Balance sheet

UBS’s total assets stood at CHF 2,125 billion on 30 September 2005, up slightly from CHF 2,091 billion on 30 June 2005. Asset growth was driven by increases in collateral trading (up CHF 53 billion) and the loan book (up CHF 15 billion). This was partially offset by positive replacement values (down CHF 14 billion) as well as a drop in the trading portfolio (down CHF 20 billion). In third quarter, currency fluctuations increased total assets by CHF 7 billion.

Lending and borrowing

Our loans to customers position rose to CHF 271 billion on 30 September 2005, up by CHF 15 billion from 30 June 2005. This was mainly the result of increased levels of lending in the Investment Bank, mainly to US mortgage originators, and higher secured financing provided by our prime brokerage business. Mortgages to Swiss private clients also rose. Borrowing was up CHF 75 billion, driven by an increase in client and interbank deposits.

Repo and securities borrowing / lending

Cash collateral on securities borrowed and reverse repurchase agreements stood at CHF 757 billion on 30 September 2005, up by CHF 53 billion from 30 June 2005. This includes the effect of reduced netting opportunities between asset and liability positions. On a gross basis, before allowable netting, the position increased by CHF 32 billion. This rise stems from the fixed income matched book (a portfolio comprised of assets and liabilities with equal maturities and equal value, so that the market risk cancels out), primarily in high quality collateral, reflecting higher client demand.

Trading portfolio / derivative instruments

Between 30 June 2005 and 30 September 2005, trading assets declined overall by CHF 20 billion to CHF 633 billion, while the value of derivative instruments decreased by CHF 14 billion to CHF 355 billion on movements in interest rates and currencies.

Trading assets inventory in debt instruments, down CHF 40 billion, contracted significantly, mainly due to lower positions in corporate bonds, US and European government bonds and mortgage-backed securities. Equity instruments rose CHF 17 billion while traded loans and precious metals were only marginally higher (CHF 2 billion and CHF 1 billion respectively).