Annual General Meeting 1999


Item 2: Appropriation of Retained Earnings

A. Proposal
The Board of Directors proposes that the Parent Company profit be appropriated as follows:

Profit for the extended financial year
(1 October 1997-31 December 1998)

CHF 650 million

Release of Other reserves
Retained earnings from previous year

CHF 1,690 million
CHF 3 million

Available for appropriation

CHF 2,343 million

Appropriation to general statutory reserve
Proposed dividends

CHF 190 million
CHF 2,150 million

Retained earnings carried forward

CHF 3 million

B. Explanations
The Board of Directors proposes that the General Meeting of Shareholders approve payment of a dividend of CHF 10 per registered share. This corresponds to the amount paid by both predecessor banks last year.

Since the Parent Company Accounts show a profit of only CHF 650 million as a result of the restructuring charge, an amount of CHF 1,690 million is to be taken from Other reserves established in prior years. If the General Meeting approves the proposal, the dividend for the financial year 1998 will be paid on 27 April 1999, after deduction of 35% federal withholding tax, to the shareholders entered in the share register or their custodian banks.