Financial Statements

Income Statement

	For the year ended		% change from
CHF million	31.12.05	31.12.04	31.12.04
Interest and discount income	27,320	18,902	45
Interest and dividend income from trading portfolio	12,482	10,457	19
Interest and dividend income from financial investments	36	13	177
Interest expense	(33,972) (21,659)	57
Net interest income	5,866	7,713	(24)
Credit-related fees and commissions	244	228	7
Fee and commission income from securities and investment business	9,751	8,002	22
Other fee and commission income	773	735	5
Fee and commission expense	(1,349) (1,135)	19
Net fee and commission income	9,419	7,830	20
Net trading income	7,289	3,469	110
Net income from disposal of financial investments	95	87	9
Income from investments in associated companies	3,943	461	755
Income from real estate holdings	38	46	(17)
Sundry income from ordinary activities	46	1,418	(97)
Sundry ordinary expenses	(234) (26)	800
Other income from ordinary activities	3,888	1,986	96
Operating income	26,462	20,998	26
Personnel expenses	10,999	9,699	13
General and administrative expenses	4,113	3,833	7
Operating expenses	15,112	13,532	12
Operating profit	11,350	7,466	52
Depreciation and write-offs on investments in associated companies and fixed assets	1,265	1,021	24
Allowances, provisions and losses	27	184	(85)
Profit before extraordinary items and taxes	10,058	6,261	61
Extraordinary income	5,274	1,016	419
Extraordinary expenses	0	49	(100)
Tax expense / (benefit)	1,835	1,282	43
Profit for the period	13,497	5,946	127

Balance Sheet

			% change from
CHF million	31.12.05	31.12.04	31.12.04

Assets
Liquid assets	2,712	4,152	(35)
Money market paper	47,840	31,262	53
Due from banks	431,071	350,055	23
Due from customers	185,331	159,988	16
Mortgage loans	153,387	132,941	15
Trading balances in securities and precious metals	358,600	288,170	24
Financial investments	4,216	4,503	(6)
Investments in associated companies	22,016	20,547	7
Fixed assets	4,527	4,212	7
Accrued income and prepaid expenses	5,359	3,129	71
Positive replacement values	136,503	128,300	6
Other assets	7,980	8,550	(7)
Total assets	1,359,542	1,135,809	20
Total subordinated assets	6,094	4,970	23
Total amounts receivable from Group companies	557,355	446,850	25

Liabilities
Money market paper issued	52,335	29,637	77
Due to banks	482,134	428,371	13
Due to customers on savings and deposit accounts	86,997	83,976	4
Other amounts due to customers	406,724	316,467	29
Medium-term bonds	1,464	1,686	(13)
Bond issues and loans from central mortgage institutions	102,386	60,125	70
Accruals and deferred income	11,451	7,588	51
Negative replacement values	160,002	158,811	1
Other liabilities	5,648	5,951	(5)
Allowances and provisions	4,249	3,929	8
Share capital	871	901	(3)
General statutory reserve	7,927	7,572	5
Reserve for own shares	10,562	9,056	17
Other reserves	13,295	15,793	(16)
Profit for the period	13,497	5,946	127
Total liabilities	1,359,542	1,135,809	20
Total subordinated liabilities	16,022	12,695	26
Total amounts payable to Group companies	404,108	357,311	13

Statement of Appropriation of Retained Earnings

CHF million
The Board of Directors proposes to the Annual General Meeting the following appropriation:
Profit for the financial year 2005 as per the Parent Bank’s Income Statement	13,497
Appropriation to general statutory reserve	334
Appropriation to other reserves	9,788
Proposed dividends	3,375
Total appropriation	13,497

Dividend Distribution

The Board of Directors will recommend to the Annual General Meeting on 19 April 2006 that UBS should pay a dividend of CHF 3.20 per share of CHF 0.80 par value. If the dividend is approved, the payment of CHF 3.20 per share, after deduction of 35% Swiss withholding tax, would be made on 24 April 2006 for shareholders who hold UBS shares on 19 April 2006.

In addition to the already increased dividend of CHF 3.20, the Board of Directors proposes that a repayment of CHF 0.60 per share be made to shareholders by means of a reduction in the par value from CHF 0.80 to CHF 0.20 for all registered shares. This payout will not be subject to the 35% Swiss withholding tax. Subject to the approval by the shareholders and the entry of the capital reduction in the Commercial Register, the payout will be made on 12 July 2006, to those shareholders in possession of UBS shares on 7 July 2006.