UBS - Global Wealth Management & Business Banking

Business Strategy Organizational structure

Graphs

Global Wealth Management & Business Banking is a leading global provider of financial services for wealthy clients and the leading bank for individual and corporate clients in Switzerland.

Business division reporting
	As of or for the year ended			% change from
CHF million, except where indicated	31.12.08	31.12.07	31.12.06	31.12.07
Income	21,690	24,841	21,775	(13)
Credit loss (expense) / recovery	(421)	28	109
Total operating income	21,269	24,869	21,884	(14)
Cash components	9,191	10,564	9,074	(13)
Share-based components ¹	187	444	377	(58)
Total personnel expenses	9,378	11,008	9,451	(15)
General and administrative expenses	5,367	3,178	3,078	69
Services (to) / from other business units	926	1,106	1,040	(16)
Depreciation of property and equipment	261	241	232	8
Amortization of intangible assets	98	85	63	15
Total operating expenses	16,030	15,618	13,864	3
Business division performance before tax	5,240	9,251	8,020	(43)

Key performance indicators
Cost / income ratio (%) ²	73.9	62.9	63.7

Attributed equity and risk-weighted assets
Average attributed equity (CHF billion) ³	17.3
Return on attributed equity (RoaE) (%) ⁴	30.4
BIS risk-weighted assets (CHF billion) ⁵	89.2	169.7	155.2
Return on BIS risk-weighted assets (%) ⁶	5.8	5.6	5.3
Goodwill and intangible assets (CHF billion) ⁷	6.2	5.8	6.0

Additional information
Invested assets (CHF billion)	1,599	2,298	2,123	(30)
Net new money (CHF billion) ⁸	(123.0)	156.3	114.5
Client assets (CHF billion)	2,393	3,554	3,337	(33)
Personnel (full-time equivalents)	49,541	51,243	48,200	(3)
1 Includes social security contributions and expenses related to alternative investment awards. 2 Operating expenses / income. 3 Refer to the "Capital management" section of this report for more information about the equity attribution framework, which was implemented in 2008. 4 Business division performance before tax / average attributed equity. 5 BIS risk-weighted assets (RWA) are according to Basel II for 2008, and according to the Basel I framework for 2007 and 2006. 6 Business division performance before tax / average BIS RWA. 7 2007 and 2006 represent goodwill and intangible assets in excess of 4% of BIS tier 1 capital. 8 Excludes interest and dividend income.

Business

A global branch network delivers comprehensive financial services to wealthy private individuals around the world and to private and corporate clients in Switzerland. All clients are provided with the advice, financial products and tools that fit their individual needs.

Strategy

The cornerstones of this business division's strategy are:

- to strengthen its global leadership in wealth management by actively investing in fast-growing markets and developing a strong focus on high and ultra-high net worth clients;

- to position UBS as the universal bank of choice in Switzerland by strengthening its position across all client segments, as well as developing clients across segments and therefore each client relationship to its full potential; and

- to maximize risk-adjusted profits by a balanced focus on top-line growth, risk and efficiency.

UBS places great emphasis on differentiating strategies for individual markets according to their profitability and growth potential. In the international markets where UBS is well established with a high market share and in Switzerland, the focus is on maximizing productivity and profitability as the growth prospects are less high. For domestic businesses within the five biggest European economies, UBS aims to increase profitability. For the key domestic US presence, UBS concentrates on continuing earnings growth and achieving profitability comparable with the best of its peer group. In those international markets which have been expanding strongly (for example, Asia, Eastern Europe, Latin America and the Middle East), UBS will continue to invest actively in order to tap their long-term growth potential. In addition, within the next seven to 10 years UBS plans to establish a significant domestic presence in select markets where its business is not yet mature.

Organizational structure

Formed on 1 July 2005, this business division encompassed UBS's global wealth management businesses and the Swiss corporate and retail banking unit. Throughout 2008, until the recent reorganization, it comprised the following business units: Wealth Management International & Switzerland, serving wealthy and affluent clients around the world, except domestic clients in the US; Wealth Management US, serving wealthy and affluent domestic US clients; and Business Banking Switzerland, serving retail and corporate clients in Switzerland. Each of these business units is provided with infrastructure, products and services by the business division's support functions, which also provide services to other UBS business divisions under a transfer pricing mechanism.

On 10 February 2009, UBS announced a reorganization of its global wealth management and Swiss business banking businesses. Global Wealth Management & Business Banking has been divided into two new business divisions: Wealth Management & Swiss Bank, which comprises all wealth management business booked outside the Americas plus the Swiss private and corporate client business; and Wealth Management Americas, including Wealth Management US, the domestic Canadian and Brazilian businesses, as well as the international business booked in the United States.

This new management structure will be the basis for the business division's segment reporting starting with UBS's financial report for first quarter 2009. UBS will provide separate segment reporting for Wealth Management & Swiss Bank and Wealth Management Americas. UBS has chosen to subdivide Wealth Management & Swiss Bank into Swiss and international business areas for reporting purposes (income data and key performance indicators):

- "Swiss clients" will cover services provided to Swiss retail, wealth management and small businesses, as well as corporate and institutional clients.

- "International clients" will encompass the international wealth management business conducted out of Switzerland and all wealth management businesses of UBS's other booking centers in Asia and Europe.

Prior to publication of first quarter 2009 results, UBS will publish restated business division results on www.ubs.com/investors showing quarterly and annual results for 2007 and 2008 under the new organizational structure announced on 10 February 2009.

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