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Risk Management and Control
Credit risk
UBS realized a net recovery of CHF 83 million in first quarter 2006, following net recoveries of CHF 132 million in fourth quarter 2005 and CHF 137 million in first quarter 2005, reflecting the continued favorable economic climate across all our markets. In particular, the continued strength of a number of emerging markets has resulted in a further release of collective loan loss provisions of CHF 23 million for country risk. The quality of our credit portfolios, as evidenced by the continuing declining trend of impaired exposures, coupled with a generally positive credit environment, has allowed us to achieve net credit loss recoveries for the last few quarters, albeit at a declining rate. While we continue to apply our proven and sound risk underwriting standards across all Business Groups it would not be prudent to simply extrapolate the full-year result from the first quarter recovery.
Global Wealth Management & Business Banking reported a net recovery of CHF 53 million in first quarter 2006, after net recoveries of CHF 72 million in fourth quarter 2005 and CHF 109 million in first quarter 2005, as we continued to benefit from low new impairments and recoveries of provisions established in earlier periods.
The Investment Bank posted a net recovery of CHF 30 million in first quarter 2006 compared to CHF 60 million in fourth quarter 2005 and CHF 28 million in first quarter 2005. No new impairments were experienced.
Our gross lending portfolio increased by CHF 3 billion to CHF 308 billion on 31 March 2006 from CHF 305 billion on 31 December 2005. In Global Wealth Management & Business Banking gross lending rose to CHF 222 billion, up from CHF 217 billion on 31 December 2005. The increase was mainly due to higher volumes in mortgages and collateralized loans in line with our strategy to focus on expanding secured lending products. The gross lending portfolio at the Investment Bank slightly decreased to CHF 85.8 billion.
The ratio of impaired loans to total loans further improved to 1.0% from 1.1% in fourth quarter 2005. Impaired loans declined 7.8% to CHF 3,167 million from last quarter’s CHF 3,434 million. 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.
TopImportant legal information - please read the disclaimer before proceeding.
Products and services in these webpages are not available for US persons, for the exclusion of residents of other nations see the disclaimers relating to the actual services.
© UBS 1998-2008. All rights reserved.
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