Performance indicators

Key performance indicators

UBS focuses on four key performance indicators: return on equity (RoE), diluted earnings per share (EPS), cost / income ratio and net new money. These are designed to monitor that UBS delivers adequate returns to shareholders and are calculated using results from continuing operations. The results for first quarter 2008 are:

- a decline in UBS's RoE, at negative 180.0% compared with positive 26.8% in first quarter 2007, primarily as a result of the substantial losses in the Investment Bank related to the US mortgage market;

- diluted EPS of negative CHF 5.63, compared with positive CHF 1.43 in first quarter 2007. The first quarter 2008 diluted EPS calculation included shares that will be issued at conversion of the mandatory convertible notes;

- a cost / income ratio that is not meaningful in first quarter due to negative income; and

- net new money outflows of CHF 12.8 billion, compared with inflows of CHF 52.8 billion a year earlier. The decline in Group net new money for first quarter 2008, compared with first quarter 2007, is the cumulative result of lower asset-gathering levels across all business groups. Global Asset Management was most affected, and saw total net new money outflows of CHF 16.5 billion in first quarter 2008, mainly the consequence of underperformance in certain investment capabilities in prior quarters and the generally unsettled investment environment. Institutional clients had a net outflow of CHF 9.6 billion, with outflows in core / value equity strategies, some multi-asset mandates, fixed income and alternative and quantitative investments only partially offset by strong inflows into money market funds and passive and growth equities mandates. In addition, wholesale intermediary recorded net outflows of CHF  6.9 billion in multi-asset, equities funds and other fixed income. Business Banking Switzerland recorded net outflows of CHF 1.9 billion, down from net new money inflows of CHF 2.7 billion in first quarter 2007. The two wealth management units made a combined positive contribution of CHF 5.6 billion to the overall net new money results - well below CHF 44.8 billion in the same quarter a year earlier. A more subdued economic climate and slowdown in financial market activity led to slower creation in personal wealth, reducing the level of net new money inflows into the international business. In Switzerland, UBS felt the negative impact of its financial losses on its reputation, with clients diversifying part of their assets away from UBS. Overall, however, it affected only a small fraction of UBS's total invested assets base.