Wealth Management USA

Business Group reporting

In second quarter 2005, Wealth Management USA’s pre-tax profit was CHF 133 million, 8% lower than the CHF 144 million in first quarter 2005. Before acquisition costs, pre-tax profit was CHF 197 million in second quarter 2005, down 2% from CHF 201 million in first quarter 2005. On the same basis, but in US dollars, the operating result fell 7% in second quarter 2005 from the previous quarter.

Search only in Quarterly Reporting Q2 2005

Spreadsheets

Business Group reporting

	Quarter ended			% change from		Year to date

CHF million	30.6.05	31.3.05	30.6.04	1Q05	2Q04	30.6.05	30.6.04


Private client revenues	1,267	1,276	1,222	(1)	4	2,543	2,528
Municipal finance revenues	116	64	100	81	16	180	186
Net goodwill funding¹	(51)	(46)	(47)	(11)	(9)	(97)	(93)


Income	1,332	1,294	1,275	3	4	2,626	2,621
Adjusted expected credit loss²	(1)	(1)	(1)	0	0	(2)	(4)


Total operating income	1,331	1,293	1,274	3	4	2,624	2,617


Cash components	868	828	861	5	1	1,696	1,765
Share-based components	36	34	33	6	9	70	66


Total personnel expenses	904	862	894	5	1	1,766	1,831
General and administrative expenses	201	194	208	4	(3)	395	400
Services to / from other business units	64	66	78	(3)	(18)	130	163
Depreciation of property and equipment	16	16	16	0	0	32	36
Amortization of goodwill	0	0	50		(100)	0	100
Amortization of other intangible assets	13	11	28	18	(54)	24	55


Total operating expenses	1,198	1,149	1,274	4	(6)	2,347	2,585


Business Group performance before tax	133	144	0	(8)		277	32
Business Group reporting excluding acquisition costs

Total operating income	1,331	1,293	1,274	3	4	2,624	2,617
Add back: Net goodwill funding¹	51	46	47	11	9	97	93


Operating income excluding acquisition costs	1,382	1,339	1,321	3	5	2,721	2,710


Total operating expenses	1,198	1,149	1,274	4	(6)	2,347	2,585
Retention payments	0	0	(47)		100	0	(99)
Amortization of goodwill	0	0	(50)		100	0	(100)
Amortization of other intangible assets	(13)	(11)	(28)	(18)	54	(24)	(55)


Operating expenses excluding acquisition costs	1,185	1,138	1,149	4	3	2,323	2,331


Business Group performance before tax and acquisition costs	197	201	172	(2)	15	398	379
KPIs

Invested assets (CHF billion)	725	667	652	9	11


Net new money (CHF billion)³	0.8	5.8	2.2			6.6	5.0
Interest and dividend income (CHF billion)⁴	4.7	4.1	3.6	15	31	8.8	7.4
Gross margin on invested assets (bps)⁵	77	79	78	(3)	(1)	78	81
Gross margin on invested assets excluding acquisition costs (bps)⁶	79	82	80	(4)	(1)	81	84


Cost / income ratio (%)⁷	89.9	88.8	99.9			89.4	98.6
Cost / income ratio excluding acquisition costs (%)⁸	85.7	84.9	86.9			85.3	85.9


Recurring income (CHF million)⁹	717	663	628	8	14	1,380	1,232
Financial advisor productivity (CHF thousand)¹⁰	170	171	165	(1)	3	341	336
Capital return and BIS data

Return on adjusted regulatory capital (%)¹¹						10.0	1.2
Return on adjusted regulatory capital before acquisition costs (%)¹²						45.5	46.0
BIS risk-weighted assets (CHF million)	19,885	17,844	19,250	11	3
Goodwill (CHF million)	4,173	3,899	3,243	7	29
Adjusted regulatory capital (CHF million)¹³	6,162	5,683	5,168	8	19
Adjusted regulatory capital excluding goodwill and intangible assets (CHF million)¹⁴	1,913	1,712	1,748	12	9

Additional Information	As at			% change from

	30.6.05	31.3.05	30.6.04	31.3.05	30.6.04


Client assets (CHF billion)	766	703	696	9	10
Headcount (full-time equivalents)	17,501	17,351	17,087	1	2
Financial advisors (full-time equivalents)	7,474	7,403	7,360	1	2

1 Goodwill and intangible asset-related funding, net of risk-free return on the corresponding equity allocated.
2 In management accounts, adjusted expected credit loss rather than credit loss expense is reported for the business groups (see note 2 to the financial statements).
3 Excludes interest and dividend income.
4 For purposes of comparison with US peers.
5 Income (annualized) / average invested assets.
6 Income, add back net goodwill funding (annualized) / average invested assets.
7 Operating expenses / income.
8 Operating expenses less the amortization of goodwill (in 2004), other intangible assets and retention payments / income, add back net goodwill funding.
9 Interest, asset-based fees for portfolio management and fund distribution, account-based and advisory fees.
10 Private client revenues / average number of financial advisors.
11 Annualized Business Group performance before tax / adjusted regulatory capital year to date average.
12 Annualized Business Group performance before tax and acquisition costs / adjusted regulatory capital excluding goodwill and intangible assets year to date average.
13 10% of BIS risk-weighted assets plus goodwill.
14 10% of BIS risk-weighted assets excluding intangible assets.

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