Global Asset Management

2Q08 vs 1Q08:

Pre-tax profit increased by CHF 22 million to CHF 352 million. This increase resulted primarily from higher performance fees, particularly in alternative and quantitative investments, that were only partly offset by lower management fee revenues resulting from a lower average quarterly invested asset base. Second quarter also included the positive effect of an adjustment relating to changes to the forfeiture provisions of future equity ownership plan (EOP) awards.

First half 2008 vs first half 2007:

Pre-tax profit increased by 13%, or CHF 80 million, to CHF 682 million. Excluding costs related to the closure of Dillon Read Capital Management (DRCM) in second quarter 2007, pre-tax profit decreased by CHF 132 million due to lower performance fees, mainly in alternative and quantitative investments and the Brazilian asset management business, combined with lower management fees as a consequence of the lower average invested asset base.

Operating income

2Q08 vs 1Q08:

Total operating income rose by 2% to CHF 808 million from CHF 791 million. Institutional revenues rose to CHF 472 million from CHF 427 million. Higher performance fees, from alternative and quantitative investments, and lower operational loss provisions were partly offset by lower management fees from lower invested assets. Wholesale intermediary revenues declined to CHF 336 million from CHF 364 million. Management fees in second quarter were affected by a lower average invested asset base.

First half 2008 vs first half 2007:

Total operating income fell by 23%, or CHF 476 million, to CHF 1,599 million. This decline resulted from lower performance fee revenues, mainly in alternative and quantitative investments and the Brazilian asset management business, and lower management fees from the reduced average invested asset base.

Operating expenses

2Q08 vs 1Q08:

Total operating expenses were CHF 456 million, down from CHF 461 million.

Personnel expenses declined to CHF 291 million from CHF 303 million, mainly reflecting the reversal of accruals recognized in first quarter 2008 relating to changes to the forfeiture provisions of future equity ownership plan (EOP) awards, partly offset by higher severance expenses. Further details regarding the EOP adjustment can be found here.

General and administrative expenses rose to CHF 113 million from CHF 104 million, due to higher professional fees and the inclusion of a full quarter's costs related to the Caisse Centrale de Réescompte business in France.

Depreciation of property and equipment rose by CHF 1 million to CHF 8 million.

Net charges-in from other business groups declined by CHF 5 million to CHF 34 million, reflecting lower charges for IT Infrastructure.

First half 2008 vs first half 2007:

Operating expenses declined by 38%, or CHF 556 million, to CHF 917 million. Excluding costs related to the closure of DRCM in second quarter 2007, operating expenses would have decreased by 27%, or CHF 344 million.

Personnel expenses were reduced by CHF 474 million to CHF 595 million. Excluding costs related to the closure of DRCM, personnel expenses declined by CHF 328 million. The decreases in compensation expenses described above contributed to this reduction in personnel expenses, whereas higher severance costs and the inclusion of acquisitions in France (in first quarter 2008) and Korea (in third quarter 2007) partly offset the decrease.

General and administrative expenses declined to CHF 217 million from CHF 277 million. Excluding DRCM closure costs, general and administrative expenses were down.

Depreciation of property and equipment dropped to CHF 15 million from CHF 42 million. Excluding the costs related to the closure of DRCM, the depreciation of property and equipment was nearly unchanged.

Net charges-in from other business groups declined by CHF 3 million to CHF 73 million.

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