Investment Bank

Business description

The Investment Bank comprises the following business units:

The equities business unit distributes, trades, finances and clears cash equity and equity-linked products. It also structures, originates and distributes new equity and equity-linked issues and provides research on companies, industry sectors, geographical markets and macro-economic trends.

The fixed income, currencies and commodities (FICC) business unit services corporate, institutional and public sector clients in all major markets globally. Major business areas include: credit, rates, foreign exchange and money markets, structured products, commodities, debt capital markets and emerging markets.

The investment banking department provides services to corporate clients, financial sponsors and hedge funds. Its advisory group assists on transactions and advises on strategic reviews and corporate restructuring solutions. Its capital markets and leveraged finance teams arrange the execution of primary and secondary equity, as well as debt issues worldwide.

Performance in 2007

Pre-tax loss of CHF 15,525 million (profit of CHF 5,943 million in 2006), due to losses in FICC on sizeable positions related to the US mortgage market.

Performance in other areas was strong:

Record equities revenues, up 13% from 2006. Retained market leadership in secondary equities trading.

Record investment banking revenues, up 39% from 2006, with market share gains exceeding growth of the global fee pool.

Recent developments

Repositioning of FICC to:

– strengthen client-facing businesses;

– improve cooperation with other parts of UBS;

– strengthen risk discipline; and

– create a workout group for mortgage-backed securities and collateralized debt obligation portfolios, including the positions that caused the 2007 losses.