UBS AG: UBS continues with successful execution of accelerated strategy

  UBS AG: UBS continues with successful execution of accelerated strategy

UK Regulatory Announcement

• UBS full-year adjusted pre-tax profit^1 CHF 3.0 billion

• Wealth management businesses’ full-year net new money up CHF 11.3 billion to
CHF 46.9 billion

• Fully applied Basel III common equity tier 1 ratio^2 up 310 basis points to
9.8% at year-end

• Phase-in Basel III common equity tier 1 ratio^2 up 460 basis points to 15.3%
at year-end

• Basel III fully applied risk-weighted assets reduced by CHF 122 billion in
2012

• UBS delivered CHF 1.4 billion of net cost savings since mid-2011;
strengthened operational risk controls further

• UBS introduces loss-absorbing high-trigger deferred capital instrument into
compensation plan

• UBS to buy back up to approximately CHF 5 billion in outstanding bonds in
public tender offer

• UBS recommends 50% dividend increase for 2012 to CHF 0.15 per share

ZURICH & BASEL, Switzerland

In 2012, UBS’s industry-leading capital position allowed it to continue to
execute its strategy and restore client confidence while addressing the
challenges of the past.

UBS (NYSE:UBS) (SWX:UBSN) made significant progress building its capital
ratios, reducing risk-weighted assets and deleveraging its balance sheet. As
also announced today, this progress allows UBS to launch tender offers to
repurchase debt of up to approximately CHF 5 billion, helping to lower UBS’s
future funding costs. The firm is making progress on its announced efficiency
programs and continues to strengthen its risk control framework.

UBS’s wealth management businesses attracted strong net new money and Retail &
Corporate recorded strong net new business volume as clients continued to
demonstrate their trust in the firm. The Investment Bank reduced its Basel III
pro-forma risk-weighted assets by CHF 81 billion in 2012 and operated at the
end of the year with risk-weighted assets of CHF 131 billion. As announced in
October, UBS is exiting certain businesses which are being transferred to the
Corporate Center. As of 1 January 2013, the core Investment Bank is operating
with Basel III pro-forma risk-weighted assets of CHF 64 billion, below its CHF
70 billion target for the year.

UBS remains on track with its accelerated strategic plans designed to make it
more stable and capable of delivering higher quality and sustainable
performance while being more focused on serving its clients. As a sign of
strength and continued confidence, UBS is recommending a 50% increase in its
dividend for shareholders for 2012 to CHF 0.15 per share.

Full-year highlights:

  *Fully applied Basel III common equity tier 1 ratio^2 up 310 basis points
    to 9.8%; very close to regulator’s minimum 2019 requirement of 10%; UBS is
    well positioned to achieve its 2013 11.5% capital ratio target
  *Phase-in Basel III common equity tier 1 ratio^2 up 460 basis points to
    15.3%
  *Significant Basel III fully applied RWA reductions of CHF 122 billion,
    down 32% from CHF 380 billion at the end of 2011; sales and reduced
    exposures contributed approximately 84% of RWA reduction in the Investment
    Bank and the Legacy Portfolio since end of September 2011; balance sheet
    reduced by CHF 158 billion; UBS Basel III estimated pro-forma liquidity
    coverage ratio 113% and estimated pro-forma net stable funding ratio 108%
    at year-end. Both above regulatory requirements of 100%
  *UBS delivered CHF 1.4 billion of net cost savings since mid-2011;
    strengthened its operational risk control framework significantly
  *Combined wealth management businesses’ adjusted pre-tax profit^1 was CHF
    2.9 billion
  *Wealth Management net new money inflows CHF 26.3 billion, exceeding
    significant 2011 inflows; strong inflows continued from Asia Pacific,
    emerging markets and ultra-high net worth clients globally; Wealth
    Management Switzerland reported net new money inflows of CHF 4.2 billion,
    up CHF 1.8 billion
  *Wealth Management Americas achieved record pre-tax profit of USD 873
    million, up 40%, and attracted net new money inflows  of USD 22.1 billion,
    up by USD 8.0 billion
  *Retail & Corporate results resilient; net new business volume growth of
    5%; deposit inflows CHF 14 billion; highest net new client assets for
    retail clients in Switzerland since 2001
  *Global Asset Management adjusted pre-tax profit^1 up 19% to CHF 544
    million on increased performance fees as it delivered stronger investment
    performance to its clients, especially in alternatives and real estate;
    62% of collective funds showed first or second quartile performance versus
    peers over one year^3
  *Investment Bank balance sheet reduced by CHF 224 billion; investment
    banking revenues up 16% with increased market share in equity as well as
    debt capital markets and global syndicated finance; cash equities business
    market share increased in EMEA and APAC, FX business continued to benefit
    from investments in cutting edge e-trading systems, enabling it to grow
    volumes significantly

Full-year results:

  *Adjusted Group pre-tax profit^1  CHF 3.0 billion
  *Net loss attributable to UBS shareholders CHF 2.5 billion mostly
    reflecting goodwill impairments and restructuring costs as UBS executes
    its strategy, as well as own credit losses and provisions for litigation,
    regulatory and similar matters; diluted earnings per share of negative CHF
    0.67
  *Adjusted group operating income^1 CHF 27.6 billion
  *Adjusted pre-tax profit^1 CHF 2.1 billion in Wealth Management; CHF 813
    million in Wealth Management Americas; CHF 507 million in Investment Bank;
    CHF 544 million in Global Asset Management and CHF 1.5 billion in Retail &
    Corporate

UBS announces new compensation model:

UBS’s performance award pool for 2012 was reduced by 7% to CHF 2.5 billion
compared with 2011, the lowest level since the beginning of the financial
crisis and 42% below the 2010 level. For 2012, UBS implemented significant
changes to its compensation framework to better align employee and shareholder
interests. The changes focus UBS’s employees on medium- and longer-term
performance, provide them with the opportunity to benefit from the firms
longer term success, and simplify UBS’s compensation framework, making it more
transparent. These changes include:

  *longer deferral periods,
  *multi-year performance conditions on equity-based deferred compensation,
  *a new loss-absorbing high-trigger deferred capital instrument, under which
    employees would forfeit deferred compensation balances if a 7% Basel III
    CET1 ratio level is breached or if a non-viability event occurs,
  *a reduction in the maximum initial cash payment that an employee may
    receive as part of a performance award.

More information on the new compensation model can be found at:
www.ubs.com/compensation

Commenting on UBS’s full-year and fourth-quarter results, Group CEO Sergio P.
Ermotti said: «We made decisive progress in executing our strategy last year
and started 2013 in a strong position. Our financial strength, our attractive
and unique business mix and our enviable global client franchise give us a
competitive advantage. This allows us to restore client confidence while we
execute our strategy and address challenges of the past. At the same time, it
allows us to increase returns to our shareholders. I am determined to continue
to execute our strategy successfully in 2013 for the benefit of our clients
and shareholders.»

Fourth-quarter results:

  *Adjusted pre-tax loss^1  CHF 1.2 billion
  *Net loss attributable to UBS shareholders of CHF 1.9 billion, primarily
    due to net charges for provisions for litigation, regulatory and similar
    matters as well as net restructuring charges and an own credit loss
  *Phase-in Basel III common equity tier 1 ratio² increased to 15.3% from
    13.6%
  *Fully applied Basel III common equity tier 1 ratio² increased to 9.8% from
    9.3%
  *Fully applied Basel III risk-weighted assets reduced by CHF 43 billion to
    CHF 258 billion
  *Wealth Management Americas adjusted pre-tax profit^1 of USD 219 million;
    net new money inflows of USD 8.8 billion, the highest fourth-quarter
    inflows since 2007; net new money target exceeded; cost/income ratio and
    gross margin on invested assets both within target ranges
  *Wealth Management adjusted pre-tax profit^1 CHF 415 million; net new money
    inflows of CHF 2.4 billion with healthy inflows from Asia Pacific,
    emerging markets and ultra high net worth clients globally
  *Retail & Corporate adjusted pre-tax profit^1  CHF 362 million; strong net
    new business volume growth of 4.4%, above target range; within target
    ranges for cost/income ratio and net interest margin
  *Global Asset Management adjusted pre-tax profit^1 CHF 164 million; higher
    net management fees and higher performance fees in alternative and
    quantitative investments and global real estate business; gross margin and
    cost/income ratio within target ranges
  *Investment Bank adjusted pre-tax loss^1 of CHF 333 million; Basel III
    risk-weighted assets reduced by 19%; good performance in investment
    banking; advisory revenues up 8% and capital markets revenues up 14%,
    outweighed by restructuring costs

Fourth-quarter net loss attributable to UBS shareholders CHF 1,890 million

Fourth-quarter net loss attributable to UBS shareholders was CHF 1,890 million
compared with a loss of CHF 2,137 million in the third quarter. The pre-tax
loss was CHF 1,823 million compared with a loss of CHF 2,529 million in the
prior quarter. The fourth quarter loss was primarily due to net charges for
provisions for litigation, regulatory and similar matters of CHF 2,081 million
as well as net restructuring charges of CHF 258 million and an own credit loss
on financial liabilities designated at fair value of CHF 414 million. The
third-quarter result was mainly due to impairment losses of CHF 3,064 million
on goodwill and other non-financial assets as well as an own credit loss of
CHF 863 million. In the fourth quarter, we recorded a tax expense of CHF 66
million compared with a tax benefit of CHF 394 million in the prior quarter.
Total operating income was CHF 6,222 million compared with CHF 6,287 million.
Excluding the impact of own credit, operating income decreased by CHF 514
million to CHF 6,636 million. Total operating expenses decreased by CHF 772
million to CHF 8,044 million.

Wealth Management’s pre-tax profit was CHF 398 million compared with CHF 582
million in the previous quarter. The gross margin on invested assets declined
by 4 basis points to 85 basis points, mainly reflecting lower interest income
resulting from the continuing low interest rate environment and lower
transactional revenues due to reduced client activity. Net new money was CHF
2.4 billion compared with CHF 7.7 billion in the previous quarter. Net inflows
in Asia Pacific and emerging markets further increased, while Europe saw net
outflows mainly from clients domiciled in Western Europe accelerating towards
the end of the quarter. Ultra high net worth clients reported strong net new
money inflows on a global basis of CHF 5.6 billion compared with CHF 4.8
billion in the previous quarter. Invested assets increased by CHF 5 billion to
CHF 821 billion, primarily due to positive market performance and net new
money inflows, partly offset by negative currency effects. Total operating
income decreased by CHF 41 million to CHF 1,748 million from CHF 1,789
million, mainly reflecting lower interest income and transaction-based
revenues. Total operating expenses increased to CHF 1,350 million from CHF
1,207 million and included restructuring costs of CHF 17 million.

Wealth Management Americas’ pre-tax profit in the fourth quarter of 2012 was
USD 216 million compared with a record pre-tax profit of USD 232 million in
the prior quarter. Total operating income was USD 1,746 million, an increase
of USD 115 million from USD 1,631 million, due to growth in managed account
fees, higher mutual fund and annuities fees resulting from changes in
accounting estimates as well as higher net interest income. This increase was
partly offset by a loan loss allowance and lower realized gains on sales of
financial investments held in the available-for-sale portfolio. Total
operating expenses increased by USD 129 million to USD 1,529 million,
primarily due to a USD 87 million increase in charges for provisions for
litigation, regulatory and similar matters. Net new money totaled USD 8.8
billion in the fourth quarter compared with USD 4.8 billion in the prior
quarter, mainly due to stronger inflows from financial advisors employed with
UBS for more than one year. Including interest and dividend income, net new
money increased to USD 16.7 billion, which included seasonally higher dividend
payments in the quarter. In US dollar terms, the gross margin on invested
assets increased 4 basis points to 84 basis points and remained within the
target range of 75 to 85 basis points.

The Investment Bank recorded a pre-tax loss of CHF 557 million in the fourth
quarter of 2012 compared with a pre-tax loss of CHF 2,856 million in the third
quarter of 2012. The third quarter included impairment losses of CHF 3,064
million on goodwill and other non-financial assets. Adjusted for impairment
losses and the effects of restructuring, the Investment Bank recorded a
pre-tax loss of CHF 333 million compared with a pre-tax profit of CHF 192
million in the prior quarter. The decrease was due to lower revenues in our
securities business, partly as a result of the accelerated implementation of
our strategy announced in October 2012. Total operating income declined 26% to
CHF 1,682 million from CHF 2,277 million in the prior quarter. Total operating
expenses decreased 56% to CHF 2,239 million compared with CHF 5,132 million,
mainly due to impairment losses of CHF 3,064 million on goodwill and other
non-financial assets in the third quarter. On an adjusted basis, excluding the
impairment losses and restructuring releases in the third quarter and
restructuring charges in the fourth quarter, operating expenses decreased 3%
to CHF 2,015 million from CHF 2,084 million. Risk-weighted assets measured on
a Basel 2.5 basis decreased by CHF 13 billion to CHF 89 billion at the end of
the fourth quarter.

Global Asset Management’s pre-tax profit in the fourth quarter of 2012 was CHF
149 million compared with CHF 126 million in the third quarter, primarily due
to higher net management and performance fees. Total operating income was CHF
492 million compared with CHF 468 million in the third quarter. Net management
fees were higher, especially in global real estate. Performance fees were also
higher, reflecting increases in alternative and quantitative investments and
global real estate. Total operating expenses were CHF 343 million compared
with CHF 342 million in the third quarter. Excluding money market flows, net
new money outflows from third parties were CHF 1.4 billion in the fourth
quarter compared with net inflows of CHF 0.3 billion in the third quarter. Net
inflows, notably from sovereign clients, were largely offset by net outflows,
particularly from clients in the Americas. The total gross margin was 34 basis
points compared with 32 basis points in the third quarter, taking it further
within our target range of 32 to 38 basis points.

Retail & Corporate’s pre-tax profit was CHF 361 million in the fourth quarter
of 2012 compared with CHF 395 million in the prior quarter. Net new business
volume growth remained above our target range. Total operating income
increased by CHF 1 million to CHF 933 million, as higher income was almost
offset by higher credit loss expenses. Total operating expenses increased to
CHF 572 million from CHF 537 million in the previous quarter, mainly due to
higher general and administrative expenses.

The Corporate Center – Core Functions’ pre-tax result in the fourth quarter of
2012 was a loss of CHF 1,874 million compared with a loss of CHF 936 million
in the previous quarter. The fourth quarter included charges for provisions
for litigation, regulatory and similar matters of CHF 1,470 million, mainly
arising from fines and disgorgement resulting from regulatory investigations
concerning LIBOR and other benchmark rates, and an own credit loss of CHF 414
million compared with a loss of CHF 863 million in the prior quarter. Treasury
income remaining in Corporate Center – Core Functions after allocations to the
business divisions was CHF 63 million compared with CHF 125 million in the
prior quarter.

The Legacy Portfolio’s pre-tax result was a loss of CHF 501 million in the
fourth quarter of 2012 compared with a pre-tax loss of CHF 62 million in the
previous quarter. This was primarily due to higher charges for provisions for
litigation, regulatory and similar matters as well as a smaller gain from the
revaluation of our option to acquire the SNB StabFund’s equity in the fourth
quarter, partly offset by a credit loss recovery recorded in the fourth
quarter compared with a credit loss expense incurred in the third quarter.

Results by business division and Corporate Center
CHF         Total operating income              Total operating expenses        Operating profit before tax
million
For the                               %                                 %                                     %
quarter     31.12.12   30.9.12   change    31.12.12  30.9.12  change    31.12.12   30.9.12   change 
ended
Wealth      1,748      1,789     (2     )   1,350     1,207    12        398        582       (32    )
Management
Wealth
Management  1,614      1,561     3         1,414     1,340    6         201        221       (9     )
Americas
Investment  1,682      2,277     (26    )   2,239     5,132    (56    )   (557     )  (2,856  )  (80    )
Bank
Global
Asset       492        468       5         343       342      0         149        126       18     
Management
Retail &    933        932       0         572       537      7         361        395       (9     )
Corporate
Corporate   (248     )  (740    )  (66    )   2,127     258      724       (2,375   )  (998    )  138    
Center
UBS         6,222      6,287     (1     )   8,044     8,816    (9     )   (1,823   )  (2,529  )  (28    )
                                                                                                  

Capital position and balance sheet

Our Basel 2.5 tier 1 capital ratio continued to improve and stood at 21.3% on
31 December 2012, up 1.1 percentage point from 30 September 2012. Basel 2.5
tier 1 capital declined by CHF 1.4 billion due to our quarterly net loss and
negative foreign currency effects. Basel 2.5 risk-weighted assets (RWA) were
CHF 17.8 billion lower at CHF 192.5 billion at the end of the fourth quarter
compared with the third quarter mainly due to declines in credit-risk RWA of
CHF 16.1 billion and market risk RWA of CHF 1.5 billion. As of 31 December
2012, our balance sheet stood at CHF 1,259 billion, a decrease of CHF 107
billion from 30 September 2012. For 2012, UBS introduced a new compensation
plan, the Deferred Contingent Capital Plan (DCCP). The DCCP strengthens UBS’s
capital position, as UBS’s regulator (FINMA) recognizes DCCP awards as
high-trigger loss-absorbing capital. Over the next five years, UBS could build
approximately 100 basis points of high-trigger loss-absorbing capital due to
awards under the DCCP.

Invested assets

Invested assets were CHF 2,230 billion as of 31 December 2012 compared with
CHF 2,242 billion as of 30 September 2012. Of the invested assets, CHF 821
billion were attributable to Wealth Management; CHF 772 billion were
attributable to Wealth Management Americas; and CHF 581 billion were
attributable to Global Asset Management.

Outlook

While progress was made on many issues during 2012, many of the underlying
challenges remain at the start of the new year. Failure to achieve further
sustained and credible improvements to the eurozone sovereign debt situation,
European banking system issues, unresolved US fiscal issues, ongoing
geopolitical risks and the outlook for growth in the global economy would
continue to exert a strong influence on client confidence and, thus, activity
levels in the first quarter of 2013. It would make further improvements in
prevailing market conditions unlikely and would consequently generate
headwinds for revenue growth, net interest margins and net new money.
Nevertheless, and despite the lack of progress on certain bilateral tax
treaties, we remain confident that our asset-gathering businesses as a whole
will continue to attract net new money, reflecting our clients’ steadfast
trust in the firm. We are confident that the actions we have taken will ensure
the firm’s long-term success and will deliver sustainable returns for our
shareholders going forward.

¹Unless otherwise indicated, “adjusted” figures exclude each of the following
items, to the extent applicable, on a Group and business division level:  Own
credit loss on financial liabilities designated at fair value for the Group
CHF 414 million in 4Q12  (CHF 863 million loss in 3Q12, CHF 239 million gain
in 2Q12, CHF 1,164 million loss 1Q12); Net restructuring provision charges CHF
258 million for the Group in 4Q12 (net release CHF 22 million in 3Q12, net
charge of CHF 9 million in 2Q12, net charge of CHF 126 million in 1Q12); CHF
3,064 million charge related to impairment testing of goodwill and other
non-financial assets in 3Q12 in the Investment Bank; Credit to personnel
expenses related to changes to a US retiree medical life-insurance benefit
plan (CHF 116 million restated for IAS19R for the Group in 2Q12) and changes
to UBS’s Swiss pension plan (CHF 730 million restated for IAS19R for the Group
in 1Q12).

²The pro-forma Basel III information is not required to be presented because
Basel III requirements were not in effect on 31 December 2012. Such measures
are non-GAAP financial measures as defined by SEC regulations. We nevertheless
include information on the basis of Basel III requirements because they are
effective as of 1 January 2013 and significantly impact our RWA and eligible
capital. The calculation of our pro-forma Basel III RWA combines existing
Basel 2.5 RWA, a revised treatment for low-rated securitization exposures that
are no longer deducted from capital but are risk-weighted at 1250%, and new
model-based capital charges. Some of these new models require final regulatory
approval and therefore our pro-forma calculations include estimates (discussed
with our primary regulator) of the effect of these new capital charges which
will be refined as models and the associated systems are enhanced.

³Swiss-, Lux-, German- and Irish-domiciled wholesale funds versus Lipper peer
rankings.

UBS key figures
               For the quarter ended                     Year ended
CHF million,
except where    31.12.12    30.9.12     31.12.11     31.12.12   31.12.11 
indicated

Group results
Operating       6,222       6,287       5,862        25,443     27,788   
income
Operating       8,044       8,816       5,381        27,216     22,482   
expenses
Operating
profit before   (1,823    )  (2,529    )  481          (1,774   )  5,307    
tax
Net profit
attributable    (1,890    )  (2,137    )  323          (2,511   )  4,138    
to UBS
shareholders
Diluted
earnings per    (0.50     )  (0.57     )  0.08         (0.67    )  1.08     
share (CHF) ^1

Key performance indicators ^2, balance sheet and capital management, and additional
information
Performance
Return on
equity (RoE)                                         (5.2     )  9.1      
(%)
Return on
tangible                                             1.6        11.9     
equity (%) ^3
Return on
risk-weighted                                        12.0       13.7     
assets, gross
(%) ^4
Return on
assets, gross                                        1.9        2.1      
(%)
Growth
Net profit      N/A         N/A         (68.0     )   N/A        (44.5    )
growth (%) ^5
Net new money   1.2         2.5         1.1          1.6        1.9      
growth (%) ^6
Efficiency
Cost / income   128.8       137.4       91.6         106.5      80.7     
ratio (%)

               As of                                     
CHF million,
except where    31.12.12    30.9.12     31.12.11                
indicated
Capital strength
BIS tier 1
capital ratio   21.3        20.2        15.9                    
(%) ^7
FINMA leverage  6.3         6.1         5.4                     
ratio (%) ^7
Balance sheet and capital management
Total assets    1,259,232   1,366,136   1,416,962               
Equity
attributable    45,895      48,065      48,530                  
to UBS
shareholders
Total book
value per       12.25       12.83       12.95                   
share (CHF) ^8
Tangible book
value per       10.52       11.06       10.36                   
share (CHF) ^8
BIS core tier
1 capital       19.0        18.1        14.1                    
ratio (%) ^7
BIS total
capital ratio   25.2        23.6        17.2                    
(%) ^7
BIS
risk-weighted   192,505     210,278     240,962                 
assets ^7
BIS tier 1      40,982      42,396      38,370                  
capital ^7

Invested
assets (CHF     2,230       2,242       2,088                   
billion) ^9
Personnel
(full-time      62,628      63,745      64,820                  
equivalents)
Market
capitalization  54,729      43,894      42,843                  
^10
                                                                   


1 Refer to “Note 9 Earnings per share (EPS) and shares outstanding” in the
“Financial information” section of our fourth quarter 2012 report for more
information. 2 For the definitions of our key performance indicators, refer to
the “Measurement of performance” section of our Annual Report 2011. 3 Net
profit attributable to UBS shareholders on a year-to-date basis before
amortization and impairment of goodwill and intangible assets / average equity
attributable to UBS shareholders less average goodwill and intangible assets
on a year-to-date basis. 4 Based on Basel 2.5 risk-weighted assets for 2012.
Based on Basel II risk-weighted assets for 2011. 5 Not meaningful and not
included if either the reporting period or the comparison period is a loss
period. 6 Group net new money includes net new money for Retail & Corporate
and excludes interest and dividend income. 7 Capital management data is
disclosed in accordance with the Basel 2.5 framework. Refer to the “Capital
management” section of our fourth quarter 2012 report for more information. 8
Refer to the “Capital management” section of our fourth quarter 2012 report
for more information. 9 In the first quarter of 2012, we have refined our
definition of invested assets. Refer to the “Recent developments and financial
reporting structure changes” section of our first quarter 2012 report for more
information. Group invested assets includes invested assets for Retail &
Corporate. 10 Refer to the appendix “UBS shares” of our fourth quarter 2012
report for more information.


Income statement
                For the quarter ended                % change from   Year ended
CHF million,
except per       31.12.12   30.9.12   31.12.11   3Q12    4Q11   31.12.12   31.12.11 
share data
Interest income  3,550      3,891     4,139      (9   )  (14 )  15,968     17,969   
Interest         (2,071   )  (2,360  )  (2,395   )  (12  )  (14 )  (9,974   )  (11,143  )
expense
Net interest     1,478      1,531     1,745      (3   )  (15 )  5,994      6,826    
income
Credit loss
(expense) /      (24      )  (129    )  (14      )  (81  )  71    (118     )  (84      )
recovery
Net interest
income after     1,454      1,401     1,731      4      (16 )  5,875      6,742    
credit loss
expense
Net fee and
commission       3,994      3,919     3,560      2      12    15,405     15,236   
income
Net trading      371        779       443        (52  )  (16 )  3,480      4,343    
income
Other income     402        188       128        114    214   682        1,467    
Total operating  6,222      6,287     5,862      (1   )  6     25,443     27,788   
income
Personnel        4,014      3,802     3,502      6      15    14,737     15,634   
expenses
General and
administrative   3,843      1,761     1,652      118    133   8,653      5,959    
expenses
Depreciation
and impairment   169        184       198        (8   )  (15 )  689        761      
of property and
equipment
Impairment of    0          3,030     0          (100 )        3,030      0        
goodwill
Amortization
and impairment   19         39        29         (51  )  (34 )  106        127      
of intangible
assets
Total operating  8,044      8,816     5,381      (9   )  49    27,216     22,482   
expenses
Operating
profit before    (1,823   )  (2,529  )  481        (28  )        (1,774   )  5,307    
tax
Tax expense /    66         (394    )  156               (58 )  461        901      
(benefit)
                                                                              
Net profit       (1,889   )  (2,135  )  324        (12  )        (2,235   )  4,406    
Net profit
attributable to  1          1         2          0      (50 )  276        268      
non-controlling
interests
Net profit
attributable to  (1,890   )  (2,137  )  323        (12  )        (2,511   )  4,138    
UBS
shareholders

Earnings per share (CHF)
Basic earnings   (0.50    )  (0.57   )  0.09       (12  )        (0.67    )  1.10     
per share
Diluted
earnings per     (0.50    )  (0.57   )  0.08       (12  )        (0.67    )  1.08     
share
                                                                                      

Media release available at www.ubs.com/media and www.ubs.com/investors

Further information on UBS’s quarterly results is available at
www.ubs.com/investors:

  *Fourth-quarter 2012 financial report
  *Fourth-quarter 2012 results slide presentation
  *Letter to shareholders (English, German, French and Italian)

Webcast

The results presentation, with Sergio P. Ermotti, Group Chief Executive
Officer, Tom Naratil, Group Chief Financial Officer, and Caroline Stewart,
Global Head of Investor Relations, will be webcast live on www.ubs.com/media
at the following time on 5 February 2013:

  *0900 CET
  *0800 GMT
  *0300 US EST

A playback of the webcast will be available from 1400 CET on 5 February 2013.

UBS AG
Investor contact
Switzerland: +41-44-234 41 00
or
Media contact
Switzerland: +41-44-234 85 00
UK: +44-207-567 47 14
Americas: +1-212-882 58 57
APAC: +852-297-1 82 00
www.ubs.com

Cautionary Statement Regarding Forward-Looking Statements

This report contains statements that constitute “forward-looking statements”,
including but not limited to management’s outlook for UBS’s financial
performance and statements relating to the anticipated effect of transactions
and strategic initiatives on UBS’s business and future development. While
these forward-looking statements represent UBS’s judgments and expectations
concerning the matters described, a number of risks, uncertainties and other
important factors could cause actual developments and results to differ
materially from UBS’s expectations. These factors include, but are not limited
to: (1) the degree to which UBS is successful in effecting its announced
strategic plans and related organizational changes, in particular its plans to
transform its Investment Bank, its efficiency initiatives and its planned
reduction in Basel III risk-weighted assets, and whether in each case those
plans and changes will, when implemented, have the effects intended; (2)
developments in the markets in which UBS operates or to which it is exposed,
including movements in securities prices or liquidity, credit spreads,
currency exchange rates and interest rates and the effect of economic
conditions and market developments on the financial position or
creditworthiness of UBS’s clients and counterparties; (3) changes in the
availability of capital and funding, including any changes in UBS’s credit
spreads and ratings; (4) changes in financial legislation and regulation in
Switzerland, the US, the UK and other major financial centers which may impose
constraints on or necessitate changes in the scope and location of UBS’s
business activities and in its legal and booking structures, including the
imposition of more stringent capital and liquidity requirements, incremental
tax requirements and constraints on remuneration; (5) changes in UBS’s
competitive position, including whether differences in regulatory capital and
other requirements among the major financial centers will adversely affect
UBS’s ability to compete in certain lines of business; (6) the liability to
which UBS may be exposed, or possible constraints or sanctions that regulatory
authorities might impose on UBS, due to litigation, contractual claims and
regulatory investigations, including those that may arise from the ongoing
investigations relating to the setting of LIBOR and other reference rates,
from market events and losses incurred by clients and counterparties during
the financial crisis of 2007 to 2009, and from the unauthorized trading
incident announced in September 2011; (7) the effects on UBS’s cross-border
banking business of tax treaties negotiated or under discussion between
Switzerland and other countries and future tax or regulatory developments; (8)
UBS’s ability to retain and attract the employees necessary to generate
revenues and to manage, support and control its businesses, which may be
affected by competitive factors including compensation practices; (9) changes
in accounting standards or policies, and accounting determinations or
interpretations affecting the recognition of gain or loss, the valuation of
goodwill and other matters; (10) limitations on the effectiveness of UBS’s
internal processes for risk management, risk control, measurement and
modeling, and of financial models generally; (11) whether UBS will be
successful in keeping pace with competitors in updating its technology,
particularly in trading businesses; (12) the occurrence of operational
failures, such as fraud, unauthorized trading and systems failures; and (13)
the effect that these or other factors or unanticipated events may have on our
reputation and the additional consequences that this may have on our business
and performance. Our business and financial performance could be affected by
other factors identified in our past and future filings and reports, including
those filed with the SEC. More detailed information about those factors is set
forth in documents furnished by UBS and filings made by UBS with the SEC,
including UBS’s Annual Report on Form 20-F for the year ended 31 December
2011. UBS is not under any obligation to (and expressly disclaims any
obligation to) update or alter its forward-looking statements, whether as a
result of new information, future events, or otherwise.

Rounding

Numbers presented throughout this report may not add up precisely to the
totals provided in the tables and text. Percentages and percent changes are
calculated based on rounded figures displayed in the tables and text and may
not precisely reflect the percentages and percent changes that would be
derived based on figures that are not rounded.

Contact:

UBS AG
 
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