Balance sheet

UBS’s total assets stood at CHF 1,839 billion on 31 March 2005, up from CHF 1,737 billion on 31 December 2004. Half of the CHF 102 billion rise was prompted by the strengthening of a number of major currencies against the Swiss franc. Increases were registered in net collateral trading (CHF 47.7 billion), trading assets (CHF 46.1 billion) and the loan book (CHF 16.2 billion), partially offset by a drop in derivative replacement values of CHF 16.3 billion.

Lending and borrowing

Our loans to customers position increased to CHF 248.4 billion on 31 March 2005, up by CHF 16.2 billion from 31 December 2004. This is the result of higher levels of lending mainly in the Investment Bank and, to a smaller extent, in the Wealth Management & Business Banking Business Group (see 'Credit risk').

Repo and securities borrowing / lending

Cash collateral on securities borrowed and reverse repurchase agreements stood at CHF 625.1 billion on 31 March 2005, up by CHF 47.7 billion from 31 December 2004. However, this asset value already includes the effect of some netting between asset and liability positions. On a gross basis, before allowable netting, the position increased by CHF 90.7 billion. The rise was driven by the fixed income matched book (a portfolio comprised of assets and liabilities with equal maturities and equal value, so that the market risk cancels out), primarily because of higher client activity and increased securities lending activities. The equity book also increased, reflecting higher stock borrowing and lending activities in the US market mainly with institutional counterparties.

Trading portfolio / derivative instruments

From 31 December 2004 to 31 March 2005, trading assets rose by CHF 46.1 billion to CHF 594.7 billion, while the value of derivative instruments decreased by CHF 16.3 billion to CHF 268.3 billion. Trading assets inventory for commercial paper rose by CHF 15.2 billion, while debt instruments were up CHF 18.2 billion, mainly due to higher positions in our mortgagebased securities inventory and in asset-backed securities. This was partially offset by reduced positions in Japanese government bonds. The value of equity instruments increased as well, and traded loans expanded in order to build up an inventory for securitization. The position in derivative instruments fell, mainly due to higher US dollar rates affecting the value of the foreign exchange swap book.