2. PRESENTATION
§ Q3 2001 RESULTS SUMMARY
§ CONSOLIDATED RESULTS Q3 2001
§ ASSET QUALITY & CAPITAL ADEQUACY
§ BUSINESS UNIT RESULTS
§ PRIORITIES / OUTLOOK
§ SUPPLEMENTS
Slide 2
3. HIGHLIGHTS Q3 2001
§ CHF 21 m net operating profit, reported loss of CHF 299 m, affected by
s CSFB operating loss of CHF 204 m
s Lower insurance profit due to lower investment income
s Unrealised loss of CHF 400 m on Swiss Life investment
s CHF 200 m provision on exposure to SAirGroup
§ Solid results in all other areas given market conditions
§ Progress on cost reduction - operating expense down 12% on Q2/01
§ Cost reduction initiative at CSFB expected to eliminate USD 1 billion in
operating cost by end of 2002, eliminate approx. 2,000 positions
§ New CSFS synergy potential - cost and revenues - being realised
§ Strong new asset inflow - CHF 48.5 bn YTD, up 34% vs. last year
Slide 3
4. OVERVIEW Q3 2001 RESULTS (1/2)
Change from
Q3/01 9M/01 Q2/01 9M/00
Net operating profit, CHF m 21 3,358 - -37%
Reported net profit, CHF m -299 2,417 - -53%
Operating ROE 0.2% 10.9%
Operating earnings per share, CHF 0.02 2.81 - -42%
Net new assets, CHF bn 7.1 48.5 -57% +34%
Change from
09.01 12.00 06.01 12.00
AuM, CHF bn 1,290.4 1,392.0 -11.1% -7.3%
Operating figures exclude amortisation of acquired intangible assets and goodwill, reported numbers include these items.
Slide 4
5. OVERVIEW Q3 2001 RESULTS (2/2)
§ CSFS: YTD operating ROE / ROIC 15.1%, 18.6% excl. CSPF
s Insurance units had strong core results
s CSB flat on previous year despite difficult markets
s CSPF launched Germany & Spain, UK on hold due to markets
s AuM down at CHF 264 bn due to sale of Winterthur International
and market conditions; NNA of CHF 1 bn in Q3
§ CSPB: CHF 5 bn NNA in seasonally weak Q3, CHF 25.5 bn YTD;
44 bp op. return on AuM in Q3 reflecting lower transaction volumes
§ CSAM: AuM down 14% vs. Q2 due to negative market movements
§ CSFB: CHF 204 m Q3 operating loss due to continued weakness in
Equity and IBD; 10% YTD operating ROE (excl. retention payments)
§ CSG: Ongoing group-wide cost initiatives
Slide 5
6. GROWTH IN ASSETS UNDER MANAGEMENT
in CHF billion
25.5 7.3 11.1 153.7
1,392.0 4.6
CSAM CSFB
CSFS CSPB
3.6 1,290.4
d) market acquisitions
nnualise
.6% a
movements
(+4
48.5 & structural
CHF w assets effects
net ne
AuM 12/00 AuM 09/01
§ Continued net inflows of CHF 7.1 bn in seasonally weak Q3
§ CHF 3.6 bn from acquisitions, net of sale of Winterthur International
Slide 6
7. REVENUE
§ Revenue drop reflecting market conditions
§ Trading and fee income down, insurance lower on weak investment return;
net interest income up on strong fixed income business Change vs.
11,182 Q2 2001
in CHF m * 11,091
10,631 14%
14%
8,720
8,676 15%
Balance sheet + 24%
13% 22%
business
41%
44%
44% 50% Fees & - 16%
43%
commissions
28%
16% 28%
26% 22% Trading - 38%
17% 19% 14% 17% 14% Insurance - 31%
Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Total - 22%
* totals include other income
Slide 7
8. BANK FEE & COMMISSION INCOME
§ Fees & commissions down 16% vs. Q2/01 on reduced market activity
§ Lower capital markets and transaction driven volumes; increase in lending
related fees in Q3 largely driven by syndication business Change vs.
Q2 2001
in CHF m 5,001 4,886 4,695
237 221 161
3,814 3,953
169 1,250 1,222 240 Lending related + 49%
1,256
1,181 1,162 Portfolio Mgmt. - 7%
1,764
2,187 2,033 Underwriting &
1,376 1,389 Corporate - 32%
Finance
1,518 1,116
1,195 1,104 1,101 Brokerage - 1%
121 333 382 365 310 Other - 15%
-228 -110 -220 -235 -249 Commission exp. + 6%
Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Total - 16%
Slide 8
9. OPERATING EXPENSES
§ Cost / income ratio * of 88.7% (Q2/01: 77.6%), reflecting lower top line
Change vs.
8,467 8,675 Q2 2001
in CHF m
7,868 7,732
6,030 5,959
6,301 5,154 5,276 Personnel - 11%
(194) (209) expenses
4,431 (181)
(189) (retention pmts.)
(2,017) (2,780) (2,552)
(1,944) (w/o bonuses) - 24%
(1,856)
2,308 1,954 2,214 1,954 Other op. exp. - 12%
1,549
321 406 483 502 502 Depreciation * 0%
Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Total - 11%
* excl. amortisation of acquired intangible assets and goodwill
Slide 9
10. OPERATING EXPENSES BY BUSINESS UNIT
§ Ongoing focus on costs across all BUs
Change vs.
Q2 2001
in CHF m
1,628 1,717
1,735 1,631 CSFS - 5%
673 706
704 288 326 661 CSPB - 6%
1,527 272 CSAM - 17%
321
652
283
5,592 5,555 5,086 CSFB - 8%
4,806
3,632
Q3/00 Q4/00 Q1/01 Q2/01 Q3/01
BU totals before depreciation, amortisation of acquired intangible assets and goodwill
Slide 10
11. CONSOLIDATED OPERATING INCOME STATEMENT
Q3/01 Q2/01 Q3/00 Change
CHF m CHF m CHF m to Q2/01
Operating income 8,720 11,182 8,675 -22%
Operating expenses 7,230 8,173 5,979 -12%
Gross operating profit 1,490 3,009 2,696 -50%
Depreciation *, write-offs 502 502 321 0%
Valuation adj., provisions & losses 653 412 234 58%
Operating profit pre e.o. & tax 335 2,095 2,141 -84%
e.o. items, net 6 0 -42 -
Taxes 184 400 390 -54%
Net operating profit bef. minorities 157 1,695 1,709 -91%
Net operating profit 21 1,611 1,654 -99%
* excl. amortisation of acquired intangible assets and goodwill
Slide 11
12. REPORTED CONSOLIDATED INCOME STATEMENT
Q3/01 Q2/01 Q3/00 Change
CHF m CHF m CHF m to Q2/01
Net operating profit 21 1,611 1,654 -99%
Amort. of acquired intangible assets 197 202 - -2%
tax effect -67 -65 - 3%
Amortisation of goodwill 190 186 49 2%
Reported net profit -299 1,288 1,605 -
Slide 12
13. ASSET QUALITY
CAPITAL EXPOSURE & PROVISION DEVELOPMENT
Non-performing loans (NPLs) *, in CHF m
1,904 CSFB
CSFB CSFB
1,887 in USD
in USD
1,484
1,012 1,792
1,479 1,804 2,668
2,895
12,105
CSB & 10,964
9,493 8,347
CSPB 7,926 7,077 6,270
YE 98 YE 99 06/00 YE 00 03/01 06/01 09/01
NPLs as
%age of
credit exp. * 4.1% 3.4% 2.8% 2.4% 2.3% 2.3% 2.2%
Coverage
ratio of NPLs 63% 63% 61% 63% 62% 60% 56%
* includes loans and loan equivalents
Slide 13
14. TOTAL COUNTERPARTY EXPOSURE
INDUSTRY BREAKDOWN
Total exposure: CHF 418 bn Other
(as of 30 September 2001) Individuals 0.9% Services
15.4% 15.6%
Public
Selected Industries 3.5%
Manufacturing
11.6%
§ Automotive: 0.5%
§ Computer: 2.8%
RE & Const.
§ Energy: 4.9%
8.5%
§ Health Care: 1.3% Energy/Environ.
Financial 4.9%
§ Telecom: 3.2% Enterprises Agri/Mining
37.8% 1.7%
Slide 14
15. TOTAL COUNTERPARTY EXPOSURE
BY RATING
in CHF bn
373 405 423 431 418
43% 43% R1 - R3
44% 45% 44%
(AAA - A)
38% 35% 36% R4
36% 37%
(BBB)
13% 16% 16% R5 - R7 or N/R
14% 15%
(non-investment grade)
6% 5% 5% 4% 4% R8
YE 99 YE 00 03/01 06/01 09/01 (impaired / non-performing)
Slide 15
16. CAPITAL ADEQUACY - CREDIT SUISSE GROUP
09.01 06.01 03.01 12.00
in CHF m
BIS tier 1 capital, consolidated 21,325 25,970 25,699 27,111
BIS tier 1 capital, banking 19,771 22,151 21,795 20,999
BIS risk-weighted assets, consolidated 237,347 261,550 250,392 239,465
BIS risk-weighted assets, banking 234,379 256,317 245,074 231,939
BIS tier 1 ratio, consolidated 9.0% 9.9% 10.3% 11.3%
BIS tier 1 ratio, banking 8.4% 8.6% 8.9% 9.1%
Slide 16
17. BIS TIER 1 RATIO COMPONENTS, CONSOLIDATED
30 SEPTEMBER 2001
in CHF bn Tier 1 ratio (consolidated)
237 Other
15 (incl. WGR)
11.8 11.3 10.3 9.9 9.0
37.9
88 CS
Goodwill 13.2 1999 2000 Q1/01 Q2/01 Q3/01
other adj. * 3.4
(3.0) adjusted
WGR capital
Tier 1 21.3 134 CSFB
capital, 21.3 237
total
Equity 9.0% RWA
* other adjustments include WGR minorities, own shares, dividends
Slide 17
18. BIS TIER 1 RATIO COMPONENTS, BANKING
30 SEPTEMBER 2001
in CHF bn Tier 1 ratio (banking)
234 Other
12 (excl. WGR)
9.1 9.1 8.9 8.6 8.4
37.9
88 CS
Goodwill 13.2 1999 2000 Q1/01 Q2/01 Q3/01
other adj. * 3.4
1.55 WGR
net equity pickup
Tier 1 19.8 134 CSFB
capital, 19.8
234
banking
Equity 8.4% RWA
* other adjustments include WGR minorities, own shares, dividends
Slide 18
19. WINTERTHUR SOLVENCY COMPONENTS
30 SEPTEMBER 2001
§ Calculated on a legal / statutory operating unit basis
§ Comfortable capital / solvency position, exceeds requirements in all locations
§ EU solvency definition used as a proxy
in CHF bn 9.1 Proxy calculation (EU approach)
net tech. 0.5 based on top-down estimates
insurance adj.
Real estate 3.8 6.5
value adj. Non-life:
16% of
2.6 premiums
Life:
Reported 9.1 4% of tech.
4.8 provisions
equity 6.5 3.9 (1% for
unit-linked)
plus
risk capital
EU 140% EU req.
capital solvency
Slide 19
20. CREDIT SUISSE FINANCIAL SERVICES
HIGHLIGHTS Q3 2001
§ Net operating profit of CHF 225 m in Q3, down 55% on Q2 and down
49% on Q3/00, largely due to lower investment income from insurance
businesses
§ YTD net operating profit of CHF 1,157 m
s Down 17% on good first nine months 2000
s Down 1.5% excluding investment-related loss at CSPF
§ YTD 15.1% operating ROE / ROIC or 18.6% excluding CSPF
§ AuM at CHF 263.9 bn (-5.2% vs. 06/01; -3.6% vs. 12/00)
§ Net new assets CHF 4.6 bn YTD, CHF 1.1 bn in Q3
Slide 20
21. WINTERTHUR INSURANCE
HIGHLIGHTS 9M 2001
§ Premiums up 15% vs. 9M/00 to CHF 14.7 bn, 11.6% organic growth
§ Combined ratio stable at 106.4% (106.5% 9M/00)
s Claims ratio slightly up at 77.4% (77.1% 9M/00), due to claims in
N-America in H1, clear improvements in Europe (UK, Italy, Spain)
s Expense ratio down at 29.0% (9M/00: 29.4%) on expense control
§ Investment return of 7.2% (4.8% current, 2.4% realised gains), same
as 9M/00 (4.7%/2.5%); Q3: 4.7% (4.2% current, 0.6% realised gains)
§ CHF 452 m net operating profit, down 16% over 9M/00
§ Strategic progress
s Winterthur International divested
s Completion of acquisition of CGNU business in Belgium
s Long-term alliances with Pearl and Prudential in UK non-life
Slide 21
22. WINTERTHUR LIFE & PENSIONS
HIGHLIGHTS 9M 2001
§ Premiums up 11% vs. 9M/00 to CHF 12.5bn, 7.6% organic growth
s Strong contribution from UK and Spain
s Lower share of unit-linked products
§ CHF 2.6 bn net new assets vs. CHF 1.9 bn for 9M/00
§ Expense ratio up to 11.5% (9M/00: 11.0%) due to e.o. items in Q2
§ Investment return reduced to 5.6% (4.3% current, 1.2% realised gains)
vs. 7.1% for 9M/00 (4.4% current, 2.7% realised gains)
§ CHF 473 m net operating profit, up 19% over 9M/00 on good operating
results in Switzerland, Germany, UK and Netherlands
§ Strategic progress
s Improvement of IT systems for management of closed blocks
s Europe Life ready for Reister product in Germany
Slide 22
23. CREDIT SUISSE BANKING
HIGHLIGHTS Q3 2001
§ Operating ROE of 14.1% (Q2 16.7%, Q3/00 13.7%)
§ CHF 153 m net operating profit, down 14% vs. Q2 (up 4% on Q3/00)
s Net interest income stable (down 1.5% vs. Q2, up 1.2% vs.
Q3/00); YTD up 4% vs. 9M/00
s Net interest margin of 231 bp (238 bp in Q2; 241 bp in Q3/00);
237 bp YTD vs. 238 bp for 9M/00
s Commission income down 9% vs. Q2 on lower transaction
volumes (down 13% vs. Q3/00)
s Operating expense down 5% vs. Q2 (-1% vs. Q3/00)
§ Stable credit quality, valuation adjustments in Q3 same as in Q2 and
less than half of Q3/00
Slide 23
24. CREDIT SUISSE PERSONAL FINANCE
HIGHLIGHTS Q3 2001
§ CSPF reporting format includes European onshore affluent offering as
well as youtrade
§ Operations launched in Spain and Germany
§ Continued growth in established areas
s AuM CHF 5.3 bn (+ 3.9% vs. 6/01)
s youtrade over 27,500 customers, AuM 0.7 bn
s Net new assets in Personal Finance of CHF 0.1 bn in Q3
§ CHF 90 m net operating loss in Q3 (CHF 286 m YTD) reflecting rollout
in Spain and Germany
Slide 24
25. CREDIT SUISSE PRIVATE BANKING
HIGHLIGHTS Q3 2001
§ CHF 5.0 bn (CHF 25.5 bn YTD) inflow of net new assets, or 1% for the
quarter (5.6% YTD)
§ Net operating profit of CHF 513 m (CHF 1,734 m YTD), 11% below
Q2/01 (YTD down 15% on good 9M/00)
§ Net margin 44 bp (49 bp YTD), gross margin 114 bp (125 bp YTD)
§ Revenues down 11% vs. Q2 and 14% vs. Q3/00 on significantly lower
transaction volumes and weaker dollar
§ Operating expense down 6% to CHF 661m over Q2, up 1% vs. Q3/00
(YTD up 7% vs. 9M/00)
Slide 25
26. CREDIT SUISSE PRIVATE BANKING
DEVELOPMENT OF GROSS MARGIN
Asset driven Transaction driven Other revenue
-10 bp
in bp 135 137
125 125
120 22 27 114
17 21
18
alternative investments ì
90 50 45 41 39 brokerage î
32
trading î
60
30 63 65 67 64 65 alternative investments ì
0
9M/00 Q1/01 Q2/01 Q3/01 9M/01
Slide 26
27. CREDIT SUISSE ASSET MANAGEMENT
HIGHLIGHTS Q3 2001
§ Revenue down 14% vs. Q2 and 10% vs. Q3/00 , YTD revenue up 3%
incl. DLJ acquisition impact in 2001, 8% down on pro-forma 2000
§ Expenses down 18% vs. Q2 and 8% vs. Q3/00, YTD expenses up 6%
incl. DLJ impact in 2001, 5% down on pro-forma 2000
§ Net operating profit of CHF 34 m, down 58% on Q2 (CHF 183 m YTD,
down 23% vs. 9M/00); higher tax charge reversing prior period benefits
§ CHF (0.7) bn (CHF 7.3 bn YTD) net new discretionary assets
§ Acquisition of SLC Asset Management Group in UK
Slide 27
28. CREDIT SUISSE FIRST BOSTON
HIGHLIGHTS Q3 2001
§ USD 123 m net operating loss reflecting challenging markets
§ Significantly lower primary equity and M&A volumes (YTD industry-wide
down 30% and 50% respectively)
§ IBD revenue USD 596 m, down 23% on Q2, although still #1 in number
of M&A deals and in high yield
§ Fixed Income revenue USD 1.6 bn, matches record Q1, 7% up on Q2;
strong result from rates business
§ Equity revenue USD 666 m, down 45% on Q2 in weak markets,
depressed by poor corporate results and 11 September fall-out
§ Financial Services Group adversely affected by decline in retail trading
§ Personnel costs down 8% on Q2, operating expenses down 6%;
but cost / income and comp. / revenue ratios still too high (YTD 85%
and 60% respectively)
Slide 28
29. CREDIT SUISSE FIRST BOSTON
COST REDUCTION
§ Improve cost ratios and profitability, while preserving the franchise
§ USD 1 bn cost reduction programme
s 2,000+ headcount reduction (approx. 70% of cost savings)
s Reduced spending (“demand” and “supply” management) and other
operating efficiencies (approx. 30% of cost savings)
§ May also exit some non-core businesses
(incremental to USD 1 bn savings)
§ Bulk of cost savings to be realised in 2002
s Headcount reduction will be largely complete by end 2001
s Spending changes, other efficiency projects and dispositions to be
implemented throughout 2002
s Some expenses will vary with revenue / business volume changes -
focus on USD 1 bn savings, and on cost / income, comp. / revenue
Slide 29
30. CREDIT SUISSE FIRST BOSTON
MARKET SHARE
Q3 2001 YTD Q3 2000 YTD
(pre-merger)
Rank Share Gap to #3 Rank Share Gap to #3
Global M&A 3 23.9% - 5 18.4% 2.1%
US 2 34.4% - 6 15.6% 11.4%
Global Debt 4 8.5% < 0.1% 4 7.7% 0.7%
U.S. 3 9.4% - 4 8.2% 0.9%
High Yield 1 16.2% - 7 5.7% 6.7%
Global Equity 5 9.0% 2.4% 4 9.4% 4.3%
Americas 5 13.5% 1.2% 4 12.8% 0.6%
Europe 5 8.6% 1.3% 7 5.4% 4.5%
Research *
Equity/North America 2 52 R - 4 38 R 8R
Equity/Europe 1 41 R - 4 26 R 10 R
Fixed Income/All-America 3 32 R - 9 10 R 7R
* R=Number of ranked analysts
Slide 30
32. CREDIT SUISSE FIRST BOSTON
PROGRESS UPDATE
§ Key messages from John Mack
s Client first
s One firm
s Ownership culture
s Respect / dignity
s Diversity initiative
s Here to build, not cut costs - but must be realistic in current
environment
§ Key management additions
s Stephen Volk
s Tom Nides
s Gary Lynch
s Stuart Breslow
s Jeff Salzman
Slide 32
33. PRIORITIES / OUTLOOK
§ Challenges for the balance of 2001
s Focus on cost initiatives across all Bus
s Restructuring / right-sizing CSFB
s Implement new CSFS structure
s Maintain / expand positions
§ Q4 continues to be challenging with continued weak markets and
transaction volumes
s CSFB operating result not expected to improve vs. Q3
s CSFB expected to take certain one-time charges associated with
restructuring and right-sizing
§ Remain optimistic about long-term trends for financial services industry
and CSG's strategic position
Slide 33
34. CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION
This presentation may contain projections or other forward-looking
statements related to Credit Suisse Group that involve risks and
uncertainties. Readers are cautioned that these statements are only
projections and may differ materially from actual future results or events.
Readers are referred to the documents filed by Credit Suisse Group
with the SEC, specifically the most recent filing on Form 20-F, which
identify important risk factors that could cause actual results to differ
from those contained in the forward-looking statements, including,
among other things, risks relating to market fluctuations and volatility,
significant interest rate changes, credit exposures, cross border
transactions and foreign exchange fluctuations, impaired liquidity,
competition and legal liability. All forward-looking statements are based
on information available to Credit Suisse Group on the date of its
posting and Credit Suisse Group assumes no obligation to update such
statements unless otherwise required by applicable law.
Slide 34
