• UBS Writes Down Positions, Predicts an Overall Loss in Third Quarter, and Reorganizes Management

    For most

    sub prime holdings, this is not possible. UBS’s financial businesses employ more than 80,000 people

    around the world. He has also been the head of O’Connor,

    a specialist hedge fund provider within A&Q, with assets under

    management of approximately USD 7.5 billion. Valuations therefore mostly

    use models with observable inputs, where possible, and level 3 valuation

    models otherwise.

    UBS is one of the world’s leading financial

    firms, serving a discerning international client base. Scoby began his career with O’Connor and

    Associates in 1987 and became a Managing Director in 1993. Its shares are listed on the SWX Swiss Stock Exchange,

    the New York Stock Exchange (NYSE) and the Tokyo Stock Exchange (TSE).

    Short bio Joseph Scoby

    UBS is the leading global wealth manager, a top tier investment banking

    and securities firm, and one of the largest global asset managers. From

    1995-1999 he was the Joint Head of US Equities at the Investment Bank,

    with responsibility for approximately 650 employees. Joseph Scoby’s record both as

    head of A&Q and previously as Joint Head of US Equities within the

    Investment Bank makes him an ideal successor to Walter Stuerzinger. I have also made

    appropriate senior management changes, and will accelerate

    already-planned changes to the firm. These positions consist overwhelmingly of

    AAA-rated tranches, 80% with a weighted average life of less than three

    years. Overall, FIRC

    will record negative revenues in the order of CHF 4 billion.

    Marco Suter, Executive Vice Chairman, UBS, will leave the Board of

    Directors to become Group Chief Financial Officer, and join the Group

    Executive Board. Scoby has a BS from Wharton School and an MA from the

    University of Pennsylvania, both earned with honors in a total of four

    years of study and awarded in 1987.

    Continued strong performance in other business areas

    Following a write down of positions in fixed income, rates and

    currencies (FIRC), mainly related to deteriorating conditions in the US

    sub prime residential mortgage market, UBS is likely to record an

    overall Group pre-tax loss of between CHF 600 million and CHF 800

    million for third quarter, ended September 30. A

    glossary, containing definitions of some of the less-well known terms

    used in today’s release, is also available at www.ubs.com/media.

    In addition to his roles at UBS, Mr. These have also been written down appropriately,

    leading to a limited loss on these positions in third quarter.

    UBS has no material exposure to conduits.

    With effect from today:

    Marcel Rohner, Group CEO, said: “UBS operates on the principle that

    management is accountable to shareholders. There is also a smaller position of below USD 4 billion net

    exposure to sub prime securities through warehouse lines and retained

    CDOs. In

    Switzerland, UBS is the market leader in retail and commercial banking.

    In addition, UBS has taken significant write downs on positions in Super

    Senior AAA-rated tranches of CDOs, based on level 3 valuation models.

    Mr. In fact, conditions remained

    turbulent, so we will make an overall pre-tax loss at Group level for

    the quarter.

    Joseph Scoby is Global Head of Alternative and Quantitative Investments

    (A&Q), an alternatives platform within Global Asset Management with

    approximately USD 60 billion in assets under management and 360

    employees around the globe. Wolf also participated as a panel member at

    the inaugural Wall Street forum for HIV and AIDS alongside former UN

    Secretary Kofi Annan.

    Robert Wolf is the Chairman & CEO of UBS for the Americas. Management action has been taken to

    make certain these positions are appropriately valued and risk managed.

    All other UBS businesses remain strong. Its business,

    global in scale, is focused on growth. Wolf graduated from the Wharton School at the University of

    Pennsylvania with a B.S. He served as Global Head of Fixed Income from

    2002 – 2004, having joined the firm in 1994

    after spending approximately 10 years at Salomon Brothers.



    In third quarter 2007, expected pre-tax loss for the Group between

    CHF 600 million and CHF 800 million, due mainly to write downs and

    losses in the FIRC business within the Investment Bank

    For the first nine months of 2007 pre-tax profits for the Group in

    the order of CHF 10 billion, and expect to end the year with good

    level of profits and a strong capital position

    All other businesses in the Investment Bank, as well as the Global

    Wealth Management & Business Banking and Global Asset Management

    business groups, performing very well

    Management changes:

    – Investment Bank Chairman and CEO Huw Jenkins to step down. Prior to his appointment to his current position in 2004, Robert

    Wolf was Global Head of Fixed Income for over three years.

    Commenting on these decisions, Marcel Rohner, Group CEO said:

    . Following these actions, UBS is in

    a strong position to continue to grow its client businesses.

    Mr. He is on the Executive

    Leadership Council for the Multiple Myeloma Research Foundation, on the

    Board of Trustees for the Children’s Aid Society, the Board of Directors

    for the partnership for NYC and on the Board of Directors for the

    National Sports Museum. Pre-tax profits for the

    first nine months of 2007 will be in the order of CHF 10 billion.

    Joseph Scoby’s first task as a member of the Group Executive Board will

    be to review and refine our risk processes. A&Q currently has over USD

    60 billion in assets under management. Between 1999 and 2005 he was Group Chief Credit Officer and

    a member of the Group Managing Board. Gall office and later broadened his experience

    with assignments in Nyon, New York, Basel, Zurich and London.

    When most mortgage backed securities positions were set up there were

    offsetting positions in place, designed to mitigate risk in normal

    market conditions. These events have led to the

    management changes announced today. The one firm approach requires a

    successful and profitable Investment Bank. As an integrated firm, UBS

    creates added value for clients by drawing on the combined resources and

    expertise of all its businesses.

    Short bio Robert Wolf

    Results for third quarter 2007 will be announced on October 30, 2007 as


    Marco Suter was elected to the Board of Directors at the Annual General

    Meeting of UBS in April 2005 and thereafter appointed as Executive Vice



    The remaining relevant positions in direct sub prime RMBS have a current

    net value of USD 19 billion. Suter has been with UBS and its predecessor, Swiss Bank Corporation,

    since 1974. in Economics. William Ferri, currently

    Head of Business Development and Logistics for A&Q, will be appointed as

    the new Global Head of Alternative and Quantitative Investments.

    “On August 14, I said that if turbulent

    conditions prevail throughout the quarter, we will probably see a very

    weak trading result in the Investment Bank, offset by predictable

    earnings from wealth and asset management. He received a BS form Cornell University in

    1988 and a JD from the University of North Carolina in 1991.

    There are other, smaller, losses in equities proprietary trading within

    an overall satisfactory result.

    Third quarter results

    As a result of the planned changes within the Investment Bank, overall

    staff numbers will fall by about 1,500 by the end of this year.

    Short bio William Ferri

    Mr. This led to substantial valuation losses, including in

    securities with high credit ratings. Mr. We have thousands of

    talented people throughout the organisation who, by working together,

    will deliver further value to our clients and additional growth to our


    Within the Investment Bank, Money Markets, Currencies and Commodities

    (MCC) will be integrated into Fixed Income under the leadership of Andre


    William Ferri is the Head of Business Development and Logistics for

    Alternative and Quantitative Investments (A&Q), an alternatives platform

    within Global Asset Management.

    The marks take a cautious view of future developments in the US mortgage

    market and UBS is content to hold these securities at this level of


    Where possible, holdings are marked at the quoted market price. Clive Standish, Group Chief Financial Officer, will retire.

    UBS has only limited exposure to leveraged lending with commitments of

    about USD 13 billion. He also has extensive

    experience in solving institutional and corporate client problems using

    derivatives. I have therefore taken

    decisive action to be as transparent as possible. These securities are either AAA-rated or High Grade, and have a

    short weighted average life.

    Working closely with other members of the management team and the key

    investment professionals within A&Q, Mr. He is a member of the

    Global Asset Management Executive Committee and a member of the UBS

    Group Managing Board.

    UBS is present in all major financial centers worldwide. Mr. Ferri has overall

    responsibility for managing the logistics platform and business

    development effort of the group, ensuring the investment team’s

    requirements are met while maintaining the appropriate control

    infrastructure. Mr. All other businesses in the Investment Bank, and our

    Global Wealth Management & Business Banking and Global Asset Management

    businesses, continue to record good results. UBS remains a formidable

    competitor in financial services and is well positioned to deliver

    long-term profitable growth.”

    Robert Wolf, Chairman and CEO, UBS Group Americas and Chief Operating

    Officer Investment Bank, will additionally become President, Investment

    Bank. Ferri began his legal career practicing corporate law at Seward &

    Kissel, from 1991 to 1995. However, the deterioration in the US sub prime

    residential mortgage backed securities market, especially in August, was

    more sudden and more severe than in recent history, and markets became

    illiquid. Ferri joined the UBS Investment Bank in 1998

    as Director of Equity Compliance. Mr. Wolf is on the Undergraduate

    Executive Board of the Wharton School and sits on the Athletics Board of

    Overseers at the University of Pennsylvania. Mr. Wolf is a member of the UBS Group Managing Board and the Investment

    Bank Management Committee. Suter first joined the bank in 1974 as an

    apprentice at SBC’s St. Group

    CFO Clive Standish to retire

    – Marco Suter, Executive Vice Chairman, UBS, to become Group CFO

    – Walter Stuerzinger, Group Chief Risk Officer (GCRO), to become

    Chief Operating Officer (COO), Corporate Center

    – Joseph Scoby, Global Head of Alternative & Quantitative

    Investments, UBS Global Asset Management, to become GCRO, UBS

    Investment Bank changes:

    – Robert Wolf, COO, Investment Bank, additionally appointed

    President, Investment Bank

    – Money Markets, Currencies and Commodities (MCC) to be integrated

    into Fixed Income

    – Initiation of cost reductions in Investment Bank

    “I am confident that, with these changes and

    by properly absorbing the lessons of this quarter, we will become a

    stronger bank. Suter was born on 7 May 1958. Prior to that, he held various

    management positions in SBC’s investment banking operations, first as

    the Continental European Head of Merchant Banking and later as the Chief

    Credit Officer for EMEA. He also

    serves as Global Chief Operating Officer for the Investment Bank.

    While the third quarter loss means that pre tax results for the full

    year 2007 will most probably be below those for 2006, total earnings

    should still be at a high level and UBS will finish the year in a strong

    capital position.

    Previously, he was General Counsel for the O’Connor

    hedge fund and fund of fund businesses, and was on the O’Connor team at

    its relaunch in 2000. He originally worked for PaineWebber

    Inc. In Global Wealth Management &

    Business Banking, all geographical regions continue to attract net new

    money. His long experience and knowledge of UBS, including as

    Group Chief Credit Officer, make him extremely well qualified for this

    position. During 2008 we will continue

    to focus on improving cost and balance sheet efficiency.”

    These write downs are mainly of (a) legacy positions of the now closed

    Dillon Read Capital Management subsidiary and (b) positions entered into

    as part of the Investment Bank’s mortgage

    backed securities business.

    Mr. He is married with two children.

    Mr. Ferri is also responsible for managing the product

    pipeline, business development, sales and client services.

    A video containing an interview with Group CEO Marcel Rohner is

    available at www.ubs.com/media as

    well as at www.cantos.com. (since 1995) where positions held included Corporate Vice President

    and Associate General Counsel to the Global Equities Division, and

    Deputy Director of Compliance.

    Mr. We have a strong balance sheet, a strong franchise, and

    leading positions in all businesses in all regions. Scoby’s

    experience includes portfolio management in commodity options,

    convertible arbitrage, equities, equity derivatives, corporate bonds,

    merger arbitrage, quantitative equity, real estate finance, and

    fundamental based equity long short funds. Global Asset Management continues to perform well. He also chairs

    the Swiss Institute for International Studies (SIAF).

    ZURICH & BASEL, Switzerland–(BUSINESS WIRE)–Regulatory News:

    Walter Stuerzinger, Group Chief Risk Officer (GCRO), will become Chief

    Operating Officer, Corporate Center, and hand over the GCRO position to

    Joseph Scoby, currently Global Head of Alternative and Quantitative

    Investments (A&Q), Global Asset Management. From 1996 until the merger of SBC

    and Union Bank of Switzerland in 1998 he served as regional manager of

    the Zurich-Eastern Switzerland-Ticino area for the corporate and

    commercial banking activities of SBC. Huw Jenkins, Chairman and CEO of the Investment Bank,

    will step down from his position and become a senior advisor to Marcel


    In the third quarter, UBS will recognize substantial losses in FIRC

    within the Investment Bank, mainly on its holdings of securities related

    to the US sub prime residential mortgage (RMBS) market. Within the

    Investment Bank, IBD has gained market share, the capital markets

    business remains strong, and equities revenues –

    though a bit weaker this quarter than a year ago, and in the context of

    extremely difficult conditions – remain


    Our first quarterly loss in nine years is an unsatisfactory result,

    especially after such a strong first half. Marcel

    Rohner, Group CEO, will reorganize senior management, take over as

    Chairman and CEO of the Investment Bank, and accelerate structural

    improvements to the firm.

    Management changes

    Despite the unsatisfactory results for the third quarter, we still

    expect to end the year with a good level of profits and in a strong

    capital position. It has offices

    in 50 countries, with about 39% of its employees working in the

    Americas, 34% in Switzerland, 16% in the rest of Europe and 11% in Asia

    Pacific. He is a Swiss citizen. Mr. Short bio Marco Suter

    Commenting on these changes Marcel Rohner said:

    Marcel Rohner, in addition to his duties as Group CEO, will for the

    foreseeable future take over the role of Chairman and CEO of the

    Investment Bank

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