UBS has announced a breakthrough in its “bank for banks” strategy. The giant Swiss bank has reached an agreement with setis-bank AG, a member of the Sachsen Lanesbank Group in east Germany, by which UBS will provide transaction banking services to setis-bank on an out-sourced basis. UBS says the deal also gives it a “firmer foothold in the all-important German market.”
The strategic partnership between UBS and setis-bank covers a number of areas. UBS is providing setis-bank with a guaranteed link to its global equity trading platform, which provides electronic access to 50 stock exchanges around the world, and so allows setis-bank clients to trade shares, warrants, bonds and mutual funds on the various markets. This trading facility is supported by straight-through processing of transactions, and cash and custody account management services.
UBS will also act as a global custodian of behalf of setis-bank, giving the German bank a service in over 70 markets, with contractual settlement date accounting. The partnership includes a linked foreign exchange service, in which stand-alone forex trades will be generated via UBS’s FX infrastructure, while trading and custody-related foreign exchange transactions will be traded and settled electronically around the clock. “This means that trading can be conducted in all convertible currencies without setis-bank, its business partners or clients incurring any processing risks,” says setis-bank. “The downstream processes from stock exchange and foreign exchange transactions are reported and settled in a fully automated manner by UBS AG’s KEYLINK STP system modules.”
Rainer Fuchs, a member of the Management Board of the Leipzig transaction bank, says he is convinced that their partnership with UBS Warburg will play a decisive role in the east-German service provider’s entry into the market. For Martin Wiedmann, Managing Director of UBS Warburg, UBS’s strategic partnership with setis-bank is “further proof that the UBS bank for Banks? initiative offers a viable alternative for small and medium-sized European banks to manage the increasingly complex processes they are faced with in the financial industry.” He points out that the out-sourcing service goes beyond the purely operational, and incorporates a wide range of cash, forex, securities, asset management, wealth management, corporate finance and trade and export finance products, as well as market information, execution and settlement.
“Financial institutions outsource parts of their value chain to UBS, giving them more freedom to concentrate on their core competencies, such as advising clients,” says Wiedmann. “Full control over the client relationship remains with the partner bank. Our partnership with setis-bank provides us with a valuable opportunity to anchor this concept in the German market.”
Setis-bank AG aims to help small and medium-sized banks in Germany accumulate private banking assets and conduct direct securities trading on the German and international stock exchanges.