Global Asset Management

The cost / income ratio was 58.3% in first quarter 2008, an increase of 3.3 percentage points compared with 55.0% in fourth quarter 2007. The increase mainly results from lower first quarter performance and management fees, partly offset by lower costs.

Institutional

At CHF 445 billion on 31 March 2008, institutional invested assets were CHF 77 billion lower than at the prior quarter-end. This decline was mainly due to the 12% fall in the US dollar and the British pound against the Swiss franc (the majority of institutional invested assets are denominated in these two currencies). Lower equity markets and, to a lesser extent, net new money outflows, also contributed to the decline in invested assets. The inclusion of the Caisse Centrale de Rescompte acquisition in France, which was completed in first quarter 2008, partly offset the decrease.

The outflow of net new money in first quarter 2008 was CHF 9.6 billion, compared with a CHF 15.3 billion outflow in fourth quarter 2007. Excluding money market flows, the outflow of net new money was CHF 14.7 billion in first quarter 2008, compared with an outflow of CHF 19.4 billion the prior quarter. Continued strong inflows into money market funds, some equities (growth, passive) and fixed income strategies, as well as inflows into real estate and infrastructure, were more than offset by outflows from some parts of the core / value equity strategies, some multi-asset mandates, fixed income and alternative and quantitative investments.

The gross margin was 35 basis points in first quarter 2008, a decrease of 12 basis points from the prior quarter, reflecting lower performance fees in alternative and quantitative investments and the Brazilian asset management business.

Wholesale intermediary

Invested assets were CHF 320 billion on 31 March 2008, down CHF 49 billion from the prior quarter-end. The decline was mainly due to the 12% fall in the US dollar and 5% decrease of the euro against the Swiss franc (the majority of wholesale intermediary assets are denominated in these two currencies). Lower equity markets and, to a lesser extent, net new money outflows, also contributed. The decrease was partly offset by the inclusion of the Caisse Centrale de Rescompte acquisition in France, which was completed in first quarter 2008.

The outflow of net new money increased in first quarter 2008 to CHF 6.9 billion from an outflow of CHF 0.9 billion the prior quarter. Excluding money market flows, the first quarter outflow of net new money was CHF 16.8 billion, compared with outflows of CHF 6.8 billion in fourth quarter 2007. Continued strong inflows into money market funds and various fixed income and equity strategies were more than offset by outflows from other fixed income, multi-asset and equities funds.

The gross margin was 42 basis points in first quarter 2008, a decrease of five basis points from the prior quarter. This result reflects the first quarter inflows into lower margin asset classes (such as money market) and lower performance fees in equities and the Brazilian asset management business.