UBS reports 2Q loss of CHF 358 million, announces repositioning of the Bank, BoD nominations, GEB appointments

UBS reports second quarter loss of CHF 358 million

Second quarter Group net loss attributable to shareholders of CHF 358 million • Net new money outflows in the two wealth management businesses of CHF 17.3 billion; Business Banking Switzerland had additional net outflows of CHF 2.0 billion; and Global Asset Management had net outflows of CHF 24.5 billion • Results were impacted by realized and unrealized losses of USD 5.1 billion on legacy risk positions, mainly on exposures related to US residential real estate related securities and other credit positions • Decisive action taken to reduce exposures to significant risk concentrations, specifically through sales during the quarter, the largest of which was the sale of US residential mortgage-backed securities to a fund managed by BlackRock • Provision of USD 900 million (CHF 919 million) associated with the comprehensive settlement related to auction rate securities

UBS announces repositioning of the Bank to allow maximum strategic flexibility in its future development

UBS will separate its business divisions into three autonomous units and vest them with increased operational authority and accountability. Cross-divisional collaboration will be promoted and driven to yield the maximum possible revenue generation for the firm, within a clear framework of servicing, revenue sharing and referral arrangements at market terms. UBS will align incentives for management and staff of each autonomous business division directly with its financial results. This will promote profit generation within an appropriate and rigorous risk framework that fully recognizes the risk/reward profile of different activities.

UBS announces Board of Directors nominations and appointments to the Group Executive Board

Sally Bott, Rainer-Marc Frey, Bruno Gehrig and William G. Parrett proposed as candidates for election to the Board of Directors of UBS AG at the EGM of 2 October 2008. Markus Diethelm appointed as Group General Counsel and John Cryan as Group Chief Financial Officer.