UBS expects to report a modest net profit for the Group and positive net new money in its wealth management businesses for the third quarter of 2011

* Net profit attributable to UBS shareholders for the third quarter 2011 includes a USD 2.3 billion loss resulting from the unauthorized trading incident reported in September 2011

* Positive net new money in UBS’s wealth management businesses expected to be broadly similar to the second quarter of 2011

* BIS tier 1 capital base expected to remain broadly in line with the prior quarter end

UBS expects to report a modest net profit attributable to shareholders for the third quarter of 2011. The result includes the previously announced USD 2.3 billion loss resulting from the unauthorized trading incident and approximately CHF 0.4 billion of restructuring charges associated with the firm’s cost reduction program. In addition, the result benefited from own credit gains on financial liabilities measured at fair value in the region of CHF 1.5 billion, primarily due to the widening of UBS’s credit spreads during the third quarter. Furthermore, UBS will report a gain on the sale of treasury-related investments of approximately CHF 0.7 billion in Wealth Management & Swiss Bank. At present, the Group tax expense is expected to be close to zero for the quarter.

UBS expects to report net new money inflows in its wealth management businesses at levels broadly similar to those of the previous quarter. Global Asset Management will report moderate net new money outflows.

UBS’s capital position remains strong and its capital base at the end of the third quarter of 2011 is expected to remain broadly in line with the balance at the end of the previous quarter, including the loss associated with the unauthorized trading incident. The BIS Basel II tier 1 capital ratio is expected to decline slightly compared with the second quarter due to the impact on risk-weighted assets of the unauthorized trading incident.

The previously announced cost reduction program, which is intended to align UBS’s cost base with changes in the market environment, is on track. The majority of affected employees have been notified, and reductions will continue into 2012. UBS will continue to invest in growth regions, including Asia Pacific, the Americas, and the emerging markets, as well as in our global wealth management franchise.

This update is based on preliminary estimates early in the third quarter closing process. No further updates are anticipated prior to October 25, 2011 when UBS will announce its third quarter results.

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Cautionary Statement Regarding Forward-Looking Statements
This release contains statements that constitute “forward-looking statements”, including statements relating to UBS’s financial performance and statements relating to the anticipated effect of strategic initiatives on UBS’s business and future development. Factors that could cause actual developments and results to differ materially from UBS’s expectations include, but are not limited to: whether UBS will be successful in effecting organizational changes and implementing strategic plans, and whether those changes and plans will have the effects intended; developments in the markets in which UBS operates or to which it is exposed; changes in the availability of capital and funding; UBS’s ability to retain earnings and manage its risk-weighted assets in order to meet its strategic objectives and comply with Swiss capital requirements without adversely affecting its business; changes in financial regulation in Switzerland, the United States, the United Kingdom and other major financial centers; possible constraints that regulatory authorities may impose directly or indirectly on UBS’s business activities, whether as a consequence of the recently announced unauthorized trading or for other reasons; changes in UBS’s competitive position, including whether differences in regulatory requirements applicable to UBS will adversely affect its ability to compete in certain lines of business; the liability to which UBS may be exposed due to litigation, contractual claims and regulatory investigations; the effects on UBS’s cross-border banking business of tax treaties recently concluded by Switzerland or to be concluded in the future; UBS’s ability to retain and attract the employees necessary to generate revenues and to manage, support and control its businesses; limitations on the effectiveness of UBS’s internal processes for risk management, risk control, measurement and modeling; whether UBS will be successful in keeping pace with competitors in updating its technology, particularly in trading businesses; and the occurrence of operational failures, such as fraud, unauthorized trading and systems failures. 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 2010. 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.