Financial Statements

Income Statement
	For the year ended		% change from
CHF million	31.12.07	31.12.06	31.12.06
Interest and discount income	58,674	45,978	28
Interest and dividend income from trading portfolio	19,003	15,324	24
Interest and dividend income from financial investments	58	32	81
Interest expense	(75,179)	(57,507)	31
Net interest income	2,556	3,827	(33)
Credit-related fees and commissions	205	199	3
Fee and commission income from securities and investment business	15,468	12,288	26
Other fee and commission income	686	840	(18)
Fee and commission expense	(3,269)	(1,820)	80
Net fee and commission income	13,090	11,507	14
Net trading income	2,767	9,467	(71)
Net income from disposal of financial investments	178	333	(47)
Income from investments in associated companies	2,592	1,910	36
Income from real estate holdings	27	21	29
Sundry income from ordinary activities	3,352	2,982	12
Sundry ordinary expenses	(3,223)	(3,059)	5
Other income from ordinary activities	2,926	2,187	34
Operating income	21,339	26,988	(21)
Personnel expenses	13,505	12,886	5
General and administrative expenses	5,191	4,736	10
Operating expenses	18,696	17,622	6
Operating profit	2,643	9,366	(72)
Depreciation and write-offs on investments in associated companies and fixed assets	8,660	1,352	541
Allowances, provisions and losses	2,780	342	713
Profit before extraordinary items and taxes	(8,797)	7,672
Extraordinary income	4,665	1,095	326
Extraordinary expenses	4	239	(98)
Tax expense	115	1,970	(94)
Profit for the period	(4,251)	6,558

Balance Sheet
CHF million	31.12.07	31.12.06	% change from 31.12.06
Assets
Liquid assets	8,530	2,660	221
Money market paper	60,266	73,430	(18)
Due from banks	527,081	439,098	20
Due from customers	274,510	316,241	(13)
Mortgage loans	141,381	153,114	(8)
Trading balances in securities and precious metals	412,977	411,981	0
Financial investments	1,685	2,844	(41)
Investments in associated companies	21,228	27,076	(22)
Fixed assets	5,273	4,527	16
Accrued income and prepaid expenses	7,221	6,573	10
Positive replacement values	124,244	138,222	(10)
Other assets	13,676	9,975	37
Total assets	1,598,072	1,585,741	1
Total subordinated assets	*6,293*	5,852	8
Total amounts receivable from Group companies	*602,667*	657,919	(8)

Liabilities
Money market paper issued	104,878	69,861	50
Due to banks	491,102	556,136	(12)
Due to customers on savings and deposit accounts	72,303	80,883	(11)
Other amounts due to customers	521,189	508,609	2
Medium-term bonds	3,228	2,238	44
Bond issues and loans from central mortgage institutions	189,023	143,779	31
Accruals and deferred income	17,368	16,672	4
Negative replacement values	145,445	149,879	(3)
Other liabilities	15,576	10,471	49
Allowances and provisions	3,970	2,305	72
Share capital	207	211	(2)
General statutory reserve	8,775	8,295	6
Reserve for own shares	9,441	9,114	4
Other reserves	19,818	20,730	(4)
Profit for the period	(4,251)	6,558
Total liabilities	1,598,072	1,585,741	1
Total subordinated liabilities	*21,114*	21,907	(4)
Total amounts payable to Group companies	*330,567*	450,093	(27)

Statement of Appropriation of Retained Earnings
CHF million
The Board of Directors proposes to the Annual General Meeting the following appropriation:
Profit / (Loss) for the financial year 2007 as per the Parent Bank's Income Statement	(4,251)
Appropriation to other reserves	(4,251)

Stock Dividend, creation of Authorized Capital

The Board of Directors has proposed to the Extraordinary Meeting of Shareholders on 27 February 2008 to create authorized share capital up to a maximum of 5% of the current share capital (103.7 million new shares) to replace the cash dividend for the business year 2007 with a stock dividend. The issuance of shares and the final exchange ratio for the entitlement to the stock dividend (not less than 20:1) will be determined by the Board of Directors on 23 April 2008.

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