UBS realized a net recovery of CHF 69 million in second quarter
2005, compared to net recoveries of CHF 137 million in
first quarter 2005 and CHF 128 million in second quarter
2004.
Wealth Management & Business Banking reported a net
recovery of CHF 26 million in second quarter 2005. We continue
to experience lower than anticipated levels of defaults,
while recoveries of previously established provisions continue
to be strong. Recoveries in second quarter 2005 did not reach
the particularly high levels seen in the same quarter a year earlier
(CHF 91 million) or first quarter 2005 (CHF 109 million).
The Investment Bank posted a net recovery of CHF 43 million
in second quarter 2005. In first quarter 2005 and in second quarter 2004, the Investment Bank realized net recoveries
of CHF 28 million and CHF 34 million respectively.
UBS’s gross loan portfolio rose to CHF 303 billion on
30 June 2005 from CHF 292 billion on 31 March 2005. Of this
increase, Wealth Management & Business Banking contributed
CHF 6.5 billion, principally driven by our mortgage
and collateralized lending businesses. The increase recorded
in the Due from banks line was mainly because of cash
collateral posted by UBS’s Investment Bank in connection
with its derivative businesses.
Our impaired loans portfolio continued to decline to CHF
4,076 million, down 7.8% from CHF 4,423 million last quarter,
leading to a further improvement in the impaired loans to
total loans ratio, which fell to 1.3% from 1.5%. The decrease
is largely attributable to the continued workout of recovery
positions and the low level of new impairments in the Business
Banking Switzerland unit.
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