At a Glance

Performance indicators

We focus on four key performance indicators, designed to ensure the delivery of continuously improving returns to our shareholders. The first two indicators, return on equity and diluted earnings per share, are calculated on a full UBS basis. The cost / income ratio and net new money indicators are limited to our financial businesses. Results show:

– Annualized return on equity at 29.6% in first half 2006, up from 26.9% in the same period a year earlier, and well above our target of 20% minimum over the cycle. Higher attributable net profit was offset by an increase in average equity from retained earnings.

– Diluted earnings per share of CHF 1.48, up 51% or CHF 0.50 from CHF 0.98 in the same quarter a year earlier, reflecting the increase in net profit and a 2% reduction in the average number of shares outstanding due to further share buybacks. These figures reflect the 2-for-1 share split made on 10 July 2006.

– A cost / income ratio in our financial businesses of 66.7%, down from 71.2% in the same quarter last year. The improvement reflected higher revenues in all businesses, outpacing the increase in personnel and general and administrative expenses.

– Net new money of CHF 36.3 billion, up from CHF 31.0 billion a year earlier. Inflows remained strong. The wealth management units recorded inflows of CHF 31.2 billion this quarter, up from CHF 20.2 billion in second quarter 2005. Inflows in the international and Swiss wealth management business rose to a record CHF 30.5 billion, driven by all-time high inflows from Asian and European clients. Annual client tax payments and the negative market environment, however, depressed inflows into our wealth management business in the US. Global Asset Management inflows fell to CHF 3.6 billion, down from CHF 8.9 billion a year earlier. Inflows from institutional clients in Europe, the Middle East and Africa and alternative and quantitative products were partly offset by equities outflows in the US. The wholesale intermediary business recorded equities and fixed income outflows, due to market volatility, which were partly offset by inflows into asset allocation funds. The Swiss retail banking business recorded net new money inflows of CHF 1.5 billion.