Financial performance

UBS results 2007

Losses on trading positions related to the US residential mortgage market totaled approximately CHF 21.3 billion.

Record net fee and commission income of CHF 30.6 billion, reflecting strong performance in wealth and asset management, investment banking and equity underwriting.

Operating expenses for financial businesses, at CHF 34.5 billion, were up 5% from 2006. Higher staff levels drove salary expenses and general and administrative expenses up.

Performance-based compensation declined, reflecting the losses on US mortgage related positions.

UBS performance indicators 2007

Return on equity was negative 10.2%, down from positive 26.4% in 2006.

Diluted earnings per share were negative CHF 2.49, compared with a positive CHF 5.57 in 2006.

Cost / income ratio for financial businesses was 110.3% in 2007, up significantly from 69.7% in 2006.

Net new money at CHF 140.6 billion, down from a record in 2006 (CHF 151.7 billion). The decrease was mostly driven by full-year outflows in Global Asset Management. Record net new money inflows were seen in Swiss and international wealth management (up by CHF 27.5 billion from 2006).

UBS financial highlights
	As of or for the year ended		% change from
CHF million, except where indicated	31.12.07	31.12.06	31.12.06

UBS Group
Operating profit before tax (from continuing and discontinued operations)	(2,800)	15,523
Net profit attributable to UBS shareholders	(4,384)	12,257
Net profit attributable to minority interests	539	493	9

Financial businesses¹
Operating income	31,032	47,171	(34)
Operating expenses	34,503	32,782	5
Net profit attributable to UBS shareholders from continuing operations	(5,235)	11,249
Personnel (full-time equivalents)	83,560	78,140	7

UBS balance sheet and capital management
Balance sheet key figures
Total assets	2,272,579	2,346,362	(3)
Equity attributable to UBS shareholders	35,585	49,686	(28)
Market capitalization	108,654	154,222	(30)
BIS capital ratios
Tier 1 (%)²	8.8	11.9
Total BIS (%)	12.0	14.7
Risk-weighted assets	372,298	341,892	9
Invested assets (CHF billion)	3,189	2,989	7
Long-term ratings
Fitch, London	AA	AA+
Moody's, New York	Aaa	Aa2
Standard & Poor's, New York	AA	AA+

UBS performance indicators
RoE (%)³
as reported	(9.4)	28.2
from continuing operations	(10.2)	26.4
Diluted earnings per share (CHF)
as reported	(2.28)	5.95
from continuing operations⁴	(2.49)	5.57
Cost / income ratio of the financial businesses (%)⁵	110.3	69.7
Net new money, financial businesses (CHF billion)⁶	140.6	151.7
1 Excludes results from Industrial Holdings. 2 Includes hybrid Tier 1 capital. 3 Net profit attributable to UBS shareholders / average equity attributable to UBS shareholders less distributions (where applicable). 4 Details of the earnings per share calculation can be found in Note 8 in Financial Statements 2007. 5 Operating expenses / operating income less credit loss expense or recovery. 6 Excludes interest and dividend income.

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