Global Asset Management

Pre-tax profit in first quarter 2008 was CHF 330 million, down CHF 155 million from CHF 485 million in fourth quarter 2007. This decline mainly reflects a decrease in performance fees following the very strong levels seen in the prior quarter, particularly in alternative and quantitative investments and in the Brazilian asset management business, combined with a decrease in management fees across almost all businesses from lower invested assets. Lower operating income was partly offset by a strong decline in expenses, driven by a decrease in both personnel and general and administrative expenses. There was no material impact on net profit before tax from the inclusion of the Caisse Centrale de Rescompte acquisition in France, which was completed in first quarter 2008.

Operating income

Total operating income in first quarter 2008 was CHF 791 million, down 27% from CHF 1,077 million in fourth quarter 2007. Institutional revenues declined to CHF 427 million in first quarter 2008, from CHF 640 million the prior quarter - a result of lower performance fees after the very strong levels seen in the prior quarter (from alternative and quantitative investments and the Brazilian asset management business) and the lower management fees which occurred across almost all businesses as a result of lower invested assets. Invested assets were impacted by the stronger Swiss franc, lower financial market valuations and, to a lesser extent, net new money outflows. This was partly offset by the inclusion of Caisse Centrale de Rescompte and lower operational loss provisions.Wholesale intermediary revenues were CHF 364 million in first quarter 2008, down from CHF 437 million a quarter earlier, primarily due to lower management fees resulting from lower invested assets.

Operating expenses

Total operating expenses were CHF 461 million in first quarter 2008, down from CHF 592 million in fourth quarter. Personnel expenses were CHF 303 million in first quarter 2008, down from CHF 372 million in the prior quarter mainly due to lower incentive-based compensation - a result of lower revenues. General and administrative expenses were CHF 104 million in first quarter 2008, down 41% from CHF 175 million a quarter earlier, primarily due to lower litigation expenses, lower professional fees and travel and entertainment expenses. Depreciation of property and equipment was CHF 7 million, slightly above the prior quarter's results. Net charges-in from other business groups were CHF 39 million in first quarter 2008, up CHF 4 million from the prior quarter.

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