2005 was our most profitable year since 2000. Pre-tax profit was CHF 5,181 million, up 12% from 2004. Before goodwill, pre-tax profit was up 6%. The result was driven by strong revenues in investment banking and in equities, reflecting our successful expansion in significant growth areas such as M&A, equity derivatives and prime brokerage. At the same time, costs increased as our business continued to expand.
Total operating income in 2005 was CHF 17,484 million, up 9% from CHF 16,083 million a year earlier.
Equities revenues were up 18% from 2004. Significant drivers of the increase were the derivatives business in the Asia Pacific region and in Europe as well as in prime brokerage where we saw an impressive revenue gain in the US. Our proprietary and our equity-linked businesses contributed slightly lower returns than the previous year.
Fixed income, rates and currencies revenues were down 4% from a year earlier. Revenues in the rates business were up against the prior year as a result of rising revenues in energy trading and derivatives. Credit fixed income saw lower revenues in structured credit as well as in the high-yield sector and in the foreign exchange and cash and collateral trading business. Credit default swaps hedging loan exposures recorded gains of CHF 103 million compared to losses of CHF 62 million a year earlier.
Investment banking revenues increased 31% from a year earlier. This reflected growth in each region. Revenues in the capital markets business rose as well on improved market conditions and our strengthened competitive position.
Higher personnel costs and increased allocated costs prompted total operating expenses in 2005 to rise to CHF 12,303 million, a 7% increase from CHF 11,473 million a year earlier.
Personnel expenses increased 14% from a year earlier, reflecting an increase in the bonus accrual and additional salary payments due to higher staff levels. General and administrative expenses were down 13% from 2004’s CHF 2,538 million. Lower provisions were partially offset by an increase in IT and other outsourcing costs.
The full-year compensation ratio, at 53%, rose two percentage points between 2005 and 2004. This reflects higher performance-related compensation and increased levels of staff.
For the year ended or as at | ||
CHF million, except where indicated | 31.12.05 | 31.12.04 |
Total operating income | 17,484 | 16,083 |
Total operating expenses | 12,303 | 11,473 |
Business Group performance before tax | 5,181 | 4,610 |
Personnel (full-time equivalents) | 18,174 | 16,970 |
– We are one of the world’s leading firms in the investment banking and securities business, providing a full spectrum of services to corporate and institutional clients, governments and financial intermediaries
– Our headquarters are in London and New York. We employ roughly 18,200 people in 34 countries around the world, with our business run on a global basis and organized into the three distinct areas of equities; fixed income rates and currencies; and investment banking
– With one in nine shares traded globally handled by UBS, we are a leading participant in the global primary and secondary markets for equity, equity-linked and equity derivative products. We are a member of 108 stock exchanges
– Our fixed income, rates and currencies business delivers a broad range of products and solutions to corporate and institutional clients in all major markets
– In investment banking, we provide first-class advice and execution capabilities to global corporate, financial sponsor and hedge fund clients. Our services include advising on mergers and acquisitions, strategic reviews and corporate restructuring solutions
Create your own report by searching and selecting articles of our Annual Reporting products.
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 1998-2008. All rights reserved.
Privacy Policy