Global Asset Management

Business Group reporting
John A. Fraser

Global Asset Management's pre-tax profit was CHF 66 million in second quarter 2007, a fall of 84% because of costs of CHF 384 million related to the closure of Dillon Read Capital Management (DRCM). Excluding these costs, pre-tax profit would have been CHF 450 million, up CHF 46 million or 11% compared with the prior quarter. Stronger performance fees, particularly in alternative and quantitative investments and the Brazilian asset management business, contributed to the increase.

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Special Content

Business Group reporting

As of or for the quarter ended

% change from

Year to date

CHF million, except where indicated

30.6.07

31.3.07

30.6.06

1Q07

2Q06

30.6.07

30.6.06

Institutional fees

642

585

379

10

69

1,227

841

Wholesale Intermediary fees

436

412

361

6

21

848

708

Total operating income

1,078

997

740

8

46

2,075

1,549

Cash components

558

364

275

53

103

922

568

Share-based components 1

220

59

36

273

511

279

60

Total personnel expenses

778

423

311

84

150

1,201

628

General and administrative expenses

162

115

83

41

95

277

167

Services (to)/from other business units

33

43

6

(23)

450

76

35

Depreciation of property and equipment

35

7

6

400

483

42

11

Amortization of intangible assets

4

5

0

(20)

9

0

Total operating expenses

1,0122

593

406

71

149

1,605 2

841

Business Group performance before tax

66

404

334

(84)

(80)

470

708

KPI

Cost/income ratio (%) 3

93.9

59.5

54.9

77.3

54.3

Institutional

Invested assets (CHF billion)

552

528

451

5

22

of which: money market funds

25

23

18

9

39

Net new money (CHF billion) 4

(2.5)

2.7

4.9

0.2

12.0

of which: money market funds

2.1

(3.9)

0.4

(1.8)

2.4

Gross margin on invested assets (bps) 5

48

45

33

7

45

46

37

1 Additionally includes social security contributions and expenses related to alternative investment awards. 2 Includes CHF 384 million related to the closure of DRCM. 3 Operating expenses/income. 4 Excludes interest and dividend income. 5 Operating income (annualized as applicable)/average invested assets.

Special Content

Business Group reporting (continued)

As of or for the quarter ended

% change from

Year to date

CHF million, except where indicated

30.6.07

31.3.07

30.6.06

1Q07

2Q06

30.6.07

30.6.06

Wholesale Intermediary

Invested assets (CHF billion)

368

355

320

4

15

of which: money market funds

58

58

57

0

2

Net new money (CHF billion) 1

0.5

2.6

(1.3)

3.1

4.2

of which: money market funds

(0.9)

(1.9)

(1.5)

(2.8)

(2.5)

Gross margin on invested assets (bps) 2

48

47

44

2

9

48

43

Capital return and BIS data

Return on allocated regulatory capital (%) 3

46.8

88.9

BIS risk-weighted assets

2,610

2,757

2,146

(5)

22

Goodwill and excess intangible assets 4

1,910

1,684

1,355

13

41

Allocated regulatory capital 5

2,171

1,960

1,570

11

38

Additional information

Invested assets (CHF billion)

920

883

771

4

19

Net new money (CHF billion) 1

(2.0)

5.3

3.6

3.3

16.2

Personnel (full-time equivalents)

3,426

3,511

3,144

(2)

9

1 Excludes interest and dividend income. 2 Operating income (annualized as applicable)/average invested assets. 3 Year to date Business Group performance before tax (annualized as applicable)/allocated regulatory capital year to date average. 4 Goodwill and intangible assets in excess of 4% of BIS Tier 1 Capital. 5 10% of BIS risk-weighted assets plus goodwill and excess intangible assets.

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