Our credit exposures continued to perform well as the global economy showed signs of a slow recovery. In third quarter 2003, we realized an aggregate net writeback of loan loss provisions of CHF 26 million, almost unchanged from the CHF 24 million experienced in second quarter. In third quarter 2002, we reported a net credit loss expense of CHF 95 million.
Wealth Management & Business Banking contributed to this strong result with a net writeback of CHF 29 million compared to a net writeback of CHF 68 million in second quarter 2003 and a net credit loss expense of CHF 57 million in third quarter 2002. This positive development was largely due to the continuing low level of new impairments and recoveries of provisions established in earlier periods.
The Investment Bank experienced a net credit loss of CHF 5 million. Given the size of our aggregate international credit exposures, this is a very strong result and a testimony to our ability to actively manage and control credit risks. In second quarter 2003, the Investment Bank reported a net credit loss of CHF 41 million and in the third quarter 2002 CHF 30 million. The few new impairments recorded during the quarter were to a large extent offset by recoveries as the strong market for distressed credits allowed the disposal of positions at better than anticipated rates.
The UBS loan portfolio amounted to CHF 259.9 billion on 30 September 2003, virtually unchanged from CHF 260.3 billion on 30 June 2003.
In the Investment Bank, gross loan exposure did not materially change but we experienced a reallocation from interbank exposure to loans to customers. Wealth Management & Business Banking was again able to grow its home mortgage lending activity. The growth experienced in this activity, however, was offset by lower demand from the corporate sector. Wealth Management USA’s loan portfolio was CHF 13.7 billion on 30 September 2003, an increase of CHF 722 million or 5.6% from 30 June 2003, reflecting increased client demand for liability products.
Total impaired loans declined to CHF 8,008 million on 30 September 2003 from CHF 8,878 million on 30 June. As a result, the impaired loans to total loans ratio again improved, falling to 3.1% in third quarter from 3.4% in the previous quarter.
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