin (Mexico), Scotiabank (Canada) and Westpac (Australia and New Zealand).[13]

Corporate

Global Corporate and Investment Banking, also known as Banc of America Securities, provides mergers and acquisitions advisory, underwriting, as well as trading in fixed income and equities markets. Its strongest groups include Leveraged Finance, Syndicated Loans, and Mortgage Backed Securities. It also has one of the largest research teams on Wall Street.

Investment Management

Global Wealth and Investment Management manages assets of institutions and individuals. It is among the 10 largest U.S. wealth managers (ranked by private banking assets under management in accounts of $1 million or more as of June 30, 2005). In July 2006, Chairman Ken Lewis announced that GWIM's total assets under management exceeded $500,000,000,000. GWIM has five primary lines of business: Premier Banking & Investments (including Banc of America Investment Services, Inc.), The Private Bank, Family Wealth Advisors, Columbia Management Group, and Banc of America Specialist.

Bank of America has recently spent $675 million building its US investment banking business and are looking to become one of the top five investment banks worldwide. "Bank of America already has excellent relationships with the corporate and financial institutions world. Its clients include 98% of the Fortune 500 companies in the US and 79% of the Global Fortune 500. These relationships, as well as a balance sheet that most banks would kill for, are the foundations for a lofty ambition." [14]

Bank of America is currently constructing a massive new headquarters for its New York City operations. The skyscaper will be located on 42nd Street and Avenue of the Americas, at Bryant Park, and will feature state of the art, environmentally-friendly technology throughout its 1.2 million square feet (111,484 m²) of office space. The building will be the headquarters for the company's investment banking division, and will also host most of Bank of America's New York-based staff.

Social responsibility

In the mid 2000s, Bank of America began accentuating its charitable side. In addition to its new eco-friendly office tower in Manhattan, Bank of America has pledged to spend billions on commercial lending and investment banking for projects that it considers "green." The corporation, which already supplied all of its employees with cash incentives to buy hybrid vehicles, is also helping its customers be eco-friendly by rolling out a new credit card program in 2007 that would donate money to helping the environment, as well as providing mortgage loan breaks for customers whose homes qualified as energy efficient.[15]

In addition to trying to help the environment, Bank of America has also donated money to help health centers in Massachusetts[16] and made donations to help homeless shelters in Miami.[17]

Controversy and criticism

Bank of America has been involved in a number of controversial issues. Many of its policies, such as "biggest check first" check clearing, overdraft fee policies, and early account closures, have become heavily criticized. Bank of America controversies details some of the more notable and public issues. Local branch offices of Bank of America have been frequently accused of being unresponsive to customers.

International operations

In 2005, Bank of America acquired a 9% stake in China Construction Bank, China's second largest bank, for $3 billion.^[18] It represented the company's largest foray into China's growing banking sector. Bank of America currently has offices in Hong Kong, Shanghai, and Guangzhou and is looking to greatly expand its Chinese business as a result of this deal. Bank of America has also invested in opening new branches in India, particularly Mumbai.

Bank of America operated under the name BankBoston in many other Latin American countries, including Brazil. In 2006, Bank of America sold all BankBoston's operations to Brazilian bank Banco Itaú, in exchange for Itaú shares. The BankBoston name and trademarks were not part of the transaction and, as part of the sale agreement, cannot be used by Bank of America. That, in practical terms, deemed the definite extinction of the BankBoston brand.

Bank of America's Global Corporate and Investment Banking spans the Globe with divisions in United States, Europe and Asia. The U.S. headquarters are located in New York, European headquarters are based in London and Asia's headquarters are split between Singapore & Hong Kong.

Bank of America corporate buildings

* Bank of America Fifth Avenue Plaza in Seattle
* Bank of America Tower in St Petersburg, FL
* Bank of America Tower in Providence, RI
* Bank of America Tower in New York City (under construction)
* Bank of America Tower in Jacksonville, FL
* Bank of America Tower in Albuquerque, NM
* Bank of America Tower in Hong Kong
* Bank of America Tower in Tampa, FL
* Bank of America Plaza in St Louis
* Bank of America Tower in Richmond, VA
* Bank of America Tower in Miami, FL
* Bank of America Tower in Lubbock, TX
* Bank of America Tower in Los Angeles
* Bank of America Tower in Boca Raton
* Bank of America Center in Houston
* Bank of America Center in San Francisco
* Bank of America Banking Center in Washington, DC (across from the White House)
* Bank of America Plaza in Atlanta, GA (the tallest building outside of NYC and Chicago)
* Bank of America Plaza in Charlotte, NC which is adjacent to the Bank of America Corporate Center
* Bank of America Plaza in Dallas, TX
* Bank of America Building in Chicago, Illinois

Diversity

Bank of America was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine. Furthermore, Amy Woods Brinkley, the Bank's Global Risk Executive, and Barbara Desoer, the Bank's Global Technology and Service Fulfillment Executive, were named two of the most powerful women in Banking by US Banker magazine, and were among the "top 50 most powerful women in business," as ranked by Fortune.

Major sponsorships

Bank of America owns the naming rights of several venues in the sports world.

* Bank of America Stadium, Charlotte, North Carolina—Carolina Panthers, NFL.
* Bank of America Arena, Seattle, Washington—University of Washington men's and women's basketball
* Bank of America 500, a NASCAR race that is hosted annually at Lowe's Motor Speedway, Concord, North Carolina

Official bank of:

* United States Olympic Team
* NASCAR
* Major League Baseball
* Minor League Baseball
* Little League
* Carolina Panthers, a NFL team.
* New England Patriots, a NFL team
* Boston Red Sox, a MLB team.
* New York Yankees, a MLB team.
* San Francisco Giants, a MLB team.
* St. Louis Cardinals, a MLB team.
* New England Revolution, a MLS team.

Ad campaigns that run during the Little League World Series and the World Series use the slogan "The Official Bank of Baseball."

4. UBS AG

UBS AG is a diversified global financial services company, headquartered in Basel and Zürich, Switzerland. It is the world's largest manager of private wealth assets, "the world's biggest manager of other people's money" and is also the second-largest bank in Europe, by both market capitalisation and profitability. UBS has a major presence in the U.S., with its American headquarters located in Manhattan (Investment Banking); Weehawken, New Jersey (Private Wealth); and Stamford, Connecticut (Capital Markets). UBS's retail offices are located throughout the United States, and in over 50 other countries. UBS is an initialism which originated from a predecessor firm, the Union Bank of Switzerland, however UBS ceased to be considered a representational acronym after its 1998 merger with Swiss Bank Corporation.[2]

UBS's global business groups are Private Banking, Investment Banking, and Asset Management. Additionally, UBS is one of the leading providers of retail banking and commercial banking services in Switzerland. Overall invested assets are 2.766 trillion Swiss francs (CHF), shareholders' equity is 47.850 billion CHF and market capitalization is 150.663 billion CHF.

The AG in the company's name means Aktiengesellschaft, which is the equivalent to a shareholder-based corporation in the USA.

In some ways, UBS has evolved on a similar path to its cross-town rival Credit Suisse. Both are Swiss commercial and retail banks which bought major US investment banks (and in the case of UBS, a leading retail stock broker, PaineWebber).

History

UBS has its roots as a Swiss Bank, originating in 1747, when its first branch was established in the Swiss region of Valposchiavo. However, the three core components of the company date back to the second half of the nineteenth century. Union Bank of Switzerland, Swiss Bank Corporation, and Paine Webber or their antecedents, were all founded in the 1860s and 1870s.

Modern UBS was formed through a merger of the Union Bank of Switzerland and the Swiss Bank Corporation in June 1998. SBC had previously built a global investment banking business through its acquisitions of Dillon Read in New York and S.G. Warburg in London. The first chairman of the merged bank had to step down in October 1998 due to the Long-Term Capital Management crisis, which affected the Union Bank of Switzerland. In 2000, UBS acquired PaineWebber Group Inc. to become the world's largest wealth management firm for private clients. Invested assets in all wealth management businesses, including the U.S., total CHF 2.766 trillion.

On June 9th, 2003, all UBS business groups rebranded under the UBS name. UBS Paine Webber, UBS Warburg, UBS Asset Management, and others became simply "UBS". As a result of the rebranding, UBS took a $1B writedown for the loss of goodwill associated with the retirement of the Paine Webber brand. UBS is no longer an acronym but is the company's brand, like 3M. Its logo of three keys stands for confidence, security, and discretion.[3]

UBS is present in all major financial centers worldwide, with offices in 50 countries. According to the UBS website, the bank had 80,060 employees on March 31, 2007. The 2006 Q1 report breaks these Financial Business permanent staff down by region as: 25,645 in Switzerland, 27,356 in the Americas, 11,341 in Europe, the Middle East and Africa (not including Switzerland), and 5,868 in Asia and Australasia.

Management

Marcel Ospel is the Chairman of the Board of Directors. The Group Executive Board is the executive body of the company.[4] Its members are:

* Executive Vice Chairman: Marco Suter
* Group CEO: Marcel Rohner
* Chairman and CEO Global Wealth Management & Business Banking: Raoul Weil
* Chairman and CEO Global Asset Management: John A. Fraser
* Chairman and CEO Investment Bank: Huw Jenkins
* Group General Counsel: Peter Kurer
* Group Chief Financial Officer: Clive Standish
* Group Chief Risk Officer: Walter Stuerzinger
* Chairman & CEO Americas: Robert Wolf
* Chairman and CEO Asia Pacific: Rory Tapner

Businesses

UBS is organized in four business groups: Global Wealth Management & Business Banking, Investment Bank, Global Asset Management, and Corporate Center.

Dillon Read Capital Management

In June 2006, UBS announced the launch of Dillon Read Capital Management, an alternative investment management business, in an effort to capture new business and retain staff that UBS was losing to other hedge funds [5]. John Costas, then CEO of UBS Investment Bank, left the position to lead up the new DRCM business. UBS guaranteed a $1B bonus pool over the first three years for the 120 employees to discourage traders from leaving [6].

On May 3, 2007, UBS announced the closure of Dillon Read Capital Management due to "operational complexities." DRCM ran up a loss of $124M in the first quarter.

UBS Polybahn

One of the more unusual businesses operated by UBS AG is the UBS Polybahn, a funicular railway in Zürich, Switzerland. The group's ownership of this line dates back to 1976, when the Union Bank of Switzerland rescued the then failing funicular company.

Competition

Main competitors are Rothschild, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Lehman Brothers, Morgan Stanley, and Merrill Lynch among others.

Workplace

Diversity

UBS was named one of the 100 Best Companies for Working Mothers living in the U.S. in 2006 for the fourth consecutive year[8] by U.S. based Working Mothers magazine. It is a member of the Stonewall Diversity Champions scheme and has active Gay and Lesbian, ethnic minority, and women's networking groups.

Records

The UBS trading floor in Stamford, Connecticut holds the Guinness World Record as the largest securities trading floor in the world. The 103,000 square-foot operation has 40 foot arched ceiling freeing it of columns or walls. The size of three football fields and home to 1,400 traders and staff who handle about $1 trillion worth of transactions a day. It is roughly 227 wide by 410 feet long.

Financials

In full-year 2006, UBS reported net profit attributable to UBS shareholders (“attributable profit”) of CHF 11,253 million, with CHF 11,249 million from continuing operations and CHF 4 million from discontinued operations.

For the year ended December 31, 2006

* Net profit CHF 11,253 million
* Moody's long-term credit rating: Aaa (Upgraded on April 20, 2007 from Aa2)
* Employees: 78,140

Major Sponsorship Deals

* Team Alinghi (America's Cup)
* Athletisma Lausanne (Golden League)

Significant controversies

* In January 1997, Christoph Meili, a night watchman at the Union Bank of Switzerland (as UBS was then known), found the bank historian destroying archives compiled by a subsidiary that had extensive dealings with Nazi Germany, in direct violation of a recent Swiss law (adopted on December 13, 1996) protecting such material. UBS acknowledged that it had "made a deplorable mistake", but maintained that the destroyed archives were unrelated to the Holocaust. Meili was suspended from his job at the security company that served UBS, following a criminal investigation into whether his whistleblowing had violated bank secrecy laws.[9]

* In 2001, UBS was blamed for refusing to extend Swissair's line of credit, forcing a grounding of Swissair's planes on October 2, 2001. UBS Chairman Marcel Ospel was blamed by many for ostensibly evading the request for an extension of Swissair's line of credit, and the day after the grounding, thousands of demonstrators marching in front of the Swissair headquarters carried a banner reading "Bin Ospel".

* In April 2002, Bank of America sued five people who left its asset- and mortgage-backed securities groups for UBS, alleging that the five conspired to steal trade secrets, proprietary software and clients from Bank of America . Bank of America filed a lawsuit for US$ 20 million against Shahid Quraishi, Peter Faigl, Paul Scialabba, Reggie DeVilliers and Daniel Huang, who had previously worked for their asset-backed group based in Charlotte.[10]

* On March 20, 2003 UBS client, HealthSouth and its founder/CEO Richard M. Scrushy were accused by the U.S. Securities and Exchange Commission (SEC) of an accounting scandal where the company's earnings were falsely inflated by $1.4 billion. In 1996, Scrushy allegedly instructed the company's senior officers and accountants to falsify company earnings reports in order to meet investor expectations and control the price of the company's stock. In certain fiscal years, the company's income was overstated by as much as 4700 percent. The $1.4 billion represents more than 10 percent of the company's total assets. Three senior bankers at UBS Howard Capek, Benjamin Lorello and William McGahan, all whom had extremely close relationships with HealthSouth's management, all testified for congressional hearings, but none was convicted of any wrongdoing. McGahan, who was in jeopardy of losing his employment with the firm at the height of the scandal [11], later resigned on April 10, 2004 for personal reasons not related to the scandal. [12]

* In April 2005, UBS lost the high profile case Zubulake v. UBS Warburg, a discrimination and sexual harassment suit. The plaintiff Laura Zubulake, a former institutional equities saleswoman at the company's Stamford office, convinced the jury that her manager, Matthew Chapin, had denied her important accounts and mocked her appearance to co-workers. Also, she claimed that there were several sexist policies in place, such as entertaining clients at strip clubs that made it difficult for women to socialize and foster business contacts with clients.[13] An important event in the case was the inability of UBS Warburg to produce several incriminating e-mails of which Zubulake could provide records. The plaintiff was able to prove that UBS had destroyed relevant e-mails after the litigation hold had been in place. Because of this, federal judge Shira Scheindlin gave the jury an "adverse inference" instruction, essentially stating that the jury had to assume that the missing e-mails provided damning evidence against the defendant. UBS was ordered to pay the plaintiff $9.1 million in compensatory damages (including back pay and professional damage), and $20.2 million in punitive damages. The case was seen as a landmark in the realms of e-discovery, document retention, computer forensics, and human resources, particularly because the defendant's inability to produce electronic documents shifted the burden of proof to the defendant.[14]

* The Securities and Exchange Board of India (SEBI) alleged that UBS had played a role in the 2004 Black Monday stock market crash which followed the National Democratic Alliance government’s defeat in the general elections. SEBI's ruling of May 17, 2005 barred UBS from issuing or renewing participatory notes for a period of one year.The ban was later lifted on appeal, as a result of a government tribunal ruling on September 9, 2005.

* On October 18, 2005, three African-American employees filed a class action lawsuit against the company in the United States District Court for the Southern District of New York alleging racial discrimination in hiring, promotion and other employment practices. The three plaintiffs in Freddie H. Cook, Sylvester L. Flaming Jr. and Timothy J. Gandy v. UBS Financial Services, Inc., claim that segregation and discrimination in job assignments and compensation were widespread and the firm had done nothing to diversify its workforce. The lawsuit also claims offices operating in Largo, Maryland and Flushing, New York were illegally created to serve African-Americans and Asian-Americans respectively, and that the firm’s management frequently ridiculed the Largo branch office and its staff, referring to it as a “diversity” office. On April 23, 2007, U.S. District Judge, Peter J. Messitte, granted plaintiff's request to dismiss the class allegations without prejudice. As a result of this dismissal, the case now comprises the individual claims of three plaintiffs. [15][16]

* In an article published in BusinessWeek on February 26, 2007, it was announced that the firm was under investigation by federal prosecutors in the United States after it was discovered that traders working for at least two unidentified hedge funds were paying a UBS employee for information on impending ratings changes on stocks.[2] It was later announced on March 1st, that Mitchel S.Guttenberg, an executive director in the firm's equity research department, was being charged along with 13 other individuals from various firms with insider-trading fraud of more than $15 million.