Who had the better deal: JPMorganJPM

buying First Republic Bank or UBS’UBS

Credit Suisse acquisition? Both have seen gains of over 40% since their respective deals, so it’s a close one. Last March, 167-year-old Credit Suisse failed as rumors and social media drama sparked a bank run at Switzerland’s second-largest bank. Billions fled, forcing the Swiss government to bail it out and sell it to the highest bidder.

Unreal deal: One year after acquiring Credit Suisse for just $3.2B (down 97% from its peak valuation) in what bankers now call “the deal of the decade,” UBS is reaping the benefits of its enormously lucrative acquisition. With a $1.6T balance sheet (double that of the Swiss economy) and over $5.5T in assets under management (AUM), UBS has become one of the world’s largest systemically important banks.

• It’s now the 19th most valuable bank, with its stock rising nearly 70% in the past year to a $100B market cap — far outperforming the iShares Global Financials ETF’sIXG
  32% return.
• And over the past five years, UBS’s return of nearly 200% has doubled that of even the S&P 500’s 85%.

UBS’s next big plan

With no other struggling Swiss banks to consume, UBS will have to look elsewhere. In 2023, UBS received the bulk of its revenue (52%) from wealth management — juiced up thanks to Credit Suisse’s rolodex of high-net-worth clients, which have added over $60B to the company’s AUM. Now, UBS hopes to grow even faster by becoming the bank of choice for wealthy US clients.

• Eyeing a US expansion, UBS aims to attract $100-200B in new assets annually over the next five years, surpassing $5T in invested assets.
• This would position UBS as a formidable competitor to Morgan StanleyMS
  , which the WSJ says has become the “highest-valued major bank in the world” thanks to its wealth management business.

All roads lead to America: While it aspires to become “the world’s leading global wealth manager,” the company will have to expand its investment banking business to compete in the US — where it hopes to become the sixth-largest player. However, other European banks have tried (and failed) to compete with JPMorgan and Goldman SachsGS

, which could complicate its big expansion dreams.