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UBS to adopt a single brand
UBS is announcing a further evolution of its brand strategy and portfolio. From the second half of 2003, its businesses will be represented by the single UBS brand. The firm will no longer market its services using the UBS Warburg or UBS PaineWebber brands. The move to a simpler branding accurately reflects UBS's integrated business model and the "one firm" approach UBS delivers to its clients. The decision to introduce a single brand will lead to a non-cash net writedown of approximately CHF 1 billion relating to the PaineWebber brand, which is currently capitalized on the UBS balance sheet.
UBS has decided to simplify its brand strategy and structure around the single brand UBS. Covering all its main businesses, the new framework will be implemented in the second half of 2003, with the move towards a single brand helping to raise the firm's profile and more accurately reflecting its integrated business model.
"UBS has emerged as one of the world's flagship financial institutions. We need a flagship brand. Making this move is a signal of our unity, strength and momentum. It's a further, logical step in our efforts to define the future as one firm," said Marcel Ospel, Chairman.
"In the financial services industry, a strong brand is critical - it's one of the major factors that attracts new clients. Strengthening and simplifying our brand identity and systematically capitalizing on it forms a key part of our organic growth drive," Peter Wuffli, President, added.
Delivering a consistent client experience
Over the last year, UBS has undertaken a thorough review of its brand strategy, focusing on brand values as much as brand structure. The review included market research in 14 countries involving thousands of clients and potential clients, including high net worth individuals, corporate and institutional clients, asset management clients, and Swiss individual clients. UBS client advisors and relationship managers were also part of the research. The results showed that all the different client groups had similar expectations regarding the provision of their financial services and their relationship with UBS. Across the board, they expect their financial firm to relentlessly pursue their financial success and provide access to the resources of a global powerhouse, while giving proactive advice and a choice of solutions.
Further findings underscored that the UBS brand enjoys the highest recognition and favorability among all of the Group's current brands in all the target client segments where UBS is active. In comparison to other top brands in the financial services industry, the UBS brand scores second overall in a ranking of positive image.
"The UBS name is already the central unifying element of our branding, and stands for the strength of the whole firm. It is also the most valuable asset in our branding architecture," UBS Warburg Chairman and Chief Executive Officer John Costas said.
Now UBS needs to further raise brand familiarity with potential clients in order to match the leading competitive position it has achieved in its core businesses.
"I have no doubt that our move to UBS as a single brand is the right way forward. It proves to all our US private clients that they are working with one of the global players in the world of finance," UBS PaineWebber Chairman and Chief Executive Officer Joseph J. Grano said.
With a single brand, the Group will be able to concentrate its marketing capabilities and activities on building one clear and unique corporate identity, giving clients a sharper idea of what UBS stands for and how its businesses fit together. To achieve this, tailored descriptors will be used alongside the UBS brand to describe services targeted at specific client segments.
The new brand strategy will have no effect on UBS's management or reporting structure. For selected business purposes existing niche brands (such as O'Connor) will remain in use.
UBS has benefited significantly from the strength of its existing brands. In particular, the strength of the PaineWebber name has helped to raise UBS's familiarity among US clients - both corporate and private. In 1999, before the acquisition of PaineWebber, awareness of the UBS brand in the US was in the low single digits in percentage terms. Two years after the deal, 40% of affluent clients and 55% of corporate and institutional clients in the US surveyed said they were very or somewhat familiar with the UBS brand. Because of its increased profile and client recognition, UBS has grown its US market share in both investment banking and wealth management as well as improving its US recruiting profile, helping it to attract and hire exceptional talent.
Although the economic value of the PaineWebber brand is preserved by the transfer of its brand equity to UBS, accounting rules do not allow the capitalization of the transferred value. The decision to introduce a single brand will therefore lead to a non-cash net writedown of approximately CHF 1 billion, which will be recorded as a significant financial event in UBS's earnings in fourth quarter 2002. If UBS had kept the brand, amortization charges would have impacted UBS's income statement for the next 18 years. The writedown has no impact on acquired goodwill.
Overall, the introduction of a masterbrand strategy will increase the cost efficiency of the Group's marketing efforts as they will no longer be divided among the three brands UBS, UBS Warburg and UBS PaineWebber.
Zurich / Basel, 12 November 2002