Wealth Management USA

In fourth quarter 2003, Wealth Management USA’s pre-tax loss was CHF 10 million compared to a pre-tax loss of CHF 43 million in third quarter 2003. Before acquisition costs, pre-tax profit increased 6% to CHF 181 million from CHF 170 million in third quarter 2003. On the same basis, but in US dollars, the operating result was 12% higher than in third quarter 2003.

Interactive Report

Business Group Reporting

	Quarter ended			% change from		Year ended

CHF million, except where indicated	31.12. 2003	30.9. 2003	31.12. 2002	3Q03	4Q02	31.12. 2003	31.12. 2002


Income	1,283	1,284	1,215	0	6	5,190¹	5,561
Credit loss expense ²	(1)	(2)	(2)	(50)	(50)	(8)	(13)


Total operating income	1,282	1,282	1,213	0	6	5,182	5,548


Personnel expenses³	930	970	927	(4)	0	3,712	4,245
General and administrative expenses	250	229	277	9	(10)	988	1,263
Depreciation	33	42	36	(21)	(8)	151	149
Amortization of goodwill and other intangible assets	79	84	1,341⁴	(6)	(94)	336	1,691⁴


Total operating expenses	1,292	1,325	2,581	(2)	(50)	5,187	7,348


Business Group performance before tax	(10)	(43)	(1,368)	77	99	(5)	(1,800)

Business Group Reporting excluding significant financial events

Total operating income	1,282	1,282	1,213	0	6	5,021⁵	5,548
Add back: Net goodwill funding ⁵	50	62	89	(19)	(44)	231	390


Operating income excluding acquisition costs	1,332	1,344	1,302	(1)	2	5,252	5,938


Total operating expenses	1,292	1,325	1,347⁷	(2)	(4)	5,187	6,114⁷
Retention payments	(62)	(67)	(80)	7	23	(263)	(351)
Amortization of goodwill and other intangible assets	(79)	(84)	(107)	6	26	(336)	(457)


Operating expenses excluding acquisition costs	1,151	1,174	1,160	(2)	(1)	4,588	5,306


Business Group performance before tax and excluding acquisition costs	181	170	142	6	27	664	632

1 Includes significant financial event: gain on disposal of Correspondent Services Corporation of CHF 161 million.
2 In management accounts, statistically derived actuarial
expected loss adjusted by deferred releases rather than the net IFRS actual credit loss is reported in the Business Groups (see Note 2 to the Financial Statements).
3 Includes retention payments in respect of the PaineWebber acquisition.
4 Includes significant financial event: writedown of PaineWebber brand name of CHF 1,234 million.
5 Excludes significant financial event: gain on disposal of Correspondent Services Corporation of CHF 161 million.
6 Goodwill and intangible asset-related funding,
net of risk-free return on the corresponding equity allocated.
7 Excludes significant financial event: writedown of PaineWebber brand name of CHF 1,234 million.

KPI's	Quarter ended			% change from		Year ended

	31.12. 2003	30.9. 2003	31.12. 2002	3Q03	4Q02	31.12. 2003	31.12. 2002


Invested assets (CHF billion)	634	626	584	1	9


Net new money (CHF billion) ¹	7.8	5.7	6.3			21.1	18.5
Interest and dividend income (CHF billion) ²	4.0	4.0	3.4	0	18	15.8	17.9
Gross margin on invested assets (bps) ³	81	82	82	(1)	(1)	86	82
Gross margin on invested assets excluding acquisition costs and SFEs (bps) ⁴	85	86	88	(1)	(3)	87	88


Cost/income ratio (%) ⁵	101	103	212			100	132
Cost/ income ratio excluding acquisition costs and SFEs (%) ⁶	86	87	89			87	89


Recurring fees ⁷	506	512	486	(1)	4	1,927	2,199
Financial advisors (full-time equivalents)	7,766	8,001	8,857	(3)	(12)

Additional Information				% change from

As at	31.12. 2003	30.9. 2003	31.12. 2002	3Q03	4Q02


Client assets (CHF billion)	690	668	650	3	6
Regulatory equity allocated (average)	5,400	5,550	6,750	(3)	(20)
Headcount (full-time equivalents)	18,016	18,204	19,563	(1)	(8)

1 Excludes interest and dividend income.
2 For purposes of comparison with US peers.
3 Income (annualized as applicable) / average invested assets.
4 Income (annualized as applicable), add back net goodwill funding and less significant financial events/ average invested assets.
5 Operating expenses /income.
6 Operating expenses less the amortization of goodwill and other intangible assets, retention payments and significant financial events / income, add back net goodwill funding and less significant financial events.
7 Asset-based fees for portfolio management and fund distribution, account-based and advisory fees.

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