ADDENDUM DATED 25 AUGUST 2016

If you are in any doubt about any of the contents of this addendum, you should obtain independentprofessional advice.

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited (the “StockExchange”) and Hong Kong Securities Clearing Company Limited (“HKSCC”) take no responsibility forthe contents of this addendum, make no representation as to its accuracy or completeness and expresslydisclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or anypart of the contents of this addendum.

Addendum to the Base Listing Document dated 5 April 2016relating to Non-collateralised Structured Products

to be issued by

UBS AG(incorporated with limited liability in Switzerland)

acting through its London Branch

Sponsor

UBS SECURITIES ASIA LIMITED

This addendum, for which we accept full responsibility, includes particulars given in compliance with theRules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ListingRules”) for the purpose of giving further information with regard to us. You must read this addendum inconjunction with our base listing document dated 5 April 2016 (our “Base Listing Document”).

We, having made all reasonable enquiries, confirm that to the best of our knowledge and belief theinformation contained in this addendum is accurate and complete in all material respects and not misleadingor deceptive, and there are no other matters the omission of which would make any statement in thisaddendum misleading.

The Structured Products involve derivatives. Investors should not invest in the Structured Productsunless they fully understand and are willing to assume the risks associated with them.

Investors are warned that the price of the Structured Products may fall in value as rapidly as it mayrise and holders may sustain a total loss of their investment. Prospective purchasers should thereforeensure that they understand the nature of the Structured Products and carefully study the risk factorsset out in our Base Listing Document and the relevant supplemental listing document and, wherenecessary, seek professional advice, before they invest in the Structured Products.

The Structured Products constitute our general unsecured contractual obligations and of no otherperson and will rank equally among themselves and with all our other unsecured obligations (save forthose obligations preferred by law) upon liquidation. If you purchase the Structured Products, you arerelying upon our creditworthiness, and have no rights under the Structured Products against (a) thecompany which has issued the underlying securities; (b) the trustee or the manager of the underlyingunit trust; or (c) the index compiler of any underlying index. If we become insolvent or default on ourobligations under the Structured Products, you may not be able to recover all or even part of theamount due under the Structured Products (if any).

IMPORTANT INFORMATION

What is this addendum about?This addendum contains supplemental general information on us, our unaudited second quarter 2016financial information for the quarter period ended 30 June 2016 and the risk management and controlapplicable to UBS Group AG (our holding company), UBS AG and our subsidiaries (together, “UBSGroup”) extracted from UBS Group AG’s second quarter 2016 financial report. This addendum is asupplement to our Base Listing Document.

What documents should you read before investing in the Structured Products?You must read this addendum together with our Base Listing Document (including any other addendumto our Base Listing Document to be issued by us from time to time) and the relevant supplemental listingdocument (including any addendum to such supplemental listing document to be issued by us from timeto time) (together, the “Listing Documents”) before investing in any Structured Product.

Where can you inspect the relevant documents?Copies of this addendum, our Base Listing Document and the relevant supplemental listing document andother documents set out in the relevant supplemental listing document may be inspected during usualbusiness hours on any weekday (Saturdays, Sundays and holidays excepted) at the offices of UBSSecurities Asia Limited.

本增編、我們的基礎上市文件連同相關補充上市文件及於相關補充上市文件內所列的其他文件，可於平日(星期六、日及假期除外)的一般辦公時間於瑞銀証券亞洲有限公司 (UBS Securities AsiaLimited) 辦事處查閱。

Are we subject to any litigation?Save as disclosed in the Listing Documents, we and our subsidiaries are not aware of any litigation orclaims of material importance pending or threatened against us or them.

Has our financial position changed since last financial year-end?There has been no material adverse change in our financial or trading position since 31 December 2015.

What are our credit ratings?Our long term debt ratings are:

Rating agency Rating as of the date of this addendumMoody’s Investors Service Ltd A1 (stable outlook)Standard & Poor’s Credit MarketServices Europe Limited A+ (stable outlook)

Rating agencies usually receive a fee from the companies that they rate. When evaluating ourcreditworthiness, you should not solely rely on our credit ratings because:• a credit rating is not a recommendation to buy, sell or hold the Structured Products;• ratings of companies may involve difficult-to-quantify factors such as market competition, the

success or failure of new products and markets and managerial competence;• a high credit rating is not necessarily indicative of low risk. Our credit ratings as of the date of this

addendum are for reference only. Any downgrading of our credit ratings could result in a reductionin the value of the Structured Products;

• a credit rating is not an indication of the liquidity or volatility of the Structured Products; and• a credit rating may be downgraded if our credit quality declines.

The Structured Products are not rated.Our credit ratings are subject to change or withdrawal at any time within each rating agency’s solediscretion. You should conduct your own research using publicly available sources to obtain the latestinformation with respect to our ratings from time to time.

How can you get further information about us or the Structured Products?You may visit http://warrants.ubs.com/en/home_e.cgi to obtain further information about us and/or theStructured Products.

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TABLE OF CONTENTS

Page

INFORMATION IN RELATION TO US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

THE UNAUDITED FINANCIAL INFORMATION OF UBS AGFOR THE QUARTERLY PERIOD ENDED 30 JUNE 2016 - EXTRACTEDFROM UBS AG’S SECOND QUARTER 2016 FINANCIAL REPORT . . . . . . . . . . . . . . . . . . . . 21

RISK MANAGEMENT AND CONTROL - EXTRACTEDFROM UBS GROUP AG’S SECOND QUARTER 2016 FINANCIAL REPORT . . . . . . . . . . . . . 29

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INFORMATION IN RELATION TO US

(1) Updated “Information in relation to us”

The following pages under this section shall replace the information in the section headed “Informationin relation to us” on pages 14 to 17 of our Base Listing Document in its entirety.

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1. Overview

UBS AG with its subsidiaries (together, “UBS AG (consolidated)”, or “UBS AG Group”; togetherwith UBS Group AG, which is the holding company of UBS AG, and its subsidiaries, “UBS Group”,“Group”, “UBS” or “UBS Group AG (consolidated)”) provides financial advice and solutions toprivate, institutional and corporate clients worldwide, as well as private clients in Switzerland. Theoperational structure of the Group is comprised of the Corporate Center and five business divisions:Wealth Management, Wealth Management Americas, Personal & Corporate Banking, AssetManagement and the Investment Bank. UBS’s strategy builds on the strengths of all of its businessesand focuses its efforts on areas in which UBS excels, while seeking to capitalize on the compellinggrowth prospects in the businesses and regions in which it operates, in order to generate attractive andsustainable returns for shareholders.

2. Corporate Information

The legal and commercial name of the company is UBS AG.

The company was incorporated under the name SBC AG on 28 February 1978 for an unlimited durationand entered in the Commercial Register of Canton Basel-City on that day. On 8 December 1997, thecompany changed its name to UBS AG. The company in its present form was created on 29 June 1998by the merger of Union Bank of Switzerland (founded 1862) and Swiss Bank Corporation (founded1872). UBS AG is entered in the Commercial Registers of Canton Zurich and Canton Basel-City. Theregistration number is CHE-101.329.561.

UBS AG is incorporated and domiciled in Switzerland and operates under the Swiss Code ofObligations as an Aktiengesellschaft, a stock corporation.

According to article 2 of the articles of association of UBS AG dated 4 May 2016 (“Articles ofAssociation”), the purpose of UBS AG is the operation of a bank. Its scope of operations extends toall types of banking, financial, advisory, trading and service activities in Switzerland and abroad. UBSAG may establish branches and representative offices as well as banks, finance companies and otherenterprises of any kind in Switzerland and abroad, hold equity interests in these companies, and conducttheir management. UBS AG is authorized to acquire, mortgage and sell real estate and building rightsin Switzerland and abroad. UBS AG may borrow and invest money on the capital markets. UBS AGis part of the group of companies controlled by the group parent company UBS Group AG. It maypromote the interests of the group parent company or other group companies. It may provide loans,guarantees and other kinds of financing and security for group companies.

The addresses and telephone numbers of UBS AG’s two registered offices and principal places ofbusiness are: Bahnhofstrasse 45, CH-8001 Zurich, Switzerland, telephone +41 44 234 1111; andAeschenvorstadt 1, CH-4051 Basel, Switzerland, telephone +41 61 288 5050.

3. Organizational Structure of UBS AG

UBS AG is a Swiss bank and the parent company of the UBS AG Group. It is 100% owned by UBSGroup AG, which is the holding company of the UBS Group. UBS Group operates as a group with fivebusiness divisions (Wealth Management, Wealth Management Americas, Personal & CorporateBanking, Asset Management and the Investment Bank) and a Corporate Center.

Over the past two years, UBS has undertaken a series of measures to improve the resolvability of theGroup in response to too big to fail requirements in Switzerland and other countries in which the Groupoperates.

In December 2014, UBS Group AG completed an exchange offer for the shares of UBS AG, becomingthe holding company for the UBS Group. Subsequently, during 2015, UBS Group AG filed andcompleted a procedure under the Swiss Stock Exchange and Securities Trading Act to squeeze outminority shareholders of UBS AG, as a result of which UBS Group AG acquired all of the outstandingshares of UBS AG.

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In June 2015, UBS AG transferred its Retail & Corporate (now Personal & Corporate Banking) andWealth Management business booked in Switzerland to UBS Switzerland AG, a banking subsidiary ofUBS AG in Switzerland.

In 2015, UBS also completed the implementation of a more self-sufficient business and operatingmodel for UBS Limited, UBS’s investment banking subsidiary in the UK, under which UBS Limitedbears and retains a larger proportion of the risk and reward in its business activities.

In the third quarter of 2015, UBS established UBS Business Solutions AG as a direct subsidiary of UBSGroup AG to act as the Group service company. UBS will transfer the ownership of the majority of itsexisting service subsidiaries to this entity. UBS expects that the transfer of shared service and supportfunctions into the service company structure will be implemented in a staged approach through 2018.The purpose of the service company structure is to improve the resolvability of the Group by enablingUBS to maintain operational continuity of critical services should a recovery or resolution event occur.

In the second quarter of 2016, UBS Americas Holding LLC, a subsidiary of UBS AG, has beendesignated as the intermediate holding company for UBS’s US subsidiaries as required under theenhanced prudential standards regulations pursuant to the Dodd-Frank Wall Street Reform andConsumer Protection Act (“Dodd-Frank”). UBS Americas Holding LLC holds all of UBS’s USsubsidiaries and is subject to US capital requirements, governance requirements and other prudentialregulation.

In 2015, UBS also established a new subsidiary of UBS AG, UBS Asset Management AG, into whichit expects to transfer the majority of the operating subsidiaries of Asset Management during 2016. UBScontinues to consider further changes to the legal entities used by Asset Management, including thetransfer of operations conducted by UBS AG in Switzerland into a subsidiary of UBS AssetManagement AG.

UBS continues to consider further changes to the Group’s legal structure in response to capital andother regulatory requirements, and in order to obtain any rebate in capital requirements for which theGroup may be eligible. Such changes may include the transfer of operating subsidiaries of UBS AG tobecome direct subsidiaries of UBS Group AG, consolidation of operating subsidiaries in the EuropeanUnion, and adjustments to the booking entity or location of products and services. These structuralchanges are being discussed on an ongoing basis with the Swiss Financial Market SupervisoryAuthority FINMA (“FINMA”) and other regulatory authorities, and remain subject to a number ofuncertainties that may affect their feasibility, scope or timing.

4. Board of Directors (“BoD”)

The BoD is the most senior body of UBS AG. The BoD consists of at least six and a maximum of twelvemembers. All the members of the BoD are elected individually by the Annual General Meeting ofShareholders (“AGM”) for a term of office of one year, which expires after completion of the nextAGM. Shareholders also elect the Chairman and the members of the Compensation Committee.

The BoD meets as often as business requires, and at least six times a year.

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4.1 Members of the Board of Directors

Member andbusiness address Title

Term ofoffice Current principal positions outside UBS AG

Axel A. Weber Chairman 2017 Chairman of the Board of Directors of UBSGroup AG. Member of the board of the SwissBankers Association, of the Board of Trustees ofAvenir Suisse, of the Advisory Board of ZukunftFinanzplatz, of the Board of the Swiss FinanceCouncil, of the Board of the Institute ofInternational Finance, of the Board of theInternational Monetary Conference; member ofthe European Financial Services Round Tableand the European Banking Group; member ofthe International Advisory Panel, MonetaryAuthority of Singapore; member of the Board ofthe Financial Services Professional Board, KualaLumpur; member of the Group of Thirty,Washington, D.C.; Chairman of the DIW BerlinBoard of Trustees; Advisory Board member ofthe Department of Economics at the Universityof Zurich.

Michel Demaré IndependentVice Chairman

2017 Independent Vice Chairman of the Board ofDirectors of UBS Group AG. Chairman of theBoard of Syngenta; Board member of Louis-Dreyfus Commodities Holdings BV;Supervisory Board member of IMD, Lausanne;Chairman of the Syngenta Foundation forSustainable Agriculture. Member of theAdvisory Board of the Department of Bankingand Finance, University of Zurich. Member ofthe Advisory Board of Zukunft Finanzplatz.

David Sidwell SeniorIndependentDirector

2017 Senior Independent Director of the Board ofDirectors of UBS Group AG. Director andChairperson of the Risk Policy and CapitalCommittee of Fannie Mae, Washington D.C.;Senior Advisor at Oliver Wyman, New York;Board member of Chubb Limited; Boardmember of GAVI Alliance; Chairman of theBoard of Village Care, New York; Director of theNational Council on Aging, Washington D.C.

Reto Francioni Member 2017 Member of the Board of Directors of UBS GroupAG. Professor, University of Basel; Boardmember of Coca-Cola HBC AG; member of theBoard of Francioni AG; Chairman of the Boardof Swiss International Air Lines; member of theBoard of MedTech Innovation Partners AG.

Ann F. Godbehere Member 2017 Member of the Board of Directors of UBS GroupAG. Board member and Chairperson of the AuditCommittee of Prudential plc, Rio Tinto plc andRio Tinto Limited. Member of the Board ofBritish American Tobacco plc.

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Member andbusiness address Title

Term ofoffice Current principal positions outside UBS AG

William G. Parrett Member 2017 Member of the Board of Directors of UBS GroupAG. Member of the Board and Chairperson ofthe Audit Committee of the Eastman KodakCompany; Board member of the BlackstoneGroup LP (chairman of audit committee andchairman of the conflicts committee); Boardmember of Thermo Fisher Scientific Inc.(chairman of audit committee); member of theCommittee on Capital Markets Regulation;member of the Carnegie Hall Board of Trustees;Past Chairman of the Board of the United StatesCouncil for International Business; PastChairman of United Way Worldwide.

Isabelle Romy Member 2017 Member of the Board of Directors of UBS GroupAG. Partner at Froriep, Zurich; associateprofessor at the University of Fribourg and at theFederal Institute of Technology, Lausanne; ViceChairman of the Sanction Commission of SIXSwiss Exchange; Member of the FundraisingCommittee of the Swiss National Committee forUNICEF.

Robert W. Scully Member 2017 Member of the Board of Directors of UBS GroupAG. Member of the Boards of Chubb Limited,Zoetis Inc. and KKR & Co LP. Member of theBoard of Dean’s Advisors of Harvard BusinessSchool.

Beatrice Weder diMauro

Member 2017 Member of the Board of Directors of UBS GroupAG. Professor at the Johannes GutenbergUniversity, Mainz; member of the SupervisoryBoard of Robert Bosch GmbH, Stuttgart. Boardmember of Bombardier Inc.. Member of the ETHZurich Foundation Board of Trustees. Memberof the Economic Advisory Board of Fraport AG;member of the Advisory Board of DeloitteGermany. Deputy Chairman of the UniversityCouncil of the University of Mainz. Member ofthe Senate of the Max Planck Society.

Dieter Wemmer Member 2017 Member of the Board of Directors of UBS GroupAG. Chief Financial Officer at Allianz SE.Administrative Board member of Allianz AssetManagement AG and Allianz InvestmentManagement SE. Member of the CFO Forum;member of the Systemic Risk Working Group ofthe European Central Bank and the Bank forInternational Settlements; Chairman of theEconomic & Finance Committee of InsuranceEurope; member of the Berlin Center ofCorporate Governance.

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Member andbusiness address Title

Term ofoffice Current principal positions outside UBS AG

Joseph Yam Member 2017 Member of the Board of Directors of UBS GroupAG. Executive Vice President of the ChinaSociety for Finance and Banking. Member of theBoard of Johnson Electric Holdings Limited andof UnionPay International Co., Ltd. InternationalAdvisory Council member of China InvestmentCorporation; Distinguished Research Fellow atthe Institute of Global Economics and Finance atthe Chinese University of Hong Kong.

5. Litigation, Regulatory and Similar Matters

UBS operates in a legal and regulatory environment that exposes it to significant litigation and similarrisks arising from disputes and regulatory proceedings. As a result, UBS (which for purposes of thissection may refer to UBS AG and / or one or more of its subsidiaries, as applicable) is involved invarious disputes and legal proceedings, including litigation, arbitration, and regulatory and criminalinvestigations.

Such matters are subject to many uncertainties and the outcome and the timing of resolution are oftendifficult to predict, particularly in the earlier stages of a case. There are also situations where UBS mayenter into a settlement agreement. This may occur in order to avoid the expense, managementdistraction or reputational implications of continuing to contest liability, even for those matters forwhich UBS believes it should be exonerated. The uncertainties inherent in all such matters affect theamount and timing of any potential outflows for both matters with respect to which provisions havebeen established and other contingent liabilities. UBS makes provisions for such matters broughtagainst it when, in the opinion of management after seeking legal advice, it is more likely than not thatUBS has a present legal or constructive obligation as a result of past events, it is probable that anoutflow of resources will be required, and the amount can be reliably estimated. Where these factorsare otherwise satisfied, a provision may be established for claims that have not yet been asserted againstUBS, but are nevertheless expected to be, based on UBS’s experience with similar asserted claims. Ifany of those conditions is not met, such matters result in contingent liabilities. If the amount of anobligation cannot be reliably estimated, a liability exists that is not recognized even if an outflow ofresources is probable. Accordingly, no provision is established even if the potential outflow ofresources with respect to select matters could be significant.

Specific litigation, regulatory and other matters are described below, including all such matters thatmanagement considers to be material and others that management believes to be of significance due topotential financial, reputational and other effects. The amount of damages claimed, the size of atransaction or other information is provided where available and appropriate in order to assist users inconsidering the magnitude of potential exposures.

In the case of certain matters below, UBS states that it has established a provision, and for the othermatters it makes no such statement. When UBS makes this statement and it expects disclosure of theamount of a provision to prejudice seriously its position with other parties in the matter, because itwould reveal what UBS believes to be the probable and reliably estimable outflow, UBS does notdisclose that amount. In some cases UBS is subject to confidentiality obligations that preclude suchdisclosure. With respect to the matters for which UBS does not state whether it has established aprovision, either (a) it has not established a provision, in which case the matter is treated as a contingentliability under the applicable accounting standard, or (b) it has established a provision but expectsdisclosure of that fact to prejudice seriously its position with other parties in the matter because it wouldreveal the fact that UBS believes an outflow of resources to be probable and reliably estimable.

With respect to certain litigation, regulatory and similar matters for which UBS has establishedprovisions, UBS is able to estimate the expected timing of outflows. However, the aggregate amountof the expected outflows for those matters for which it is able to estimate expected timing is immaterialrelative to its current and expected levels of liquidity over the relevant time periods.

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The aggregate amount provisioned for litigation, regulatory and similar matters as a class is disclosedin Note 15a of the unaudited interim consolidated financial statements of UBS AG, included in the UBSAG Second Quarter 2016 Report. It is not practicable to provide an aggregate estimate of liability forUBS’s litigation, regulatory and similar matters as a class of contingent liabilities. Doing so wouldrequire UBS to provide speculative legal assessments as to claims and proceedings that involve uniquefact patterns or novel legal theories, which have not yet been initiated or are at early stages ofadjudication, or as to which alleged damages have not been quantified by the claimants. Although ittherefore cannot provide a numerical estimate of the future losses that could arise from litigation,regulatory and similar matters, UBS believes that the aggregate amount of possible future losses fromthis class that are more than remote substantially exceeds the level of current provisions. Litigation,regulatory and similar matters may also result in non-monetary penalties and consequences. Forexample, the Non-Prosecution Agreement (“NPA”) described in paragraph 5 of this section, which UBSentered into with the US Department of Justice (“DOJ”), Criminal Division, Fraud Section inconnection with its submissions of benchmark interest rates, including, among others, the BritishBankers’ Association London Interbank Offered Rate (“LIBOR”), was terminated by the DOJ based onits determination that UBS had committed a US crime in relation to foreign exchange matters. As aconsequence, UBS AG has pleaded guilty to one count of wire fraud for conduct in the LIBOR matter,and has agreed to pay a US dollar (“USD”) 203 million fine and accept a three-year term of probation.A guilty plea to, or conviction of, a crime (including as a result of termination of the NPA) could havematerial consequences for UBS. Resolution of regulatory proceedings may require UBS to obtainwaivers of regulatory disqualifications to maintain certain operations, may entitle regulatory authoritiesto limit, suspend or terminate licenses and regulatory authorizations and may permit financial marketutilities to limit, suspend or terminate UBS’s participation in such utilities. Failure to obtain suchwaivers, or any limitation, suspension or termination of licenses, authorizations or participations, couldhave material consequences for UBS.

The risk of loss associated with litigation, regulatory and similar matters is a component of operationalrisk for purposes of determining UBS’s capital requirements. Information concerning its capitalrequirements and the calculation of operational risk for this purpose is included in the “Capitalmanagement” section of the UBS Group Second Quarter 2016 Report.

Provisions for litigation, regulatory and similar matters by business division and CorporateCenter unit1, 2

CHF millionWealth

Management

WealthManagement

Americas

Personal&

CorporateBanking

AssetManagement

InvestmentBank

CC —Services

CC —GroupALM

CC —Non-core

andLegacy

Portfolio UBS

Balance as of 31 December2015 245 459 83 16 585 310 0 1,284 2,983

Balance as of 31 March2016 242 427 81 13 557 307 0 1,248 2,876

Increase in provisionsrecognized in the incomestatement 10 23 0 0 27 2 0 23 85

Release of provisionsrecognized in the incomestatement (1) (7) 0 (5) 0 0 0 0 (13)

Provisions used inconformity withdesignated purpose (3) (35) (2) (1) (1) (7) 0 (249) (299)

Foreign currency translation/unwind of discount (1) 8 0 0 6 (1) 0 20 32

Balance as of 30 June 2016 247 416 79 7 589 301 0 1,042 2,682

1 Provisions, if any, for the matters described in this section are recorded in Wealth Management (item 3), WealthManagement Americas (item 4), CC — Services (item 7) and CC — Non-core and Legacy Portfolio (item 2). Provisions,if any, for the matters described in this section in items 1 and 6 are allocated between Wealth Management and Personal& Corporate Banking, and provisions, if any, for the matters described in this section in item 5 are allocated between theInvestment Bank, CC — Services and CC — Non-core and Legacy Portfolio.

2 Provision movements are grouped by item for purposes of this table and may therefore differ from those shown in the tablein Note 15a of the unaudited interim consolidated financial statements of UBS AG, included in the UBS AG Second

Quarter 2016 Report.

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A. Inquiries regarding cross-border wealth management businesses

Tax and regulatory authorities in a number of countries have made inquiries, served requests forinformation or examined employees located in their respective jurisdictions relating to thecross-border wealth management services provided by UBS and other financial institutions. It ispossible that implementation of automatic tax information exchange and other measures relatingto cross-border provision of financial services could give rise to further inquiries in the future.UBS has received a disclosure order from the Swiss Federal Tax Administration (“FTA”) totransfer information based on a request for international administrative assistance in tax matters.The request concerns a number of UBS account numbers pertaining to current and former clientsand is based on data from 2006 and 2008. UBS has taken steps to inform affected clients aboutthe administrative assistance proceeding and their procedural rights, including the right to appeal.The request is based on data received from the German authorities, who seized certain data relatedto UBS clients booked in Switzerland during their investigations and have apparently shared thisdata with other European countries. UBS expects other countries to file similar requests.

As a result of investigations in France, in 2013, UBS (France) S.A. and UBS AG were put underformal examination for complicity in having illicitly solicited clients on French territory, andwere declared witness with legal assistance regarding the laundering of proceeds of tax fraud andof banking and financial solicitation by unauthorized persons. In 2014, UBS AG was placed underformal examination with respect to the potential charges of laundering of proceeds of tax fraud,and the investigating judges ordered UBS AG to provide bail of Euro (“EUR”) 1.1 billion. UBSAG appealed the determination of the bail amount, but both the appeal court (Cour d’Appel) andthe French Supreme Court (Cour de Cassation) upheld the bail amount and rejected the appealin full in late 2014. UBS AG has filed and has had formally registered an application to theEuropean Court of Human Rights to challenge various aspects of the French court’s decision. InSeptember 2015, the former CEO of UBS Wealth Management was placed under formalexamination in connection with these proceedings. In addition, the investigating judges havesought to issue arrest warrants against three Swiss-based former employees of UBS AG who didnot appear when summoned by the investigating judge.

In 2015, UBS (France) S.A. was placed under formal examination for complicity regarding thelaundering of proceeds of tax fraud and of banking and financial solicitation by unauthorizedpersons for the years 2004 until 2008 and declared witness with legal assistance for the years 2009to 2012. A bail of EUR 40 million was imposed, and was subsequently reduced by the Court ofAppeals to EUR 10 million.

In February 2016, the investigating judge notified UBS AG and UBS (France) S.A. that he hasclosed his investigation. In July 2016, UBS AG and UBS (France) S.A. received the NationalFinancial Prosecutor’s recommendation. The parties have 30 days to comment on therecommendation or to file additional submissions. The judge may then issue his final decreewhich would set out any charges for which UBS AG and UBS (France) S.A. will be tried, bothlegally and factually.

UBS has been notified by the Belgian investigating judge that it is under formal investigationregarding the laundering of proceeds of tax fraud and of banking, financial solicitation byunauthorized persons and serious tax fraud.

In 2015, UBS received inquiries from the US Attorney’s Office for the Eastern District of NewYork and from the US Securities and Exchange Commission (“SEC”), which are investigatingpotential sales to US persons of bearer bonds and other unregistered securities in possibleviolation of the Tax Equity and Fiscal Responsibility Act of 1982 and the registrationrequirements of the US securities laws. UBS is cooperating with the authorities in theseinvestigations.

UBS has, and reportedly numerous other financial institutions have, received inquiries fromauthorities concerning accounts relating to the Fédération Internationale de Football Associationand other constituent soccer associations and related persons and entities. UBS is cooperatingwith authorities in these inquiries.

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UBS’s balance sheet at 30 June 2016 reflected provisions with respect to matters described in thisitem 1 in an amount that UBS believes to be appropriate under the applicable accounting standard.As in the case of other matters for which UBS has established provisions, the future outflow ofresources in respect of such matters cannot be determined with certainty based on currentlyavailable information, and accordingly may ultimately prove to be substantially greater (or maybe less) than the provision that UBS has recognized.

B. Claims related to sales of residential mortgage-backed securities and mortgages

From 2002 through 2007, prior to the crisis in the US residential loan market, UBS was asubstantial issuer and underwriter of US residential mortgage-backed securities (“RMBS”) andwas a purchaser and seller of US residential mortgages. A subsidiary of UBS, UBS Real EstateSecurities Inc. (“UBS RESI”), acquired pools of residential mortgage loans from originators and(through an affiliate) deposited them into securitization trusts. In this manner, from 2004 through2007, UBS RESI sponsored approximately USD 80 billion in RMBS, based on the originalprincipal balances of the securities issued.

UBS RESI also sold pools of loans acquired from originators to third-party purchasers. Thesewhole loan sales during the period 2004 through 2007 totalled approximately USD 19 billion inoriginal principal balance.

UBS was not a significant originator of US residential loans. A subsidiary of UBS originatedapproximately USD 1.5 billion in US residential mortgage loans during the period in which it wasactive from 2006 to 2008, and securitized less than half of these loans.

RMBS-related lawsuits concerning disclosures: UBS is named as a defendant relating to its roleas underwriter and issuer of RMBS in lawsuits related to approximately USD 2.6 billion inoriginal face amount of RMBS underwritten or issued by UBS. Of the USD 2.6 billion in originalface amount of RMBS that remains at issue in these cases, approximately USD 1.2 billion wasissued in offerings in which a UBS subsidiary transferred underlying loans (the majority of whichwere purchased from third-party originators) into a securitization trust and made representationsand warranties about those loans (“UBS-sponsored RMBS”). The remaining USD 1.4 billion ofRMBS to which these cases relate was issued by third parties in securitizations in which UBSacted as underwriter (“third-party RMBS”).

In connection with certain of these lawsuits, UBS has indemnification rights against survivingthird-party issuers or originators for losses or liabilities incurred by UBS, but UBS cannot predictthe extent to which it will succeed in enforcing those rights.

UBS is a defendant in two lawsuits brought by the National Credit Union Administration(“NCUA”), as conservator for certain failed credit unions, asserting misstatements and omissionsin the offering documents for RMBS purchased by the credit unions. Both lawsuits were filed inUS District Courts, one in the District of Kansas and the other in the Southern District of NewYork (“SDNY”). The original principal balance at issue in the Kansas case is approximately USD1.15 billion and the original principal balance at issue in the SDNY case is approximately USD400 million. In February 2016, UBS made an offer of judgment to NCUA in the SDNY case,which NCUA accepted, pursuant to which UBS agreed to pay to NCUA approximately USD 33million plus approximately USD 36.8 million in prejudgment interest, for a total of approximatelyUSD 69.8 million, in addition to reasonable attorneys’ fees incurred by NCUA. Judgment wasentered by the Court on April 25, 2016.

Lawsuits related to contractual representations and warranties concerning mortgages and RMBS:When UBS acted as an RMBS sponsor or mortgage seller, it generally made certainrepresentations relating to the characteristics of the underlying loans. In the event of a materialbreach of these representations, UBS was in certain circumstances contractually obligated torepurchase the loans to which the representations related or to indemnify certain parties againstlosses. UBS has received demands to repurchase US residential mortgage loans as to which UBSmade certain representations at the time the loans were transferred to the securitization trustaggregating approximately USD 4.1 billion in original principal balance. Of this amount, UBSconsiders claims relating to approximately USD 2 billion in original principal balance to be

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resolved, including claims barred by the statute of limitations. Substantially all of the remainingclaims are in litigation, including the matters described in the next paragraph. UBS believes thatnew demands to repurchase US residential mortgage loans are time-barred under a decisionrendered by the New York Court of Appeals.

In 2012, certain RMBS trusts filed an action (“Trustee Suit”) in the SDNY seeking to enforceUBS RESI’s obligation to repurchase loans in the collateral pools for three RMBS securitizations(“Transactions”) with an original principal balance of approximately USD 2 billion, for whichAssured Guaranty Municipal Corp. (“Assured Guaranty”), a financial guaranty insurancecompany, had previously demanded repurchase. In January 2015, the court rejected plaintiffs’efforts to seek damages for all loans purportedly in breach of representations and warranties inany of the three Transactions and limited plaintiffs to pursuing claims based solely on allegedbreaches for loans identified in the complaint or other breaches that plaintiffs can establish wereindependently discovered by UBS. In February 2015, the court denied plaintiffs’ motion seekingreconsideration of its ruling. However, in April 2016, the Court ruled that, based on an interveningdecision of an intermediate New York appellate court, it would allow plaintiffs to proceed withtheir claims at trial as to all loans purportedly in breach. With respect to the loans subject to theTrustee Suit that were originated by institutions still in existence, UBS intends to enforce itsindemnity rights against those institutions. A bench trial in the SDNY adjourned in May 2016 andpost-trial briefs are being submitted.

UBS also has tolling agreements with certain institutional purchasers of RMBS concerning theirpotential claims related to substantial purchases of UBS-sponsored or third-party RMBS.

Mortgage-related regulatory matters: In 2014, UBS received a subpoena from the US Attorney’sOffice for the Eastern District of New York issued pursuant to the Financial Institutions Reform,Recovery and Enforcement Act of 1989 (“FIRREA”), which seeks documents and informationrelated to UBS’s RMBS business from 2005 through 2007. In 2015, the Eastern District of NewYork identified a number of transactions that are currently the focus of their inquiry, as to whichUBS is providing additional information. UBS continues to respond to the FIRREA subpoena andto subpoenas from the New York State Attorney General relating to its RMBS business. Inaddition, UBS has also been responding to inquiries from both the Special Inspector General forthe Troubled Asset Relief Program (who is working in conjunction with the US Attorney’s Officefor Connecticut and the DOJ) and the SEC relating to trading practices in connection withpurchases and sales of mortgage-backed securities in the secondary market from 2009 through thepresent. UBS is cooperating with the authorities in these matters. Numerous other banksreportedly are responding to similar inquiries from these authorities.

Provision for claims related to sales of residential mortgage-backed securities andmortgages

USD million

Balance as of 31 December 2015 1,218

Balance as of 31 March 2016 1,242

Increase in provision recognized in the income statement 0

Release of provision recognized in the income statement 0

Provision used in conformity with designated purpose (255)

Balance as of 30 June 2016 988

As reflected in the table “Provision for claims related to sales of residential mortgage-backedsecurities and mortgages,” UBS’s balance sheet at 30 June 2016 reflected a provision of USD 988million with respect to matters described in this item 2. As in the case of other matters for whichUBS has established provisions, the future outflow of resources in respect of this matter cannotbe determined with certainty based on currently available information, and accordingly mayultimately prove to be substantially greater (or may be less) than the provision that UBS hasrecognized.

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C. Madoff

In relation to the Bernard L. Madoff Investment Securities LLC (“BMIS”) investment fraud, UBSAG, UBS (Luxembourg) SA and certain other UBS subsidiaries have been subject to inquiries bya number of regulators, including FINMA and the Luxembourg Commission de Surveillance duSecteur Financier. Those inquiries concerned two third-party funds established underLuxembourg law, substantially all assets of which were with BMIS, as well as certain fundsestablished in offshore jurisdictions with either direct or indirect exposure to BMIS. These fundsnow face severe losses, and the Luxembourg funds are in liquidation. The last reported net assetvalue of the two Luxembourg funds before revelation of the Madoff scheme was approximatelyUSD 1.7 billion in the aggregate, although that figure likely includes fictitious profit reported byBMIS. The documentation establishing both funds identifies UBS entities in various roles,including custodian, administrator, manager, distributor and promoter, and indicates that UBSemployees serve as board members. UBS (Luxembourg) SA and certain other UBS subsidiariesare responding to inquiries by Luxembourg investigating authorities, without, however, beingnamed as parties in those investigations. In 2009 and 2010, the liquidators of the two Luxembourgfunds filed claims on behalf of the funds against UBS entities, non-UBS entities and certainindividuals, including current and former UBS employees. The amounts claimed areapproximately EUR 890 million and EUR 305 million, respectively. The liquidators have filedsupplementary claims for amounts that the funds may possibly be held liable to pay the BMISTrustee. These amounts claimed by the liquidator are approximately EUR 564 million and EUR370 million, respectively. In addition, a large number of alleged beneficiaries have filed claimsagainst UBS entities (and non-UBS entities) for purported losses relating to the Madoff scheme.The majority of these cases are pending in Luxembourg, where appeals were filed by theclaimants against the 2010 decisions of the court in which the claims in a number of test caseswere held to be inadmissible. In 2014, the Luxembourg Court of Appeal dismissed one test caseappeal in its entirety, which decision was appealed by the investor. In 2015, the LuxembourgSupreme Court found in favor of UBS and dismissed the investor’s appeal. In June 2016, theLuxembourg Court of Appeal dismissed the remaining test cases in their entirety. In the US, theBMIS Trustee filed claims in 2010 against UBS entities, among others, in relation to the twoLuxembourg funds and one of the offshore funds. The total amount claimed against all defendantsin these actions was not less than USD 2 billion. Following a motion by UBS, in 2011, the SDNYdismissed all of the BMIS Trustee’s claims other than claims for recovery of fraudulentconveyances and preference payments that were allegedly transferred to UBS on the ground thatthe BMIS Trustee lacks standing to bring such claims. In 2013, the Second Circuit affirmed theDistrict Court’s decision and, in 2014, the US Supreme Court denied the BMIS Trustee’s petitionseeking review of the Second Circuit ruling. In 2014, several claims, including a purported classaction, were filed in the US by BMIS customers against UBS entities, asserting claims similar tothe ones made by the BMIS Trustee, seeking unspecified damages. One claim was voluntarilywithdrawn by the plaintiff. In 2015, following a motion by UBS, the SDNY dismissed the tworemaining claims on the basis that the New York courts did not have jurisdiction to hear the claimsagainst the UBS entities. The plaintiff in one of those claims has appealed the dismissal. InGermany, certain clients of UBS are exposed to Madoff-managed positions through third-partyfunds and funds administered by UBS entities in Germany. A small number of claims have beenfiled with respect to such funds. In 2015, a court of appeal ordered UBS to pay EUR 49 million,plus interest (approximately EUR 15.3 million).

D. Puerto Rico

Declines since August 2013 in the market prices of Puerto Rico municipal bonds and ofclosed-end funds (“the funds”) that are sole-managed and co-managed by UBS Trust Companyof Puerto Rico and distributed by UBS Financial Services Incorporated of Puerto Rico (“UBSPR”) have led to multiple regulatory inquiries, as well as customer complaints and arbitrationswith aggregate claimed damages of approximately USD 1.8 billion, of which claims withaggregate claimed damages of approximately USD 642 million have been resolved throughsettlements, arbitration or withdrawal of the claim. The claims are filed by clients in Puerto Ricowho own the funds or Puerto Rico municipal bonds and / or who used their UBS account assetsas collateral for UBS non-purpose loans; customer complaint and arbitration allegations includefraud, misrepresentation and unsuitability of the funds and of the loans. A shareholder derivativeaction was filed in 2014 against various UBS entities and current and certain former directors of

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the funds, alleging hundreds of millions of US dollars in losses in the funds. In 2015, defendants’motion to dismiss was denied. Defendants’ requests for permission to appeal that ruling weredenied by the Puerto Rico Court of Appeals and the Puerto Rico Supreme Court. In 2014, a federalclass action complaint also was filed against various UBS entities, certain members of UBS PRsenior management, and the co-manager of certain of the funds seeking damages for investorlosses in the funds during the period from May 2008 through May 2014. Defendants have movedto dismiss that complaint. In 2015, a class action was filed in Puerto Rico state court against UBSPR seeking equitable relief in the form of a stay of any effort by UBS PR to collect onnon-purpose loans it acquired from UBS Bank USA in December 2013 based on plaintiffs’allegation that the loans are not valid. The trial court denied defendants’ motion to dismiss theaction based on a forum selection clause in the loan agreements; the Puerto Rico Supreme Courthas stayed the action pending its review of defendants’ appeal from that ruling.

In 2014, UBS reached a settlement with the Office of the Commissioner of Financial Institutionsfor the Commonwealth of Puerto Rico (“OCFI”) in connection with OCFI’s examination ofUBS’s operations from January 2006 through September 2013, pursuant to which UBS is payingup to an aggregate of USD 7.7 million in investor education contributions and restitution.

In 2015, the SEC and the Financial Industry Regulatory Authority (“FINRA”) announcedsettlements with UBS PR of their separate investigations stemming from the 2013 market events.Without admitting or denying the findings in either matter, UBS PR agreed in the SEC settlementto pay USD 15 million and USD 18.5 million in the FINRA matter (which includes up to USD11 million in restitution to 165 UBS PR customers and a civil penalty of USD 7.5 million). UBSalso understands that the DOJ is conducting a criminal inquiry into the impermissiblereinvestment of non-purpose loan proceeds. UBS is cooperating with the authorities in thisinquiry.

In 2011, a purported derivative action was filed on behalf of the Employee Retirement System ofthe Commonwealth of Puerto Rico (“System”) against over 40 defendants, including UBS PR,which was named in connection with its underwriting and consulting services. Plaintiffs allegedthat defendants violated their purported fiduciary duties and contractual obligations in connectionwith the issuance and underwriting of approximately USD 3 billion of bonds by the System in2008 and sought damages of over USD 800 million. Defendants’ motion to dismiss is pending.

Also, in 2013, an SEC Administrative Law Judge dismissed a case brought by the SEC againsttwo UBS executives, finding no violations. The charges had stemmed from the SEC’sinvestigation of UBS’s sale of closed-end funds in 2008 and 2009, which UBS settled in 2012.Beginning in 2012, two federal class action complaints, which were subsequently consolidated,were filed against various UBS entities, certain of the funds, and certain members of UBS PRsenior management, seeking damages for investor losses in the funds during the period fromJanuary 2008 through May 2012 based on allegations similar to those in the SEC action. TheMagistrate Judge for the consolidated case has recommended that plaintiffs’ motion to certify theproposed class be denied.

In 2015, Puerto Rico’s Governor stated that the Commonwealth was unable to meet itsobligations. Certain agencies and public corporations of the Commonwealth have defaulted oncertain interest payments beginning in August 2015 and additional payment defaults are expectedto occur. In June 2016, federal legislation created an oversight board with power to oversee PuertoRico’s finances and to restructure its debt. These events, further defaults, any further legislativeaction to create a legal means of restructuring Commonwealth obligations or to impose additionaloversight on the Commonwealth’s finances, or any restructuring of the Commonwealth’sobligations, may increase the number of claims against UBS concerning Puerto Rico securities,as well as potential damages sought.

UBS’s balance sheet at 30 June 2016 reflected provisions with respect to matters described in thisitem 4 in amounts that UBS believes to be appropriate under the applicable accounting standard.As in the case of other matters for which UBS has established provisions, the future outflow ofresources in respect of such matters cannot be determined with certainty based on currentlyavailable information, and accordingly may ultimately prove to be substantially greater (or maybe less) than the provisions that UBS has recognized.

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E. Foreign exchange, LIBOR, and benchmark rates, and other trading practices

Foreign exchange-related regulatory matters: Following an initial media report in 2013 ofwidespread irregularities in the foreign exchange markets, UBS immediately commenced aninternal review of its foreign exchange business, which includes its precious metals and relatedstructured products businesses. Since then, various authorities have commenced investigationsconcerning possible manipulation of foreign exchange markets, including FINMA, the SwissCompetition Commission (“WEKO”), the DOJ, the SEC, the US Commodity Futures TradingCommission (“CFTC”), the Board of Governors of the Federal Reserve System (“FederalReserve Board”), the UK Financial Conduct Authority (“FCA”) (to which certainresponsibilities of the UK Financial Services Authority (“FSA”) have passed), the UK SeriousFraud Office (“SFO”), the Australian Securities and Investments Commission (“ASIC”), theHong Kong Monetary Authority (“HKMA”), the Korea Fair Trade Commission and the BrazilCompetition Authority. In addition, WEKO is, and a number of other authorities reportedly are,investigating potential manipulation of precious metals prices. UBS has taken and will continueto take appropriate action with respect to certain personnel as a result of its ongoing review.

In 2014, UBS reached settlements with the FCA and the CFTC in connection with their foreignexchange investigations, and FINMA issued an order concluding its formal proceedings withrespect to UBS relating to its foreign exchange and precious metals businesses. UBS has paid atotal of approximately CHF 774 million to these authorities, including GBP 234 million in finesto the FCA, USD 290 million in fines to the CFTC, and CHF 134 million to FINMA representingconfiscation of costs avoided and profits. In 2015, the Federal Reserve Board and the ConnecticutDepartment of Banking issued an Order to Cease and Desist and Order of Assessment of a CivilMonetary Penalty Issued upon Consent (“Federal Reserve Order”) to UBS AG. As part of theFederal Reserve Order, UBS AG paid USD 342 million as civil monetary penalty.

In 2015, the DOJ’s Criminal Division (“Criminal Division”) terminated the December 2012 NPAwith UBS AG related to UBS’s submissions of benchmark interest rates. As a result, UBS AGentered into a plea agreement with the Criminal Division pursuant to which UBS AG agreed toand did plead guilty to a one-count criminal information filed in the US District Court for theDistrict of Connecticut charging UBS AG with one count of wire fraud in violation of 18 USCSections 1343 and 2. Under the plea agreement, UBS AG agreed to a sentence that includes a USD203 million fine and a three-year term of probation. The criminal information charges that,between approximately 2001 and 2010, UBS AG engaged in a scheme to defraud counterpartiesto interest rate derivatives transactions by manipulating benchmark interest rates, including YenLIBOR. Sentencing is currently scheduled for 29 November 2016. The Criminal Divisionterminated the NPA based on its determination, in its sole discretion, that certain UBS AGemployees committed criminal conduct that violated the NPA, including fraudulent and deceptivecurrency trading and sales practices in conducting certain foreign exchange market transactionswith clients and collusion with other participants in certain foreign exchange markets.

UBS has ongoing obligations to cooperate with these authorities and to undertake certainremediation, including actions to improve UBS’s processes and controls.

UBS has been granted conditional immunity by the Antitrust Division of the DOJ (“AntitrustDivision”) from prosecution for EUR / USD collusion and entered into a non-prosecutionagreement covering other currency pairs. As a result, UBS AG will not be subject to prosecutions,fines or other sanctions for antitrust law violations by the Antitrust Division, subject to UBS AG’scontinuing cooperation. However, the conditional immunity grant does not bar governmentagencies from asserting other claims and imposing sanctions against UBS AG, as evidenced bythe settlements and ongoing investigations referred to above. UBS has also been grantedconditional leniency by authorities in certain jurisdictions, including WEKO, in connection withpotential competition law violations relating to precious metals, and as a result, will not be subjectto prosecutions, fines or other sanctions for antitrust or competition law violations in thosejurisdictions, subject to UBS AG’s continuing cooperation.

In 2015, UBS AG settled charges with the SEC relating to structured notes issued by UBS AG thatwere linked to the UBS V10 Currency Index with Volatility Cap.

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Investigations relating to foreign exchange and precious metals matters by numerous authorities,including the CFTC, remain ongoing notwithstanding these resolutions.

Foreign exchange-related civil litigation: Putative class actions have been filed since November2013 in US federal courts and in other jurisdictions against UBS and other banks on behalf ofputative classes of persons who engaged in foreign currency transactions with any of thedefendant banks. They allege collusion by the defendants and assert claims under the antitrustlaws and for unjust enrichment. In 2015, additional putative class actions were filed in federalcourt in New York against UBS and other banks on behalf of a putative class of persons whoentered into or held any foreign exchange futures contracts and options on foreign exchangefutures contracts since 1 January 2003. The complaints assert claims under the CommodityExchange Act (“CEA”) and the US antitrust laws. In 2015, a consolidated complaint was filed onbehalf of both putative classes of persons covered by the US federal court class actions describedabove. UBS has entered into a settlement agreement that would resolve all of these US federalcourt class actions. The agreement, which has been preliminarily approved by the court and issubject to final court approval, requires, among other things, that UBS pay an aggregate of USD141 million and provide cooperation to the settlement classes.

A putative class action has been filed in federal court in New York against UBS and other bankson behalf of participants, beneficiaries, and named fiduciaries of plans qualified under theEmployee Retirement Income Security Act of 1974 (“ERISA”) for whom a defendant bankprovided foreign currency exchange transactional services, exercised discretionary authority ordiscretionary control over management of such ERISA plan, or authorized or permitted theexecution of any foreign currency exchange transactional services involving such plan’s assets.The complaint asserts claims under ERISA.

In 2015, a putative class action was filed in federal court against UBS and numerous other bankson behalf of a putative class of persons and businesses in the US who directly purchased foreigncurrency from the defendants and their co-conspirators for their own end use. That action has beentransferred to federal court in New York.

In 2015, UBS was added to putative class actions pending against other banks in federal court inNew York and other jurisdictions on behalf of putative classes of persons who bought or soldphysical precious metals and various precious metal products and derivatives. The complaints inthese lawsuits assert claims under the antitrust laws and the CEA, and other claims.

LIBOR and other benchmark-related regulatory matters: Numerous government agencies,including the SEC, the CFTC, the DOJ, the FCA, the SFO, the Monetary Authority of Singapore(“MAS”), the HKMA, FINMA, the various state attorneys general in the US, and competitionauthorities in various jurisdictions have conducted or are continuing to conduct investigationsregarding submissions with respect to LIBOR and other benchmark rates. These investigationsfocus on whether there were improper attempts by UBS, among others, either acting on its ownor together with others, to manipulate LIBOR and other benchmark rates at certain times.

In 2012, UBS reached settlements with the FSA, the CFTC and the Criminal Division of the DOJin connection with their investigations of benchmark interest rates. At the same time, FINMAissued an order concluding its formal proceedings with respect to UBS relating to benchmarkinterest rates. UBS has paid a total of approximately Swiss franc (“CHF”) 1.4 billion in fines anddisgorgement — including GBP 160 million in fines to the FSA, USD 700 million in fines to theCFTC, USD 500 million in fines to the DOJ, and CHF 59 million in disgorgement to FINMA.UBS Securities Japan Co. Ltd. (“UBSSJ”) entered into a plea agreement with the DOJ underwhich it entered a plea to one count of wire fraud relating to the manipulation of certainbenchmark interest rates, including Yen LIBOR. UBS entered into an NPA with the DOJ, which(along with the plea agreement) covered conduct beyond the scope of the conditional leniency /immunity grants described below, required UBS to pay the USD 500 million fine to the DOJ afterthe sentencing of UBSSJ, and provided that any criminal penalties imposed on UBSSJ atsentencing be deducted from the USD 500 million fine. Under the NPA, UBS agreed, among otherthings, that for two years from 18 December 2012 UBS would not commit any US crime, and itwould advise DOJ of any potentially criminal conduct by UBS or any of its employees relatingto violations of US laws concerning fraud or securities and commodities markets. The term of the

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NPA was extended by one year to 18 December 2015. In 2015, the Criminal Division terminatedthe NPA based on its determination, in its sole discretion, that certain UBS AG employeescommitted criminal conduct that violated the NPA. As a result, UBS entered into a plea agreementwith the DOJ under which it entered a guilty plea to one count of wire fraud relating to themanipulation of certain benchmark interest rates, including Yen LIBOR, and agreed to pay a fineof USD 203 million and accept a three-year term of probation. Sentencing is currently scheduledfor 29 November 2016.

In 2014, UBS reached a settlement with the European Commission (“EC”) regarding itsinvestigation of bid-ask spreads in connection with Swiss franc interest rate derivatives and paida EUR 12.7 million fine, which was reduced to this level based in part on UBS’s cooperation withthe EC. The MAS, HKMA and the Japan Financial Services Agency have also resolvedinvestigations of UBS (and in some cases, other banks). UBS has ongoing obligations tocooperate with the authorities with whom UBS has reached resolutions and to undertake certainremediation with respect to benchmark interest rate submissions.

Investigations by the CFTC, ASIC and other governmental authorities remain ongoingnotwithstanding these resolutions.

UBS has been granted conditional leniency or conditional immunity from authorities in certainjurisdictions, including the Antitrust Division of the DOJ, WEKO and the EC, in connection withpotential antitrust or competition law violations related to submissions for Yen LIBOR andEuroyen TIBOR. WEKO has also granted UBS conditional immunity in connection with potentialcompetition law violations related to submissions for CHF LIBOR and certain transactions relatedto CHF LIBOR. As a result of these conditional grants, UBS will not be subject to prosecutions,fines or other sanctions for antitrust or competition law violations in the jurisdictions where UBShas conditional immunity or leniency in connection with the matters covered by the conditionalgrants, subject to UBS’s continuing cooperation. However, the conditional leniency andconditional immunity grants UBS has received do not bar government agencies from assertingother claims and imposing sanctions against it, as evidenced by the settlements and ongoinginvestigations referred to above. In addition, as a result of the conditional leniency agreementwith the DOJ, UBS is eligible for a limit on liability to actual rather than treble damages weredamages to be awarded in any civil antitrust action under US law based on conduct covered bythe agreement and for relief from potential joint and several liability in connection with such civilantitrust action, subject to UBS satisfying the DOJ and the court presiding over the civil litigationof its cooperation. The conditional leniency and conditional immunity grants do not otherwiseaffect the ability of private parties to assert civil claims against UBS.

LIBOR and other benchmark-related civil litigation: A number of putative class actions and otheractions are pending in, or expected to be transferred to, the federal courts in New York againstUBS and numerous other banks on behalf of parties who transacted in certain interest ratebenchmark-based derivatives. Also pending are actions asserting losses related to variousproducts whose interest rates were linked to USD LIBOR, including adjustable rate mortgages,preferred and debt securities, bonds pledged as collateral, loans, depository accounts, investmentsand other interest-bearing instruments. All of the complaints allege manipulation, through variousmeans, of various benchmark interest rates, including USD LIBOR, Euroyen TIBOR, YenLIBOR, EURIBOR, CHF LIBOR, GBP LIBOR or USD ISDAFIX rates, and seek unspecifiedcompensatory and other damages under varying legal theories. In 2013, the district court in theUSD action dismissed the federal antitrust and racketeering claims of certain USD LIBORplaintiffs and a portion of their claims brought under the CEA and state common law. Certainplaintiffs appealed the decision to the Second Circuit, which, in May 2016, vacated the districtcourt’s ruling finding no antitrust injury and remanded the case back to the district court for afurther determination on whether plaintiffs have antitrust standing. In 2014, the court in one ofthe Euroyen TIBOR lawsuits dismissed certain of the plaintiff’s claims, including federal antitrustclaims. In 2015, the same court dismissed plaintiff’s federal racketeering claims and affirmed itsprevious dismissal of plaintiff’s antitrust claims. UBS and other defendants in other lawsuitsincluding those related to EURIBOR, CHF LIBOR and GBP LIBOR have filed motions todismiss.

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Since September 2014, putative class actions have been filed in federal court in New York andNew Jersey against UBS and other financial institutions, among others, on behalf of parties whoentered into interest rate derivative transactions linked to ISDAFIX. The complaints, which havesince been consolidated into an amended complaint, allege that the defendants conspired tomanipulate ISDAFIX rates from 1 January 2006 through January 2014 in violation of US antitrustlaws and certain state laws, and seek unspecified compensatory damages, including trebledamages. In March 2016, the court in the ISDAFIX action denied in substantial part defendants’motion to dismiss, holding that plaintiffs have stated Sherman Act, breach-of-contract, andunjust-enrichment claims against defendants, including UBS AG.

Government bonds: Putative class actions have been filed in US federal courts against UBS andother banks on behalf of persons who participated in markets for US Treasury securities since2007. The complaints generally allege that the banks colluded with respect to, and manipulatedprices of, US Treasury securities sold at auction. They assert claims under the antitrust laws andthe CEA and for unjust enrichment. The cases have been consolidated in the SDNY. Followingfiling of these complaints, UBS and reportedly other banks are responding to investigations andrequests for information from various authorities regarding US Treasury securities and othergovernment bond trading practices. As a result of its review to date, UBS has taken appropriateaction.

With respect to additional matters and jurisdictions not encompassed by the settlements and orderreferred to above, UBS’s balance sheet at 30 June 2016 reflected a provision in an amount thatUBS believes to be appropriate under the applicable accounting standard. As in the case of othermatters for which UBS has established provisions, the future outflow of resources in respect ofsuch matters cannot be determined with certainty based on currently available information, andaccordingly may ultimately prove to be substantially greater (or may be less) than the provisionthat UBS has recognized.

F. Swiss retrocessions

The Federal Supreme Court of Switzerland ruled in 2012, in a test case against UBS, thatdistribution fees paid to a firm for distributing third-party and intra-group investment funds andstructured products must be disclosed and surrendered to clients who have entered into adiscretionary mandate agreement with the firm, absent a valid waiver.

FINMA has issued a supervisory note to all Swiss banks in response to the Supreme Courtdecision. The note sets forth the measures Swiss banks are to adopt, which include informing allaffected clients about the Supreme Court decision and directing them to an internal bank contactfor further details. UBS has met the FINMA requirements and has notified all potentially affectedclients.

The Supreme Court decision has resulted, and may continue to result, in a number of clientrequests for UBS to disclose and potentially surrender retrocessions. Client requests are assessedon a case-by-case basis. Considerations taken into account when assessing these cases include,among others, the existence of a discretionary mandate and whether or not the clientdocumentation contained a valid waiver with respect to distribution fees.

UBS’s balance sheet at 30 June 2016 reflected a provision with respect to matters described inthis item 6 in an amount that UBS believes to be appropriate under the applicable accountingstandard. The ultimate exposure will depend on client requests and the resolution thereof, factorsthat are difficult to predict and assess. Hence, as in the case of other matters for which UBS hasestablished provisions, the future outflow of resources in respect of such matters cannot bedetermined with certainty based on currently available information, and accordingly mayultimately prove to be substantially greater (or may be less) than the provision that UBS hasrecognized.

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G. Banco UBS Pactual tax indemnity

Pursuant to the 2009 sale of Banco UBS Pactual S.A. (“Pactual”) by UBS to BTG Investments,LP (“BTG”), BTG has submitted contractual indemnification claims that UBS estimates amountto approximately Brazilian Real (“BRL”) 2.5 billion, including interest and penalties, which is netof liabilities retained by BTG. The claims pertain principally to several tax assessments issued bythe Brazilian tax authorities against Pactual relating to the period from December 2006 throughMarch 2009, when UBS owned Pactual. These assessments are being challenged in administrativeand judicial proceedings. The majority of these assessments relate to the deductibility of goodwillamortization in connection with UBS’s 2006 acquisition of Pactual and payments made to Pactualemployees through various profit-sharing plans. In 2015, an intermediate administrative courtissued a decision that was largely in favor of the tax authority with respect to the goodwillamortization assessment. In May 2016, the highest level of the administrative court agreed toreview this decision on a number of the significant issues.

5.1. Material Contracts

No material contracts have been entered into outside of the ordinary course of UBS AG’s or UBS AGGroup’s business, which could result in any member of the UBS AG Group being under an obligationor entitlement that is material to UBS AG’s ability to meet its obligations to the investors in relationto the issued securities.

5.2. Significant Changes in the Financial or Trading Position; Material Adverse Change in Prospects

There has been no significant change in the financial or trading position of UBS AG or UBS AG Groupsince 30 June 2016, which is the end of the last financial period for which interim financial informationhas been published.

There has been no material adverse change in the prospects of UBS AG or UBS AG Group since 31December 2015.

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THE UNAUDITED FINANCIAL INFORMATION OFUBS AG FOR THE QUARTERLY PERIOD ENDED 30 JUNE 2016

- EXTRACTED FROM UBS AG’S SECOND QUARTER2016 FINANCIAL REPORT

The information set out below in this section has been extracted without adjustment from the unauditedsecond quarter 2016 financial report of UBS AG for the quarterly period ended 30 June 2016 released on 4August 2016. The page numbers of the second quarter 2016 financial report appear on the bottom left or righthand side of the pages in this addendum.

The second quarter 2016 financial report is available for inspection at the office of the Sponsor specified onthe back page. You may also visit our website athttps://www.ubs.com/global/en/about_ubs/investor_relations/quarterly_reporting/2016.html to access suchreport.

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15

����������� �������������������statements (unaudited)

Income statement

For the quarter ended % change from Year-to-date

CHF million, except per share data Note 30.6.16 31.3.16 30.6.15 1Q16 2Q15 30.6.16 30.6.15

Interest income 3 3,548 3,406 3,409 4 4 6,953 6,583

Interest expense 3 (2,390) (1,697) (1,918) 41 25 (4,088) (3,454)

Net interest income 3 1,157 1,708 1,491 (32) (22) 2,866 3,129

Credit loss (expense) / recovery (7) (3) (13) 133 (46) (9) (29)

Net interest income after credit loss expense 1,151 1,706 1,479 (33) (22) 2,857 3,100

Net fee and commission income 4 4,087 4,121 4,409 (1) (7) 8,208 8,832

Net trading income 3 1,891 1,011 1,612 87 17 2,902 3,741

Other income 5 270 17 285 (5) 288 972

Total operating income 7,399 6,855 7,784 8 (5) 14,254 16,644

Personnel expenses 6 3,953 3,899 4,124 1 (4) 7,852 8,297

General and administrative expenses 7 1,727 1,711 1,723 1 0 3,438 3,470

Depreciation and impairment of property, equipment and software 239 242 209 (1) 14 481 429

Amortization and impairment of intangible assets 24 23 30 4 (20) 47 58

Total operating expenses 5,942 5,876 6,087 1 (2) 11,818 12,254

Operating profit / (loss) before tax 1,457 979 1,698 49 (14) 2,436 4,391

Tax expense / (benefit) 8 369 265 443 39 (17) 634 1,112

Net profit / (loss) 1,088 713 1,255 53 (13) 1,802 3,278

Net profit / (loss) attributable to preferred noteholders 78 0 76 3 78 76

Net profit / (loss) attributable to non-controlling interests 1 0 1 0 1 1

Net profit / (loss) attributable to UBS AG shareholders 1,009 713 1,178 42 (14) 1,723 3,201

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����������� ����������������������� �������������

16

Statement of comprehensive income

For the quarter ended Year-to-date

CHF million 30.6.16 31.3.16 30.6.15 30.6.16 30.6.15

Comprehensive income attributable to UBS AG shareholders

Net profit / (loss) 1,009 713 1,178 1,723 3,201

Other comprehensive income that may be reclassified to the income statement

Foreign currency translation

Foreign currency translation movements, before tax 311 (953) (748) (642) (1,582)

Foreign exchange amounts reclassified to the income statement from equity 26 123 (2) 149 (2)

Income tax relating to foreign currency translation movements (2) 5 4 3 7

Subtotal foreign currency translation, net of tax 335 (825) (746) (491) (1,577)

Financial assets available for sale

Net unrealized gains / (losses) on financial assets available for sale, before tax 116 253 (103) 369 119

Impairment charges reclassified to the income statement from equity 3 0 0 3 0

Realized gains reclassified to the income statement from equity (166) (89) (87) (255) (208)

Realized losses reclassified to the income statement from equity 5 13 7 19 23

Income tax relating to net unrealized gains / (losses) on financial assets available for sale 3 (46) 37 (44) (1)

Subtotal financial assets available for sale, net of tax (39) 131 (146) 93 (67)

Cash flow hedges

Effective portion of changes in fair value of derivative instruments designated as cash flow hedges, before tax 502 944 (420) 1,445 (156)

Net (gains) / losses reclassified to the income statement from equity (274) (303) (265) (577) (510)

Income tax relating to cash flow hedges (47) (127) 140 (174) 136

Subtotal cash flow hedges, net of tax 181 513 (545) 694 (530)

Total other comprehensive income that may be reclassified to the income statement, net of tax 476 (181) (1,437) 296 (2,173)

Other comprehensive income that will not be reclassified to the income statement

Defined benefit plans

Gains / (losses) on defined benefit plans, before tax (198) (191) (581) (389) 154

Income tax relating to defined benefit plans (4) 12 170 8 (16)

Subtotal defined benefit plans, net of tax (202) (179) (412) (381) 138

Own credit on financial liabilities designated at fair value

Gains / (losses) from own credit on financial liabilities designated at fair value, before tax (173) 68 (105)

Income tax relating to own credit on financial liabilities designated at fair value 16 (16) 0

Subtotal own credit on financial liabilities designated at fair value, net of tax (157) 52 (105) 0

Total other comprehensive income that will not be reclassified to the income statement, net of tax (359) (127) (412) (486) 138

Total other comprehensive income 118 (308) (1,849) (190) (2,035)

Total comprehensive income attributable to UBS AG shareholders 1,127 405 (671) 1,533 1,166

— 23 —

17

Statement of comprehensive income (continued)

For the quarter ended Year-to-date

CHF million 30.6.16 31.3.16 30.6.15 30.6.16 30.6.15

Comprehensive income attributable to preferred noteholders

Net profit / (loss) 78 0 76 78 76

Other comprehensive income that will not be reclassified to the income statement

Foreign currency translation movements, before tax 328 (50) (49) 279 (173)

Income tax relating to foreign currency translation movements 0 0 0 0 0

Subtotal foreign currency translation, net of tax 328 (50) (49) 279 (173)

Total other comprehensive income that will not be reclassified to the income statement, net of tax 328 (50) (49) 279 (173)

Total comprehensive income attributable to preferred noteholders 406 (50) 26 357 (98)

Comprehensive income attributable to non-controlling interests

Net profit / (loss) 1 0 1 1 1

Other comprehensive income that will not be reclassified to the income statement

Foreign currency translation movements, before tax 0 (1) (2) 0 (4)

Income tax relating to foreign currency translation movements 0 0 0 0 0

Subtotal foreign currency translation, net of tax 0 (1) (2) 0 (4)

Total other comprehensive income that will not be reclassified to the income statement, net of tax 0 (1) (2) 0 (4)

Total comprehensive income attributable to non-controlling interests 1 0 (1) 1 (2)

Total comprehensive income

Net profit / (loss) 1,088 713 1,255 1,802 3,278

Other comprehensive income 446 (358) (1,900) 88 (2,212)

of which: other comprehensive income that may be reclassified to the income statement 476 (181) (1,437) 296 (2,173)

of which: other comprehensive income that will not be reclassified to the income statement (30) (177) (463) (207) (39)

Total comprehensive income 1,535 355 (645) 1,890 1,066

— 24 —

����������� ����������������������� �������������

18

Balance sheet

% change from

CHF million Note 30.6.16 31.3.16 31.12.15 31.3.16 31.12.15

Assets

Cash and balances with central banks 94,246 105,710 91,306 (11) 3

Due from banks 12,870 13,472 11,866 (4) 8

Loans 307,860 306,629 312,723 0 (2)

Cash collateral on securities borrowed 11 29,367 32,432 25,584 (9) 15

Reverse repurchase agreements 11 73,289 73,562 67,893 0 8

Trading portfolio assets 9 101,364 105,332 124,047 (4) (18)

of which: assets pledged as collateral which may be sold or repledged by counterparties 30,778 32,549 51,943 (5) (41)

Positive replacement values 9, 10, 11 198,441 180,518 167,435 10 19

Cash collateral receivables on derivative instruments 11 29,955 25,460 23,763 18 26

Financial assets designated at fair value 9, 11 63,922 40,652 5,808 57

Financial assets available for sale 9 18,211 31,266 62,543 (42) (71)

Financial assets held to maturity 4,798 2,889 66

Investments in associates 950 953 954 0 0

Property, equipment and software 7,941 7,750 7,683 2 3

Goodwill and intangible assets 6,402 6,326 6,568 1 (3)

Deferred tax assets 12,150 12,190 12,833 0 (5)

Other assets 12 28,368 23,016 22,249 23 28

Total assets 990,135 968,158 943,256 2 5

— 25 —

19

Balance sheet (continued)

% change from

CHF million Note 30.6.16 31.3.16 31.12.15 31.3.16 31.12.15

Liabilities

Due to banks 15,259 11,350 11,836 34 29

Due to customers 429,555 416,966 402,522 3 7

Cash collateral on securities lent 11 6,301 6,353 8,029 (1) (22)

Repurchase agreements 11 8,043 6,516 9,653 23 (17)

Trading portfolio liabilities 9 29,614 33,157 29,137 (11) 2

Negative replacement values 9, 10, 11 196,006 179,018 162,430 9 21

Cash collateral payables on derivative instruments 11 36,352 36,690 38,282 (1) (5)

Financial liabilities designated at fair value 9, 11, 13 59,664 57,761 62,995 3 (5)

Debt issued 14 85,931 87,796 82,359 (2) 4

Provisions 15 3,653 3,961 4,163 (8) (12)

Other liabilities 12 65,719 70,988 74,606 (7) (12)

Total liabilities 936,096 910,557 886,013 3 6

Equity

Share capital 386 386 386 0 0

Share premium 29,483 29,484 29,477 0 0

Retained earnings 27,235 30,019 29,433 (9) (7)

Other comprehensive income recognized directly in equity, net of tax (3,752) (4,228) (4,047) (11) (7)

Equity attributable to UBS AG shareholders 53,353 55,660 55,248 (4) (3)

Equity attributable to preferred noteholders 649 1,905 1,954 (66) (67)

Equity attributable to non-controlling interests 37 36 41 3 (10)

Total equity 54,039 57,601 57,243 (6) (6)

Total liabilities and equity 990,135 968,158 943,256 2 5

— 26 —

��������������������� ���������������������� ������������

24

Notes to the UBS AG interim ��������������������� ������������

Note 1 Basis of accounting

������������������������� ������������������ ����of UBS AG and its subsidiaries (together referred to as “UBS AG” in these Financial Statements) are prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), and are stated in Swiss francs (CHF), the currency of Switzerland where UBS AG is incorporated. UBS AG is 100% held by UBS Group AG. These interim Financial Statements are prepared in accordance with IAS 34, Interim Financial Reporting.

In preparing these interim Financial Statements, the same accounting policies and methods of computation have been applied as in the UBS AG consolidated annual Financial State-ments for the period ended 31 December 2015, except for the changes described below and in “Note 1 Basis of accounting” in ������������������������� ��������������������!���-ter 2016 report. These interim Financial Statements are unaudited and should be read in conjunction with UBS AG’s audited con-solidated Financial Statements included in the Annual Report 2015. In the opinion of management, all necessary adjustments "���� ���������������#�����������������$���������#�����&������������#���������������'�"�*

Preparation of these interim Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, expenses and dis-closures of contingent assets and liabilities. These estimates and assumptions are based on the best available information. Actual results in the future could differ from such estimates and such differences may be material to the Financial Statements. Revisions to estimates, based on regular reviews, are recognized in the period in which they occur. For more information on areas of esti-mation uncertainty considered to require critical judgment, refer �� �� � +� ��� ����� /�� ��:����� ������:� #��������� �� ���������� ������������ ������� ��� ���� ������ ��� ���Annual Report 2015.

London Clearing House interest rate swaps converted to a settlement model

Effective 30 June 2016, UBS AG elected to convert its interest rate swaps (IRS) transacted with the London Clearing House from the previous collateral model to a settlement model. The IRS are now legally settled on a daily basis resulting in the derecognition of the associated assets and liabilities. Previously, UBS AG applied IAS 32 netting principles to offset the IRS with the associated variation margin. Gross cash collateral receivables and payables on deriva-tive instruments and corresponding netting presented in Note 11 decreased by CHF 93 billion as of 30 June 2016, with no change to net cash collateral receivables and payables on derivative instru-ments recognized on the balance sheet.

➔ Refer to Note 11 for more information

Derecognition of exchange-traded derivative client cash balances from UBS AG’s balance sheet

In accordance with UBS AG’s accounting policy, client cash bal-ances associated with derivatives clearing and execution services are not recognized on the balance sheet if, through contractual agreement, regulation or practice, UBS AG does not obtain ben-������� �����������������������;������*�������������������considered to have been met when (i) UBS AG is not permitted to reinvest client cash balances; (ii) interest paid by central counter-parties (CCPs), brokers or deposit banks on cash deposits forms part of the client cash balances with deductions being made solely as compensation for clearing and execution services provided; (iii) UBS AG does not guarantee and is not liable to clients for the performance of the CCP, broker or deposit bank; and (iv) the cli-ent cash balances are legally isolated from UBS AG’s estate.

During the second quarter of 2016, UBS AG formally and legally waived certain rights available to it under the rules of the US Commodity Futures Trading Commission that had previously enabled it to invest certain client cash balances in other assets, �=�:��� �������������;������������*�����������&��������derecognized related client cash balances. Consequently, Cash collateral receivables on derivative instruments decreased by CHF 2.8 billion, Due from banks decreased by CHF 0.9 billion and Cash collateral payables on derivative instruments decreased by CHF 3.6 billion as of 30 June 2016.

— 27 —

25

Note 1 Basis of accounting (continued)

Amendments to IFRS 2 Share-based Payment

In June 2016, the IASB issued amendments to IFRS 2, Share-based Payment, which are mandatorily effective for UBS on 1 January 2018, with early adoption permitted. The amendments require that the approach used to account for vesting conditions when measuring cash-settled share-based payments is consistent with

that used for equity-settled share-based payments. The amend- ��������������>������������������������?;�����#�> �����-tled net of withholding tax as well as the accounting conse-!������������:���� ��� �����������������?;�����#�> ���from cash-settled to equity-settled. UBS AG expects that the adoption of these amendments will not have a material impact on ������������� ��*

— 28 —

RISK MANAGEMENT AND CONTROL - EXTRACTED FROMUBS GROUP AG’S SECOND QUARTER 2016 FINANCIAL REPORT

The information set out below in this section has been extracted without adjustment from the second quarter2016 financial report of UBS Group AG. The page numbers of the second quarter 2016 financial reportappear on the bottom left or right hand side of the pages in this addendum.

The second quarter 2016 financial report is available for inspection at the office of the Sponsor specified onthe back page. You may also visit our website athttps://www.ubs.com/global/en/about_ubs/investor_relations/quarterly_reporting/2016.html to access suchreport.

— 29 —

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— 30 —

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�� �D������ � �������� ����1������������ ����������� ������������ ���� � ��� ����� �� ��� ��� � ������ �� �����1� ��� � � � � �� ���;�� ����������������� 1������������� ����� �� ����� ������ ��

Banking and traded products exposure by business division and Corporate Center unit

30.6.16

CHF millionWealth

Management

WealthManagement

Americas

Personal &Corporate

BankingAsset

ManagementInvestment

BankCC –

Services

CC – Group

ALM

CC – Non-core

and Legacy Portfolio Group

Banking productsGross exposure1, 2, 3, 4 109,946 51,913 153,752 382 61,607 654 99,984 1,137 479,374

of which: loans (on-balance sheet) 102,804 48,931 134,777 4 16,304 18 6,434 189 309,460of which: guarantees and loan commitments (off-balance sheet) 3,735 952 17,559 0 34,313 10 0 948 57,516

Total impaired exposure, gross 76 27 1,105 193 30 1,431of which: impaired loan exposure, gross 76 27 851 166 30 1,149

Total allowances and provisions for credit losses 62 28 495 0 89 0 0 16 691Traded products1, 5

Gross exposure 7,229 1,566 1,939 0 42,036 52,769of which: over-the-counter derivatives 6,177 29 1,850 0 20,003 28,058of which: securities financing transactions 0 250 0 0 15,057 15,306of which: exchange-traded derivatives 1,052 1,287 89 0 6,976 9,405

31.3.16

CHF millionWealth

Management

WealthManagement

Americas

Personal &Corporate

BankingAsset

ManagementInvestment

BankCC –

Services

CC – Group

ALM

CC – Non-core

and Legacy Portfolio Group

Banking productsGross exposure1, 2, 3, 4 109,032 49,839 152,396 383 65,828 628 112,572 1,490 492,169

of which: loans (on-balance sheet) 102,434 46,832 135,041 3 15,583 11 6,728 103 306,736of which: guarantees and loan commitments (off-balance sheet) 3,691 1,147 15,620 0 39,894 11 0 1,354 61,718

Total impaired exposure, gross 88 27 1,166 217 30 1,527of which: impaired loan exposure, gross 88 27 892 201 30 1,237

Total allowances and provisions for credit losses 66 29 503 0 82 0 0 15 694Traded products1, 5

Gross exposure 6,625 1,397 1,525 0 37,114 46,661of which: over-the-counter derivatives 5,746 8 1,459 0 17,813 25,027of which: securities financing transactions 0 264 0 0 14,082 14,346of which: exchange-traded derivatives 878 1,125 66 0 5,219 7,288

1 Internal management view of credit risk, which differs in certain respects from IFRS. 2 Does not include reclassified securities and similar acquired securities held by CC – Non-core and Legacy Portfolio. 3 Excludes loans designated at fair value. 4 As of 30 June 2016, IFRS loans exposure for the Investment Bank and CC – Non-core and Legacy Portfolio was CHF 11,828 million (31 March 2016: CHF 11,539 million) and CHF 2,732 million (31 March 2016: CHF 2,940 million), respectively. For all other business divisions and Corporate Center units, IFRS loans exposure was the same as the internal management view. 5 As counterparty risk for traded products is managed at counterparty level, no further split between exposures in the Investment Bank, CC – Non-core and Legacy Portfolio and CC – Group ALM is provided.

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Key risk metrics

— 31 —

Risk

, tre

asur

y an

d ca

pita

l man

agem

ent

%$

&�����������������&����������������$��� ��������'��������(�)���������*��� ��������������� ���������

Wealth Management Wealth Management Americas Personal & Corporate Banking

CHF million 30.6.16 31.3.16 30.6.16 31.3.16 30.6.16 31.3.16

Secured by residential property 32,131 32,068 8,736 8,349 96,735 97,069

Secured by commercial / industrial property 2,003 1,920 0 0 18,531 18,848

Secured by cash 15,465 15,106 1,247 1,051 1,882 1,984

Secured by securities 46,378 46,922 38,050 36,582 1,638 1,658

Secured by guarantees and other collateral 6,284 6,003 607 603 6,720 6,207

Unsecured loans 543 415 290 247 9,272 9,275

Total loans, gross 102,804 102,434 48,931 46,832 134,777 135,041

Total loans, net of allowances 102,742 102,369 48,902 46,804 134,316 134,572

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Average by risk type

CHF million Min. Max. Period end Average EquityInterest

ratesCredit

spreadsForeign

exchange Commodities

Wealth Management 0 0 0 0 0 0 0 0 0

Wealth Management Americas 0 1 1 1 0 1 1 0 0

Personal & Corporate Banking 0 0 0 0 0 0 0 0 0

Asset Management 0 0 0 0 0 0 0 0 0

Investment Bank 7 15 8 9 4 9 3 3 1

CC – Services 0 0 0 0 0 0 0 0 0

CC – Group ALM 6 8 8 7 0 7 0 0 0

CC – Non-core and Legacy Portfolio 4 4 4 4 0 3 2 1 0

Diversification effect2, 3 (10) (10) 0 (10) (2) (1) 0

Total 30.6.16 8 18 11 11 4 11 4 3 1

Total 31.3.16 9 16 10 12 6 10 4 4 1

1 Statistics at individual levels may not be summed to deduce the corresponding aggregate figures. The minima and maxima for each level may occur on different days, and likewise, the VaR for each business line or risk type, being driven by the extreme loss tail of the corresponding distribution of simulated profits and losses for that business line or risk type, may well be driven by different days in the historical time series, rendering invalid the simple summation of figures to arrive at the aggregate total. 2 Difference between the sum of the standalone VaR for the business divisions and Corporate Center units and the VaR for the Group as a whole. 3 As the minimum and maximum occur on different days for different business divisions and Corporate Center units, it is not meaningful to calculate a portfolio diversification effect.

— 32 —

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CHF million –200 bps –100 bps + 1bp +100 bps +200 bps

CHF (7.3) (7.3) 0.3 30.7 60.5

EUR (136.1) (136.8) (0.3) (29.1) (53.2)

GBP (186.8) (100.6) 0.1 2.3 (7.2)

USD 548.6 409.4 (0.4) (6.5) (35.4)

Other (5.6) (8.2) 0.0 5.1 10.4

Total effect on interest rate-sensitive banking book positions 30.6.16 212.7 156.5 (0.2) 2.5 (24.8)

Total effect on interest rate-sensitive banking book positions 31.3.16 209.5 130.7 (1.7) (163.8) (348.6)

1 Does not include interest rate sensitivities for credit valuation adjustments on monoline credit protection, US and non-US reference-linked notes. 2 In the prevailing negative interest rate environment for the Swiss franc in particular, and to a lesser extent for the euro, interest rates for Wealth Management and Personal & Corporate Banking client transactions are generally being floored at non-negative levels. Accordingly, for the purposes of this disclosure table, downward moves of 100 / 200 basis points are floored to ensure that the resulting shocked interest rates do not turn negative. The flooring results in non-linear sensitivity behavior.

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CHF million 30.6.16 31.3.16

Banking products Traded productsTrading

inventory Total Total

Beforehedges

Net ofhedges1

Beforehedges

Net ofhedges

Net long per issuer

Net ofhedges

Net ofhedges1

Austria 27 27 315 192 653 996 873 560 435

Belgium 93 93 124 124 62 279 279 392 392

Finland 113 81 44 44 493 651 618 654 622

France 1,040 772 1,379 1,249 2,326 4,746 4,347 5,646 5,207

Greece 15 15 1 1 2 18 18 7 7

Ireland2 77 77 1,263 1,263 124 1,464 1,464 775 775

Italy 2,388 1,962 564 502 72 3,024 2,535 1,495 1,004

Netherlands 1,549 1,077 1,088 938 3,352 5,989 5,366 6,659 6,009

Portugal 125 60 7 7 5 137 72 144 79

Spain 968 710 417 417 588 1,973 1,715 1,286 1,019

Other3 76 76 7 7 9 93 93 120 120

1 Not deducted from the “Net of hedges” exposures are total allowances and provisions for credit losses of CHF 50 million (of which: Malta CHF 36 million, Ireland CHF 6 million and France CHF 5 million). 2 The major-ity of the Ireland exposure relates to funds and foreign bank subsidiaries. 3 Represents aggregate exposures to Andorra, Cyprus, Estonia, Latvia, Lithuania, Malta, Monaco, Montenegro, San Marino, Slovakia and Slo-venia.

— 33 —

PARTIES

HEAD OFFICE OF THE ISSUERUBS AG

Bahnhofstrasse 45CH-8001 Zurich

Switzerlandand

Aeschenvorstadt 1CH-4051 Basel

Switzerland

OFFICE OF THE ISSUERUBS AG, London Branch

1 Finsbury AvenueLondon

EC2M 2PPUnited Kingdom

PLACE OF BUSINESS OF THE ISSUER IN HONG KONG52nd Floor

Two International Finance Centre8 Finance Street

CentralHong Kong

SPONSORUBS Securities Asia Limited

52nd FloorTwo International Finance Centre

8 Finance StreetCentral

Hong Kong

LEGAL ADVISORS AS TO HONG KONG LAWKing & Wood Mallesons

13th FloorGloucester Tower

The Landmark15 Queen’s Road Central

CentralHong Kong

AUDITORSErnst & Young Ltd

Aeschengraben 9P.O. Box 2149 CH-4002 Basel

Switzerland

LIQUIDITY PROVIDERUBS Securities Hong Kong Limited

52nd FloorTwo International Finance Centre

8 Finance StreetCentral

Hong Kong