UBS reports second quarter 2005 result of CHF 2,147 million

UBS (NYSE:UBS):

UBS (including industrial holdings)
Quarter % change
ended from
-------------------------- ---------
CHF million, except where
indicated 30.6.05 31.3.05 30.6.04 1Q05 2Q04
----------------------------------------------------------------------
Operating income 12,011 12,971 10,217 (7) 18
Operating expenses 9,042 9,389 7,537 (4) 20
Net profit 2,293 2,833 2,153 (19) 7
Net profit attributable to
minority interests 146 208 110 (30) 33
Net profit attributable to UBS
shareholders 2,147 2,625 2,043 (18) 5

Financial businesses

Operating income 9,381 10,104 9,429 (7) (1)
Operating expenses 6,583 6,877 6,827 (4) (4)
Net profit attributable to UBS
shareholders 2,111 2,427 1,940 (13) 9
----------------------------------------------------------------------

-- Net profit attributable to UBS shareholders of CHF 2,147 million in second quarter

-- Financial businesses contributed CHF 2,111 million in second quarter - up 9% from year earlier, virtually flat pre-goodwill

-- In first half 2005, attributable profit from financial businesses was CHF 4,538 million, in line with first half 2004 -- Annualized RoE in first half at 28.2%, again well above 15-20% target range, EPS in second quarter of CHF 2.10

-- Results show continued strength across the firm, led by strong asset-based revenues in the wealth and asset management businesses

-- Net new money, at CHF 30 billion in second quarter, was again extremely strong, with a near record CHF 19.2 billion contribution from wealth management clients worldwide.

UBS reports net profit attributable to its shareholders("attributable profit") of CHF 2,147 million in second quarter 2005.Financial businesses contributed CHF 2,111 million, up 9% from a yearearlier, but virtually flat pre-goodwill (down CHF 12 million). Infirst half 2005, attributable profit from financial businesses was CHF4,538 million, in line with the same period in 2004 pre-goodwill (downCHF 13 million).

UBS's industrial holdings, including its stake in Motor-Columbusand its private equity portfolio, contributed CHF 36 million, or 1.7%,to UBS's attributable profit.

"Our advisory capabilities and the strength of our wealth andasset management businesses helped us to offset the challengingmarkets facing our trading desks," said Peter Wuffli, Chief ExecutiveOfficer.

Income from financial businesses, excluding credit lossrecoveries, was CHF 9,312 million in second quarter 2005, CHF 11million higher than second quarter 2004. Practically all majorasset-based fee categories were up, in particular investment fund feesand fees from portfolio management mandates, as markets rose and newclient money flowed into UBS. Corporate finance fees were at thehighest level ever seen in a second quarter, driven by the strongmomentum of UBS's mergers and acquisitions franchise, which wonseveral prestigious mandates, such as advising credit card issuer MBNAon its merger with Bank of America, and cable television companyAdelphia Communications on its sale to Time Warner and Comcast. Bondunderwriting fees were also at their highest level ever, as corporateclients continued to tap into debt markets. These effects drove netfee and commission income up to its highest level since 2001 - makingup 57% of overall operating income. This helped to counterbalance adecrease in revenues from trading activities, mainly reflecting adifficult fixed income environment. Equities trading held up well,driven by growth in the prime brokerage business.

Positive business sentiment and sound credit fundamentals in bothSwiss and international credit markets led to a low level of newdefaults, again resulting in net recoveries of CHF 69 million insecond quarter 2005 compared to CHF 128 million in the same quarter ayear earlier.

Invested asset levels rose to CHF 2.55 trillion in second quarter2005 because of increasing market valuations and strong net new moneyof CHF 30 billion, with inflows in the wealth management businesses ata near record of CHF 19.2 billion, including particularly strongcontributions into the domestic European business and from Asianclients.

Operating expenses fell 4% to CHF 6,583 million from a yearearlier, mainly reflecting the discontinuation of goodwillamortization from 1 January 2005 onwards. If goodwill amortizationexpenses for second quarter 2004 are excluded, operating expenses weredown 1%, mostly because of a fall in operational risk costs. Personnelexpenses rose 4% in second quarter from a year earlier, as salaryexpenses were pushed up by the continuous expansion of UBS's businessand annual pay rises.

Headcount in the financial businesses was 69,200 on 30 June 2005,up 1,003 from 68,197 on 31 March 2005, with higher staffing levelsacross all businesses reflecting the growth of UBS's franchiseworldwide. In Switzerland, headcount has risen by 398 since the end oflast year, in Europe it is up 506, in the Americas 356 and in AsiaPacific 533.

Risk-weighted assets, BIS Tier 1 ratio

Risk-weighted assets stood at CHF 300.6 billion on 30 June 2005,up from CHF 286.0 billion on 31 March 2005. The majority of theincrease was driven by the strengthening of major currencies, such asthe US Dollar and UK sterling, against the Swiss franc. Capitalrequirements also increased because of higher lending in the wealthmanagement businesses around the world. To a lesser extent, capitalrequirements also increased because of growth in lending in the Swissmortgage business and to mortgage originators through the InvestmentBank's mortgage-backed securities business. Much of the increasedlending activity is collateralized.

BIS Tier 1 capital rose to CHF 36.7 billion on 30 June 2005 fromCHF 32.8 billion on 31 March 2005. The BIS Tier 1 ratio increased to12.2% at the end of June from 11.5% at the end of March.

Global integration of wealth management units

On 1 July 2005, the US, Swiss and international wealth managementbusinesses, as well as the Swiss corporate and retail banking unit,were brought together in one Business Group titled Global WealthManagement & Business Banking.

The highly successful municipal finance unit, previously locatedwithin the Wealth Management USA business, has been transferred to theInvestment Bank's fixed income area.

In its financial reporting, UBS will retain separate disclosure ofthe performance and profitability of the Wealth Management USA unit.Before releasing third quarter results, UBS will restate its resultsto reflect these shifts.

Outlook

UBS performed well through a mixed second quarter for globalmarkets. The start of the quarter was challenging, but subsequentlymarkets picked up. UBS believes this momentum should continue, atleast in the short term.

"While the natural seasonality in our industry tends to boostearnings in the first part of the year, we have every reason tobelieve this will be another year of strong results for UBS and ourshareholders," said Clive Standish.

Performance against UBS financial targets

UBS's performance against financial targets shows*:

-- Annualized return on equity in first half 2005 was 28.2%, down from 29.5%* in the same period a year ago, but still well above the target range of 15-20%. The drop was driven by an increase in average equity as strong retained earnings outpaced distributions via dividends or buybacks, partly offset by higher annualized net profit.

-- Basic earnings per share stood at CHF 2.10, down marginally (2%) from CHF 2.14* in the same quarter a year earlier, due to a decrease in attributable profit. This was partially offset by a 2% reduction in the average number of shares outstanding due to the continuing repurchase of shares.

-- The cost/income ratio of the financial businesses stood at 70.7% in second quarter 2005, down from the 71.4% shown in the same quarter last year. The improvement reflected a small increase in income and lower general and administrative expenses compared to the second quarter a year earlier, which included a particularly high level of operational risk costs.

Performance against targets

Year to date 30.6.05 31.3.05 30.6.04
----------------------------------------------------------------------
RoE (%) 1
as reported 28.2 32.4 27.2
before goodwill 28.2 32.4 29.5 2
----------------------------------------------------------------------

Quarter ended 30.6.05 31.3.05 30.6.04
----------------------------------------------------------------------
Basic EPS (CHF)
as reported 3 2.10 2.60 1.96
before goodwill 2.10 2.60 2.14 4
----------------------------------------------------------------------
Cost / income ratio of the financial
businesses (%) 5,6
as reported 70.7 69.0 73.4
before goodwill 70.7 69.0 71.4 7
----------------------------------------------------------------------
Net new money, wealth management businesses
(CHF billion) 8
Wealth Management 18.4 15.4 8.2
Wealth Management USA 0.8 5.8 2.2
----------------------------------------------------------------------
Total 19.2 21.2 10.4
----------------------------------------------------------------------

1 Net profit attributable to UBS shareholders (annualized) / average
equity attributable to UBS shareholders less dividends.

2 Net profit attributable to UBS shareholders (annualized), less the
amortization of goodwill / average equity attributable to UBS
shareholders less dividends.

3 Details of the EPS calculation can be found in note 8 to the
financial statements.

4 Net profit attributable to UBS shareholders less the amortization of
goodwill / weighted average shares outstanding.

5 Excludes results from industrial holdings.

6 Operating expenses / operating income less credit loss expense or
recovery.

7 Operating expenses less the amortization of goodwill / operating
income less credit loss expense or recovery.

8 Excludes interest and dividend income.

* Before goodwill amortization: Until the end of 2004, targets were
evaluated on a pre-goodwill basis. With the introduction of new
and revised International Financial Reporting Standards (IFRS),
goodwill amortization stopped at the beginning of 2005.



UBS Financial Highlights

Highlights UBS
Quarter ended % change from Year to date
-------------------------------------------------------
CHF million,
except where
indicated 30.6.05 31.3.05 30.6.04 1Q05 2Q04 30.6.05 30.6.04
----------------------------------------------------------------------
Net profit
attributable
to UBS
shareholders 2,147 2,625 2,043 (18) 5 4,772 4,320
----------------------------------------------------------------------
Basic earnings
per share
(CHF) 1 2.10 2.60 1.96 (19) 7 4.70 4.12
Diluted
earnings per
share (CHF) 1 2.01 2.48 1.84 (19) 9 4.48 3.92
Return on
equity
attributable
to UBS
shareholders
(%) 2 28.2 27.2
----------------------------------------------------------------------
Performance
indicators 3
Basic earnings
per share
(CHF) 4 2.10 2.60 2.14 (19) (2) 4.70 4.47
Return on
equity
attributable
to UBS
shareholders
(%)2 28.2 29.5
----------------------------------------------------------------------

Highlights financial businesses5

As at or for
the quarter ended % change from Year to date
-------------------------------------------------------
CHF million,
except where
indicated 30.6.05 31.3.05 30.6.04 1Q05 2Q04 30.6.05 30.6.04
----------------------------------------------------------------------
Operating
income 9,381 10,104 9,429 (7) (1) 19,485 19,564
Operating
expenses 6,583 6,877 6,827 (4) (4) 13,460 13,947
Net profit
attributable
to UBS
shareholders 2,111 2,427 1,940 (13) 9 4,538 4,188
----------------------------------------------------------------------
Cost / income
ratio (%) 6 70.7 69.0 73.4 69.8 71.8
Net new money,
wealth
management
businesses
(CHF billion) 7 19.2 21.2 10.4 40.4 29.4
----------------------------------------------------------------------
Headcount
(full-time
equivalents) 69,200 68,197 66,022 1 5
----------------------------------------------------------------------
Pre-goodwill
earnings 3
----------------------------------------------------------------------
Operating
income 9,381 10,104 9,429 (7) (1) 19,485 19,564
Operating
expenses 6,583 6,877 6,644 (4) (1) 13,460 13,584
Net profit
attributable
to UBS
shareholders 2,111 2,427 2,123 (13) (1) 4,538 4,551
----------------------------------------------------------------------
Cost / income
ratio (%) 6 70.7 69.0 71.4 69.8 69.9
----------------------------------------------------------------------

Highlights balance sheet & capital management



CHF million, As at % change from
except where ----------------------------------------
indicated 30.6.05 31.3.05 30.6.04 31.3.05 30.6.04
-------------------------------------------------------
Equity
attributable
to UBS
shareholders 38,002 38,130 0
-------------------------------------------------------
Market
capitalization 108,193 109,838 98,001 (1) 10
-------------------------------------------------------
BIS capital
ratios
Tier 1 (%) 8 12.2 11.5 12.1
Total BIS (%) 13.9 13.0 13.5
Risk-weighted
assets 300,636 286,014 267,521 5 12
-------------------------------------------------------
Invested assets
(CHF billion) 2,550 2,360 2,231 8 14
-------------------------------------------------------
Long-term
ratings
Fitch, London AA+ AA+ AA+
Moody's, New York Aa2 Aa2 Aa2
Standard &
Poor's, New York AA+ AA+ AA+
----------------------------------------------------------------------

1 For the EPS calculation, see note 8 to the financial statements.

2 Net profit attributable to UBS shareholders (annualized) / average
equity attributable to UBS shareholders less dividends.

3 Excludes the amortization of goodwill in 2004. Due to changes in
accounting standards, there is no amortization of goodwill from
2005 onwards.

4 Net profit attributable to UBS shareholders / weighted average
shares outstanding.

5 Excludes results from industrial holdings.

6 Operating expenses / operating income less credit loss expense or
recovery.

7 Includes Wealth Management and Wealth Management USA. Excludes
interest and dividend income.

8 Includes hybrid Tier 1 capital, please refer to the BIS capital and
ratios table in the capital management section of the Second
Quarter 2005 Financial Report.



USD-convenience translation (spot rate of CHF/USD as at 30.6.05):
1.28

Highlights UBS
Quarter
ended
USD million, except where indicated 30.6.05
----------------------------------------------------------------------
Net profit attributable to UBS shareholders 1,677
----------------------------------------------------------------------
Basic earnings per share (USD) 1 1.64
Diluted earnings per share (USD) 1 1.57
Return on equity attributable to UBS shareholders (%)2 28.2
----------------------------------------------------------------------

Highlights financial businesses 3
Quarter
ended
USD million, except where indicated 30.6.05
----------------------------------------------------------------------
Operating income 7,329
Operating expenses 5,143
Net profit attributable to UBS shareholders 1,649
----------------------------------------------------------------------
Cost / income ratio (%)4 70.7
Net new money, wealth management businesses (USD billion) 5 15.0
----------------------------------------------------------------------

Highlights balance sheet & capital management

As at
USD million, except where indicated 30.6.05
----------------------------------------------------------------------
Equity attributable to UBS shareholders 29,689
----------------------------------------------------------------------
Market capitalization 84,526
----------------------------------------------------------------------
BIS capital ratios
Tier 1 (%)6 12.2
Total BIS (%) 13.9
Risk-weighted assets 234,872
----------------------------------------------------------------------
Invested assets (USD billion) 1,992
----------------------------------------------------------------------

1 For the EPS calculation, see note 8 to the financial statements.

2 Net profit attributable to UBS shareholders (annualized) / average
equity attributable to UBS shareholders less dividends.

3 Excludes results from industrial holdings.

4 Operating expenses / operating income less credit loss expense or
recovery.

5 Includes Wealth Management and Wealth Management USA. Excludes
interest and dividend income.

6 Includes hybrid Tier 1 capital, please refer to the BIS capital and
ratios table in the capital management section of the Second
Quarter 2005 Financial Report.

Results from the Financial Businesses

Wealth Management & Business Banking

In second quarter 2005, the Wealth Management unit's pre-taxprofit was CHF 963 million, a quarterly record and an improvement of5% from first quarter 2005. The result reflected rising asset-basedfees from the record asset base and higher interest income, due to thecontinued expansion of margin lending activities.

Net new money, at CHF 18.4 billion, was at its highest level ever.The international clients area recorded CHF 17.0 billion in net newmoney, driven by a record inflow into the domestic European businessand further strong contributions from Asian clients. The Swiss clientsarea showed an inflow of CHF 1.4 billion, a clear improvement from CHF0.9 billion in first quarter 2005.

In second quarter 2005, the gross margin on invested assets was101 basis points, down 3 basis points from first quarter 2005. Thedrop mainly reflects a decrease in non-recurring margin. Althoughtransactional revenues rose slightly, they did not keep pace with theincrease in invested assets.

Invested assets on 30 June 2005 were CHF 890 billion, up by CHF 70billion or 9% from 31 March 2005, reflecting positive marketperformance, the appreciation of the US dollar, and strong net newmoney. Levels also rose due to the integration of the acquiredoperations of Dresdner Bank in Latin America and Julius Baer in NorthAmerica.

The Business Banking Switzerland unit reported a pre-tax profit ofCHF 564 million in second quarter 2005 - CHF 33 million or 6% higherthan in first quarter 2005. This is the second highest result everreported, exceeded only in second quarter 2003, which benefited fromdisposal gains. The result shows the continued tight management of thecost base, with lower adjusted expected credit loss reflecting thestructural improvement of the loan portfolio in recent years.

Total operating income in second quarter 2005 was up 2% from firstquarter 2005 while operating expenses decreased marginally.

The loan portfolio, at CHF 140.5 billion on 30 June 2005, was CHF1.1 billion above the level on 31 March 2005. An increase in privateclient mortgages was partly offset by the ongoing workout of therecovery portfolio.

Global Asset Management

The Global Asset Management unit's pre-tax profit was CHF 220million in second quarter 2005, only CHF 4 million or 2% off therecord CHF 224 million in first quarter. The result reflected lowerperformance fees, mainly in alternative and quantitative investments,partly offset by increasing management fees from traditionalinvestments, reflecting the higher asset base which rose as a resultof positive currency fluctuations, continued strong net new moneyinflows and higher market levels.

Total operating expenses fell slightly in second quarter, largelya result of lower personnel expenses, with performance-basedcompensation falling in line with revenues.

Net new money in the Institutional business in second quarter 2005was CHF 2.7 billion, compared with CHF 5.1 billion in first quarter2005, with the decline reflecting money market outflows. Excludingmovements related to money market funds, net new money was CHF 4.2billion, unchanged compared to first quarter 2005. Major inflows werereported into fixed income mandates and alternative investments.

Net new money in the Wholesale Intermediary business was CHF 6.2billion in second quarter 2005, up from CHF 4.7 billion in firstquarter 2005. Excluding money market outflows, net new money was CHF10.7 billion, compared to CHF 7.2 billion in first quarter. The maindrivers were strong inflows into equity funds and asset allocationfunds in Europe and the Americas.

Invested assets at the end of second quarter 2005 stood at CHF 686billion, up from CHF 635 billion on 31 March 2005, reflecting strongnet new money inflows, positive market performance and currencyimpacts.

Investment Bank

The Investment Bank posted a pre-tax profit of CHF 1,077 million,up 12% from the same period last year. Pre-goodwill, pre-tax profitwas up 5%.

Total operating income in second quarter 2005 was CHF 3,690million, down 6% from the same quarter a year earlier. Lower revenuesin fixed income, rates and currencies were partly offset by verystrong results in investment banking and a robust equitiesperformance.

Equities revenues were up 3% from the same period in 2004. Primebrokerage had a strong quarter and performance in the derivativesbusiness was solid, especially in Europe, aided by improved optionsvolume early in the quarter. Income from secondary cash trading saw amoderate decrease on uncertain market conditions. Equity capitalmarkets revenues fell significantly despite market share increases inmost regions due to a lower level of issuance in the market.

Fixed income, rates and currencies revenues were down 18% from theresult achieved a year earlier. Difficult trading conditions resultedin lower revenues in the credit fixed income and rates business lines.Revenues in the cash and collateral trading business rose, offsettingdeclines in foreign exchange trading. Results in the principal financeand commercial real estate business were flat. Credit default swapshedging loan exposures recorded zero in revenues against positiverevenues of CHF 12 million a year ago.

Investment banking revenues in second quarter 2005 were up 17%from a year earlier, making it the best second quarter performancesince 2001. The result reflected UBS's ability to take advantage ofstrong corporate activity levels, particularly in Europe, andparticipate in significant transactions in the Americas.

Total operating expenses in second quarter 2005 were down 11% fromthe same period last year, reflecting the decline in operational riskcosts. Personnel expenses decreased by 2% as reduced accruals for cashbonuses, in line with lower revenues, were partially offset by a risein headcount.

Market risk for the Investment Bank, as measured by the average10-day 99% VaR, was CHF 362 million in second quarter 2005, slightlydown from the CHF 371 million seen in the previous quarter. Interestrate VaR, which is the largest contributor, increased in the quarter.

Wealth Management USA

The Wealth Management USA unit's pre-tax profit was CHF 133million, 8% lower than the CHF 144 million in first quarter 2005.Before acquisition costs, pre-tax profit was CHF 197 million in secondquarter 2005, down 2% from CHF 201 million in first quarter 2005.

Because Wealth Management USA's business is almost entirelyconducted in US dollars, comparisons of results to prior periods areaffected by the movements of the US dollar against the Swiss franc. Insecond quarter 2005, the US dollar appreciated 6% against the Swissfranc.

In US dollar terms, performance was 7% lower than first quarter,reflecting the impact of an 11% decline in transactional revenuespartly offset by higher recurring income and an improvement inmunicipal finance revenues, reflecting higher numbers of lead managedtransactions and derivative deals.

The inflow of net new money in second quarter 2005 was CHF 0.8billion compared to CHF 5.8 billion in first quarter 2005, with thedecline partially related to outflows attributable to April taxpayments.

Financial advisor headcount was 7,474 on 30 June 2005, up 71 from7,403 on 31 March 2005. UBS continues to invest in recruiting andtraining, with our primary aim remaining the hiring of talented andhighly productive financial advisors.

Media release available at www.ubs.com/media

Further information on UBS's quarterly results is available atwww.ubs.com/media

-- 2Q2005 Report (pdf and interactive version)

-- 2Q2005 Results slide presentation

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

Webcast: The results presentation by Peter Wuffli, Chief ExecutiveOfficer, and Clive Standish, Chief Financial Officer, will be webcastlive via www.ubs.com at the following time on 9 August 2005:

-- 0900 CET

-- 0800 GMT

-- 0300 US EST

Webcast playback will be available from 1400 CET on 9 August 2005.

Cautionary statement regarding forward-looking statements

This communication contains statements that constitute"forward-looking statements", including, but not limited to,statements relating to the implementation of strategic initiatives,such as the European wealth management business, and other statementsrelating to our future business development and economic performance.

While these forward-looking statements represent our judgments andfuture expectations concerning the development of our business, anumber of risks, uncertainties and other important factors could causeactual developments and results to differ materially from ourexpectations.

These factors include, but are not limited to, (1) general market,macro-economic, governmental and regulatory trends, (2) movements inlocal and international securities markets, currency exchange ratesand interest rates, (3) competitive pressures, (4) technologicaldevelopments, (5) changes in the financial position orcreditworthiness of our customers, obligors and counterparties anddevelopments in the markets in which they operate, (6) legislativedevelopments, (7) management changes and changes to our Business Groupstructure and (8) other key factors that we have indicated couldadversely affect our business and financial performance which arecontained in other parts of this document and in our past and futurefilings and reports, including those filed with the SEC.

More detailed information about those factors is set forthelsewhere in this document and in documents furnished by UBS andfilings made by UBS with the SEC, including UBS's Annual Report onForm 20-F for the year ended 31 December 2004. UBS is not under anyobligation to (and expressly disclaims any such obligations to) updateor alter its forward-looking statements whether as a result of newinformation, future events, or otherwise.

Financial Businesses

Net new money 1
Quarter ended Year to date
----------------------------------------
CHF billion 30.6.05 31.3.05 30.6.04 30.6.05 30.6.04
----------------------------------------------------------------------
UBS 30.0 32.3 16.9 62.3 52.0
----------------------------------------------------------------------
Wealth Management & Business
Banking
Wealth Management 18.4 15.4 8.2 33.8 24.4
Business Banking Switzerland 2.0 1.0 1.0 3.0 2.0
----------------------------------------------------------------------
Global Asset Management
Institutional 2.7 5.1 7.6 7.8 17.7
Wholesale Intermediary 6.2 4.7 (4.6) 10.9 (6.0)
----------------------------------------------------------------------
Wealth Management USA 0.8 5.8 2.2 6.6 5.0
----------------------------------------------------------------------
Corporate Center
Private Banks & GAM (0.1) 0.3 2.5 0.2 8.9
----------------------------------------------------------------------
1 Excludes interest and dividend income.

Invested assets
As at % change from
----------------------------------------
CHF billion 30.6.05 31.3.05 30.6.04 31.3.05 30.6.04
----------------------------------------------------------------------
UBS 2,550 2,360 2,231 8 14
----------------------------------------------------------------------
Wealth Management & Business
Banking
Wealth Management 890 820 750 9 19
Business Banking Switzerland 148 143 139 3 6
----------------------------------------------------------------------
Global Asset Management
Institutional 396 366 338 8 17
Wholesale Intermediary 290 269 257 8 13
----------------------------------------------------------------------
Investment Bank 0 0 1 (100)
----------------------------------------------------------------------
Wealth Management USA 725 667 652 9 11
----------------------------------------------------------------------
Corporate Center
Private Banks & GAM 101 95 94 6 7
----------------------------------------------------------------------

Financial Businesses

Net interest and trading income

Quarter % change
ended from Year to date
--------------------------------------------------
CHF million 30.6.05 31.3.05 30.6.04 1Q05 2Q04 30.6.05 30.6.04
------------------------------------------------ ---------------------
Net interest income 2,220 2,690 2,864 (17) (22) 4,910 5,889
Net trading income 1,586 1,936 1,363 (18) 16 3,522 3,337
------------------------------------------------ ---------------------
Total net interest
and trading income 3,806 4,626 4 227 (18) (10) 8,432 9,226
----------------------------------------------------------------------

Breakdown by business activity

Quarter % change
ended from Year to date
--------------------------------------------------
CHF million 30.6.05 31.3.05 30.6.04 1Q05 2Q04 30.6.05 30.6.04
------------------------------------------------------=---------------
Equities 717 936 696 (23) 3 1,653 1,642
Fixed income 1,227 1,748 1,619 (30) (24) 2,975 3,770
Foreign
exchange 305 372 422 (18) (28) 677 836
Other 95 82 72 16 32 177 161
----------------------------------------------------------------------
Net income from
trading activities 2,344 3,138 2,809 (25) (17) 5,482 6,409
----------------------------------------------------------------------
Net income from
interest margin
products 1,332 1,313 1,290 1 3 2,645 2,555
----------------------------------------------------------------------
Net income from
treasury and other
activities 130 175 128 (26) 2 305 262
----------------------------------------------------------------------
Total net interest
and trading income 3,806 4,626 4,227 (18) (10) 8,432 9,226
----------------------------------------------------------------------

Reporting by Business Groups / Units

CHF million Total operating income Total operating expenses
--------------------------- ---------------------------
For the
quarter
ended 30.6.05 30.6.04 % change 30.6.05 30.6.04 % change
----------------------------------------------------------------------
Wealth Management & Business
Banking
Wealth
Management 2,164 1,928 12 1,201 1,058 14
Business
Banking
Switzerland 1,275 1,272 0 711 773 (8)
----------------------------------------------------------------------
Global Asset
Management 549 498 10 329 361 (9)
----------------------------------------------------------------------
Investment
Bank 3,690 3,906 (6) 2,613 2,943 (11)
----------------------------------------------------------------------
Wealth
Management
USA 1,331 1,274 4 1,198 1,274 (6)
----------------------------------------------------------------------
Corporate
Center
Private
Banks & GAM 287 279 3 164 176 (7)
Corporate
Functions 85 272 (69) 367 242 52
----------------------------------------------------------------------
Financial
Businesses 9,381 9,429 (1) 6,583 6,827 (4)
----------------------------------------------------------------------


Reporting by Business Groups / Units

CHF million Performance before tax
---------------------------
For the quarter ended 30.6.05 30.6.04 % change
----------------------------------------------------------------------
Wealth Management & Business Banking
Wealth
Management 963 870 11
Business
Banking
Switzerland 564 499 13
----------------------------------------------------------------------
Global Asset
Management 220 137 61
----------------------------------------------------------------------
Investment
Bank 1,077 963 12
----------------------------------------------------------------------
Wealth
Management
USA 133 0
----------------------------------------------------------------------
Corporate
Center
Private
Banks & GAM 123 103 19
Corporate
Functions (282) 30
----------------------------------------------------------------------
Financial
Businesses 2,798 2,602 8
----------------------------------------------------------------------

UBS (including Industrial Holdings)

Income Statement (unaudited)

Quarter % change
ended from
----------------------------------
CHF million, except per share data 30.6.05 31.3.05 30.6.04 1Q05 2Q04
----------------------------------------------------------------------

Operating income
Interest income 15,576 12,574 9,767 24 59
Interest expense (13,356) (9,884) (6,903) 35 93
----------------------------------------------------------------------
Net interest income 2,220 2,690 2,864 (17) (22)
Credit loss (expense) / recovery 69 137 128 (50) (46)
----------------------------------------------------------------------
Net interest income after credit
loss expense 2,289 2,827 2,992 (19) (23)
----------------------------------------------------------------------
Net fee and commission income 5,380 5,155 4,856 4 11
Net trading income 1,586 1,936 1,363 (18) 16
Other income 192 435 297 (56) (35)
Revenues from Industrial Holdings 2,564 2,618 709 (2) 262
----------------------------------------------------------------------
Total operating income 12,011 12,971 10,217 (7) 18
----------------------------------------------------------------------

Operating expenses
Personnel expenses 5,057 5,440 4,746 (7) 7
General and administrative expenses 1,683 1,651 1,923 2 (12)
Depreciation of property and
equipment 389 382 356 2 9
Amortization of goodwill 0 0 183 (100)
Amortization of other intangible
assets 80 80 46 0 74
Goods and materials purchased 1,833 1,836 283 0 548
----------------------------------------------------------------------
Total operating expenses 9,042 9,389 7,537 (4) 20
----------------------------------------------------------------------
Operating profit from continuing
operations before tax 2,969 3,582 2,680 (17) 11
----------------------------------------------------------------------
Tax expense 627 742 560 (15) 12
----------------------------------------------------------------------
Net profit from continuing
operations 2,342 2,840 2,120 (18) 10
----------------------------------------------------------------------
Net profit / loss from discontinued
operations (49) (7) 33 (600)
----------------------------------------------------------------------
Net profit 2,293 2,833 2,153 (19) 7
----------------------------------------------------------------------
Net profit attributable to minority
interests 146 208 110 (30) 33
Net profit attributable to UBS
shareholders 2,147 2,625 2,043 (18) 5
----------------------------------------------------------------------
Basic earnings per share (CHF) 2.10 2.60 1.96 (19) 7
Diluted earnings per share (CHF) 2.01 2.48 1.84 (19) 9
----------------------------------------------------------------------

Income Statement (unaudited)
Year to date
----------------
CHF million, except per share data 30.6.05 30.6.04
----------------------------------------------------------------------

Operating income
Interest income 28,150 19,318
Interest expense (23,240)(13,429)
----------------------------------------------------------------------
Net interest income 4,910 5,889
Credit loss (expense) / recovery 206 130
----------------------------------------------------------------------
Net interest income after credit loss expense 5,116 6,019
----------------------------------------------------------------------
Net fee and commission income 10,535 9,883
Net trading income 3,522 3,337
Other income 627 539
Revenues from Industrial Holdings 5,182 1,665
----------------------------------------------------------------------
Total operating income 24,982 21,443
----------------------------------------------------------------------

Operating expenses
Personnel expenses 10,497 10,120
General and administrative expenses 3,334 3,691
Depreciation of property and equipment 771 714
Amortization of goodwill 0 366
Amortization of other intangible assets 160 94
Goods and materials purchased 3,669 671
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Total operating expenses 18,431 15,656
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Operating profit from continuing operations before tax 6,551 5,787
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Tax expense 1,369 1,283
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Net profit from continuing operations 5,182 4,504
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Net profit / loss from discontinued operations (56) 18
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Net profit 5,126 4,522
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Net profit attributable to minority interests 354 202
Net profit attributable to UBS shareholders 4,772 4,320
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Basic earnings per share (CHF) 4.70 4.12
Diluted earnings per share (CHF) 4.48 3.92
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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 Average rate
As at Quarter ended Year to date
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30.6.05 31.3.05 30.6.04 30.6.05 31.3.05 30.6.04 30.6.05 30.6.04
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1 USD 1.28 1.20 1.25 1.25 1.18 1.27 1.21 1.26
1 EUR 1.55 1.55 1.52 1.55 1.55 1.53 1.55 1.55
1 GBP 2.30 2.26 2.27 2.28 2.24 2.29 2.26 2.31
100 JPY 1.16 1.12 1.15 1.15 1.13 1.15 1.14 1.17
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