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Total operating expenses were CHF 7,847 million in first quarter 2008, down 16% from CHF 9,380 million in first quarter 2007.

Personnel expenses

Personnel expenses were CHF 5,274 million in first quarter 2008, down 26% from CHF 7,094 million in first quarter 2007. Accruals for performance-related payments fell as a result of UBS's first quarter loss, which followed writedowns related to the US credit crisis. Share-based compensation was at a very low level in first quarter 2008. This occurred because of a decline in currencies (particularly the US dollar and the British pound) against the Swiss franc and a decline of the UBS share price, which resulted in an over-accrual for performance payments from fourth quarter 2007 following the restatement made in relation to the amended International Financial Reporting Standards 2 (IFRS 2). On the other hand, some personnel costs were up, mainly reflecting severance costs in the Investment Bank which further reduced staff levels during first quarter 2008.

General and administrative expenses

At CHF 2,243 million in first quarter 2008, general and administrative expenses increased by CHF 341 million from CHF 1,902 million in the same period one year earlier. Legal provisions and related legal fees increased, mainly in the Investment Bank, but all the other categories of general and administrative expenses were reduced. Travel and entertainment and outsourcing of IT and other services declined, mainly in the Investment Bank following cost reduction measures. Rent and maintenance of machines and equipment were down on lower IT costs. Telecommunications and postage expenditures were reduced due to lower market data services and communication expenses. Marketing and public relations expenses declined due to lower advertising costs in Corporate Center and Global Wealth Management & Business Banking. Compared with fourth quarter 2007, general and administrative expenses were down by 1%. Higher legal provisions almost fully offset the reductions in all other cost categories.

Depreciation

Depreciation was CHF 281 million in first quarter 2008, down CHF 19 million from a year ago, due to lower IT- related depreciation.

Amortization of intangible assets

At CHF 49 million, amortization of intangible assets declined 42% from CHF 84 million a year ago, reflecting the fact that certain intangible assets related to Pactual were fully amortized at the end of 2007.

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