UBS results in second quarter 2008

- Net loss attributable to UBS shareholders of CHF 358 million

Operating income

Net income from trading businesses was negative CHF 3,935 million. The most substantial impact came from additional credit valuation adjustments on protection bought from monoline insurers. Most of the other losses relate to exposures to the US residential real estate market (sub-prime and Alt-A) and the US reference-linked note program.

Net income from interest margin businesses was down by 1% from second quarter 2007 to CHF 1,526 million, as higher loan and savings volumes at Wealth Management International & Switzerland were offset by lower income from mortgages and savings accounts.

Net fee and commission income, at CHF 6,221 million, was down by 21% from a year earlier, with decreases in all major categories.

Operating expenses

Personnel expenses were down by 36% from second quarter 2007, at CHF 4,612 million, reflecting primarily lower accruals on performance-related compensation and the reversal of accruals recognized in first quarter 2008 relating to changes to the forfeiture provisions of future equity ownership plan (EOP) awards.

General and administrative expenses increased by 25% in second quarter 2008 compared with the same period one year prior. Cost-cutting in all categories was offset by provisions made for the expected costs of the repurchase of auction rate securities and related costs, including fines, of CHF 919 million.

Income taxes

Recognition of a net income tax benefit of CHF 3,829 million for second quarter 2008. This includes a net impact of CHF 3,200 million from the recognition of a deferred tax asset on available tax losses.