Global Asset Management

John A. Fraser Chairman and CEO Global Asset Management

Global Asset Management reported a pre-tax profit of CHF 544 million for full-year 2004, up 64% from CHF 332 million in 2003. The increase was driven by higher operating income, which rose 16%, reflecting strong net new money inflows, a continuing change in asset mix towards higher-margin products and a rise in market valuations, resulting in increased asset levels and revenues. This was only partially offset by a slight rise in operating expenses, mainly due to higher incentive- based compensation as a result of the higher revenues. For 2004, the pre-goodwill cost / income ratio was 66.7%, a decrease of 5.4 percentage points from 2003.

For full-year 2004, net new money inflows in the institutional business stood at CHF 23.7 billion, almost doubling from CHF 12.7 billion a year earlier. Strong inflows were recorded into alternative and quantitative investments, equity and fixed income mandates. The gross margin for full-year 2004 was 32 basis points, on par with full-year 2003.

The wholesale intermediary fund business recorded a net new money outflow of CHF 4.5 billion compared to an out- flow of CHF 5.0 billion in 2003. Inflows of CHF 16.1 billion into fixed income, asset allocation and equity funds were more than offset by money market outflows of CHF 20.6 billion, mainly transfers into UBS’s US bank. The 2004 gross margin was 36 basis points, up by 5 basis points from a year earlier, reflecting the significant improvement of wholesale intermediary fees as a result of the continuing shift to higher-margin products.

Invested assets for the Business Group totaled CHF 601 billion on 31 December 2004, up from CHF 574 billion at the end of 2003.

Business Group reporting