UBS - Investment Bank

In fourth quarter 2007, the Investment Bank recorded a loss of CHF 15,461 million, compared with a pre-tax profit of CHF 1,356 million in fourth quarter 2006. This was due to net revenues of negative CHF 15,534 million in the fixed income, currencies and commodities area, mainly related to the inventory of securities linked to the US sub-prime residential mortgage markets.

Search only in Quarterly Reporting Q4 2007

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Business Group reporting

Business Group reporting
	Quarter ended			% change from		Year ended
CHF million	31.12.07	30.9.07	31.12.06	3Q07	4Q06	31.12.07	31.12.06
Equities	2,672	1,709	2,545	56	5	10,603	9,397
Fixed income, currencies and commodities	(15,534)	(4,226)	2,018	(268)		(15,681)	9,056
Investment banking	1,259	1,103	1,015	14	24	4,540	3,273
Income	(11,603)	(1,414)	5,578	(721)		(538)	21,726
Adjusted expected credit loss ¹	(12)	(5)	24	140		(19)	61
Total operating income	(11,615)	(1,419)	5,602	(719)		(557)	21,787
Cash components	2,224	834	2,452	167	(9)	8,918	9,801
Share-based components ²	381	356	366	7	4	1,499	1,552
Total personnel expenses	2,605	1,190	2,818	119	(8)	10,417	11,353
General and administrative expenses	902	801	996	13	(9)	3,423	3,260
Services (to) / from other business units	247	173	312	43	(21)	746	956
Depreciation of property and equipment	51	59	91	(14)	(44)	210	203
Amortization of intangible assets	41	38	29	8	41	172	72
Total operating expenses	3,846	2,261	4,246	70	(9)	14,968	15,844
Business Group performance before tax	(15,461)	(3,680)	1,356	(320)		(15,525)	5,943

KPIs
Compensation ratio (%) ³	N/A ⁴	N/A ⁴	50.5			N/A ⁴	52.3
Cost / income ratio (%) ⁵	N/A ⁴	N/A ⁴	76.1			N/A ⁴	72.9
Impaired lending portfolio as a % of total lending portfolio, gross	0.4	0.4	0.1
Average VaR (10-day, 99% confidence, 5 years of historical data)	665	447	391	49	70

Capital return and BIS data
Return on allocated regulatory capital (%) ⁶						(63.0)	29.4
BIS risk-weighted assets	190,763	209,245	174,599	(9)	9
Goodwill and excess intangible assets ⁷	5,300	5,366	5,465	(1)	(3)
Allocated regulatory capital ⁸	24,376	26,291	22,925	(7)	6

Additional information
Deferral (included in adjusted expected credit loss) ¹	49	57	68	(14)	(28)	217	232
Expected credit loss (included in adjusted expected credit loss) ¹	(61)	(62)	(44)	2	(39)	(236)	(171)
Personnel (full-time equivalents)	21,932	22,833	21,899	(4)	0
1 In management accounts, adjusted expected credit loss rather than credit loss expense or recovery is reported for the Business Groups (see Note 2). The adjusted expected credit loss is the sum of expected credit loss and deferrals. The expected credit loss reflects expected average annual impairment costs. The deferral represents the difference between actual credit loss and expected credit loss, amortized over a three-year period. 2 Additionally includes social security contributions and expenses related to alternative investment awards. 3 Personnel expenses / income. 4 Both the cost / income and the compensation ratios are not meaningful due to losses recorded in the Investment Bank. 5 Operating expenses / income. 6 Business Group performance before tax / average allocated regulatory capital. 7 Goodwill and intangible assets in excess of 4% of BIS Tier 1 capital. 8 10% of BIS risk-weighted assets plus goodwill and excess intangible assets.

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Investment Bank

Business Group reporting