Key Performance Indicators

The pre-goodwill cost / income ratio, at its lowest level since 2000, was 62.9% in fourth quarter 2004, down from 72.1% in third quarter, which was burdened by restructuring costs. The ratio also benefited from higher operating income in all our businesses.

Institutional

Institutional invested assets, at their highest level since 2000, were CHF 344 billion on 31 December 2004, up by CHF 2 billion from 30 September 2004. The positive impacts of net new money and strong financial market valuations were partly offset by the decline in the US dollar rate against the Swiss franc.

Net new money in fourth quarter was CHF 3.0 billion, the same as the previous quarter’s inflow. Strong inflows were reported in fixed income mandates in the UK and the Americas as well as in alternative and quantitative investments, partly offset by equity mandate outflows in Asia Pacific and Europe.

Full-year 2004 net new money inflows were CHF 23.7 billion, up significantly from CHF 12.7 billion a year earlier. Strong inflows were recorded into alternative and quantitative investments, equity and fixed income mandates. Asset allocation and money market mandates experienced slight outflows. Money market outflows totaled CHF 1.2 billion, down from CHF 5.0 billion in 2003.

The gross margin was 33 basis points in fourth quarter, an increase of 3 basis points compared to third quarter, reflecting higher performance fees in both alternative and quantitative investments, and traditional investments.

Wholesale Intermediary

Invested assets were CHF 257 billion on 31 December 2004, down by CHF 2 billion from 30 September 2004. Positive market performance and net new money inflows, mainly into asset allocation and equity funds, were more than offset by the weakening of the US dollar against the Swiss franc and outflows from money market funds.

In fourth quarter 2004, net new money was CHF 0.5 billion, down from CHF 1.0 billion in third quarter. Strong inflows were reported into asset allocation, equity and fixed income funds although outflows were seen from money market funds.

In full-year 2004, the net new money outflow was CHF 4.5 billion compared to an outflow of CHF 5.0 billion in 2003. Inflows of CHF 16.1 billion into fixed income, asset allocation and equity funds in 2004 were more than offset by money market outflows of CHF 20.6 billion.

The gross margin was 37 basis points in fourth quarter 2004, unchanged from third quarter 2004.

Money market sweep accounts

Some of the money market fund assets managed by our US wholesale intermediary business represents the cash portion of private client accounts. Money market outflows from these accounts into UBS Bank USA were approximately CHF 1.2 billion in fourth quarter 2004. Before the bank’s launch, cash balances of private clients in the US were swept into our money market funds. Now, those cash proceeds are redirected automatically into FDIC-insured deposit accounts at UBS Bank USA. Although there was no one-time bulk transfer of client money market assets to the bank, the funds invested in our sweep accounts are being used to complete client transactions and will therefore gradually deplete over time. Such funds are a low-fee component of Global Asset Management’s invested assets. Full-year money market outflows in our US wholesale intermediary business were CHF 13.6 billion, of which approximately CHF 11 billion related to UBS Bank USA. We do not expect further major outflows from our money market funds into UBS Bank USA in 2005.