Why UBS?

I will be having an interview with UBS in the coming weeks and one of the most important questions I will be asked is "Why UBS?" Having spoken with analysts, they all explain that UBS is differentiating itself by becoming less capital intensive, more selective in the clients it lends to, and more advisory focused. How can I tailor that into an answer for why ubs? How will those changes positively affect me as an analyst? Thanks for the help

Interview Question: Why UBS?

In any interview or informational phone call - you will likely be asked an equivalent of this question - so it is critical that you have a thought out and practiced answer. To help your answer stand out, you should do extensive research on the firm's website to determine what they consider to be their core values and competitive advantages. In addition to this background research - you should try and speak with members of the firm in the division you're interested in so that you can get a better understanding of the culture of the firm. All of these things should be considered into your answer.

What Differentiates UBS from Other Banks?

Our users share below some of the elements that differentiates UBS. A few of these things include the international nature of the firm, including the European exposure, as well as UBS's renewed focus on the advisory business.

SSits - Risk Management Vice President:
UBS is cutting back on relationship lending, which means they aren't making low margin/loss leading loans to win other advisory fees from the borrowing clients, where the fees cross subsidize the loans.

Acknowledge the above to demonstrate you see through the bullshit, then you say that you think UBS has an advantage in that it has a strong brand/reputation for quality analysis and advice, supplemented by a broad distribution capabilities in ECM and DCM.

This means that you think it can successfully pitch for deals on the merit of the quality of its advice rather than using balance sheet (eg via loans) to buy its way into fees.

Distribution capability supplementation is important in that it indicates that UBS can take underwriting risk (which is a balance sheet risk), but with higher confidence that it can syndicate that risk out, whereas other banks with lower distribution capabilities don't have as much confidence that they won't end up triggering underwriting obligations and having to buy up unallocated debt or equity, which incurs funding and capital costs etc.

Example Why UBS? Answer

I first became interested in UBS when attending an informational session at XYZ school. There I spoke with several alumni from the UBS Investment Banking Division. After connecting with members of the firm at that event, I was connected to speak to more alumni from the firm who spoke extensively about how the firm is really investing in the advisory business and looking to grow the investment banking practice. Recently, I had the chance to come visit a banking floor and speak with bankers throughout the day. After that experience, I knew that I wanted to work at UBS due to the very collegial nature of the environment as well as the growing nature of the advisory investment banking practice.

Read more about UBS in our Corporate Database.

Preparing for investment banking interviews?

The WSO investment banking interview course is designed by countless professionals with real world experience, tailored to people aspiring to break into the industry. This guide will help you learn how to answer these questions and many, many more.

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"UBS is differentiating itself by becoming less capital intensive, more selective in the clients it lends to, and more advisory focused" - this is standard bullshit touted by all banks which are cutting bank their relationship lending and other balance sheet deployment in this era of higher regulatory capital requirements.

Those who can, do. Those who can't, post threads about how to do it on WSO.
 

Tell them you have a cunning plan to turn UBS from "Used to Be Smart" to ... some better acronym ... but you won't reveal the plan (or the acronym) until they make you a firm offer.

Those who can, do. Those who can't, post threads about how to do it on WSO.
 
TheRapist:
Tell them their commercial really touched you. When they say "You and Us - UBS", you really thought they were talking to you.

Great answer! I would go for this one. UBS urgently needs people with humor and a well-developed sense for sarcasm.

 

The fact that they have to give out 100 offers to fill 10 spots should convey how badly in shape they are. People at my alma mater are turning this shit down for boutiques. You should tell them you are very sadistic and UBS would be perfect for you to unleash your emo and depression.

 

In Stamford? Trading floor there is awesome. Largest in the world. It is a great job, although you'd be living in Stamford. Emphasize your personal investment experience and interest. In second rounds we had a written test. Don't worry too much about it. Just remember how to read a graph.

I worked at UBS two summers ago. Each morning you meet to discuss different products/desks. Also give you some insight on each traders investment thesis. The rotation includes prop and sales desks.

Honestly, everyone in the interview is smart. Just literally tell them that you are passionate about the job. Tell them the first thing you do when you wake up is read the journal. Tell them a story about an interconnected investment thesis. They love to talk about an event, such as high projected demand for a consumer electronic product, and find the best play to capitalize on this knowledge; example: buy equity farther up the supply chain.

Good luck and PM me after. My good friend stayed on full time and will be on the floor with you. Let me know how the interview goes.

 

hey, thanks for the advice. The interview went okay, but luckily enough I still made it to final rounds. They didn't end up asking me why UBS, I had something prepared though.

I got thrown off by the brainteaser questions. I've only interviewed for IB positions so far, so the math/quiz questions were different so I will definitely have to better prepare for those.

 
Best Response

Serious answer: What your analyst contacts are telling you is that UBS is cutting back on relationship lending, which means they aren't making low margin/loss leading loans to win other advisory fees from the borrowing clients, where the fees cross subsidise the loans.

Why is UBS cutting back? Because Basel II and III/regulatory requirements are increasing capital costs, which mean a bank incurs a higher cost for funding loans and other balance sheet use.

How do you tailor this into an answer for an interview? You acknowledge the above to demonstrate you see through the bullshit, then you say that you think UBS has an advantage in that it has a strong brand/reputation for quality analysis and advice, supplemented by a broad distribution capabilities in ECM and DCM.

This means that you think it can successfully pitch for deals on the merit of the quality of its advice rather than using balance sheet (eg via loans) to buy its way into fees.

Distribution capability supplementation is important in that it indicates that UBS can take underwriting risk (which is a balance sheet risk), but with higher confidence that it can syndicate that risk out, whereas other banks with lower distribution capabilities don't have as much confidence that they won't end up triggering underwriting obligations and having to buy up unallocated debt or equity, which incurs funding and capital costs etc.

This is a generic answer which you could use for Citi, JPMorgan, GS, Citi etc. Someone else may have a better UBS-specific answer.

Those who can, do. Those who can't, post threads about how to do it on WSO.
 

For whatever reason BBs seem to care a lot about this question compared to smaller firms, and having gone through SA interviews I found the "weaker" BBs particularly wanted to know why I was interested in them. I think your best bet is to focus on the discussions you have had with analysts at UBS and your perception of them as opposed to trying to come up with an answer related to the firm as a whole. If you can be specific and highlight that you've spent time investigating UBS, then that will sound much better than a generic answer. Personally, my interviews with firms like DB/Barcap/etc went poorly because I had nothing to go on except a fairly generic answer which my interviewers picked apart.

 

The comment that @hedgehog68 made about syndication is essentially the same as my (later) point about distribution. That is, syndication = distribution = ability to take underwritten equity or debt and sell that to a network of investors, whether institutional or private wealth clients, so that the underwriting bank doesn't end up holding the risk.

If they test you by asking who else has similar abilities, mention that Credit Suisse is (in)famous for underwriting and then stuffing shitty product down into its private wealth client network, BUT you think UBS is more (chuckle chuckle) ethical and responsible than CS (cough Swiss bankers cough cough).

Those who can, do. Those who can't, post threads about how to do it on WSO.
 

I really don't think UBS will press you on this question. Their bankers feel embarrassed to ask it given the current state of affairs. Just be prepared with the generic "Why a BB" (platform, global footprint, etc.) and throw in a comment about how you think it's a great time to join to UBS IBD now that the firm has re-focused and the IB franchise will benefit from a reallocation of resources, etc...cite some recent deal wins as evidence of a comeback. That's more than enough.

It's still the worst BB to work for by a large margin so anyone asking you this question will be expecting a bullshit response.

 

If the interviewers don't ask you this question, I recommend (when the interviewee question segment comes around) you ask them whether "[their bank] is capital constrained under the new regime of regulatory capital under Basel II/III and how that impacts the ability to win advisory work if they are less able to deploy capital for relationship loans". This demonstrates you understand a lot more about how IB business origination works than the average candidate.

Key client areas this applies to - PE funds. Big PE sponsors like KKR, Warburg Pincus etc give advisory mandates to the IBs that use their balance sheets to support them in LBOs etc. If you're an advisory shop without the ability to do these sort of low-margin relationship loans (ie syndicate the first and second lien and hold the loss-leading revolver component), your ability to win advisory mandates is a lot tougher. Everyone in IB knows this, which is part of the reason why there is a mini-boom happening at the moment in the world of LBO lending.

Those who can, do. Those who can't, post threads about how to do it on WSO.
 

And if you're asked why are IBs more willing to take this underwriting/syndication risk on LBO debt now vs 12 - 24 months ago - it's because: - the market for LBO debt is running hot - Likely because funds flows into CLO funds have been big and those CLOs are hungry for whatever they can get - But you think there is a significant risk the market will bifurcate sometime in 2014 (possibly by end of Q1), with deals with big sponsors or >$100m pa EBITDA targets remaining in demand, but mid-market targets (

Those who can, do. Those who can't, post threads about how to do it on WSO.
 

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