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SECURITIES AND EXCHANGE COMMISSION
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date: May 7, 2004
UBS AG
Bahnhofstrasse 45, Zurich, Switzerland, and
Aeschenvorstadt 1, Basel, Switzerland
(Registrant’s Address)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-Fx Form 40-Fo
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yeso Nox
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
Table of Contents
This Form 6-K consists of the First Quarter 2004 Report, which appears immediately following this page.
Table of Contents
Financial Reporting
Table of Contents
First Quarter 2004 Report
4 May 2004
UBS Financial Highlights
1 | Operating expenses / operating income less credit loss expense or recovery. | |
2 | For the EPS calculation, see Note 8 to the Financial Statements. | |
3 | Net profit year to date (annualized as applicable) / average shareholders’ equity less dividends. | |
4 | Includes hybrid Tier 1 capital, please refer to the BIS capital and ratios table in the UBS Results section. | |
5 | Excludes the amortization of goodwill and other intangible assets. | |
6 | There were no significant financial events in the current and comparative periods. | |
7 | Operating expenses less the amortization of goodwill and other intangible assets and significant financial events / operating income less credit loss expense or recovery and significant financial events. | |
8 | Net profit less the amortization of goodwill and other intangible assets and significant financial events (after tax) / weighted average shares outstanding. | |
9 | Net profit for diluted EPS less the amortization of goodwill and other intangible assets and significant financial events (after tax) / weighted average shares outstanding for diluted EPS. | |
10 | Net profit year to date (annualized as applicable) less the amortization of goodwill and other intangible assets and significant financial events (after tax) / average shareholders’ equity less dividends. |
Throughout this report, 2003 and 2002 results have been restated to reflect the accounting changes (IAS 32/39, investment property, credit risk losses incurred on OTC derivatives, change in treatment of corporate client assets in Business Banking Switzerland) effective 1 January 2004 and announced 22 April 2004.
Quarter ended | % change from | |||||||||||||||||||
CHF million, except where indicated | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Income statement key figures | ||||||||||||||||||||
Operating income | 10,295 | 8,538 | 7,768 | 21 | 33 | |||||||||||||||
Operating expenses | 7,206 | 6,303 | 6,174 | 14 | 17 | |||||||||||||||
Operating profit before tax and minority interest | 3,089 | 2,235 | 1,594 | 38 | 94 | |||||||||||||||
Net profit | 2,423 | 1,808 | 1,209 | 34 | 100 | |||||||||||||||
Cost / income ratio (%)1 | 70.0 | 73.4 | 78.8 | |||||||||||||||||
Per share data (CHF) | ||||||||||||||||||||
Basic earnings per share2 | 2.25 | 1.68 | 1.05 | 34 | 114 | |||||||||||||||
Diluted earnings per share2 | 2.18 | 1.64 | 1.02 | 33 | 114 | |||||||||||||||
Return on shareholders’ equity (%)3 | 29.2 | 17.8 | 13.2 | |||||||||||||||||
CHF million, except where indicated | % change from | |||||||||||||||||||
As at | 31.3.04 | 31.12.03 | 31.3.03 | 31.12.03 | 31.3.03 | |||||||||||||||
Balance sheet key figures | ||||||||||||||||||||
Total assets | 1,670,033 | 1,550,056 | 8 | |||||||||||||||||
Shareholders’ equity | 37,602 | 35,310 | 6 | |||||||||||||||||
Market capitalization | 105,857 | 95,401 | 67,808 | 11 | 56 | |||||||||||||||
BIS capital ratios | ||||||||||||||||||||
Tier 1 (%)4 | 12.1 | 11.8 | 11.5 | |||||||||||||||||
Total BIS (%) | 13.5 | 13.3 | 13.6 | |||||||||||||||||
Risk-weighted assets | 262,674 | 251,901 | 238,746 | 4 | 10 | |||||||||||||||
Invested assets (CHF billion) | 2,238 | 2,133 | 1,923 | 5 | 16 | |||||||||||||||
Headcount (full-time equivalents) | ||||||||||||||||||||
Switzerland | 26,469 | 26,662 | 27,689 | (1 | ) | (4 | ) | |||||||||||||
Europe (excluding Switzerland) | 10,011 | 9,906 | 10,130 | 1 | (1 | ) | ||||||||||||||
Americas | 25,211 | 25,511 | 26,770 | (1 | ) | (6 | ) | |||||||||||||
Asia / Pacific | 3,939 | 3,850 | 3,806 | 2 | 3 | |||||||||||||||
Total | 65,630 | 65,929 | 68,395 | 0 | (4 | ) | ||||||||||||||
Long-term ratings | ||||||||||||||||||||
Fitch, London | AA+ | AA+ | AAA | |||||||||||||||||
Moody’s, New York | Aa2 | Aa2 | Aa2 | |||||||||||||||||
Standard & Poor’s, New York | AA+ | AA+ | AA+ | |||||||||||||||||
Earnings adjusted for significant financial events and pre-goodwill5, 6
Quarter ended | % change from | |||||||||||||||||||
CHF million, except where indicated | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Operating income | 10,295 | 8,538 | 7,768 | 21 | 33 | |||||||||||||||
Operating expenses | 6,981 | 6,078 | 5,932 | 15 | 18 | |||||||||||||||
Operating profit before tax and minority interest | 3,314 | 2,460 | 1,836 | 35 | 81 | |||||||||||||||
Net profit | 2,648 | 2,033 | 1,451 | 30 | 82 | |||||||||||||||
Cost / income ratio (%)7 | 67.8 | 70.8 | 75.7 | |||||||||||||||||
Basic earnings per share (CHF)8 | 2.46 | 1.89 | 1.26 | 30 | 95 | |||||||||||||||
Diluted earnings per share (CHF)9 | 2.38 | 1.84 | 1.23 | 29 | 93 | |||||||||||||||
Return on shareholders’ equity (%)10 | 31.9 | 20.5 | 15.8 | |||||||||||||||||
First Quarter 2004 Report
4 May 2004
Contents
Financial Calendar | ||
Publication of Second Quarter 2004 results | Tuesday, 10 August 2004 | |
Publication of Third Quarter 2004 results | Tuesday, 2 November 2004 | |
Publication of Fourth Quarter 2004 results | Tuesday, 8 February 2005 | |
Switchboards | ||||||
Zurich | +41 1 234 1111 | New York | +1 212 821 3000 | |||
London | +44 20 7568 0000 | Hong Kong | +852 2971 8888 | |||
Investor Relations |
Hotline: +41 1 234 4100 | email: sh-investorrelations@ubs.com | Web: www.ubs.com/investors | ||
Zurich | New York | |||||
Christian Gruetter | +41 1 234 4360 | Christopher McNamee | +1 212 713 3091 | |||
Matt Miller | +41 1 234 4100 | +1 212 713 1381 | ||||
Oliver Lee | +41 1 234 2733 | |||||
Cate Lybrook | +41 1 234 2281 | |||||
Fax | +41 1 234 3415 | |||||
UBS AG | UBS Americas Inc. | |||||
Investor Relations | Investor Relations | |||||
P.O. Box | 135 West 50th Street, 10thFloor | |||||
CH-8098 Zurich | New York, NY 10020 | |||||
Switzerland | United States of America | |||||
UBS Shareholder Services | US Transfer Agent | |||||
UBS AG | Mellon Investor Services | |||||
Shareholder Services | Overpeck Centre | |||||
P.O. Box | 85 Challenger Road | |||||
CH-8098 Zurich | Ridgefield Park, NJ 07660 | |||||
Switzerland | United States of America | |||||
Phone: +41 1 235 6202 | calls from the US | +1 866 541 9689 | ||||
Fax: +41 1 235 3154 | calls outside the US | +1 201 329 8451 | ||||
email: sh-shareholder-services@ubs.com | Fax: | +1 201 296 4801 | ||||
email: sh-relations@melloninvestor.com | ||||||
Media Relations |
Hotline: +41 1 234 8500 | email: sh-gpr@ubs.com | Web: www.ubs.com/media | ||
Interactive First Quarter 2004 Report
Other reports
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First Quarter 2004 Report
4 May 2004
Shareholders’ Letter
![]() | ||
Dear Shareholders, | ||
With our best quarterly performance on record, the year has started extremely well. Net profit was CHF 2,423 million, double our result in first quarter 2003 (and up 82% before goodwill). Revenues rose 33%. Before goodwill, earnings per share increased 95% to CHF 2.46 while return on equity was at 31.9% – record quarterly levels for both. | ||
This outstanding performance is naturally a reflection of the excellent trading conditions in major financial markets and the positive effect of strong market valuations on invested assets. We also believe, however, that it shows the payoff from investing in our businesses somewhat countercyclically over the past few years – positioning ourselves for exactly these kinds of opportunities. |
All our businesses reported both revenue and pre-tax profit gains compared to a year ago. Our Investment Bank reported a 115% gain in pre-tax profit, with results driven by the best fixed income and second best equities performances since 2000. Our wealth management and institutional asset management businesses profited as financial markets attracted more frequent investor activity. Strong market valuations also helped asset-based fees. Our Wealth Management and Global Asset Management units reported their best results in three years, and the Wealth Management USA business reported its best operating performance since PaineWebber became part of UBS.
Increasing our market risk limits allowed us to take advantage of the trading conditions we saw in first quarter, particularly in fixed income where the high level of client activity, along with the levels of rates and steepness of the yield curve remained attractive. Set against a 34% increase in average Value at Risk compared to a year earlier, total income from trading activities rose 33%.
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UBS has all that it needs to grow.One of our major investments is in our brand, which this quarter was reflected in a new global advertising campaign, launched in February. Our advertising investment concentrates on key markets where we need to further build familiarity with our brand in order to achieve our growth targets – particularly the US. The campaign – themed “You and us” – shows how UBS delivers global financial resources through personal client relationships based on intimate understanding.
Expanding our core businesses also implies that we will continue to divest non-core businesses and participations. Our current stake in Motor-Columbus (a Swiss holding company whose most significant asset is a majority ownership interest in Atel, a Swiss electricity company) is no exception. At the beginning of April, we announced the acquisition of an additional 20% stake in Motor-Columbus from the German utility RWE, temporarily raising our participation to 55.6%, allowing us to protect the value of our investment and
putting us in a strong position, as majority shareholder, to divest it in the future when the opportunity arises.
Outlook– This quarter was one of those rare periods when conditions for every one of our businesses were simultaneously excellent. As the year progresses, such a positive combination of circumstances is not likely to continue, especially given the natural seasonality that boosts the first quarter in some units. That said, 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.
4 May 2004
UBS
![]() | ![]() | |
Marcel Ospel | Peter Wuffli | |
Chairman | Chief Executive Officer |
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UBS Results
4 May 2004
UBS Results
Initiatives and achievements
Appointment of new board members
Standish assumes role as CFO
Integration of IT infrastructure
across the firm
new unit covers most of our IT infrastructure functions across the firm, and aims to serve our businesses in a client-focused and cost-efficient way.
Acquisition of majority stake
in Motor-Columbus
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New accounting standards and changes in
accounting and presentation
Recently issued IFRS standards
Changes in accounting and presentation
from 1 January 2004
– | early adoption ofIAS 32 Financial Instruments: Disclosure and PresentationandIAS 39 Financial Instruments: Recognition and Measurement | |
– | change in the accounting for investment property from historical cost less accumulated depreciation to the fair value method | |
– | change in accounting for credit risk losses incurred on over-the-counter (OTC) derivatives which are now reported in net trading income and no longer through credit loss expense | |
– | exclusion of corporate client assets in Business Banking Switzerland (except for pension funds) from invested assets, including the related net new money flows. |
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UBS Results
4 May 2004
Financial Statements of this report and our restatement release issued on 22 April which you can find on the web at www.ubs.com/investors.
New disclosure starting this quarter
shows the impact of collateral on the coverage ratio for impaired loans.
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Performance Against Targets
Year to date (annualized as applicable) | 31.3.04 | 31.12.03 | 31.3.03 | |||||||||
RoE (%) | ||||||||||||
as reported1 | 29.2 | 17.8 | 13.2 | |||||||||
before goodwill and adjusted for significant financial events2 | 31.9 | 20.5 | 15.8 | |||||||||
For the quarter ended | 31.3.04 | 31.12.03 | 31.3.03 | |||||||||
Basic EPS (CHF) | ||||||||||||
as reported3 | 2.25 | 1.68 | 1.05 | |||||||||
before goodwill and adjusted for significant financial events4 | 2.46 | 1.89 | 1.26 | |||||||||
Cost / income ratio (%) | ||||||||||||
as reported5 | 70.0 | 73.4 | 78.8 | |||||||||
before goodwill and adjusted for significant financial events6 | 67.8 | 70.8 | 75.7 | |||||||||
Net new money, wealth management units (CHF billion)7 | ||||||||||||
Wealth Management | 16.2 | 6.4 | 7.4 | |||||||||
Wealth Management USA | 2.8 | 7.8 | 3.7 | |||||||||
Total | 19.0 | 14.2 | 11.1 | |||||||||
1 | Net profit / average shareholders’ equity less dividends. | |
2 | Net profit less the amortization of goodwill and other intangible assets and significant financial events (after tax) / average shareholders’ equity less dividends. | |
3 | Details of the EPS calculation can be found in Note 8 to the Financial Statements. | |
4 | Net profit less the amortization of goodwill and other intangible assets and significant financial events (after tax) / weighted average shares outstanding. | |
5 | Operating expenses / operating income less credit loss expense or recovery. | |
6 | Operating expenses less the amortization of goodwill and other intangible assets and significant financial events / operating income less credit loss expense or recovery and significant financial events. | |
7 | Excludes interest and dividend income. |
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UBS Results
4 May 2004
Results
We reported our best quarterly result ever in first quarter 2004. Net profit was CHF 2,423 million, up 100% from CHF 1,209 million in the same quarter a year earlier. Before goodwill, net profit rose 82% from first quarter 2003. Our outstanding performance reflected clear success in capturing revenue opportunities and growing our business as major financial markets continued to recover. Operating income, up 33%, was also at an all-time record. At the same time, we continued to manage costs tightly as expenses, up 17%, rose far less than revenues. All our business units posted higher operating income and pre-tax profits in first quarter compared to a year earlier. Our Investment Bank reported a 115% gain in pre-tax profit, helped by the best fixed income and second best equity performance since 2000 with excellent trading returns rewarding increased levels of risk. Our wealth management and asset management businesses profited from growing asset bases and increased investor activity as individuals showed more willingness to enter the securities markets. For the first time since 2001, quarterly fee and commission income was over CHF 5 billion, making up almost half of total revenues. Wealth Management USA reported its best operating performance since joining UBS. Global Asset Management’s result was its best since 2000. Costs were kept under tight control in all our businesses, with general and administrative expenses up only 8% from first quarter 2003. The 23% overall rise in personnel expenses, however, was a direct reflection of our outstanding performance – prompting higher accruals for performance-related compensation.
UBS targets
UBS’s performance is reported in accordance with International Financial Reporting Standards (IFRS). Additionally, we provide comments and analysis on an adjusted basis which excludes from the reported amounts certain items we term
significant financial events (SFEs). An additional adjustment we use in our results discussion is the exclusion of the amortization of goodwill and other acquired intangible assets.
– | Our annualized return on equity in first quarter 2004 was 31.9%, up from 15.8% a year earlier and well above our 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 our continued buyback programs. | |
– | Basic earnings per share (EPS) also stood at the highest level ever. In first quarter 2004 they were CHF 2.46, nearly double the CHF 1.26 seen in the same quarter a year ago, reflecting the sharp net profit increase as well as the 7% reduction in average number of shares outstanding from our continuous repurchase of shares. | |
– | The cost/income ratio was 67.8% in first quarter 2004, an improvement from 75.7% in the same period last year - and the lowest level seen since 2000. Its progress reflects a 31% rise in income against an 18% increase in operating expenses. All our Business Groups posted higher revenues in the helpful market environment, which were generated from a fixed cost base that has been steadily |
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Invested Assets
Quarter ended | % change from | |||||||||||||||||||
CHF billion | 31.3.04 | 31.12.03 | 31.3.03 | 31.12.03 | 31.3.03 | |||||||||||||||
UBS | 2,238 | 2,133 | 1,923 | 5 | 16 | |||||||||||||||
Wealth Management & Business Banking | ||||||||||||||||||||
Wealth Management | 737 | 701 | 638 | 5 | 16 | |||||||||||||||
Business Banking Switzerland | 139 | 136 | 126 | 2 | 10 | |||||||||||||||
Global Asset Management | ||||||||||||||||||||
Institutional | 335 | 313 | 264 | 7 | 27 | |||||||||||||||
Wholesale Intermediary | 267 | 261 | 255 | 2 | 5 | |||||||||||||||
Investment Bank | 4 | 4 | 3 | 0 | 33 | |||||||||||||||
Wealth Management USA | 663 | 634 | 569 | 5 | 17 | |||||||||||||||
Corporate Center | ||||||||||||||||||||
Private Banks & GAM | 93 | 84 | 68 | 11 | 37 | |||||||||||||||
reduced over the last few years. Those gains were partially offset by higher personnel expenses due to increased accruals for performance-related compensation. |
2004, down slightly from CHF 3.7 billion a year earlier.
Significant financial events
There were no significant financial events in all quarters presented.
UBS results
Operating income
Net New Money1
Quarter ended | ||||||||||||
CHF billion | 31.3.04 | 31.12.03 | 31.3.03 | |||||||||
UBS | 35.1 | 10.7 | 20.7 | |||||||||
Wealth Management & Business Banking | ||||||||||||
Wealth Management | 16.2 | 6.4 | 7.4 | |||||||||
Business Banking Switzerland | 1.0 | (0.2 | ) | 1.7 | ||||||||
Global Asset Management | ||||||||||||
Institutional | 10.1 | 1.4 | 3.9 | |||||||||
Wholesale Intermediary | (1.4 | ) | (8.3 | ) | 3.4 | |||||||
Investment Bank | 0.0 | 0.6 | 0.0 | |||||||||
Wealth Management USA | 2.8 | 7.8 | 3.7 | |||||||||
Corporate Center | ||||||||||||
Private Banks & GAM | 6.4 | 3.0 | 0.6 | |||||||||
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UBS Results
4 May 2004
of our business. The increase in market levels positively impacted the asset base of our wealth and asset management businesses, prompting fee-based revenues to rise. Fee and brokerage income profited from the seasonally strong first quarter and a much improved market environment that helped to significantly increase the level of institutional and private client market activity. Both our equities and our fixed income businesses reported strong results, particularly in their trading activities. Private equity made a positive contribution, reflecting lower write-downs and higher divestment gains.
rise to the income, rather than by the type of income generated.
Net Interest and Trading Income
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Net interest income | 3,218 | 3,007 | 2,909 | 7 | 11 | |||||||||||||||
Net trading income | 1,785 | 578 | 1,221 | 209 | 46 | |||||||||||||||
Total net interest and trading income | 5,003 | 3,585 | 4,130 | 40 | 21 | |||||||||||||||
Breakdown by business activity
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Net income from interest margin products | 1,265 | 1,233 | 1,285 | 3 | (2 | ) | ||||||||||||||
Equities | 946 | 701 | 319 | 35 | 197 | |||||||||||||||
Fixed income | 2,151 | 1,146 | 1,960 | 88 | 10 | |||||||||||||||
Foreign exchange | 414 | 321 | 357 | 29 | 16 | |||||||||||||||
Other | 89 | 86 | 71 | 3 | 25 | |||||||||||||||
Net income from trading activities | 3,600 | 2,254 | 2,707 | 60 | 33 | |||||||||||||||
Net income from treasury activities | 310 | 326 | 398 | (5 | ) | (22 | ) | |||||||||||||
Other1 | (172 | ) | (228 | ) | (260 | ) | (25 | ) | (34 | ) | ||||||||||
Total net interest and trading income | 5,003 | 3,585 | 4,130 | 40 | 21 | |||||||||||||||
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year earlier. The result was one of the best since 2001 and reflected high client activity as well as another quarter of favorable interest rates and yield curve configuration. Particular strength was seen in rates derivatives and mortgages, partially offset by a weaker result in investment grade trading. Positive revenues of CHF 53 million relating to Credit Default Swaps (CDSs) hedging existing credit exposure in the loan book compared to a mark to market loss of CHF 38 million a year ago. Foreign exchange saw strong sales volumes in cash and derivative transactions, helping trading revenues to rise 16% to CHF 414 million in first quarter 2004 from CHF 357 million a year earlier.
lier. Major gains were seen in all geographical regions. Net brokerage fees were CHF 1,341 million in first quarter 2004, up 50% from CHF 895 million a year earlier. This was the highest level seen since first quarter 2001, reflecting the improved markets and the resulting higher institutional as well as individual client activity. Investment fund fees, at their highest level ever, were CHF 1,131 million in first quarter 2004, up 28% from CHF 882 million a year earlier, mainly reflecting higher asset- and sales-based fees in our wealth and asset management businesses. Portfolio and other management and advisory fees rose 25% to CHF 1,122 million in first quarter from CHF 901 million a year earlier. The gain was due to higher management and performance fees in our asset management business and increased portfolio management and advisory fees in our wealth management businesses, resulting from rising invested asset levels.
Operating expenses
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UBS Results
4 May 2004
was slightly offset by lower contributions to retirement benefit plans, declining severance expenses at the Investment Bank and lower retention expenses at the Wealth Management USA business. Personnel expenses are managed on a full-year basis with final fixing of annual performance-related payments in fourth quarter.
Tax
Allowances and provisions for credit risk
CHF million | Wealth Management | |||||||
As at | 31.3.04 | 31.12.03 | ||||||
Due from banks | 772 | 738 | ||||||
Loans | 39,245 | 35,500 | ||||||
Total lending portfolio, gross | 40,017 | 36,238 | ||||||
Allowances for credit losses | (18 | ) | (16 | ) | ||||
Total lending portfolio, net | 39,999 | 36,222 | ||||||
Impaired lending portfolio, gross | 12 | 8 | ||||||
Estimated liquidation proceeds of collateral for impaired loans | (2 | ) | 0 | |||||
Impaired lending portfolio, net of collateral | 10 | 8 | ||||||
Allocated allowances for impaired lending portfolio | 10 | 8 | ||||||
Other allowances and provisions | 8 | 8 | ||||||
Total allowances and provisions for credit losses | 18 | 16 | ||||||
of which allowances and provisions for country risk | 8 | 8 | ||||||
Non-performing loans | 9 | 2 | ||||||
Allowances for non-performing loans | 6 | 0 | ||||||
Ratios | ||||||||
Allowances and provisions as a % of lending portfolio, gross | 0.0 | 0.0 | ||||||
Impaired as a % of lending portfolio, gross | 0.0 | 0.0 | ||||||
Allocated allowances as a % of impaired lending portfolio, gross | 83.3 | 100.0 | ||||||
Allocated allowances as a % of impaired lending portfolio, net of collateral | 100.0 | 100.0 | ||||||
Non-performing loans as a % of lending portfolio, gross | 0.0 | 0.0 | ||||||
Allocated allowances as a % of non-performing loans, gross | 66.7 | 0.0 | ||||||
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with tax losses carried forward. The slight increase from the full-year rate reflects our stronger results and therefore slightly higher progressive tax rates in Switzerland. We continue to believe that an underlying tax rate of around 19% (before significant financial events) is a reasonable indicator for full-year 2004.
Fair value disclosure of options
for the valuation of options (mainly longer expected option life and higher risk free rates) drove the after-tax cost higher.
Credit risk
UBS experienced another strong credit result in first quarter 2004, posting a net credit recovery
Business Banking | Wealth Management | |||||||||||||||||||||||||||||||||||
Switzerland | Investment Bank | USA | Others1 | UBS | ||||||||||||||||||||||||||||||||
31.3.04 | 31.12.03 | 31.3.04 | 31.12.03 | 31.3.04 | 31.12.03 | 31.3.04 | 31.12.03 | 31.3.04 | 31.12.03 | |||||||||||||||||||||||||||
3,250 | 2,574 | 21,264 | 24,486 | 1,713 | 1,493 | 3,095 | 2,733 | 30,094 | 32,024 | |||||||||||||||||||||||||||
136,637 | 135,960 | 34,776 | 30,668 | 12,582 | 11,623 | 2,356 | 2,220 | 225,596 | 215,971 | |||||||||||||||||||||||||||
139,887 | 138,534 | 56,040 | 55,154 | 14,295 | 13,116 | 5,451 | 4,953 | 255,690 | 247,995 | |||||||||||||||||||||||||||
(2,732 | ) | (2,876 | ) | (588 | ) | (655 | ) | (25 | ) | (25 | ) | (4 | ) | (4 | ) | (3,367 | ) | (3,576 | ) | |||||||||||||||||
137,155 | 135,658 | 55,452 | 54,499 | 14,270 | 13,091 | 5,447 | 4,949 | 252,323 | 244,419 | |||||||||||||||||||||||||||
5,927 | 6,382 | 739 | 791 | 25 | 25 | 4 | 3 | 6,707 | 7,209 | |||||||||||||||||||||||||||
(2,350 | ) | (2,460 | ) | (46 | ) | (3 | ) | (2 | ) | (2 | ) | 0 | 0 | (2,400 | ) | (2,465 | ) | |||||||||||||||||||
3,577 | 3,922 | 693 | 788 | 23 | 23 | 4 | 3 | 4,307 | 4,744 | |||||||||||||||||||||||||||
2,664 | 2,822 | 565 | 599 | 25 | 25 | 4 | 4 | 3,268 | 3,458 | |||||||||||||||||||||||||||
353 | 304 | 136 | 181 | 1 | 3 | 0 | 0 | 498 | 496 | |||||||||||||||||||||||||||
3,017 | 3,126 | 701 | 780 | 26 | 28 | 4 | 4 | 3,766 | 3,954 | |||||||||||||||||||||||||||
124 | 110 | 114 | 144 | 0 | 0 | 0 | 0 | 246 | 262 | |||||||||||||||||||||||||||
4,176 | 4,418 | 452 | 455 | 25 | 25 | 3 | 1 | 4,665 | 4,901 | |||||||||||||||||||||||||||
2,440 | 2,346 | 391 | 392 | 25 | 25 | 3 | 1 | 2,865 | 2,764 | |||||||||||||||||||||||||||
2.2 | 2.3 | 1.3 | 1.4 | 0.2 | 0.2 | 0.1 | 0.1 | 1.5 | 1.6 | |||||||||||||||||||||||||||
4.2 | 4.6 | 1.3 | 1.4 | 0.2 | 0.2 | 0.1 | 0.1 | 2.6 | 2.9 | |||||||||||||||||||||||||||
44.9 | 44.2 | 76.5 | 75.7 | 100.0 | 100.0 | 100.0 | 133.3 | 48.7 | 48.0 | |||||||||||||||||||||||||||
74.5 | 72.0 | 81.5 | 76.0 | 108.7 | 108.7 | 100.0 | 133.3 | 75.9 | 72.9 | |||||||||||||||||||||||||||
3.0 | 3.2 | 0.8 | 0.8 | 0.2 | 0.2 | 0.1 | 0.0 | 1.8 | 2.0 | |||||||||||||||||||||||||||
58.4 | 53.1 | 86.5 | 86.2 | 100.0 | 100.0 | 100.0 | 100.0 | 61.4 | 56.4 | |||||||||||||||||||||||||||
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UBS Results
4 May 2004
of CHF 3 million, compared to credit loss expense of CHF 46 million in fourth quarter 2003 and CHF 69 million in first quarter 2003.
book, as expressed by the ratio of impaired loans to total loans, improved to 2.6% from 2.9%.
Market risk
Market risk is incurred primarily through UBS’s trading activities, which are centered in the Investment Bank.
Credit loss (expense) / recovery
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Wealth Management & Business Banking | (54 | ) | (100 | ) | (64 | ) | (46 | ) | (16 | ) | ||||||||||
Investment Bank | 58 | 54 | (5 | ) | 7 | |||||||||||||||
Wealth Management USA | (1 | ) | 0 | 0 | ||||||||||||||||
Corporate Center | 0 | 0 | 0 | |||||||||||||||||
UBS | 3 | (46 | ) | (69 | ) | |||||||||||||||
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UBS: Value at Risk (10-day 99% confidence)
Quarter ended 31.3.04 | Quarter ended 31.12.03 | |||||||||||||||||||||||||||||||||||
CHF million | Limits | Min. | Max. | Average | 31.3.04 | Min. | Max. | Average | 31.12.03 | |||||||||||||||||||||||||||
Business Groups | ||||||||||||||||||||||||||||||||||||
Investment Bank | 600 | 388.9 | 555.5 | 465.6 | 518.4 | 294.9 | 430.2 | 356.1 | 410.5 | |||||||||||||||||||||||||||
Wealth Management USA | 50 | 12.7 | 27.4 | 17.2 | 17.8 | 10.0 | 20.6 | 15.6 | 16.7 | |||||||||||||||||||||||||||
Global Asset Management 1 | 30 | 7.2 | 15.8 | 10.6 | 7.7 | 7.7 | 13.1 | 10.3 | 8.1 | |||||||||||||||||||||||||||
Wealth Management & Business Banking | 5 | 0.5 | 1.1 | 0.8 | 0.9 | 0.6 | 1.3 | 0.9 | 0.7 | |||||||||||||||||||||||||||
Corporate Center 2 | 150 | 46.9 | 69.0 | 57.8 | 52.4 | 43.0 | 58.9 | 50.3 | 49.2 | |||||||||||||||||||||||||||
Reserve | 170 | |||||||||||||||||||||||||||||||||||
Diversification effect | 3 | 3 | (69.7 | ) | (57.5 | ) | 3 | 3 | (64.9 | ) | (71.6 | ) | ||||||||||||||||||||||||
Total | 750 | 397.5 | 557.7 | 482.3 | 539.7 | 297.9 | 456.3 | 368.3 | 413.6 | |||||||||||||||||||||||||||
Investment Bank: Value at Risk (10-day 99% confidence)
Quarter ended 31.3.04 | Quarter ended 31.12.03 | |||||||||||||||||||||||||||||||
CHF million | Min. | Max. | Average | 31.3.04 | Min. | Max. | Average | 31.12.03 | ||||||||||||||||||||||||
Risk type | ||||||||||||||||||||||||||||||||
Equities | 150.5 | 176.1 | 158.4 | 154.4 | 141.9 | 189.4 | 154.7 | 159.8 | ||||||||||||||||||||||||
Interest rates | 367.1 | 521.0 | 434.3 | 521.0 | 252.9 | 437.1 | 341.1 | 394.5 | ||||||||||||||||||||||||
Foreign exchange | 5.3 | 72.6 | 30.1 | 19.1 | 8.4 | 46.4 | 22.9 | 28.3 | ||||||||||||||||||||||||
Other 1 | 9.3 | 28.6 | 16.8 | 14.6 | 7.4 | 21.1 | 14.3 | 9.5 | ||||||||||||||||||||||||
Diversification effect | 2 | 2 | (174.0 | ) | (190.7 | ) | 2 | 2 | (176.9 | ) | (181.6 | ) | ||||||||||||||||||||
Total | 388.9 | 555.5 | 465.6 | 518.4 | 294.9 | 430.2 | 356.1 | 410.5 | ||||||||||||||||||||||||
Within these risk levels, we have continued to avoid risk concentrations and focused on taking risk in liquid assets. As can be seen in the back-testing graph, revenue volatility remained low.
emerging markets, and severe currency and interest rate movements. These scenarios are kept under constant review and fine-tuned as neces-
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UBS Results
4 May 2004
BIS Capital and Ratios
CHF million, except where indicated | % change from | |||||||||||||||||||
As at | 31.3.04 | 31.12.03 | 31.3.03 | 31.12.03 | 31.3.03 | |||||||||||||||
Risk-weighted assets | 262,674 | 251,901 | 238,746 | 4 | 10 | |||||||||||||||
BIS Tier 1 capital | 31,700 | 29,765 | 27,562 | 7 | 15 | |||||||||||||||
of which hybrid Tier 1 capital 1 | 3,294 | 3,224 | 3,113 | 2 | 6 | |||||||||||||||
BIS total capital | 35,473 | 33,581 | 32,490 | 6 | 9 | |||||||||||||||
BIS Tier 1 capital ratio (%) | 12.1 | 11.8 | 11.5 | |||||||||||||||||
of which hybrid Tier 1 capital (%) 1 | 1.3 | 1.3 | 1.3 | |||||||||||||||||
BIS total capital ratio (%) | 13.5 | 13.3 | 13.6 | |||||||||||||||||
sary. Like VaR, stress loss exposure ended the quarter higher than at the previous quarter end. The average was also higher but exposure remained within limits.
Capital management
We remain committed to being one of the best-capitalized financial services firms in the world and will therefore continue to manage our balance sheet prudently. This clear focus as well as our ongoing strong cash flow generation allowed us to continue our share buyback programs.
pushed our Tier 1 capital ratio up to 12.1% from 11.8% a quarter earlier.
Buyback program
UBS Shares and Market Capitalization
Number of shares, except where indicated | % change from | |||||||||||||||||||
As at | 31.3.04 | 31.12.03 | 31.3.03 | 31.12.03 | 31.3.03 | |||||||||||||||
Total ordinary shares issued | 1,184,421,495 | 1,183,046,764 | 1,256,702,037 | 0 | (6 | ) | ||||||||||||||
Second trading line treasury shares | ||||||||||||||||||||
2002 first program | (67,700,000 | ) | ||||||||||||||||||
2002 second program | (8,270,080 | ) | ||||||||||||||||||
2003 program | (59,482,000 | ) | (56,707,000 | ) | (1,470,000 | ) | ||||||||||||||
2004 program | 0 | |||||||||||||||||||
Shares outstanding for market capitalization | 1,124,939,495 | 1,126,339,764 | 1,179,261,957 | 0 | (5 | ) | ||||||||||||||
Share price (CHF) | 94.10 | 84.70 | 57.50 | 11 | 64 | |||||||||||||||
Market capitalization (CHF million) | 105,857 | 95,401 | 67,808 | 11 | 56 | |||||||||||||||
Total treasury shares | 109,842,853 | 111,360,692 | 106,106,685 | (1 | ) | 4 | ||||||||||||||
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Treasury shares
2004 from 111,360,692, or 9.4% of all issued, on 31 December 2003. A decline in the number of treasury shares held for employee share and option programs was responsible for the drop. The majority of grants for those programs are made in first quarter. The overall decline was partially offset by shares purchased under our buy-back program.
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Wealth Management & Business Banking
4 May 2004
Wealth Management & Business Banking
Chairman, Wealth Management &
Business Banking
CEO, Wealth Management &
Business Banking
In first quarter 2004, Wealth Management recorded its best quarterly result in three years. Pre-tax profit was CHF 868 million, up 23% from fourth quarter 2003. Net new money inflows were a record CHF 16.2 billion, including an all-time high contribution of CHF 4.2 billion from the European wealth management business. Business Banking Switzerland’s pre-tax profit was CHF 510 million in first quarter 2004, a 5% decrease from fourth quarter 2003, reflecting slightly lower operating income.
Business Group reporting
Quarter ended | % change from | |||||||||||||||||||
CHF million, except where indicated | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Income | 3,203 | 3,028 | 2,866 | 6 | 12 | |||||||||||||||
Adjusted expected credit loss 1 | (17 | ) | (5 | ) | (57 | ) | 240 | (70 | ) | |||||||||||
Total operating income | 3,186 | 3,023 | 2,809 | 5 | 13 | |||||||||||||||
Personnel expenses | 1,185 | 1,118 | 1,146 | 6 | 3 | |||||||||||||||
General and administrative expenses | 523 | 543 | 517 | (4 | ) | 1 | ||||||||||||||
Depreciation | 82 | 101 | 94 | (19 | ) | (13 | ) | |||||||||||||
Amortization of goodwill and other intangible assets | 18 | 17 | 19 | 6 | (5 | ) | ||||||||||||||
Total operating expenses | 1,808 | 1,779 | 1,776 | 2 | 2 | |||||||||||||||
Business Group performance before tax | 1,378 | 1,244 | 1,033 | 11 | 33 | |||||||||||||||
Business Group performance before tax and amortization of goodwill and other intangible assets | 1,396 | 1,261 | 1,052 | 11 | 33 | |||||||||||||||
Additional information | ||||||||||||||||||||
Regulatory equity allocated (average) | 9,150 | 8,850 | 8,500 | 3 | 8 | |||||||||||||||
Cost / income ratio (%) 2 | 56.4 | 58.8 | 62.0 | |||||||||||||||||
Cost / income ratio before goodwill (%) 3 | 55.9 | 58.2 | 61.3 | |||||||||||||||||
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Wealth Management
1 | In management accounts, adjusted expected credit loss rather than credit loss is reported for the Business Groups (see Note 2 to the Financial Statements). | |
2 | Excludes interest and dividend income. | |
3 | Income (annualized)/average invested assets. | |
4 | Operating expenses/income. | |
5 | Operating expenses less the amortization of goodwill and other intangible assets / income. | |
6 | Operating expenses less the amortization of goodwill and other intangible assets and expenses for the European wealth management business / income less income for the European wealth management business. |
Business Unit reporting
Quarter ended | % change from | |||||||||||||||||||
CHF million, except where indicated | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Income | 1,932 | 1,739 | 1,575 | 11 | 23 | |||||||||||||||
Adjusted expected credit loss 1 | (2 | ) | 1 | (2 | ) | 0 | ||||||||||||||
Total operating income | 1,930 | 1,740 | 1,573 | 11 | 23 | |||||||||||||||
Personnel expenses | 522 | 479 | 474 | 9 | 10 | |||||||||||||||
General and administrative expenses | 508 | 518 | 525 | (2 | ) | (3 | ) | |||||||||||||
Depreciation | 14 | 21 | 21 | (33 | ) | (33 | ) | |||||||||||||
Amortization of goodwill and other intangible assets | 18 | 17 | 19 | 6 | (5 | ) | ||||||||||||||
Total operating expenses | 1,062 | 1,035 | 1,039 | 3 | 2 | |||||||||||||||
Business unit performance before tax | 868 | 705 | 534 | 23 | 63 | |||||||||||||||
Business unit performance before tax and amortization of goodwill and other intangible assets | 886 | 722 | 553 | 23 | 60 | |||||||||||||||
KPI’s | ||||||||||||||||||||
Invested assets (CHF billion) | 737 | 701 | 638 | 5 | 16 | |||||||||||||||
Net new money (CHF billion) 2 | 16.2 | 6.4 | 7.4 | |||||||||||||||||
Gross margin on invested assets (bps) 3 | 107 | 100 | 98 | 7 | 9 | |||||||||||||||
Cost / income ratio (%) 4 | 55.0 | 59.5 | 66.0 | |||||||||||||||||
Cost / income ratio before goodwill (%) 5 | 54.0 | 58.5 | 64.8 | |||||||||||||||||
Cost / income ratio before goodwill and excluding the European wealth management business (%) 6 | 46.9 | 49.2 | 56.7 | |||||||||||||||||
Client advisors (full-time equivalents) | 3,343 | 3,300 | 3,065 | 1 | 9 | |||||||||||||||
International Clients | ||||||||||||||||||||
Income | 1,336 | 1,205 | 1,088 | 11 | 23 | |||||||||||||||
Invested assets (CHF billion) | 521 | 491 | 447 | 6 | 17 | |||||||||||||||
Net new money (CHF billion) 2 | 15.1 | 7.1 | 7.0 | |||||||||||||||||
Gross margin on invested assets (bps) 3 | 106 | 99 | 97 | 7 | 9 | |||||||||||||||
European wealth management (part of International Clients) | ||||||||||||||||||||
Income | 92 | 80 | 52 | 15 | 77 | |||||||||||||||
Invested assets (CHF billion) | 51 | 46 | 31 | 11 | 65 | |||||||||||||||
Net new money (CHF billion) 2 | 4.2 | 1.7 | 3.0 | |||||||||||||||||
Client advisors (full-time equivalents) | 695 | 672 | 575 | 3 | 21 | |||||||||||||||
Swiss Clients | ||||||||||||||||||||
Income | 596 | 534 | 487 | 12 | 22 | |||||||||||||||
Invested assets (CHF billion) | 216 | 210 | 191 | 3 | 13 | |||||||||||||||
Net new money (CHF billion) 2 | 1.1 | (0.7 | ) | 0.4 | ||||||||||||||||
Gross margin on invested assets (bps) 3 | 112 | 102 | 101 | 10 | 11 | |||||||||||||||
Additional information | % change from | |||||||||||||||||||
As at | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Client assets (CHF billion) | 931 | 884 | 777 | 5 | 20 | |||||||||||||||
Regulatory equity allocated (average) | 2,800 | 2,700 | 2,550 | 4 | 10 | |||||||||||||||
Headcount (full-time equivalents) | 9,199 | 9,176 | 9,316 | 0 | (1 | ) | ||||||||||||||
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Wealth Management & Business Banking
4 May 2004
Key performance indicators
The first quarter 2004 net new money inflow of CHF 16.2 billion was CHF 9.8 billion higher than the fourth quarter 2003 figure of CHF 6.4 billion, and 72% higher than the previous record intake in third quarter 2003. The International Clients business reported a record CHF 15.1 billion in net new money, with positive inflows in all geographical regions. Particularly strong inflows were seen from Asia, Eastern European and European domestic clients. The Swiss Clients business also showed a record intake of CHF 1.1 billion, reflecting successful client acquisition activity. In first quarter, the net new money intake from existing clients was particularly high. Our extremely strong performance reflects continuous investment in our domestic European business as well as other growth areas, among them the Asia Pacific region, giving us significantly enhanced capacity. A clear example of that is our client advisor workforce, which has expanded by 19% over the last two years. The stronger market environment, as well as certain seasonal effects, also had a positive influence.
Invested assets on 31 March 2004 were CHF 737 billion, up 5% from CHF 701 billion on 31 December 2003, due to the high net new money intake, the slight increase in the US dollar against the Swiss franc (approximately 37% of Wealth Management’s invested assets are dollar-denominated) and the effect of the continued recovery seen in most financial markets.
high client activity levels, and the margin also benefited from our continuous effort to enhance our client offering with value-added products and services.
The pre-goodwill cost/income ratio, at 54.0% in first quarter 2004, was down 4.5 percentage points from fourth quarter 2003. The drop was due to the strong growth in operating income combined with strictly controlled non-personnel expenses. Excluding the European wealth man-
20
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agement business, the pre-goodwill cost/income ratio was 46.9% in first quarter 2004, down 2.3 percentage points from the previous quarter.
European wealth management
Our European wealth management business continues to perform strongly with all its key performance indicators at all-time highs. Net new money in first quarter 2004 was CHF 4.2 billion – up strongly from CHF 1.7 billion in fourth quarter 2003. This was the best result since the initiative’s launch at the beginning of 2001. Particularly strong inflows were seen in Germany and the UK. The inflow in first quarter 2004 represents an annualized growth rate of 37% of year-end 2003 assets.
The level of invested assets reached a record CHF 51 billion on 31 March 2004, up from CHF 46 billion on 31 December 2003, as a result of the strong net new money inflows, the first-time inclusion of the invested assets from the acquisition of Merrill Lynch’s private client business in Germany and positive market and currency developments.
Income in first quarter 2004 was a record CHF 92 million, up 15% from CHF 80 million in fourth quarter 2003 because of higher recurring revenues from the rapidly growing asset base and increased client transaction activity.
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Wealth Management & Business Banking
4 May 2004
Initiatives and achievements
Australian private client business joins Wealth
Management
Top-tier in unit-linked life insurance in Switzerland
to the article published on page 20 of our Second Quarter 2003 Report.
Results
In first quarter 2004, Wealth Management’s pre-tax profit was CHF 868 million, up CHF 163 million, or 23%, from fourth quarter 2003. This was the best result in three years and reflected higher operating income, which rose on gains in asset-based and transaction fees. In contrast, operating expenses increased only slightly, allowing almost the entire rise in operating income to be captured in the bottom line.
Operating income
selling assets. Investors gained access to a product with an attractive yield, while we received a substantial flow of assets into our wealth management business.
an end in themselves. Rather, they form part of a holistic approach to wealth management. Together with client advisors, the CAG team takes into account the client’s entire needs, both private and corporate, when advising on corporate finance solutions.
22
Table of Contents
income increased on rising asset-based fees, benefiting from gains in asset levels. Non-recurring income rose due to higher brokerage fees, reflecting an increase in client activity levels, which were particularly strong due to the positive market environment. The share of recurring income increased from 70% to 71%.
Operating expenses
Headcount
Outlook
We started the year with very strong results. The helpful market environment was reflected in very high client activity levels, a rising asset base, and exceptionally strong inflows of net new money. The countercyclical investments we have made in our franchise and staff over the last two years have started to pay off, giving us the opportunity to grow in markets where new wealth is being created. We are in a prime position to further grow our asset base and continue to improve profitability although we are obviously dependent on overall market developments that have an impact on client activity levels, our asset base and therefore, profitability.
But the transaction is only a first step. A team of specialists from different areas of Wealth Management ensures that the transaction is structured efficiently, the proceeds of any sale effectively invested and estate-planning issues settled in line with the client’s objectives.
Paris, Madrid and London, as well as in Switzerland. In January 2004,Euromoney named UBS as “Best in Western Europe” for corporate advisory services in the magazine’s first annual survey of the global private banking industry.
of a typical entrepreneur, typically the sale or restructuring of a family-owned business. For larger deals or capital market transactions, it can call on the execution capabilities of the Investment Bank.
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Wealth Management & Business Banking
4 May 2004
Business Banking Switzerland
Business Unit reporting
Quarter ended | % change from | |||||||||||||||||||
CHF million, except where indicated | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Interest income | 857 | 866 | 901 | (1 | ) | (5 | ) | |||||||||||||
Non-interest income | 414 | 423 | 390 | (2 | ) | 6 | ||||||||||||||
Income | 1,271 | 1,289 | 1,291 | (1 | ) | (2 | ) | |||||||||||||
Adjusted expected credit loss 1 | (15 | ) | (6 | ) | (55 | ) | 150 | (73 | ) | |||||||||||
Total operating income | 1,256 | 1,283 | 1,236 | (2 | ) | 2 | ||||||||||||||
Personnel expenses | 663 | 639 | 672 | 4 | (1 | ) | ||||||||||||||
General and administrative expenses | 15 | 25 | (8 | ) | (40 | ) | ||||||||||||||
Depreciation | 68 | 80 | 73 | (15 | ) | (7 | ) | |||||||||||||
Amortization of goodwill and other intangible assets | 0 | 0 | 0 | |||||||||||||||||
Total operating expenses | 746 | 744 | 737 | 0 | 1 | |||||||||||||||
Business unit performance before tax | 510 | 539 | 499 | (5 | ) | 2 | ||||||||||||||
Business unit performance before tax and amortization of goodwill and other intangible assets | 510 | 539 | 499 | (5 | ) | 2 | ||||||||||||||
KPI’s | ||||||||||||||||||||
Invested assets (CHF billion) | 139 | 136 | 126 | 2 | 10 | |||||||||||||||
Net new money (CHF billion) 2 | 1.0 | (0.2 | ) | 1.7 | ||||||||||||||||
Cost / income ratio (%) 3 | 58.7 | 57.7 | 57.1 | |||||||||||||||||
Cost / income ratio before goodwill (%) 4 | 58.7 | 57.7 | 57.1 | |||||||||||||||||
Non-performing loans / gross loans (%) | 3.0 | 3.2 | 3.5 | |||||||||||||||||
Impaired loans / gross loans (%) | 4.2 | 4.6 | 5.7 | |||||||||||||||||
Additional information | % change from | |||||||||||||||||||
As at or for the period ended | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Deferral (included in adjusted expected credit loss) | 103 | 114 | 77 | (10 | ) | 34 | ||||||||||||||
Client assets (CHF billion) | 642 | 622 | 481 | 3 | 33 | |||||||||||||||
Regulatory equity allocated (average) | 6,350 | 6,150 | 5,950 | 3 | 7 | |||||||||||||||
Headcount (full-time equivalents) | 17,529 | 17,620 | 18,302 | (1 | ) | (4 | ) | |||||||||||||
24
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Key performance indicators
Our cost/income ratio was 58.7% in first quarter 2004, up 1.0 percentage points from fourth quarter 2003, due to slightly lower income. Operating expenses were almost unchanged in comparison to the previous quarter.
Net new money was CHF 1.0 billion in first quarter 2004, up from fourth quarter 2003’s small outflow of CHF 0.2 billion. This increase was mainly related to inflows in our private client business.
31 March 2004 from 3.2% on 31 December 2003, while the impaired loan ratio improved to 4.2% from 4.6% in the same period.
Initiatives and achievements
New IT platform improves year-end processing
Results
In first quarter 2004, Business Banking Switzerland reported a pre-tax profit of CHF 510 million – a 5% decrease from fourth quarter 2003. Operating income fell due to a slightly lower deferred credit loss release as well as reduced interest and fee income. Operating costs increased marginally, as the rise in personnel expenses offset the decline in depreciation and general and administrative expenses.
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Table of Contents
Wealth Management & Business Banking
4 May 2004
Operating income
Operating expenses
general and administrative expenses, and then offset by lower general and administrative expenses in the provider unit. Depreciation decreased to a more normal level of CHF 68 million, down CHF 12 million from fourth quarter 2003, which was impacted by the accelerated depreciation of certain software.
Headcount
Outlook
Business Banking Switzerland delivered a good result in first quarter 2004, mainly due to continued strict management of the cost base. We remain determined to keep our profitability at levels that compare favorably to our peers, and will keep managing our cost base in line with revenue developments.
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Global Asset Management
4 May 2004
Global Asset Management
Chairman and CEO,
Global Asset Management
In the best quarterly result since 2000, first quarter pre-tax profit was CHF 144 million, a 29% rise from fourth quarter 2003. Continued inflows of net new money into equities and alternative mandates and improving market valuations resulted in higher management fees – strongly contributing to the record performance.
Business Group reporting
Quarter ended | % change from | |||||||||||||||||||
CHF million, except where indicated | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Institutional fees | 280 | 228 | 198 | 23 | 41 | |||||||||||||||
Wholesale Intermediary fees | 227 | 223 | 180 | 2 | 26 | |||||||||||||||
Total operating income | 507 | 451 | 378 | 12 | 34 | |||||||||||||||
Personnel expenses | 236 | 200 | 188 | 18 | 26 | |||||||||||||||
General and administrative expenses | 88 | 96 | 99 | (8 | ) | (11 | ) | |||||||||||||
Depreciation | 6 | 10 | 7 | (40 | ) | (14 | ) | |||||||||||||
Amortization of goodwill and other intangible assets | 33 | 33 | 40 | 0 | (18 | ) | ||||||||||||||
Total operating expenses | 363 | 339 | 334 | 7 | 9 | |||||||||||||||
Business Group performance before tax | 144 | 112 | 44 | 29 | 227 | |||||||||||||||
Business Group performance before tax and amortization of goodwill and other intangible assets | 177 | 145 | 84 | 22 | 111 | |||||||||||||||
KPI’s | ||||||||||||||||||||
Cost / income ratio (%) 1 | 71.6 | 75.2 | 88.4 | |||||||||||||||||
Cost / income ratio before goodwill (%) 2 | 65.1 | 67.8 | 77.8 | |||||||||||||||||
Institutional | ||||||||||||||||||||
Invested assets (CHF billion) | 335 | 313 | 264 | 7 | 27 | |||||||||||||||
of which: money market funds | 19 | 14 | 19 | 36 | 0 | |||||||||||||||
Net new money (CHF billion) 3 | 10.1 | 1.4 | 3.9 | |||||||||||||||||
of which: money market funds | 0.8 | (1.6 | ) | (0.6 | ) | |||||||||||||||
Gross margin on invested assets (bps) 4 | 35 | 30 | 29 | 17 | 21 | |||||||||||||||
Wholesale Intermediary | ||||||||||||||||||||
Invested assets (CHF billion) | 267 | 261 | 255 | 2 | 5 | |||||||||||||||
of which: money market funds | 82 | 87 | 110 | (6 | ) | (25 | ) | |||||||||||||
Net new money (CHF billion) 3 | (1.4 | ) | (8.3 | ) | 3.4 | |||||||||||||||
of which: money market funds | (6.4 | ) | (12.5 | ) | 0.6 | |||||||||||||||
Gross margin on invested assets (bps) 4 | 34 | 34 | 28 | 0 | 21 | |||||||||||||||
Additional information | % change from | |||||||||||||||||||
As at | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Client assets (CHF billion) | 602 | 574 | 519 | 5 | 16 | |||||||||||||||
Regulatory equity allocated (average) | 1,000 | 1,000 | 950 | 0 | 5 | |||||||||||||||
Headcount (full-time equivalents) | 2,664 | 2,689 | 2,732 | (1 | ) | (2 | ) | |||||||||||||
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Global Asset Management
4 May 2004
Key performance indicators
The pre-goodwill cost / income ratio was 65.1% in first quarter 2004, down from 67.8% in fourth quarter 2003 and at its lowest level since 2000. Higher asset-based and performance fees, coupled with lower general and administrative expenses, contributed to the overall improvement. Those developments were partly offset by higher incentive-based compensation which, in turn, reflected the stronger revenue performance.
Institutional
Institutional invested assets were CHF 335 billion on 31 March 2004, up by CHF 22 billion from 31 December 2003. The gain reflected strong net new money inflows and continued favorable market developments as well as the Swiss franc’s decline against the US dollar and UK sterling.
Net new money inflows in first quarter 2004 totaled CHF 10.1 billion, up significantly from
CHF 1.4 billion in fourth quarter 2003. This was the best result since 1999 and reflects the strength of our long-term investment performance. Major recipients of the inflows were equity mandates, primarily in the UK and EMEA, as well as multi-manager mandates in the alternative and quantitative investments business, partially offset by outflows in fixed income mandates, mainly in Asia Pacific.
The gross margin increased to 35 basis points in first quarter 2004 from 30 basis points in fourth quarter 2003, reflecting higher performance-based revenues and the long-term asset shift towards higher-margin asset classes.
Wholesale Intermediary
Invested assets were CHF 267 billion on 31 March 2004, up from CHF 261 billion on 31 December 2003. Positive market developments, the Swiss franc’s weakening against the US dollar as well as net new money inflows in equities and fixed income mandates were partly offset by outflows from money market funds,
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primarily related to assets switching to UBS Bank USA, which is part of Wealth Management USA (see below).
Net new money outflows were CHF 1.4 billion in first quarter 2004, compared with an outflow of CHF 8.3 billion in fourth quarter 2003. The CHF 6.4 billion money market outflow in first quarter 2004 was mainly due to a CHF 4.2 billion outflow related to UBS Bank USA. Excluding money market outflows, we recorded an inflow of CHF 5.0 billion, with particularly strong flows into equity mandates in all regions, as well as in fixed income mandates in EMEA.
The first quarter gross margin of 34 basis points was unchanged from fourth quarter 2003.
Money market sweep accounts
accounts. In first quarter 2004, we saw outflows from these money market assets of CHF 4.2 billion compared with outflows of CHF 10.6 billion in fourth quarter 2003, bringing total outflows to CHF 20.2 billion since the launch of the UBS Bank USA in third quarter 2003. Before its start, cash balances of private clients in the US were swept into our money market funds. Now, those cash proceeds are redirected automatically into FDIC-insured deposit accounts at UBS Bank USA. Although there was no bulk transfer of client assets to the bank, the funds invested in our sweep accounts are being used to complete client transactions and will therefore gradually deplete over time. Such funds are a low-fee component of Global Asset Management’s invested assets.
Investment capabilities and performance
After a strong performance in 2003, equity markets lacked direction in first quarter 2004, although they ended by and large in positive territory. Japan led the other markets, with gains driven by its domestic banking and consumer sectors. The quarter was also notable for the pull-back in the technology sector, which had previously outpaced the market.
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Global Asset Management
4 May 2004
Annualized | ||||||||||||||||
Composite | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||
Global Equity Composite vs. MSCI World Equity (Free) Index | – | + | + | + | ||||||||||||
Global Bond Composite vs. Citigroup World Government Bond Index | = | + | – | + | ||||||||||||
Global Securities Composite vs. Global Securities Markets Index | + | + | + | + | ||||||||||||
The actively managed Global Equity composite lagged the benchmark over the quarter, reflecting underperforming securities selection globally.
For the quarter, performance in the single manager investment stream of the alternative and quantitative investments business was mixed. Long short equity, convertibles, quantitatives, merger arbitrage and credit relative all performed well. Macro trading was volatile but flat on the year. The majority of the multi-manager programs registered strong performance in the quarter. However, the volatile market conditions in March were not favorable for underlying managers whose strategies follow market trend scenarios and chart-technical models. Programs with higher allocations to these types of managers underperformed.
Hedge funds offer attractive diversification features when added to a traditional portfolio of stocks and bonds. As hedge funds and other alternative investments tend not to move in step with traditional assets, adding them to a portfolio helps to reduce risk and volatility while improving returns.
York, London, Zurich, Tokyo, Hong Kong, and Singapore, it serves as one of the principal hedge fund providers in UBS. Since its inception in 2003, invested assets have more than doubled to CHF 26 billion (USD 20 billion).
ified index-based funds based on fundamental analysis of the constituent stocks.
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Two of the four Swiss-based real estate mutual funds performed well above their respective benchmarks, while the other two performed below their benchmarks. In most countries, demand for real estate investments is strong and finding attractive, appropriately priced investments remains a challenge.
Initiatives and achievements
Third-party fund administration
with assets of CHF 236 billion, of which 314 were UBS Funds worth CHF 220 billion.
Results
Global Asset Management pre-tax profit was CHF 144 million in first quarter 2004, up 29% from CHF 112 million in fourth quarter 2003. It was the highest quarterly result since 2000. The increase was mainly attributable to higher management fees reflecting the strong net new money inflows and continued strong market valuations as well as lower general and administrative
UBS believes that the alternative and quantitative investments business’ broad span of activities offers one of the strongest global capabilities in the industry. Investors can either use its direct hedge fund capabilities as components of their own strategies, or they can take the multi-manager
approach to ensure their exposure to the hedge fund sector is well-diversified and broad-based.
therefore benefit from the same capabilities that support our institutional relationships. Together with GAM, the alternative and quantitative investments business makes UBS one of the world’s largest hedge fund managers.
Defining alternative investments
Alternative investments cover a broad array of investment techniques and asset classes. In general, they are distinguished from traditional investments by their use of innovative techniques and focus on exploiting opportunities across a wide range of asset classes. Hedge funds are by far the best known type of alternative investment.
Today, the term hedge fund covers most non-traditional investment funds that seek absolute returns rather than returns relative to a traditional stock or bond index. Hedge funds offer attractive diversification features when added to a traditional portfolio of stocks and bonds. Global Asset Management estimates that there are more than 3,500 fund managers
and approximately 6,000 hedge funds, with invested assets of more than USD 800 billion. This amount is still relatively small when compared with traditional assets managed by all other institutions, suggesting that the sector has substantial growth potential. Assets are expected to reach USD 1 trillion by 2005, according to leading industry data provider TASS Tremont.
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Global Asset Management
4 May 2004
expenses. These developments were partly offset by higher incentive-based compensation expenses as a result of the overall improvement in revenues.
Operating income
Operating expenses
expenses rose by CHF 36 million from the previous quarter, a result of higher accruals for performance-related compensation based on the improved overall revenues. This was partially offset by lower salary expenses and severance costs. In first quarter 2004, general and administrative expenses were CHF 88 million – at their lowest level since 2000 – representing a decrease of CHF 8 million compared to fourth quarter 2003, mainly due to lower IT expenses.
Headcount
Outlook
Markets are showing signs of sustainable strength and we are seeing solid growth from new business in our activities worldwide. In order to further improve our profitability, we will continue to keep our sharp focus on managing costs while constantly widening the range of investment opportunities for our clients.
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Investment Bank
4 May 2004
Investment Bank
Chairman and CEO,
Investment Bank
1 | In management accounts, adjusted expected credit loss rather than credit loss is reported for the Business Groups (see Note 2 to the Financial Statements). | |
2 | Personnel expenses/income. | |
3 | Operating expenses/income. | |
4 | Operating expenses less the amortization of goodwill and other intangible assets/income. | |
5 | Historical cost of investments made, less divestments and impairments. |
In first quarter 2004, the Investment Bank posted a record pre-tax profit of CHF 1,674 million, up 115% from first quarter last year. This reflected a significant rise in revenues across all businesses, particularly in our Equities business and in Fixed Income, Rates and Currencies, which posted another record result. Results also benefited from gains on private equity divestments.
Business Group reporting
Quarter ended | % change from | |||||||||||||||||||
CHF million, except where indicated | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Investment Banking | 455 | 622 | 287 | (27 | ) | 59 | ||||||||||||||
Equities | 1,722 | 1,405 | 823 | 23 | 109 | |||||||||||||||
Fixed Income, Rates and Currencies | 2,595 | 1,427 | 2,182 | 82 | 19 | |||||||||||||||
Private Equity | 165 | 113 | (75 | ) | 46 | |||||||||||||||
Income | 4,937 | 3,567 | 3,217 | 38 | 53 | |||||||||||||||
Adjusted expected credit loss 1 | 0 | (10 | ) | (18 | ) | (100 | ) | (100 | ) | |||||||||||
Total operating income | 4,937 | 3,557 | 3,199 | 39 | 54 | |||||||||||||||
Personnel expenses | 2,590 | 1,604 | 1,794 | 61 | 44 | |||||||||||||||
General and administrative expenses | 534 | 606 | 478 | (12 | ) | 12 | ||||||||||||||
Depreciation | 66 | 86 | 80 | (23 | ) | (18 | ) | |||||||||||||
Amortization of goodwill and other intangible assets | 73 | 69 | 70 | 6 | 4 | |||||||||||||||
Total operating expenses | 3,263 | 2,365 | 2,422 | 38 | 35 | |||||||||||||||
Business Group performance before tax | 1,674 | 1,192 | 777 | 40 | 115 | |||||||||||||||
Business Group performance before tax and amortization of goodwill and other intangible assets | 1,747 | 1,261 | 847 | 39 | 106 | |||||||||||||||
KPI’s | ||||||||||||||||||||
Compensation ratio (%) 2 | 52 | 45 | 56 | |||||||||||||||||
Cost / income ratio (%) 3 | 66.1 | 66.3 | 75.3 | |||||||||||||||||
Cost / income ratio before goodwill (%) 4 | 64.6 | 64.4 | 73.1 | |||||||||||||||||
Non-performing loans / gross loans (%) | 0.8 | 0.8 | 1.5 | |||||||||||||||||
Impaired loans / gross loans (%) | 1.3 | 1.4 | 2.5 | |||||||||||||||||
Average VaR (10-day 99%) | 466 | 356 | 350 | 31 | 33 | |||||||||||||||
Private Equity | ||||||||||||||||||||
Value creation (CHF billion) | 0.5 | (0.1 | ) | (0.1 | ) | |||||||||||||||
Investment (CHF billion) 5 | 2.3 | 2.3 | 2.9 | 0 | (21 | ) | ||||||||||||||
Portfolio fair value (CHF billion) | 3.2 | 2.9 | 3.6 | 10 | (11 | ) | ||||||||||||||
Additional information | % change from | |||||||||||||||||||
As at or for the period ended | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Net new money (CHF billion) | 0.0 | 0.6 | 0.0 | |||||||||||||||||
Invested assets (CHF billion) | 4 | 4 | 3 | 0 | 33 | |||||||||||||||
Client assets (CHF billion) | 152 | 143 | 130 | 6 | 17 | |||||||||||||||
Deferral (included in adjusted expected credit loss) | 20 | 10 | 9 | 100 | 122 | |||||||||||||||
Regulatory equity allocated (average) | 13,700 | 12,750 | 12,600 | 7 | 9 | |||||||||||||||
Headcount (full-time equivalents) | 15,712 | 15,550 | 15,910 | 1 | (1 | ) | ||||||||||||||
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Investment Bank
4 May 2004
Key performance indicators
Performance in first quarter 2004 reflected our ability to capitalize on improving market conditions combined with disciplined cost control. The pre-goodwill cost / income ratio was 64.6%, 8.5 percentage points lower than in first quarter 2003. This improvement reflects higher revenues in all businesses, combined with tight control of non-personnel costs.
The compensation ratio for first quarter 2004 fell by 4 percentage points from the same period last year to 52%. Accrual levels for incentive-based compensation are driven by the revenue mix across business areas and managed in line with market levels. The 7 percentage point increase in the compensation ratio from the fourth quarter 2003 level of 45% is due to annual performance-related payments being determined only in fourth quarter, resulting in the steep downward correction of the ratio at that time.
As noted in our fourth quarter 2003 report, on 1 January 2004 we raised the Investment Bank’s value at risk (VaR) limit to CHF 600 mil-
lion from CHF 450 million, reflecting increased market opportunities and the growing competitiveness of our trading businesses. Within this new limit, average VaR rose to CHF 466 million in first quarter 2004 compared with CHF 356 million in the previous quarter. The main driver for VaR remained interest rate exposures – in particular exposures to highly rated securities in the credit markets.
At the end of the first quarter, the Investment Bank’s outstanding loans were up a marginal CHF 0.9 billion from 31 December 2003. The non-performing loans to gross loans ratio remained at 0.8%. The impaired loans to gross loans ratio decreased from 1.4% to 1.3%.
The level of private equity investments remained unchanged from 31 December 2003 at CHF 2.3 billion, as the reductions from successful divestments and returns of capital were offset by the funding of undrawn commitments. This additional funding, together with valuation increases, led to an increase in the fair value of the portfolio to CHF 3.2 billion from CHF 2.9 billion a quarter earlier. Unfunded commitments were CHF 1.4 billion on 31 March 2004, down 7% from 31 December 2003.
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Initiatives and achievements
Corporate clients
Institutional clients
Significant deals
Mergers and acquisitions
– | exclusive financial advisor to Regions Financial, a US-based banking group, on its announced USD 6 billion merger with Union Planters Bank | |
– | co-advisor and broker to J Sainsbury, the UK supermarket company, on its announced USD 2.5 billion sale of Shaw’s Supermarkets, a US subsidiary, to Albertson’s Inc | |
– | sole advisor to Group 4 Falck, a leading security services company, on its announced USD 2.1 billion merger with Securicor and its divestment of non-security businesses. |
Equity underwriting
– | joint global coordinator and joint bookrunner on the EUR 3.6 billion IPO for Belgacom, Belgium’s largest telecom company | |
– | joint bookrunner for the sell-down of German utility RWE’s entire holding in Hochtief, Germany’s largest construction company, through a combined equity (EUR 750 million) and exchangeable bond (EUR 200 million) offering | |
– | joint global coordinator and joint bookrunner for the sale of the Japanese government’s remaining stake in West Japan Railway Company. |
Key performance indicators: league table rankings
31.3.04 | 31.12.03 | 31.3.03 | ||||||||||||||||||||||
Market | Market | Market | ||||||||||||||||||||||
Rank | share % | Rank | share % | Rank | share % | |||||||||||||||||||
Global mergers and acquisitions (completed) 1 | 7 | 10.3 | 8 | 11.2 | 10 | 7.2 | ||||||||||||||||||
International equity new issues 2 | 6 | 9.0 | 4 | 8.5 | 7 | 5.1 | ||||||||||||||||||
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Investment Bank
4 May 2004
Fixed income underwriting
– | joint bookrunner for Pacific Gas & Electric (PG&E), a US utility, on a USD 6.7 billion bond offering | |
– | joint bookrunner for Mizuho Financial Group, the Japanese banking group, in a USD 1.5 billion debt offering | |
– | joint lead manager to HBOS/Halifax, the leading mortgage originator in the UK, on the launch and pricing of a GBP 6.1 billion prime residential mortgage-backed securitization. |
Results
At CHF 1,674 million, pre-tax profit in first quarter 2004 was the best ever achieved by the Investment Bank. It represented an increase of 115% from the same period a year earlier and of 40% from fourth quarter 2003. The significant improvement from the previous year, achieved despite the weakening of the US dollar against the Swiss franc, reflected higher revenues in almost all businesses, including record revenues in the Fixed Income, Rates and Currencies (FIRC) area and excellent results in the Equities business, as well as successful Private Equity divestments. Our businesses have demonstrated their ability to match resources to market opportunities and simultaneously take advantage of strong market conditions.
Operating income
ing a 54% increase from a year earlier and a 39% improvement on fourth quarter 2003. The main contributors were the FIRC and Equities businesses, which capitalized on helpful market conditions and higher volumes, along with improved Private Equity results.
Investment Banking revenues, at CHF 455 million, were up 59% on the same period last year, reflecting increased activity in mergers and acquisitions, continued favorable debt capital markets and improving market conditions for equity issuance. The business posted strong increases in revenues across all regions, but particularly in Asia Pacific. Investment Banking revenues were 27% lower than in fourth quarter because of the seasonal pattern of investment banking deal completion – for which revenues are consistently strongest in the last quarter of the year.
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turned in its best results of the year in first quarter. Excellent results in rates, foreign exchange and cash and collateral trading drove performance year on year. Credit default swaps hedging our credit exposures posted revenues of CHF 53 million in first quarter, an improvement from negative CHF 38 million a year earlier.
Operating expenses
Headcount
Outlook
Taking full advantage of strong market conditions, our businesses increased their revenues in first quarter and further improved their competitive position. Market uncertainty could, of course, return to affect business conditions later this year, but we remain cautiously optimistic about a full recovery of financial markets and investor confidence. Our proven ability to shift emphasis according to changing market opportunities will remain important in coming quarters.
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Wealth Management USA
4 May 2004
Wealth Management USA
CEO, Wealth Management USA
In first quarter 2004, Wealth Management USA’s pre-tax profit was CHF 43 million compared to a pre-tax loss of CHF 10 million in fourth quarter 2003, reflecting strong revenue growth as well as a decrease in staff retention payments. Before acquisition costs, pre-tax profit increased 20% to CHF 218 million. On the same basis, but in US dollars, the operating result was 23% higher than in fourth quarter.
Business Group reporting
Quarter ended | % change from | |||||||||||||||||||
CHF million, except where indicated | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Private client revenues | 1,306 | 1,220 | 1,105 | 7 | 18 | |||||||||||||||
Municipal finance revenues | 86 | 113 | 122 | (24 | ) | (30 | ) | |||||||||||||
Net goodwill funding | (46 | ) | (50 | ) | (61 | ) | 8 | 25 | ||||||||||||
Income | 1,346 | 1,283 | 1,166 | 5 | 15 | |||||||||||||||
Adjusted expected credit loss 1 | (3 | ) | (1 | ) | (2 | ) | 200 | 50 | ||||||||||||
Total operating income | 1,343 | 1,282 | 1,164 | 5 | 15 | |||||||||||||||
Personnel expenses 2 | 947 | 930 | 888 | 2 | 7 | |||||||||||||||
General and administrative expenses | 238 | 250 | 246 | (5 | ) | (3 | ) | |||||||||||||
Depreciation | 38 | 33 | 38 | 15 | 0 | |||||||||||||||
Amortization of goodwill and other intangible assets | 77 | 79 | 87 | (3 | ) | (11 | ) | |||||||||||||
Total operating expenses | 1,300 | 1,292 | 1,259 | 1 | 3 | |||||||||||||||
Business Group performance before tax | 43 | (10 | ) | (95 | ) | |||||||||||||||
Business Group reporting excluding acquisition costs and significant financial events
Total operating income | 1,343 | 1,282 | 1,164 | 5 | 15 | |||||||||||||||
Add back: Net goodwill funding 3 | 46 | 50 | 61 | (8 | ) | (25 | ) | |||||||||||||
Operating income excluding acquisition costs | 1,389 | 1,332 | 1,225 | 4 | 13 | |||||||||||||||
Total operating expenses | 1,300 | 1,292 | 1,259 | 1 | 3 | |||||||||||||||
Retention payments | (52 | ) | (62 | ) | (67 | ) | (16 | ) | (22 | ) | ||||||||||
Amortization of goodwill and other intangible assets | (77 | ) | (79 | ) | (87 | ) | (3 | ) | (11 | ) | ||||||||||
Operating expenses excluding acquisition costs | 1,171 | 1,151 | 1,105 | 2 | 6 | |||||||||||||||
Business Group performance before tax and acquisition costs | 218 | 181 | 120 | 20 | 82 | |||||||||||||||
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Wealth Management USA (continued)
Quarter ended | % change from | |||||||||||||||||||
KPI's | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Invested assets (CHF billion) | 663 | 634 | 569 | 5 | 17 | |||||||||||||||
Net new money (CHF billion) 1 | 2.8 | 7.8 | 3.7 | |||||||||||||||||
Interest and dividend income (CHF billion) 2 | 3.8 | 4.0 | 4.0 | (5 | ) | (5 | ) | |||||||||||||
Gross margin on invested assets (bps) 3 | 83 | 81 | 81 | 2 | 2 | |||||||||||||||
Gross margin on invested assets excluding acquisition costs and SFEs (bps) 4 | 86 | 85 | 85 | 1 | 1 | |||||||||||||||
Cost / income ratio (%) 5 | 96.6 | 100.7 | 108.0 | |||||||||||||||||
Cost / income ratio excluding acquisition costs and SFEs (%) 6 | 84.1 | 86.4 | 90.1 | |||||||||||||||||
Recurring fees 7 | 518 | 506 | 454 | 2 | 14 | |||||||||||||||
Financial advisor productivity (CHF thousand) 8 | 172 | 155 | 126 | 11 | 37 | |||||||||||||||
Additional information | % change from | |||||||||||||||||||
As at | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Client assets (CHF billion) | 711 | 690 | 634 | 3 | 12 | |||||||||||||||
Regulatory equity allocated (average) | 5,250 | 5,400 | 5,950 | (3 | ) | (12 | ) | |||||||||||||
Headcount (full-time equivalents) | 17,679 | 18,016 | 19,243 | (2 | ) | (8 | ) | |||||||||||||
Financial advisors (full-time equivalents) | 7,451 | 7,766 | 8,625 | (4 | ) | (14 | ) | |||||||||||||
Key performance indicators
Invested assets were CHF 663 billion on 31 March 2004, up 5% from CHF 634 billion on 31 December 2003. In US dollar terms, invested assets increased 2% in first quarter, reflecting positive inflows of net new money and the effects of market appreciation on invested assets. On the same basis, compared to first quarter a year earlier, invested assets have increased 24%.
The inflow of net new money was CHF 2.8 billion in first quarter 2004, lower than CHF 7.8 billion in fourth quarter 2003 and CHF 3.7 bil-
lion reported for first quarter a year earlier. Including interest and dividends, net new money in first quarter 2004 was CHF 6.6 billion. Although net new money declined from CHF 11.8 billion in fourth quarter 2003, the first quarter result compares favorably to the performance reported by competitors.
Gross margin on invested assets was 83 basis points in first quarter 2004, 2 basis points higher than in fourth quarter 2003. Excluding acquisition costs (goodwill and intangible asset amortization, net goodwill funding costs and retention payments), gross margin was 86 basis points, up
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Wealth Management USA
4 May 2004
1 basis point from fourth quarter 2003. The increase in gross margin followed from the recovery in transactional revenues.
The cost / income ratio before acquisition costs was 84.1% in first quarter 2004, down from 86.4% in fourth quarter 2003. This represents the lowest ratio since PaineWebber became part of UBS. The improvement reflects a strong recovery in revenues, and fixed costs that are significantly lower than when PaineWebber joined UBS. Compared to first quarter 2003, the cost / income ratio before acquisition costs improved by 6.0 percentage points.
Recurring fees stood at CHF 518 million in first quarter 2004, 2% higher than the CHF 506 million recorded in fourth quarter 2003. In US dollar terms, recurring fees rose 5% from fourth quarter 2003 to record levels. This derived from increased asset levels in fee-based accounts as USD 3.8 billion in net assets flowed into managed account products.
to CHF 172,000 from CHF 155,000 in fourth quarter 2003. Higher revenues were generated by a smaller number of financial advisors, with financial advisor headcount standing at 7,451 on 31 March 2004. The decline of 315 in the head-count from 7,766 on 31 December 2003 reflects turnover primarily among trainees and less experienced or less productive financial advisors. We continue to recruit talented and highly productive financial advisors. Given the improved market conditions, we also expect to increase hiring of new trainees.
Initiatives and achievements
Municipal Securities ranks top
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Results
Investor activity continued to grow in first quarter 2004, with average daily trading volumes rising 11% from fourth quarter 2003. However, activity near the end of the quarter was affected by a drop in investor sentiment. The UBS Index of Investor Optimism fell, reflecting investor concerns about unemployment and the stock market outlook.
Operating income
investors, increased levels of loans outstanding, and lower funding costs. The increased lending and lower funding costs can be ascribed to UBS Bank USA. These positive effects were partially offset in US dollar terms by a 22% decline in municipal finance income from CHF 113 million (USD 88 million) in fourth quarter 2003 to CHF 86 million (USD 68 million) in first quarter 2004. This decline reflects lower origination volumes across the industry and changes in the interest rate environment affecting the value of municipal securities.
Operating expenses
Headcount
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Wealth Management USA
4 May 2004
Outlook
The strong results achieved in first quarter reflect our efforts to enhance our service offering and to improve profitability. While investor sentiment continues to be affected by concerns about the financial
markets and the economy, we believe that our deep understanding of our clients’ needs continues to provide a firm foundation for our competitive positioning. We will continue to invest in the quality of our advice and service with the aim of benefiting to the maximum from market opportunities.
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Corporate Center
4 May 2004
Corporate Center
CFO
Business Group reporting
Quarter ended | % change from | |||||||||||||||||||
CHF million, except where indicated | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Income | 299 | 255 | 210 | 17 | 42 | |||||||||||||||
Credit loss (expense) / recovery 1 | 23 | (30 | ) | 8 | 188 | |||||||||||||||
Total operating income | 322 | 225 | 218 | 43 | 48 | |||||||||||||||
Personnel expenses | 213 | 186 | 186 | 15 | 15 | |||||||||||||||
General and administrative expenses | 124 | 172 | 57 | (28 | ) | 118 | ||||||||||||||
Depreciation | 111 | 143 | 114 | (22 | ) | (3 | ) | |||||||||||||
Amortization of goodwill and other intangible assets | 24 | 27 | 26 | (11 | ) | (8 | ) | |||||||||||||
Total operating expenses | 472 | 528 | 383 | (11 | ) | 23 | ||||||||||||||
Business Group performance before tax | (150 | ) | (303 | ) | (165 | ) | 50 | 9 | ||||||||||||
Private Banks & GAM | ||||||||||||||||||||
Performance before tax | 113 | 46 | 56 | 146 | 102 | |||||||||||||||
Performance before tax and amortization of goodwill and other intangible assets | 132 | 66 | 77 | 100 | 71 | |||||||||||||||
Invested assets (CHF billion) | 93 | 84 | 68 | 11 | 37 | |||||||||||||||
Net new money (CHF billion) 2 | 6.4 | 3.0 | 0.6 | |||||||||||||||||
Headcount (full-time equivalents) | 1,647 | 1,672 | 1,697 | (1 | ) | (3 | ) | |||||||||||||
Additional information | % change from | |||||||||||||||||||
As at | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Regulatory equity allocated (average) | 8,400 | 8,400 | 9,550 | 0 | (12 | ) | ||||||||||||||
Total headcount (full-time equivalents) | 2,847 | 2,878 | 2,892 | (1 | ) | (2 | ) | |||||||||||||
Results
Corporate Center recorded a pre-tax loss of CHF 150 million in first quarter 2004, compared to a pre-tax loss of CHF 165 million in the same quarter a year earlier.
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Corporate Center
4 May 2004
income from our treasury activities, which reflected a generally lower interest rate environment and a drop in our invested equity as we continued to buy back shares. The impact of falling interest rates was somewhat offset by the diversification of our invested equity into currencies other than Swiss francs.
Headcount
Private Banks & GAM
Invested assets in Private Banks & GAM were CHF 93 billion on 31 March 2004, up from CHF 84 billion on 31 December 2003, reflecting a record inflow of net new money and positive financial market developments. The inflow of net new money, at CHF 6.4 billion in first quarter
2004 compared to CHF 3.0 billion in fourth quarter 2003, was driven by inflows into GAM, which were also at a quarterly all-time high. Pre-tax profit was also at record levels, rising to CHF 113 million in first quarter 2004 from CHF 46 million in fourth quarter 2003. Revenues rose, benefiting from higher fee income that gained as a result of the increased asset base. General and administrative expenses were lower, reflecting fewer restructuring costs related to the merger of Cantrade, Bank Ehinger and Armand von Ernst. The decline in expenses was partly offset by rising personnel expenses as the strong performance of the business led to higher accruals for performance-related compensation.
Headcount Private Banks & GAM
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Financial Statements
4 May 2004
Financial Statements
Income Statement(unaudited)
Quarter ended | % change from | |||||||||||||||||||||||
CHF million, except per share data | Note | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | ||||||||||||||||||
Operating income | ||||||||||||||||||||||||
Interest income | 3 | 9,741 | 9,739 | 9,632 | 0 | 1 | ||||||||||||||||||
Interest expense | 3 | (6,523 | ) | (6,732 | ) | (6,723 | ) | (3 | ) | (3 | ) | |||||||||||||
Net interest income | 3,218 | 3,007 | 2,909 | 7 | 11 | |||||||||||||||||||
Credit loss (expense) / recovery | 3 | (46 | ) | (69 | ) | |||||||||||||||||||
Net interest income after credit loss expense | 3,221 | 2,961 | 2,840 | 9 | 13 | |||||||||||||||||||
Net fee and commission income | 4 | 5,005 | 4,820 | 3,826 | 4 | 31 | ||||||||||||||||||
Net trading income | 3 | 1,785 | 578 | 1,221 | 209 | 46 | ||||||||||||||||||
Other income | 5 | 284 | 179 | (119 | ) | 59 | ||||||||||||||||||
Total operating income | 10,295 | 8,538 | 7,768 | 21 | 33 | |||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||
Personnel expenses | 6 | 5,171 | 4,038 | 4,202 | 28 | 23 | ||||||||||||||||||
General and administrative expenses | 7 | 1,507 | 1,667 | 1,397 | (10 | ) | 8 | |||||||||||||||||
Depreciation of property and equipment | 303 | 373 | 333 | (19 | ) | (9 | ) | |||||||||||||||||
Amortization of goodwill and other intangible assets | 225 | 225 | 242 | 0 | (7 | ) | ||||||||||||||||||
Total operating expenses | 7,206 | 6,303 | 6,174 | 14 | 17 | |||||||||||||||||||
Operating profit before tax and minority interests | 3,089 | 2,235 | 1,594 | 38 | 94 | |||||||||||||||||||
Tax expense | 579 | 327 | 313 | 77 | 85 | |||||||||||||||||||
Net profit before minority interests | 2,510 | 1,908 | 1,281 | 32 | 96 | |||||||||||||||||||
Minority interests | (87 | ) | (100 | ) | (72 | ) | (13 | ) | 21 | |||||||||||||||
Net profit | 2,423 | 1,808 | 1,209 | 34 | 100 | |||||||||||||||||||
Basic earnings per share (CHF) | 8 | 2.25 | 1.68 | 1.05 | 34 | 114 | ||||||||||||||||||
Diluted earnings per share (CHF) | 8 | 2.18 | 1.64 | 1.02 | 33 | 114 | ||||||||||||||||||
45
Table of Contents
Financial Statements
4 May 2004
Balance Sheet(unaudited)
% change from | ||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.12.03 | |||||||||
Assets | ||||||||||||
Cash and balances with central banks | 3,433 | 3,584 | (4 | ) | ||||||||
Due from banks | 29,830 | 31,740 | (6 | ) | ||||||||
Cash collateral on securities borrowed | 243,501 | 213,932 | 14 | |||||||||
Reverse repurchase agreements | 330,560 | 320,499 | 3 | |||||||||
Trading portfolio assets | 519,706 | 461,772 | 13 | |||||||||
Positive replacement values | 258,315 | 248,206 | 4 | |||||||||
Loans | 222,493 | 212,679 | 5 | |||||||||
Financial investments | 5,438 | 5,139 | 6 | |||||||||
Accrued income and prepaid expenses | 7,855 | 6,218 | 26 | |||||||||
Investments in associates | 1,718 | 1,616 | 6 | |||||||||
Property and equipment | 7,554 | 7,683 | (2 | ) | ||||||||
Goodwill and other intangible assets | 11,616 | 11,529 | 1 | |||||||||
Other assets | 28,014 | 25,459 | 10 | |||||||||
Total assets | 1,670,033 | 1,550,056 | 8 | |||||||||
Total subordinated assets | 5,466 | 4,794 | 14 | |||||||||
Liabilities | ||||||||||||
Due to banks | 124,002 | 127,012 | (2 | ) | ||||||||
Cash collateral on securities lent | 56,142 | 53,278 | 5 | |||||||||
Repurchase agreements | 429,506 | 415,863 | 3 | |||||||||
Trading portfolio liabilities | 169,153 | 143,957 | 18 | |||||||||
Negative replacement values | 272,738 | 254,768 | 7 | |||||||||
Financial liabilities designated at fair value | 39,313 | 35,286 | 11 | |||||||||
Due to customers | 359,362 | 346,633 | 4 | |||||||||
Accrued expenses and deferred income | 12,086 | 13,673 | (12 | ) | ||||||||
Debt issued | 127,573 | 88,843 | 44 | |||||||||
Other liabilities | 37,950 | 31,360 | 21 | |||||||||
Total liabilities | 1,627,825 | 1,510,673 | 8 | |||||||||
Minority interests | 4,606 | 4,073 | 13 | |||||||||
Shareholders’ equity | ||||||||||||
Share capital | 948 | 946 | 0 | |||||||||
Share premium account | 7,175 | 6,935 | 3 | |||||||||
Net gains / (losses) not recognized in the income statement, net of tax | (703 | ) | (983 | ) | 28 | |||||||
Retained earnings | 39,064 | 36,641 | 7 | |||||||||
Equity classified as obligation to purchase own shares | (172 | ) | (49 | ) | (251 | ) | ||||||
Treasury shares | (8,710 | ) | (8,180 | ) | (6 | ) | ||||||
Total shareholders’ equity | 37,602 | 35,310 | 6 | |||||||||
Total liabilities, minority interests and shareholders’ equity | 1,670,033 | 1,550,056 | 8 | |||||||||
Total subordinated liabilities | 9,050 | 9,301 | (3 | ) | ||||||||
46
Table of Contents
Statement of Changes in Equity(unaudited)
CHF million | ||||||||
For the quarter ended | 31.3.04 | 31.3.03 | ||||||
Issued and paid up share capital | ||||||||
Balance at the beginning of the period | 946 | 1,005 | ||||||
Issue of share capital | 2 | 0 | ||||||
Cancelation of second trading line treasury shares | 0 | 0 | ||||||
Balance at the end of the period | 948 | 1,005 | ||||||
Share premium | ||||||||
Balance at the beginning of the period, restated | 6,935 | 12,641 | ||||||
Premium on shares issued and warrants exercised | 90 | 13 | ||||||
Net premium / (discount) on treasury share and own equity derivative activity | 150 | (120 | ) | |||||
Balance at the end of the period | 7,175 | 12,534 | ||||||
Net gains / (losses) not recognized in the income statement, net of taxes | ||||||||
Foreign currency translation | ||||||||
Balance at the beginning of the period | (1,644 | ) | (849 | ) | ||||
Movements during the period | 157 | (30 | ) | |||||
Subtotal – balance at the end of the period | (1,487 | ) | (879 | ) | ||||
Net unrealized gains / (losses) on available for sale investments, net of taxes | ||||||||
Balance at the beginning of the period | 805 | 946 | ||||||
Net unrealized gains / (losses) on available for sale investments | 386 | (80 | ) | |||||
Impairment charges reclassified to the income statement | 55 | 132 | ||||||
Gains reclassified to the income statement | (158 | ) | (26 | ) | ||||
Losses reclassified to the income statement | 2 | 11 | ||||||
Subtotal – balance at the end of the period | 1,090 | 983 | ||||||
Change in fair value of derivative instruments designated as cash flow hedges, net of taxes | ||||||||
Balance at the beginning of the period | (144 | ) | (256 | ) | ||||
Net unrealized gains / (losses) on the revaluation of cash flow hedges | (156 | ) | (27 | ) | ||||
Net (gains) / losses reclassified to the income statement | (6 | ) | 53 | |||||
Subtotal – balance at the end of the period | (306 | ) | (230 | ) | ||||
Balance at the end of the period | (703 | ) | (126 | ) | ||||
Retained earnings | ||||||||
Balance at the beginning of the period, restated | 36,641 | 32,700 | ||||||
Net profit for the period | 2,423 | 1,209 | ||||||
Balance at the end of the period | 39,064 | 33,909 | ||||||
Equity classified as obligation to purchase own shares | ||||||||
Balance at the beginning of the period, restated | (49 | ) | (104 | ) | ||||
Net movements | (123 | ) | 37 | |||||
Balance at the end of the period | (172 | ) | (67 | ) | ||||
Treasury shares, at cost | ||||||||
Balance at the beginning of the period | (8,180 | ) | (7,131 | ) | ||||
Acquisitions | (2,634 | ) | (910 | ) | ||||
Disposals | 2,104 | 541 | ||||||
Cancelation of second trading line treasury shares | 0 | 0 | ||||||
Balance at the end of the period | (8,710 | ) | (7,500 | ) | ||||
Total shareholders’ equity | 37,602 | 39,755 | ||||||
Out of the total number of 109,842,853 treasury shares on 31 March 2004, 59,482,000 shares have been repurchased for cancelation. On 31 March 2004, a maximum of 5,497,021 shares can be issued against the exercise of options from former PaineWebber employee option plans.
47
Table of Contents
Financial Statements
4 May 2004
Statement of Cash Flows(unaudited)
CHF million | ||||||||
For the quarter ended | 31.3.04 | 31.3.03 | ||||||
Cash flow from / (used in) operating activities | ||||||||
Net profit | 2,423 | 1,209 | ||||||
Adjustments to reconcile net profit to cash flow from / (used in) operating activities | ||||||||
Non-cash items included in net profit and other adjustments: | ||||||||
Depreciation of property and equipment | 303 | 333 | ||||||
Amortization of goodwill and other intangible assets | 225 | 242 | ||||||
Credit loss expense / (recovery) | (3 | ) | 69 | |||||
Equity in income of associates | (8 | ) | (10 | ) | ||||
Deferred tax expense / (benefit) | 181 | 119 | ||||||
Net loss / (gain) from investing activities | (180 | ) | 172 | |||||
Net loss / (gain) from financing activities | 385 | (112 | ) | |||||
Net (increase) / decrease in operating assets: | ||||||||
Net due from / to banks | (2,787 | ) | 13,827 | |||||
Reverse repurchase agreements and cash collateral on securities borrowed | (39,630 | ) | (18,404 | ) | ||||
Trading portfolio and net replacement values | (11,706 | ) | (3,364 | ) | ||||
Loans / due to customers | 2,918 | 15,042 | ||||||
Accrued income, prepaid expenses and other assets | (4,131 | ) | (668 | ) | ||||
Net increase / (decrease) in operating liabilities: | ||||||||
Repurchase agreements, cash collateral on securities lent | 16,507 | (239 | ) | |||||
Accrued expenses and other liabilities | 6,521 | (1,973 | ) | |||||
Income taxes paid | (317 | ) | (250 | ) | ||||
Net cash flow from / (used in) operating activities | (29,299 | ) | 5,993 | |||||
Cash flow from / (used in) investing activities | ||||||||
Investments in subsidiaries and associates | (247 | ) | 0 | |||||
Disposal of subsidiaries and associates | 129 | 27 | ||||||
Purchase of property and equipment | (395 | ) | (226 | ) | ||||
Disposal of property and equipment | 263 | 15 | ||||||
Net (investment in) / divestment of financial investments | 235 | 254 | ||||||
Net cash flow from / (used in) investing activities | (15 | ) | 70 | |||||
Cash flow from / (used in) financing activities | ||||||||
Net money market paper issued / (repaid) | 33,149 | 335 | ||||||
Net movements in treasury shares and own equity derivative activity | (290 | ) | (474 | ) | ||||
Capital issuance | 2 | 0 | ||||||
Issuance of long-term debt, including financial liabilities designated at fair value | 15,553 | 4,132 | ||||||
Repayment of long-term debt, including financial liabilities designated at fair value | (2,865 | ) | (4,469 | ) | ||||
Increase in minority interests | 518 | 65 | ||||||
Dividend payments to / and purchase from minority interests | (161 | ) | (156 | ) | ||||
Net cash flow from / (used in) financing activities | 45,906 | (567 | ) | |||||
Effects of exchange rate differences | 2,137 | (1,144 | ) | |||||
Net increase / (decrease) in cash equivalents | 18,729 | 4,352 | ||||||
Cash and cash equivalents, beginning of the period | 73,356 | 82,344 | ||||||
Cash and cash equivalents, end of the period | 92,085 | 86,696 | ||||||
Cash and cash equivalents comprise: | ||||||||
Cash and balances with central banks | 3,433 | 3,243 | ||||||
Money market paper 1 | 61,166 | 51,470 | ||||||
Due from banks maturing in less than three months | 27,486 | 31,983 | ||||||
Total | 92,085 | 86,696 | ||||||
48
Table of Contents
Notes to the Financial Statements
4 May 2004
Notes to the Financial Statements(unaudited)
Note 1 Basis of Accounting
UBS AG’s (“UBS”) consolidated financial statements (“the Financial Statements”) are prepared in accordance with International Financial Reporting Standards (IFRS) and stated in Swiss francs (CHF). These Financial Statements are presented in accordance with IAS 34 “Interim Financial Reporting”. In preparing the interim Financial Statements, the same accounting principles and methods of computation are applied as in the Financial Statements at 31 December 2003 and for the year then ended. These interim Financial Statements should be read in conjunction with the audited Financial Statements included in the UBS Financial Report 2003.
Changes in Accounting Policies
Financial Instruments
49
Table of Contents
Notes to the Financial Statements
4 May 2004
tive as a trading instrument. These instruments are now carried at fair value in their entirety with changes in fair value recorded in the income statement. The amounts are now included on the balance sheet within the line item Financial liabilities designated at fair value, with amounts of CHF 39,313 million at 31 March 2004 and CHF 35,286 million at 31 December 2003 being reported in that new line.
Investment properties
This change required restatement of the 2002 and 2003 comparative financial years. The effects of the restatement were as follows:
Credit risk losses incurred on OTC derivatives
Recently issued accounting standards
IFRS 3 Business Combinations
50
Table of Contents
Under IFRS 3, all business combinations must be accounted for using the purchase method of accounting. The pooling of interests method of accounting for business combinations has been eliminated. Goodwill arising from business combinations entered into on or after 31 March 2004 is not amortized but tested annually for impairment. Goodwill carried on the balance sheet relating to business combinations prior to 31 March 2004 will continue to be amortized until 31 December 2004. Beginning 2005, amortization will cease and all goodwill carried on the balance sheet will be subject to impairment testing. Intangible assets with indefinite useful lives will also be tested for impairment rather than being amortized.
IFRS 4 Insurance Contracts
IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations
Amendment to IAS 39 Fair Value Hedge Accounting for a Portfolio Hedge of Interest Rate Risk
51
Table of Contents
Notes to the Financial Statements
4 May 2004
Note 2 Reporting by Business Group
Internal charges and transfer pricing adjustments are reflected in the performance of each business. Revenue-sharing agreements are used to allocate external customer revenues to a Business Group on a reasonable basis. Transactions between Business Groups are conducted at arm’s length.
For the quarter ended 31 March 2004
Wealth | ||||||||||||||||||||||||
Wealth Management & | Global Asset | Investment | Management | Corporate | ||||||||||||||||||||
CHF million | Business Banking | Management | Bank | USA | Center | UBS | ||||||||||||||||||
Income | 3,203 | 507 | 4,937 | 1,346 | 299 | 10,292 | ||||||||||||||||||
Credit loss (expense) / recovery | (54 | ) | 0 | 58 | (1 | ) | 0 | 3 | ||||||||||||||||
Total operating income | 3,149 | 507 | 4,995 | 1,345 | 299 | 10,295 | ||||||||||||||||||
Personnel expenses | 1,185 | 236 | 2,590 | 947 | 213 | 5,171 | ||||||||||||||||||
General and administrative expenses | 523 | 88 | 534 | 238 | 124 | 1,507 | ||||||||||||||||||
Depreciation | 82 | 6 | 66 | 38 | 111 | 303 | ||||||||||||||||||
Amortization of goodwill and other intangible assets | 18 | 33 | 73 | 77 | 24 | 225 | ||||||||||||||||||
Total operating expenses | 1,808 | 363 | 3,263 | 1,300 | 472 | 7,206 | ||||||||||||||||||
Business Group performance before tax | 1,341 | 144 | 1,732 | 45 | (173 | ) | 3,089 | |||||||||||||||||
Tax expense | 579 | |||||||||||||||||||||||
Net profit before minority interests | 2,510 | |||||||||||||||||||||||
Minority interests | (87 | ) | ||||||||||||||||||||||
Net profit | 2,423 | |||||||||||||||||||||||
For internal management reporting purposes we measure credit loss expense using an expected loss concept. The table below shows Business Group performance consistent with the way in which our businesses are managed and the way Business Group performance is measured. Expected credit loss reflects the average annual costs that are expected to arise from positions in the current portfolio that become impaired in the future. The Adjusted expected credit loss reported for each Business Group is the Expected credit loss on its portfolio, plus the deferral which is the difference between Credit loss expense and Expected credit loss, amortized over a three-year period. The difference between these Adjusted expected credit loss figures and the Credit loss expense recorded at Group level for financial reporting purposes is reported in the Corporate Center.
Wealth | ||||||||||||||||||||||||
Wealth Management & | Global Asset | Investment | Management | Corporate | ||||||||||||||||||||
CHF million | Business Banking | Management | Bank | USA | Center | UBS | ||||||||||||||||||
Income | 3,203 | 507 | 4,937 | 1,346 | 299 | 10,292 | ||||||||||||||||||
Adjusted expected credit loss | (17 | ) | 0 | 0 | (3 | ) | 23 | 3 | ||||||||||||||||
Total operating income | 3,186 | 507 | 4,937 | 1,343 | 322 | 10,295 | ||||||||||||||||||
Personnel expenses | 1,185 | 236 | 2,590 | 947 | 213 | 5,171 | ||||||||||||||||||
General and administrative expenses | 523 | 88 | 534 | 238 | 124 | 1,507 | ||||||||||||||||||
Depreciation | 82 | 6 | 66 | 38 | 111 | 303 | ||||||||||||||||||
Amortization of goodwill and other intangible assets | 18 | 33 | 73 | 77 | 24 | 225 | ||||||||||||||||||
Total operating expenses | 1,808 | 363 | 3,263 | 1,300 | 472 | 7,206 | ||||||||||||||||||
Business Group performance before tax | 1,378 | 144 | 1,674 | 43 | (150 | ) | 3,089 | |||||||||||||||||
Tax expense | 579 | |||||||||||||||||||||||
Net profit before minority interests | 2,510 | |||||||||||||||||||||||
Minority interests | (87 | ) | ||||||||||||||||||||||
Net profit | 2,423 | |||||||||||||||||||||||
52
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Note 2 Reporting by Business Group (continued)
For the quarter ended 31 March 2003
Wealth | ||||||||||||||||||||||||
Wealth Management & | Global Asset | Investment | Management | Corporate | ||||||||||||||||||||
CHF million | Business Banking | Management | Bank | USA | Center | UBS | ||||||||||||||||||
Income | 2,866 | 378 | 3,217 | 1,166 | 210 | 7,837 | ||||||||||||||||||
Credit loss (expense) / recovery | (64 | ) | 0 | (5 | ) | 0 | 0 | (69 | ) | |||||||||||||||
Total operating income | 2,802 | 378 | 3,212 | 1,166 | 210 | 7,768 | ||||||||||||||||||
Personnel expenses | 1,146 | 188 | 1,794 | 888 | 186 | 4,202 | ||||||||||||||||||
General and administrative expenses | 517 | 99 | 478 | 246 | 57 | 1,397 | ||||||||||||||||||
Depreciation | 94 | 7 | 80 | 38 | 114 | 333 | ||||||||||||||||||
Amortization of goodwill and other intangible assets | 19 | 40 | 70 | 87 | 26 | 242 | ||||||||||||||||||
Total operating expenses | 1,776 | 334 | 2,422 | 1,259 | 383 | 6,174 | ||||||||||||||||||
Business Group performance before tax | 1,026 | 44 | 790 | (93 | ) | (173 | ) | 1,594 | ||||||||||||||||
Tax expense | 313 | |||||||||||||||||||||||
Net profit before minority interests | 1,281 | |||||||||||||||||||||||
Minority interests | (72 | ) | ||||||||||||||||||||||
Net profit | 1,209 | |||||||||||||||||||||||
For internal management reporting purposes we measure credit loss expense using an expected loss concept. The table below shows Business Group performance consistent with the way in which our businesses are managed and the way Business Group performance is measured. Expected credit loss reflects the average annual costs that are expected to arise from positions in the current portfolio that become impaired in the future. The Adjusted expected credit loss reported for each Business Group is the Expected credit loss on its portfolio, plus the deferral which is the difference between Credit loss expense and Expected credit loss, amortized over a three-year period. The difference between these Adjusted expected credit loss figures and the Credit loss expense recorded at Group level for financial reporting purposes is reported in the Corporate Center.
Wealth | ||||||||||||||||||||||||
Wealth Management & | Global Asset | Investment | Management | Corporate | ||||||||||||||||||||
CHF million | Business Banking | Management | Bank | USA | Center | UBS | ||||||||||||||||||
Income | 2,866 | 378 | 3,217 | 1,166 | 210 | 7,837 | ||||||||||||||||||
Adjusted expected credit loss | (57 | ) | 0 | (18 | ) | (2 | ) | 8 | (69 | ) | ||||||||||||||
Total operating income | 2,809 | 378 | 3,199 | 1,164 | 218 | 7,768 | ||||||||||||||||||
Personnel expenses | 1,146 | 188 | 1,794 | 888 | 186 | 4,202 | ||||||||||||||||||
General and administrative expenses | 517 | 99 | 478 | 246 | 57 | 1,397 | ||||||||||||||||||
Depreciation | 94 | 7 | 80 | 38 | 114 | 333 | ||||||||||||||||||
Amortization of goodwill and other intangible assets | 19 | 40 | 70 | 87 | 26 | 242 | ||||||||||||||||||
Total operating expenses | 1,776 | 334 | 2,422 | 1,259 | 383 | 6,174 | ||||||||||||||||||
Business Group performance before tax | 1,033 | 44 | 777 | (95 | ) | (165 | ) | 1,594 | ||||||||||||||||
Tax expense | 313 | |||||||||||||||||||||||
Net profit before minority interests | 1,281 | |||||||||||||||||||||||
Minority interests | (72 | ) | ||||||||||||||||||||||
Net profit | 1,209 | |||||||||||||||||||||||
53
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Notes to the Financial Statements
4 May 2004
Note 3 Net Interest and Trading Income
Accounting standards require separate disclosure of net interest income and net trading income (see the second and the third table). This required disclosure, however, does not take into account that net interest and trading income are generated by a range of different business activities. In many cases, a particular business activity can generate both net interest and trading income. Fixed income trading activity, for example, generates both trading profits and coupon income. UBS management therefore analyzes net interest and trading income according to the business activity generating it. The first table below (labeled Net interest and trading income) provides information that corresponds to this management view. For example, net income from trading activities is further broken down into the four sub-components of Equities, Fixed income, Foreign exchange and Other. These activities generate both types of income (interest and trading revenue) and therefore this analysis is not comparable to the breakdown provided in the third table on the next page (Net trading income only).
Net interest and trading income
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Net interest income | 3,218 | 3,007 | 2,909 | 7 | 11 | |||||||||||||||
Net trading income | 1,785 | 578 | 1,221 | 209 | 46 | |||||||||||||||
Total net interest and trading income | 5,003 | 3,585 | 4,130 | 40 | 21 | |||||||||||||||
Breakdown by business activity
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Net income from interest margin products | 1,265 | 1,233 | 1,285 | 3 | (2 | ) | ||||||||||||||
Equities | 946 | 701 | 319 | 35 | 197 | |||||||||||||||
Fixed income | 2,151 | 1,146 | 1,960 | 88 | 10 | |||||||||||||||
Foreign exchange | 414 | 321 | 357 | 29 | 16 | |||||||||||||||
Other | 89 | 86 | 71 | 3 | 25 | |||||||||||||||
Net income from trading activities | 3,600 | 2,254 | 2,707 | 60 | 33 | |||||||||||||||
Net income from treasury activities | 310 | 326 | 398 | (5 | ) | (22 | ) | |||||||||||||
Other1 | (172 | ) | (228 | ) | (260 | ) | (25 | ) | (34 | ) | ||||||||||
Total net interest and trading income | 5,003 | 3,585 | 4,130 | 40 | 21 | |||||||||||||||
54
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Note 3 Net Interest and Trading Income (continued)
Net interest income1
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Interest income | ||||||||||||||||||||
Interest earned on loans and advances | 2,733 | 2,354 | 2,572 | 16 | 6 | |||||||||||||||
Interest earned on securities borrowed and reverse repurchase agreements | 2,274 | 2,905 | 2,844 | (22 | ) | (20 | ) | |||||||||||||
Interest and dividend income from financial investments | 21 | 15 | 25 | 40 | (16 | ) | ||||||||||||||
Interest and dividend income from trading portfolio | 4,713 | 4,465 | 4,191 | 6 | 12 | |||||||||||||||
Total | 9,741 | 9,739 | 9,632 | 0 | 1 | |||||||||||||||
Interest expense | ||||||||||||||||||||
Interest on amounts due to banks and customers | 1,187 | 1,720 | 1,192 | (31 | ) | (0 | ) | |||||||||||||
Interest on securities lent and repurchase agreements | 2,141 | 2,062 | 2,482 | 4 | (14 | ) | ||||||||||||||
Interest and dividend expense from trading portfolio | 2,315 | 2,274 | 2,193 | 2 | 6 | |||||||||||||||
Interest on financial liabilities designated at FV | 275 | 231 | 137 | 19 | 101 | |||||||||||||||
Interest on debt issued | 605 | 445 | 719 | 36 | (16 | ) | ||||||||||||||
Total | 6,523 | 6,732 | 6,723 | (3 | ) | (3 | ) | |||||||||||||
Net interest income | 3,218 | 3,007 | 2,909 | 7 | 11 | |||||||||||||||
Net trading income1
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Equities | 701 | 529 | 186 | 33 | 277 | |||||||||||||||
Fixed income2 | 546 | (354 | ) | 579 | (6 | ) | ||||||||||||||
Foreign exchange and other | 538 | 403 | 456 | 33 | 18 | |||||||||||||||
Net trading income | 1,785 | 578 | 1,221 | 209 | 46 | |||||||||||||||
Included in the Net trading income table are the fair value changes of CHF (385) million for the quarter ended 31 March 2004 (CHF (178) million and CHF 112 million for the quarter ended 31 December 2003 and 31 March 2003 respectively) related to financial liabilities designated as held at fair value through profit and loss. The major portion of the entire change in fair value is attributable to the change in fair value of derivatives embedded in the liabilities designated as held at fair value. The exposure from such embedded derivatives is economically hedged with derivatives whose change in fair value is also reported in Net trading income, offsetting the fair value changes related to financial liabilities designated as held at fair value.
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Notes to the Financial Statements
4 May 2004
Note 4 Net Fee and Commission Income
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Underwriting fees | 711 | 771 | 437 | (8 | ) | 63 | ||||||||||||||
Corporate finance fees | 200 | 306 | 114 | (35 | ) | 75 | ||||||||||||||
Brokerage fees | 1,768 | 1,495 | 1,229 | 18 | 44 | |||||||||||||||
Investment fund fees | 1,131 | 1,051 | 882 | 8 | 28 | |||||||||||||||
Fiduciary fees | 54 | 56 | 63 | (4 | ) | (14 | ) | |||||||||||||
Custodian fees | 314 | 318 | 279 | (1 | ) | 13 | ||||||||||||||
Portfolio and other management and advisory fees | 1,122 | 1,021 | 901 | 10 | 25 | |||||||||||||||
Insurance-related and other fees | 65 | 69 | 103 | (6 | ) | (37 | ) | |||||||||||||
Total securities trading and investment activity fees | 5,365 | 5,087 | 4,008 | 5 | 34 | |||||||||||||||
Credit-related fees and commissions | 65 | 74 | 62 | (12 | ) | 5 | ||||||||||||||
Commission income from other services | 240 | 293 | 260 | (18 | ) | (8 | ) | |||||||||||||
Total fee and commission income | 5,670 | 5,454 | 4,330 | 4 | 31 | |||||||||||||||
Brokerage fees paid | 427 | 403 | 334 | 6 | 28 | |||||||||||||||
Other | 238 | 231 | 170 | 3 | 40 | |||||||||||||||
Total fee and commission expense | 665 | 634 | 504 | 5 | 32 | |||||||||||||||
Net fee and commission income | 5,005 | 4,820 | 3,826 | 4 | 31 | |||||||||||||||
Note 5 Other Income
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Gains / (losses) from disposal of associates and subsidiaries | ||||||||||||||||||||
Net gain from disposal of: | ||||||||||||||||||||
Consolidated subsidiaries | 0 | (7 | ) | 0 | ||||||||||||||||
Investments in associates | 0 | 0 | 0 | |||||||||||||||||
Total | 0 | (7 | ) | 0 | ||||||||||||||||
Financial investments available for sale | ||||||||||||||||||||
Net gain from disposal of: | ||||||||||||||||||||
Private equity investments | 239 | 242 | 63 | (1 | ) | 279 | ||||||||||||||
Other financial investments | 10 | (2 | ) | 5 | 100 | |||||||||||||||
Impairment charges on private equity investments and other financial investments | (69 | ) | (129 | ) | (240 | ) | 47 | 71 | ||||||||||||
Total | 180 | 111 | (172 | ) | 62 | |||||||||||||||
Net income from investments in property | 18 | 19 | 16 | (5 | ) | 13 | ||||||||||||||
Equity in income of associates | 8 | 9 | 10 | (11 | ) | (20 | ) | |||||||||||||
Gains / (losses) from investment properties | 0 | (7 | ) | 0 | ||||||||||||||||
Other | 78 | 54 | 27 | 44 | 189 | |||||||||||||||
Total other income | 284 | 179 | (119 | ) | 59 | |||||||||||||||
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Note 6 Personnel Expenses
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Salaries and bonuses | 4,236 | 3,220 | 3,267 | 32 | 30 | |||||||||||||||
Contractors | 129 | 129 | 134 | 0 | (4 | ) | ||||||||||||||
Insurance and social contributions | 291 | 203 | 216 | 43 | 35 | |||||||||||||||
Contribution to retirement plans | 177 | 150 | 203 | 18 | (13 | ) | ||||||||||||||
Other personnel expenses | 338 | 336 | 382 | 1 | (12 | ) | ||||||||||||||
Total personnel expenses | 5,171 | 4,038 | 4,202 | 28 | 23 | |||||||||||||||
Note 7 General and Administrative Expenses
Quarter ended | % change from | |||||||||||||||||||
CHF million | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Occupancy | 350 | 330 | 304 | 6 | 15 | |||||||||||||||
Rent and maintenance of machines and equipment | 171 | 176 | 174 | (3 | ) | (2 | ) | |||||||||||||
Telecommunications and postage | 199 | 205 | 219 | (3 | ) | (9 | ) | |||||||||||||
Administration | 144 | 154 | 143 | (6 | ) | 1 | ||||||||||||||
Marketing and public relations | 111 | 122 | 89 | (9 | ) | 25 | ||||||||||||||
Travel and entertainment | 136 | 158 | 118 | (14 | ) | 15 | ||||||||||||||
Professional fees | 137 | 193 | 109 | (29 | ) | 26 | ||||||||||||||
IT and other sourcing | 215 | 234 | 198 | (8 | ) | 9 | ||||||||||||||
Other | 44 | 95 | 43 | (54 | ) | 2 | ||||||||||||||
Total general and administrative expenses | 1,507 | 1,667 | 1,397 | (10 | ) | 8 | ||||||||||||||
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Notes to the Financial Statements
4 May 2004
Note 8 Earnings per Share (EPS) and Shares Outstanding
Quarter ended | % change from | |||||||||||||||||||
Basic earnings (CHF million) | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Net profit | 2,423 | 1,808 | 1,209 | 34 | 100 | |||||||||||||||
Quarter ended | % change from | |||||||||||||||||||
Diluted earnings (CHF million) | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Net profit | 2,423 | 1,808 | 1,209 | 34 | 100 | |||||||||||||||
Less: Profit on own equity derivative contracts | (3 | ) | 0 | (17 | ) | 82 | ||||||||||||||
Net profit for diluted EPS | 2,420 | 1,808 | 1,192 | 34 | 103 | |||||||||||||||
Quarter ended | % change from | |||||||||||||||||||
Weighted average shares outstanding | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Weighted average shares outstanding | 1,076,148,650 | 1,075,169,790 | 1,153,931,972 | 0 | (7 | ) | ||||||||||||||
Potentially dilutive ordinary shares resulting from options and warrants outstanding | 33,652,562 | 28,432,962 | 16,327,254 | 18 | 106 | |||||||||||||||
Weighted average shares outstanding for diluted EPS | 1,109,801,212 | 1,103,602,752 | 1,170,259,226 | 1 | (5 | ) | ||||||||||||||
Quarter ended | % change from | |||||||||||||||||||
Earnings per share (CHF) | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Basic EPS | 2.25 | 1.68 | 1.05 | 34 | 114 | |||||||||||||||
Diluted EPS | 2.18 | 1.64 | 1.02 | 33 | 114 | |||||||||||||||
Quarter ended | % change from | |||||||||||||||||||
Shares outstanding | 31.3.04 | 31.12.03 | 31.3.03 | 4Q03 | 1Q03 | |||||||||||||||
Total ordinary shares issued | 1,184,421,495 | 1,183,046,764 | 1,256,702,037 | 0 | (6 | ) | ||||||||||||||
Second trading line treasury shares | ||||||||||||||||||||
2002 first program | 67,700,000 | (100 | ) | |||||||||||||||||
2002 second program | 8,270,080 | (100 | ) | |||||||||||||||||
2003 program | 59,482,000 | 56,707,000 | 1,470,000 | 5 | ||||||||||||||||
2004 program | 0 | |||||||||||||||||||
Other treasury shares | 50,360,853 | 54,653,692 | 28,666,605 | (8 | ) | 76 | ||||||||||||||
Total treasury shares | 109,842,853 | 111,360,692 | 106,106,685 | (1 | ) | 4 | ||||||||||||||
Shares outstanding | 1,074,578,642 | 1,071,686,072 | 1,150,595,352 | 0 | (7 | ) | ||||||||||||||
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Note 9 Currency Translation Rates
The following table shows the principal rates used to translate the financial statements of foreign entities into Swiss francs:
Spot rate | Average rate | |||||||||||||||||||||||
As at | Quarter ended | |||||||||||||||||||||||
31.3.04 | 31.12.03 | 31.3.03 | 31.3.04 | 31.12.03 | 31.3.03 | |||||||||||||||||||
1 USD | 1.27 | 1.24 | 1.35 | 1.26 | 1.29 | 1.36 | ||||||||||||||||||
1 EUR | 1.56 | 1.56 | 1.48 | 1.57 | 1.55 | 1.47 | ||||||||||||||||||
1 GBP | 2.34 | 2.22 | 2.14 | 2.33 | 2.24 | 2.18 | ||||||||||||||||||
100 JPY | 1.21 | 1.15 | 1.15 | 1.19 | 1.19 | 1.14 | ||||||||||||||||||
Note 10 Post Balance Sheet Event
On 2 April 2004, UBS signed an agreement with RWE, a German utilities company, to purchase its 20% ownership interest in Motor-Columbus AG (Motor-Columbus) and its 1.23% direct interest in Atel AG (Atel), a subsidiary of Motor-Columbus, for a cash consideration of CHF 420 million. Together with the 35.6% interest already owned, UBS will hold a 55.6% majority interest in Motor-Columbus after the transaction has closed, which is expected to occur in early July 2004. Motor-Columbus is a Swiss holding company whose most significant asset is a 58.5% ownership interest in Atel, a Swiss group engaged in the production, distribution and trading of electricity. In complying with the Swiss takeover code, UBS will make an unconditional tender offer to the minority shareholders of Atel to acquire their shares at a price of
CHF 1,230 per share. Under the takeover code, UBS would also have to make a tender offer to the minority shareholders of Società Elettrica Sopracenerina, a publicly listed subsidiary of Atel, for which UBS however is seeking to receive an exemption from the Swiss authorities. The tender offer to the minority shareholders of Atel and Sopracenerina, in case the exemption from the offer is not granted, would, if accepted in full, increase the purchase price by a maximum of CHF 1,589 million.
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UBS Registered Shares
4 May 2004
UBS Registered Shares
UBS ordinary shares are registered shares with a par value of CHF 0.80 per share. They are issued in the form of Global Registered Shares (GRS). A Global Registered Share is a security that provides direct and equal ownership for all shareholders. It can be traded and transferred across applicable borders without the need for conversion, with identical shares traded on different stock exchanges in different currencies. The share is listed on the Swiss (traded on virt-x), New York and Tokyo stock exchanges.
Ticker symbols
Trading exchange | Bloomberg | Reuters | ||||
virt-x | UBSN VX | UBSN.VX | ||||
New York Stock Exchange | UBS US | UBS.N | ||||
Tokyo Stock Exchange | 8657 JP | UBS.T | ||||
Security identification codes
ISIN | CH0012032030 | |
Valoren | 1203203 | |
Cusip | CINS H8920M855 | |
UBS share price
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Publisher / Copyright: UBS AG, Switzerland.
Language: English. SAP-No. 80834E-0402
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UBS AG | ||
P.O. Box, CH-8098 Zurich | ||
P.O. Box, CH-4002 Basel | ||
www.ubs.com |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
UBS AG | ||||||
By: | /s/ Robert Dinerstein | |||||
Name: | Robert Dinerstein | |||||
Title | Managing Director | |||||
By: | /s/ Per Dyrvik | |||||
Name: | Per Dyrvik | |||||
Title: | Managing Director |
Date: May 7, 2004