Global Wealth Management & Business Banking pre-tax profit at UBS was a record SFr2,341 million in second quarter 2007, an increase of 4 per cent from first quarter 2007. Pre-tax profit for the Wealth Management International & Switzerland business, at an all-time high of SFr1,543 million, was up 3 per cent from first quarter. Total operating income rose 4 per cent from first quarter, with recurring income benefitting from the higher asset base and non-recurring income up on higher client activity. But operating expenses increased 6 per cent from first quarter, reflecting higher personnel levels as well as the full effect of annual salary increases, said the Zurich-based bank in its latest earnings release. In the US wealth management business, pre-tax profit was SFr161 million, down 6 per cent from first quarter, affected by legal and litigation expenses. Total operating income was up 5 per cent from first quarter 2007, reflecting broad growth in revenues, mostly due to rising financial markets. Total operating expenses were up 6 per cent from first quarter, with personnel expenses increasing as a result of higher salary costs and increased financial advisor-related compensation. Non-personnel expenses rose 19 per cent from first quarter 2007, with more than half of the rise being a result of an increase in legal and litigation expenses. Business Banking Switzerland's pre-tax profit was a record SFr637 million, up 11 per cent from the previous quarter. The bank’s wealth management units recorded inflows of Sfr35.2 billion in the quarter, up from Sfr31.2 billion in the second quarter of 2006. Inflows from the international and Swiss wealth management business rose by Sfr2.2 billion to Sfr32.7 billion. Net new money in European wealth management was Sfr2.6 billion down from Sfr7.2 billion in last year’s comparative period. US domestic inflows were Sfr2.5 billion up from SFr0.7 billion a year earlier but down from Sfr10.9 billion in the first quarter. Overall, UBS reported net income in the second quarter of SFr5.62 billion up from SFr3.1 billion a year earlier. During the quarter, the bank replaced chief executive officer Peter Wuffli with wealth-management head Marcel Rohner after the collapse of the Dillon Read Capital Management hedge fund cost the bank SFr229 million after tax. The figures also include a SFr1.9 billion gain from the sale of its stake in Julius Baer. Excluding these two items, attributable profit in the bank’s core operational businesses would have been SFr3,455 million, up 14 per cent from the same period a year earlier and 9 per cent higher than the record first quarter 2007 performance, said UBS. According to Bloomberg, UBS’ nine largest competitors reported an average profits rise of 23 per cent in the period.