Recent developments

UBS provided an update on its strategic positioning at its 15 April 2009 annual general meeting (AGM). Changes to market conditions, lower levels of activity and the decrease in asset prices have resulted in a deterioration of revenue prospects for banks. UBS is in the process of adapting its strategic positioning and size according to this new environment.

Management ­believes that an integrated business model remains fundamentally attractive to UBS. The firm will focus on international wealth management and the Swiss banking business, alongside its global expertise in investment banking and asset management.

Numerous steps are being taken as part of this strategic refocusing. UBS will continue to reduce risks and exit businesses it considers to be high-risk and unpromising. The bank is currently evaluating its businesses to determine which it will remain active in and grow, and which it will exit. As a consequence, UBS will withdraw from certain locations.

The Investment Bank will build on its strong positions in the equities and foreign exchange businesses, as well as in the corporate finance and mergers and acquisitions businesses. As previously announced, the fixed income, currencies and commodities business area of the Investment Bank was significantly restructured at the beginning of 2009 and select businesses were exited or are in the process of being exited (refer to the 2008 annual report for more information on organizational changes since 1 January 2008).

The firm aims to achieve cost savings by the end of 2010 of approximately CHF 3.5 to 4 billion (compared with 2008 levels). UBS ­expects to realize substantial cost savings in all areas and to reduce the number of its employees to about 67,500 in 2010.