...As a wholly owned subsidiary of UBS AG (UBS), the recently assigned ratings of UBS Bank USA (UBSB) are linked to those of its parent company, and further augmented by its sound track record, significant levels of liquidity, and solid asset quality. UBSB's operations are closely allied to those of UBS's North American wealth management business, primarily encompassing securities-based lending, FDIC- insured money market deposit and transaction accounts. These are predominantly offered through UBSB's broker-dealer affiliate, UBS Financial Services Inc.(UBS FSI). Earnings are driven by deposit spreads tied to LIBOR, which have materially compressed throughout the economic environment of the past 12 months. Mark-to- market impacts in the trading portfolio also affect results. Nonetheless, UBSB has remained profitable, reporting an ROA and ROE of 0.54% and 4.25% in 1H09. Unlike many traditional banks, UBSB's loan portfolio possesses minimal real estate- related credit risk. Given its niche focus,...
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