If central bank stimulus worked in the United States it will work in Europe, and one of our new holdings is in a prime position to reap the benefits.

Swiss bank UBS (NYSE: UBS) currently yields 3%, is one of the two largest banks in Switzerland and one of the largest “private” banks in the world. It also has a large Swiss retail and corporate banking operation, as well as an investment banking business. And analysts are predicting major dividend growth this year.

To understand the largesse being bestowed now on UBS and other European banks, consider how important the U.S. Federal Reserve’s stimulus has been to our own banks. In a note issued last month, analysts at Citigroup advised clients that with the Fed’s stimulus essentially at an end it’s time to start underweighting U.S. stocks.

Not surprisingly they suggested overweighting countries in which the central banks are still working to stimulate their economies, especially Europe and Japan. They particularly liked financial stocks.

When a central bank injects money to the financial system, it doesn’t just start handing out hundred dollar bills on street corners.

That money is funneled through banks as the central bank buys bonds and other assets from them, boosting reserves and giving the banks more money to make more loans. Interest rates are also slashed, making loans cheaper for borrowers and reducing interest costs for banks, which boosts their profits.

A study from the global consultancy McKinsey & Company found that between 2007 and 2012, Fed stimulus added about $150 billion to interest income at American banks. That largely was driven by a big spread between interest paid by banks on deposits and what they charged on loans, which amounted to about 1.1%. Given the similarities between the American and European banking systems, we should expect to see a similar boost to European banks.

Banking for the Rich

As we said, UBS is a private bank. While you don’t have to know a password or secret knock to access a private bank per se, you do have to be wealthy since the role of a private bank is to connect the rich with personalized financial and banking services. That usually involves investment products that can’t legally be sold to someone with less than $5 million in assets and oftentimes more, tax avoidance advice and portfolio management services.

That’s an attractive business because private banking clients tend to stick. Moving those types of accounts to a different bank takes time, effort and money, and the wealthy can afford to be risk tolerant and won’t jump ship when markets falter.

That stickiness is part of why the bank’s wealth management segment, which is mostly private banking, generates more than half of UBS’ annual revenue and most of the banks’ profits.

UBS’s investment banking operations are big, but are also a potential liability. They manage $282.8 billion in assets, and investment banking is also a top revenue generator at $2.7 billion in the latest reported period, throwing off $777 million in profit before tax.

Here’s why they’re a liability: following large losses between 2007 and 2009, which required a government bailout, and a rogue trader incident in 2011, which damaged its reputation, UBS lost nearly $400 billion in assets. Most of those losses came from private banking, which UBS was loath to lose. Plus, the bank racked up a bevy of fines from regulators and ultimately ousted its CEO. Hence the decision to become more of an investment banking consultancy rather than a full-service investment bank.

Successful Strategy

That strategy has paid off. While full-year results won’t be announced until next month, analysts predict that earnings per share will have grown by more than 50% in 2015. They expect a 15% increase this year.

That bodes well for the banks dividend, which after being suspended between 2008, and then reinstated in 2012, has quadrupled since 2012. With a current payout ratio of just 27.6%, expect the dividend to continue rising. In fact, analysts predict that the dividend will rise to $0.912 in 2016 based on strong earnings growth.

It’s important to keep in mind that despite being the largest private bank in the world and still showing solid growth, UBS’ shares will be somewhat volatile this year. The bank reports in Swiss francs, one of the strongest currencies in the world, but only about a quarter of is revenue is in francs. That has the potential to drag down results in currency-adjusted terms.

Still, the bank is one of the best-capitalized in Europe, so if the global economy hits another rough patch the bank has the reserves to ride it out.

Its capital also means UBS can make some major acquisitions, particularly in the wealth management business. Add in the European Central Bank’s commitment, and that should generate solid earnings and dividend growth. Buy UBS under $25.