UBS realized a net recovery of CHF 132 million in fourth quarter
2005, following net recoveries of CHF 37 million in third
quarter 2005 and CHF 57 million in fourth quarter 2004. A
significant contributor to this quarter’s level of recoveries was
a release of CHF 62 million of collective loan loss provisions
for country risk. Of this, CHF 29 million was attributable to
Global Wealth Management & Business Banking and the balance,
CHF 33 million, to positions held by the Investment
Bank. For full-year 2005, our net recoveries were CHF 375 million,
compared to net recoveries of CHF 241 million in 2004.
Global Wealth Management & Business Banking reported
a net recovery of CHF 72 million in fourth quarter 2005,
compared to net recoveries of CHF 16 million for both third
quarter 2005 and fourth quarter 2004. For full-year 2005, it
reported a net recovery of CHF 223 million, compared to net
recoveries of CHF 94 million in 2004. This was the result of
higher than anticipated recoveries of provisions established in
earlier periods and a relatively low level of new impairments,
reflecting both the continuing benign credit environment and
the quality of our Swiss loan portfolio.
The Investment Bank posted a net recovery of CHF 60 million
in fourth quarter 2005 compared to net recoveries of
CHF 21 million in third quarter 2005 and CHF 41 million in
fourth quarter 2004. For full-year 2005, the Investment Bank
realized net recoveries of CHF 152 million, slightly more than the
CHF 147 million recovered in 2004. The level of new impairments
observed at the Investment Bank continues to be at a
cyclical low and is a reflection of the generally favorable global
macroeconomic environment as well as the continued application
of sound risk assessment standards in our lending activities.
Our gross lending portfolio decreased by CHF 12 billion to
CHF 305 billion on 31 December 2005 from CHF 317 billion
on 30 September 2005. In the Global Wealth Management
& Business Banking Business Group, gross loans outstanding
rose slightly to CHF 217 billion on 31 December 2005, up from
CHF 216 billion on 30 September 2005. On the other hand,
we saw a CHF 9 billion reduction of the gross lending portfolio
at the Investment Bank to CHF 87 billion on 31 December
2005. This reduction was mainly due to a lower exposure from
interbank operations.
The disposal of Private Banks & GAM in December 2005,
formerly reported under Corporate Center, reduced the total
lending portfolio by CHF 5.4 billion, total allowances by CHF
61 million and impaired loans by CHF 110 million compared
to the previous quarter.
The ratio of impaired loans to total lending portfolio improved
to 1.1% from 1.2% in third quarter 2005. Impaired
loans further declined 10% to CHF 3,434 million from CHF
3,815 million on 30 September 2005. The decrease is largely
attributable to the continued workout of recovery positions
and the low level of new impairments.
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