Investment Bank

Business group reporting

In second quarter 2008, the Investment Bank recorded a pre-tax loss of CHF 5,233 million, compared with a pretax profit of CHF 1,659 million in second quarter 2007. This decline mainly reflects net revenues of negative CHF 4,720 million in the fixed income, currencies and commodities area. These were largely due to further 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.

Search only in Quarterly Reporting Q2 2008

Spreadsheets

Business group reporting

Business group reporting
	As of or for the quarter ended			% change from		Year-to-date
CHF million	30.6.08	31.3.08	30.6.07	1Q08	2Q07	30.6.08	30.6.07
Investment banking	1,008	557	2,079	81	(52)	1,566	3,414
Advisory	437	376	697	16	(37)	813	1,135
Capital market revenues	750	279	1,472	169	(49)	1,029	2,452
Equities	438	108	874	306	(50)	546	1,420
Fixed income, currencies and commodities	312	171	598	82	(48)	483	1,032
Other fee income and risk management	(179)	(98)	(90)	(83)	(99)	(276)	(173)

Sales and trading	(3,178)	(17,165)	4,142	81		(20,343)	9,065
Equities	1,542	1,948	2,673	(21)	(42)	3,490	5,541
Fixed income, currencies and commodities	(4,720)	(19,113)	1,469	75		(23,833)	3,524
Total Investment Bank income	(2,170)	(16,608)	6,221	87		(18,778)	12,479
Credit loss (expense) / recovery	(10)	(308)	3	(97)		(318)	(17)
Total Investment Bank operating income core business	(2,180)	(16,916)	6,224	87		(19,096)	12,462
Own credit	(122)	2,103	0			1,981	0
Total Investment Bank operating income as reported	(2,302)	(14,813)	6,224	84		(17,116)	12,462
Cash components	1,731	2,068	2,829	(16)	(39)	3,798	5,855
Share-based components ¹	(237)	(34)	560	(597)		(271)	1,156
Total personnel expenses	1,494	2,034	3,389	(27)	(56)	3,527	7,011
General and administrative expenses	784	1,116	941	(30)	(17)	1,900	1,700
Services (to) / from other business units	248	192	150	29	65	439	360
Depreciation of property and equipment	45	51	46	(12)	(2)	97	100
Impairment of goodwill	341	0	0			341	0
Amortization of intangible assets	20	22	39	(9)	(49)	43	93
Total operating expenses	2,931	3,415	4,565	(14)	(36)	6,347	9,264
Business group performance before tax	(5,233)	(18,228)	1,659	71		(23,462)	3,198

Key performance indicators
Compensation ratio (%) ²	N/A ³	N/A ³	54.5			N/A ³	56.2
Cost / income ratio (%) ⁴	N/A ³	N/A ³	73.4			N/A ³	74.2
Impaired lending portfolio as a % of total lending portfolio, gross	0.4	0.3	0.1
Average VaR (10-day, 99% confidence, 5 years of historical data)	313	306	520	2	(40)

Attributed equity and risk-weighted assets
Average attributed equity (CHF billion) ⁵	27.0	28.0		(4)
Return on attributed equity (RoaE) (%) ⁶						(170.6)
BIS risk-weighted assets (CHF billion) ⁷	214.2	225.2	195.3	(5)
Return on BIS risk-weighted assets (%) ⁸						(21.1)	3.5
Goodwill and intangible assets (CHF billion) ⁹	4.8	4.9	5.5	(2)

Additional information
Personnel (full-time equivalents)	19,475	21,170	22,137	(8)	(12)
1 Additionally includes social security contributions and expenses related to alternative investment awards. 2 Personnel expenses / income. 3 Both the cost / income and the compensation ratios are not meaningful due to losses recorded in the Investment Bank. 4 Operating expenses / income. 5 See this page for further explanation. 6 Year-to-date business group performance before tax (annualized as applicable) / attributed equity (year-to-date average). 7 BIS risk-weighted assets (RWA) are according to Basel II; for quarters prior to 1Q08, RWA are according to the Basel I framework. 8 Year-to-date business group performance before tax (annualized as applicable) / BIS RWA (year-to-date average). 9 Quarters prior to 1Q08 represent goodwill and intangible assets in excess of 4% of BIS tier 1 capital.