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UBS reports first quarter net profit of CHF 2,423 million

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Best quarterly performance ever, double the result reported in first quarter 2003 (up 100% or 82% before goodwill amortization) - Operating income up 33% with revenue growth in all businesses - Annualized RoE at 29.2% (31.9% before goodwill), and earnings per share up 114% (up 95% before goodwill) -- both at all-time highs - Net new money of CHF 35 billion in total, with record CHF 19 billion from wealth management clients worldwide

Quarter ended

     % change from

CHF million






Operating income

10 295

8 538

7 768



Operating expenses

7 206

6 303

6 174



Operating profit before tax and minority interest

3 089

2 235

1 594



Net profit

2 423

1 808

1 209



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UBS reports net profit of CHF 2,423 million in first quarter 2004, a 100% rise from the same period a year earlier, and the best quarterly performance on record. Before goodwill amortization, net profit rose 82%.

"This outstanding performance reflects the excellent conditions in major financial markets. It also shows the payoff from investing in our businesses countercyclically over the past few years -- positioning ourselves for exactly these kinds of opportunities. And it demonstrates that we are growth managers as well as cost and risk managers," said Peter Wuffli, Chief Executive Officer.

All businesses reported both revenue and pre-tax profit gains in first quarter compared to a year earlier. The Investment Bank recorded a 115% gain in pre-tax profit, with results driven by the best fixed income and second best equities performances since 2000. The Wealth Management and Global Asset Management businesses reported their best results in three years, and the Wealth Management USA business saw its best operating performance since PaineWebber became part of UBS.

Net new money flows show that UBS's wealth and asset management businesses are growing fast. This quarter saw clients adding a total of CHF 35.1 billion to their investments with UBS. Inflows from institutional asset management clients reached an all-time high of CHF 10.1 billion. Private clients contributed a record CHF 19.0 billion to the wealth management businesses worldwide, compared to CHF 11.1 billion a year earlier and CHF 14.2 billion in fourth quarter 2003. The domestic European wealth management business saw a record inflow of CHF 4.2 billion.

Operating income was up 33% from first quarter 2003 to its highest quarterly level ever. Revenues rose across all categories. The increase in market levels positively impacted the asset base of the wealth and asset management businesses, prompting fee-based revenue to rise. Fee and brokerage income profited from the seasonally strong first quarter and a much improved market environment that saw significantly increased institutional and private client activity.
Corporate finance fees grew 75% in an improving M&A environment, with the total global corporate fee pool increasing by 40%.

Increased market risk limits allowed UBS to take advantage of the favorable trading conditions in first quarter. Set against a 34% increase in average Value at Risk (VaR) compared to a year earlier, total income from trading activities rose 33%. Equities trading income was at its highest level since first quarter 2001, driven by a rapid expansion in market volumes, far higher client activity levels and therefore a significant improvement in trading opportunities. Proprietary trading revenues recovered sharply from the particularly weak first quarter in 2003. Fixed income trading continued to perform strongly, driven by another quarter of favorable interest rates and yield curve configuration, alongside strong client flows.

UBS experienced another excellent credit result, posting a net credit recovery of CHF 3 million in first quarter 2004 compared to a credit loss expense of CHF 69 million a year earlier.
Operating expenses, up 17% from first quarter 2003, rose far less than revenues, with the increase mainly reflecting higher accruals for performance-related compensation.

Global brand campaign launched
One of the key elements in UBS's growth strategy is the firm's investment in building a strong brand. This was reflected in a new global advertising campaign launched in February. The campaign -- themed "You and us" -- shows how UBS delivers global financial resources through personal client relationships based on intimate understanding. The advertising investment concentrates on key markets where UBS needs to further build familiarity with its brand in order to achieve its growth targets -- particularly the US.

Senior executive appointment
Georges Gagnebin, currently Chairman of the Wealth Management & Business Banking Business Group, has decided to pursue a new challenge within UBS. On 1 October 2004, he will step down from the Group Executive Board to focus full-time on his role as Vice Chairman of the holding company housing our independent private banks and the GAM asset management business.
Georges Gagnebin held several senior management roles with UBS over the last 13 years, and was head of the firm's private banking business from 2000 to the middle of 2002. UBS is grateful for his valuable contribution in building the firm's wealth management business into the leading franchise worldwide.

For UBS, the year started with an extremely strong first quarter. Conditions in all businesses were simultaneously excellent. As the year progresses, such a positive combination of circumstances is not likely to continue, in particular given the natural seasonality which boosts the first quarter in some businesses.
"With our businesses firing on all cylinders and the growth indicators all showing positive, we have every reason to feel optimistic about UBS's future," said Clive Standish, Chief Financial Officer.

Financial ratios
Annualized return on equity for first quarter 2004 was 29.2%, compared to 13.2% a year earlier. Basic earnings per share were CHF 2.25 in first quarter 2004, compared to CHF 1.05 a year earlier. The cost/income ratio was 70.0%, compared to 78.8% a year earlier.

Performance against UBS financial targets
(pre-goodwill and adjusted for significant financial events)
UBS sets its financial targets and evaluates performance in terms of adjusted results, excluding significant financial events* and excluding the amortization of goodwill and other intangible assets.
UBS's performance against financial targets shows:

  • Annualized return on equity in first quarter 2004 was 31.9%, up from 15.8% a year earlier and well above the target range of 15 to 20%. It was the best result ever, reflecting higher net profit combined with a lower average level of equity resulting from continued share buyback programs.

  • Basic earnings per share also stood at CHF 2.46, the highest level ever, up 95% from the CHF 1.26 seen in the same quarter a year ago, driven by the same factors as return on equity.

  • The cost/income ratio was 67.8%, an improvement from 75.7% in the same period last year -- and the lowest level since 2000. Its progress reflects higher revenues generated from a fixed cost base that has been steadily reduced over the last few years.

Year to date (annualized as applicable)




RoE (%)

as reported





before goodwill and adjusted for significant financial events





For the quarter ended




Basic EPS (CHF)

as reported





before goodwill and adjusted for significant financial events





Cost / income ratio (%)

as reported





before goodwill and adjusted for significant financial events





Net new money, wealth management units (CHF billion)


Wealth Management




Wealth Management USA








Further information



Full Media Release:

Quarterly results

Further information on UBS's quarterly results is available in the Investors & Analysts section.

Further information:

  • 1Q2004 Report (pdf and interactive version)

  • 1Q2004 Results slide presentation

  • Letter to shareholders (English, German, French and Italian)

Webcast: The results presentation by Peter Wuffli, Chief Executive Officer, and Clive Standish, Chief Financial Officer, will be webcast live via at the following time on 4 May 2004:

  • 0900 CET

  • 0800 GMT

  • 0300 US EDT

Webcast playback will be available from 1400 CET on 4 May 2004, with a bookmarked version at 1800 CET the same day.

Zurich / Basel, 4 May 2004