Net revenues for the quarter were € 8.0 billion, up 21% versus the first quarter 2005. In the Corporate and Investment Bank (CIB), revenues in sales and trading rose 37% to € 4.4 billion, with best-ever quarterly revenues both in Sales & Trading (Debt and other products) and Sales & Trading (Equity). Revenues in Sales & Trading (Debt and other products) rose 19% to € 2.8 billion, while Sales & Trading (Equity) rose 90% to € 1.6 billion, reflecting growth in all major regions and most core businesses. Revenues in Origination rose 18% to € 468 million, while revenues in Advisory rose 58% to € 180 million, reflecting high levels of corporate activity in Europe, notably in Germany. Revenues in Private Clients and Asset Management (PCAM) rose 14% to € 2.3 billion, driven by strong business flows from both investment management and consumer lending products in Private & Business Clients (PBC), together with continued momentum in Asset and Wealth Management (AWM). Revenues in this division grew 18% compared to the first quarter 2005, with the current quarter including higher gains on asset sales in Real Estate Asset Management.

Provision for credit losses, which includes provisions for both loan losses and off-balance sheet positions (the latter reported in noninterest expenses), was € 4 million for the first quarter 2006, compared to € 81 million in the first quarter 2005. This reduction primarily reflected recoveries and releases owing to a series of successful workouts in CIB, while the level of new provisions was low due to the high quality of the loan book and a benign credit environment. Problem loans at the end of the first quarter were € 3.6 billion, down from € 3.9 billion at the end of the previous quarter, while the ratio of problem loans to total loans fell to 2.2%, the lowest level for more than five years. The ratio of loan loss allowances to problem loans rose to 51%.

Noninterest expenses for the quarter were € 5.4 billion, up 14% versus the first quarter 2005. The reported cost/income ratio improved by four percentage points to 67%, versus 71% in the first quarter 2005. Restructuring expenses were € 42 million during the quarter, compared to € 168 million in the first quarter 2005. The operating cost base, which excludes restructuring expenses and other items, was € 5.3 billion, up 17% versus the first quarter 2005. The underlying cost/income ratio improved by two percentage points to 68%, versus 70% in the first quarter 2005, reflecting sustained cost discipline in a period of strong business performance. Compensation costs rose 21% to € 3.6 billion, reflecting higher performance-related compensation. The ratio of compensation costs to revenues remained stable compared to the previous year. Non-compensation costs rose 10% to € 1.7 billion, reflecting higher business volumes and continued investments in growth initiatives.

Income before income taxes for the quarter was € 2.6 billion, up 46% versus the first quarter 2005. Reported pre-tax return on average active equity was 40%, up ten percentage points from 30% in the first quarter 2005. Per our target definition (which excludes restructuring expenses of € 42 million in the current quarter and of € 168 million in the first quarter last year), pre-tax return on average active equity was also 40%, up seven percentage points from 33% in the first quarter 2005.

Net income for the quarter was € 1.7 billion, up 55% versus the first quarter 2005. Net income in the current quarter includes € 46 million of cumulative effects of accounting changes, net of tax, resulting primarily from the adoption of SFAS 123(R), which requires the adjustment of accrued compensation costs to reflect expected forfeitures. Diluted earnings per share were € 3.30, up 58% versus € 2.09 in the first quarter 2005. The effective tax rate was 36% compared to 38% in the first quarter 2005.

The BIS Tier 1 capital ratio rose to 8.8% at the end of the quarter, from 8.7% at the end of the previous quarter. This ratio thus remains at the upper end of our target range of 8−9%. During the quarter we repurchased 12.1 million shares, or 2.3% of the total shares issued, for a consideration of € 1.1 billion, as part of our fourth share buyback program. By the end of the first quarter, repurchases under this program reached a cumulative total of 28.3 million shares at an average price of € 84.84 per share. This represents 5.5% of total shares issued, and 52% of the total repurchase capacity of this program. At the 2006 Annual General Meeting on June 1st, management will seek shareholder approval for a new buyback authorization of up to 10% of shares issued.

Group Headcount (on a full-time equivalent basis) saw a net rise of 676 during the quarter, reflecting investments in business expansion, notably in Europe and key emerging markets. As part of the bank’s investment in PBC’s distribution platform, 215 additional full time equivalent posts were created in Germany.