Wealth Management USA

In third quarter 2004, Wealth Management USA’s pre-tax profit was CHF 43 million, up from CHF 16 million in second quarter 2004. The improvement reflects the end of merger-related retention payments, partially offset by declining transactional revenue related to lower client activity. Before acquisition costs, third quarter 2004 pre-tax profit was CHF 169 million, 10% lower than a quarter earlier. Net new money, totaling CHF 5.3 billion, showed renewed strength.

Business Group Reporting

	Quarter ended			% change from		Year to date

CHF million, except where indicated	30.9. 2004	30.6. 2004	30.9. 2003	2Q04	3Q03	30.9. 2004	30.9. 2003


Private client revenues	1,173	1,222	1,243	(4)	(6)	3,701	3,739¹
Municipal finance revenues	106	100	103	6	3	292	349
Net goodwill funding	(48)	(47)	(62)	(2)	23	(141)	(181)


Income	1,231	1,275	1,284	(3)	(4)	3,852	3,907
Adjusted expected credit loss²	(1)	(1)	(2)	0	50	(5)	(7)


Total operating income	1,230	1,274	1,282	(3)	(4)	3,847	3,900


Personnel expenses³	813	878	948	(7)	(14)	2,617	2,718
General and administrative expenses	202	208	164	(3)	23	602	539
Services to / from other business units	76	78	109	(3)	(30)	239	327
Depreciation	18	16	20	13	(10)	54	54
Amortization of goodwill and other intangible assets	78	78	84	0	(7)	233	257


Total operating expenses	1,187	1,258	1,325	(6)	(10)	3,745	3,895


Business Group performance before tax	43	16	(43)	169		102	5

Business Group reporting excluding acquisition costs and significant financial events

	Quarter ended			% change from		Year to date

CHF million, except where indicated	30.9. 2004	30.6. 2004	30.9. 2003	2Q04	3Q03	30.9. 2004	30.9. 2003


Total operating income	1,230	1,274	1,282	(3)	(4)	3,847	3,739⁴
Add back: Net goodwill funding⁵	48	47	62	2	(23)	141	181


Operating income excluding acquisition costs	1,278	1,321	1,344	(3)	(5)	3,988	3,920


Total operating expenses	1,187	1,258	1,325	(6)	(10)	3,745	3,895
Retention payments	0	(47)	(67)	100	100	(99)	(201)
Amortization of goodwill and other intangible assets	(78)	(78)	(84)	0	7	(233)	(257)


Operating expenses excluding acquisition costs	1,109	1,133	1,174	(2)	(6)	3,413	3,437


Business Group performance before tax and acquisition costs	169	188	170	(10)	(1)	575	483

1 Includes significant financial event: gain on disposal of Correspondent Services Corporation of CHF 161 million.
2 In management accounts, adjusted expected credit loss rather than credit loss is reported for the Business units (see Note 2 to the Financial Statements).
3 Includes retention payments in respect of the PaineWebber acquisition. There have been no further retention payments after second quarter 2004.
4 Excludes significant financial event: Gain on disposal of Correspondent Services Corporation of CHF 161 million.
5 Goodwill and intangible asset-related funding, net of risk-free return on the corresponding equity allocated.

KPI's	Quarter ended			% change from		Year to date

	30.9. 2004	30.6. 2004	30.9. 2003	2Q04	3Q03	30.9. 2004	30.9. 2003


Invested assets (CHF billion)	654	652	626	0	4


Net new money (CHF billion)¹	5.3	2.2	5.7			10.3	13.3
Interest and dividend income (CHF billion)²	4.1	3.6	4.0	14	3	11.5	11.8
Gross margin on invested assets (bps)³	75	78	82	(4)	(9)	79	87
Gross margin on invested assets excluding acquisition costs and SFEs (bps)⁴	78	80	86	(3)	(9)	82	87


Cost / income ratio (%)⁵	96.4	98.7	103.2			97.2	99.7
Cost / income ratio excluding acquisition costs and SFEs (%)⁶	86.7	85.7	87.2			85.5	87.5


Recurring fees⁷	522	523	512	0	2	1,563	1,421
Financial advisor productivity (CHF thousand)⁸	160	165	153	(3)	5	495	424

Additional Information				% change from

As at	30.9. 2004	30.6. 2004	30.9. 2003	2Q04	3Q03


Client assets (CHF billion)	685	696	668	(2)	3
Regulatory equity allocated (average)	5,150	5,250	5,550	(2)	(7)
Headcount (full-time equivalents)	17,210	17,087	17,643	1	(2)
Financial Advisors (full-time equivalents)	7,343	7,360	8,001	0	(8)

1 Excludes interest and dividend income.
2 For purposes of comparison with US peers.
3 Income (annualized) / average invested assets.
4 Income (annualized), addv 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.
8 Private client revenues less significant financial events / average number of financial advisors.

Top

Important legal information - please read the disclaimer before proceeding.
Products and services in these webpages may not be available for residents of certain nations. Please consult the sales restrictions relating to the service in question for further information.
© UBS 1998-2009. All rights reserved.
Privacy Policy