Enquiries
Credit Suisse Group,
Media Relations Telephone +41 1 333 8844
Credit Suisse Group,
Investor Relations Telephone +41 1 333 4570
Internet www.credit-suisse.com
Commentary on Results Non-GAAP
Financial Information
For additional information with
respect to Credit Suisse Group’s results for the third quarter and the first nine months of 2003, we refer you to the Group’s Quarterly Report Q3 2003, as well as the Group’s
slide presentation for analysts and press, posted on the Internet at www.credit-suisse.com/results. This press release may contain non-GAAP financial information. A reconciliation of such non-GAAP financial information to the most directly comparable measures under Swiss Generally Accepted Accounting Principles (as well as other related information) is also included in the Quarterly Report Q3 2003. The operating basis business unit results described above reflect the results of the separate segments
constituting the respective business units and certain acquisition-related costs not allocated to the segments.
Credit Suisse Group
Credit Suisse Group is a leading
global financial services company headquartered in Zurich. The business unit
Credit Suisse Financial Services provides private clients and small and medium-sized
companies with private banking and financial advisory services, banking products,
and pension and insurance solutions from Winterthur. The business unit Credit
Suisse First Boston, an investment bank, serves global institutional, corporate,
government and individual clients in its role as a financial intermediary.
Credit Suisse Group’s registered shares (CSGN) are listed in Switzerland
and Frankfurt, and in the form of American Depositary Shares (CSR) in New
York. The Group employs around 61,300 staff worldwide. As of September 30,
2003, it
reported assets under management of CHF 1,199.2 billion.
Cautionary statement regarding
forward-looking information
This press release contains statements
that constitute forward-looking statements. In addition, in the future we,
and others on our behalf, may make statements that constitute forward-looking
statements. Such forward-looking statements may include, without limitation,
statements relating to our plans, objectives or goals; our future economic
performance or prospects; the potential effect on our future performance
of certain contingencies; and assumptions underlying any such statements.
Words such as “believes,” “anticipates,” “expects,” "intends” and “plans” and
similar expressions are intended to identify forward-looking statements but
are not the exclusive means of identifying such statements. We do not intend
to update these forward-looking statements except as may be required by applicable
Page 13 of 12
laws.
By their very nature, forward-looking statements involve inherent risks
and uncertainties, both general and specific, and risks exist that predictions,
forecasts, projections and other outcomes described or implied in forward-looking
statements will not be achieved. We caution you that a number of important
factors could cause results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such forward-looking
statements. These factors include (i) market and interest rate fluctuations;
(ii) the strength of the global economy in general and the strength of
the
economies of the countries in which we conduct our operations in
particular; (iii) the ability of counterparties to meet their obligations to
us; (iv) the effects of, and changes in, fiscal, monetary, trade and tax
policies, and currency fluctuations; (v) political and social developments,
including war, civil unrest or terrorist activity; (vi) the possibility
of foreign exchange controls, expropriation, nationalization or confiscation
of assets in countries in which we conduct our operations; (vii) the ability
to maintain sufficient liquidity and access capital markets; (viii) operational
factors such as systems failure, human error, or the failure to properly
implement procedures; (ix) actions taken by regulators with respect to
our
business and practices in one or more of the countries in which we conduct
our operations; (x) the effects of changes in laws, regulations or accounting
policies or practices; (xi) competition in geographic and business areas
in which we conduct our operations; (xii) the ability to retain and recruit
qualified personnel; (xiii) the ability to maintain our reputation and
promote our brands; (xiv) the ability to increase market share and control
expenses;
(xv) technological changes; (xvi) the timely development and acceptance
of our new products and services and the perceived overall value of these
products
and services by users; (xvii) acquisitions, including the ability to integrate
successfully acquired businesses; (xviii) the adverse resolution of litigation
and other contingencies; and (xix) our success at managing the risks involved
in the foregoing. We caution you that the foregoing list of important
factors is not exclusive; when evaluating forward-looking statements, you should
carefully consider the foregoing factors and other uncertainties and events,
as well as the risks identified in our most recently filed Form 20-F and
reports on Form 6-K furnished to the US Securities and Exchange Commission.
Cautionary statement regarding
non-GAAP financial information
This press release may contain non-GAAP financial information. A reconciliation of such non-GAAP financial information to the most directly comparable measures under generally accepted accounting principles, is posted on our website at http://www.credit-suisse.com/sec.html.
Page 14 of 12
Presentation of Credit Suisse Group’s Third Quarter Results 2003 via Webcast and Telephone Conference
Date |
Tuesday, November
4, 2003 |
|
|
Time |
15.00 CET / 14.00 GMT /
09.00 EST |
|
|
Speakers |
Philip K. Ryan, CFO of Credit Suisse
Group |
|
Ulrich Koerner, CFO of Credit Suisse
Financial Services |
|
Barbara Yastine, CFO of Credit Suisse
First Boston |
|
|
|
All presentations will be held in English. |
|
|
Webcast |
www.credit-suisse.com/results |
|
|
Telephone |
Europe: +41
91 610 5600 |
|
UK: +44
207 107 0611 |
|
USA: +1 866
291 4166 |
|
|
|
Reference: “Credit Suisse Group
quarterly results” |
|
|
Q&A |
You will have the opportunity to ask
the speakers questions via telephone conference following the presentations. |
|
|
|
Video on demand available approximately three hours
after the event
at www.credit-suisse.com/results |
|
|
Playback |
Telephone available approximately
one hour after the event; please dial: |
|
Europe: +41
91 612 4330 |
|
UK: +44
207 866 4300 |
|
USA: +1
412 858 1440 |
|
|
|
Conference ID: 332# |
|
|
Note |
We recommend that you dial in approximately
ten minutes before the start of the presentation for the webcast and
telephone conference. Further instructions and technical test functions
are now available on our website. |
|
|
|
Page 15 of 12
QUARTERLY REPORT 2003
Q3
Credit Suisse Group is a leading global financial services company headquartered in Zurich. The business unit Credit Suisse Financial Services provides private clients and small and medium-sized companies with private banking and financial advisory services, banking products, and pension and insurance solutions from Winterthur. The business unit Credit Suisse First Boston, an investment bank, serves global institutional, corporate, government and individual clients in its role as a financial intermediary. Credit Suisse Groups registered shares (CSGN) are listed in Switzerland and Frankfurt, and in the form of American Depositary Shares (CSR) in New York. The Group employs around 61,300 staff worldwide.
|
This symbol is used to indicate topics on which further information is available on our website. Go to www.credit-suisse.com/results/bookmarks.html to find links to the relevant information. The additional information -indicated is openly accessible and does not form part of the Quarterly Report. Some areas of Credit Suisse Groups websites are only available in English.
|
Cautionary statement regarding forward-looking information
|
This Quarterly Report contains statements that constitute forward-looking statements. In addition, in the future we, and others on our behalf, may make statements that constitute forward-looking statements. Such forward-looking statements may include, without limitation, statements relating to our plans, objectives or goals; our future economic performance or prospects; the potential effect on our future performance of certain contingencies; and assumptions underlying any such statements.
|
Words such as "believes," "anticipates," "expects," "intends" and "plans" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. We do not intend to update these forward-looking statements except as may be required by applicable laws.
|
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include (i) market and interest rate fluctuations; (ii) the strength of the global economy in general and the strength of the economies of the countries in which we conduct our operations in particular; (iii) the ability of counterparties to meet their obligations to us; (iv) the effects of, and changes in, fiscal, monetary, trade and tax policies, and currency fluctuations; (v) political and social developments, including war, civil unrest or terrorist activity; (vi) the possibility of foreign exchange controls, expropriation, nationalization or confiscation of assets in countries in which we conduct our operations; (vii) the ability to maintain sufficient liquidity and access capital markets; (viii) operational factors such as systems failure, human error, or the failure to properly implement procedures; (ix) actions taken by regulators with respect to our business and practices in one or more of the countries in which we conduct our operations; (x) the effects of changes in laws, regulations or accounting policies or practices; (xi) competition in geographic and business areas in which we conduct our operations; (xii) the ability to retain and recruit qualified personnel; (xiii) the ability to maintain our reputation and promote our brands; (xiv) the ability to increase market share and control expenses; (xv) technological changes; (xvi) the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users; (xvii) acquisitions, including the ability to integrate successfully acquired businesses; (xviii) the adverse resolution of litigation and other contingencies; and (xix) our success at managing the risks involved in the foregoing.
|
We caution you that the foregoing list of important factors is not exclusive; when evaluating forward-looking statements, you should carefully consider the foregoing factors and other uncertainties and events, as well as the risks identified in our most recently filed Form 20-F and reports on Form 6-K furnished to the US Securities and Exchange Commission.
|
Cautionary statement regarding non-GAAP financial information
|
This Quarterly Report may contain non-GAAP financial information. A reconciliation of such non-GAAP financial information to the most directly comparable measures under generally accepted accounting principles is contained in this report and is posted on our website at www.credit-suisse.com/sec.html.
|
Oswald J. Grübel
Co-CEO Credit Suisse Group
Chief Executive Officer
Credit Suisse Financial Services
John J. Mack
Co-CEO Credit Suisse Group
Chief Executive Officer
Credit Suisse First Boston
Credit Suisse Groups net profit in the third quarter of 2003 was CHF 2.0 billion. The third quarter net profit includes an after-tax gain of CHF 1.3 billion net of related provisions from divestitures at Winterthur. Additionally, the Groups third quarter of 2003 net profit includes the strengthening by CHF 383 million after tax of certain provisions related to Winterthurs current and former international business portfolio.
|
The Group made considerable progress during the third quarter of 2003. Most notably, Private Banking generated strong revenues, despite the typical third quarter seasonality. Private Bankings operating income, combined with efficiency gains, resulted in a 79% increase in segment profit compared with the third quarter of 2002. Corporate & Retail Banking also benefited from increased efficiency and low credit provisions. In addition to making good progress in building capital and strengthening its balance sheet, Winterthur made additional improvements in expense reductions and pricing in the first nine months of 2003. Credit Suisse First Bostons conservative risk positioning in light of US interest rate volatility reduced fixed income trading results but resulted in lower Value-at-Risk. The Equity and Investment Banking divisions of Credit Suisse First Boston continued to see modest improvements in client flows and business activity. |
At Credit Suisse Financial Services, the focus on cost management remained a priority and the banking segments reported a reduction in operating expenses in the third quarter, while the insurance segments reported a reduction in administration costs in the first nine months of 2003. At Credit Suisse First Boston, expenses declined, reflecting lower incentive bonus accruals and the change in the vesting period of stock awards. Having reduced the guaranteed portion of incentive-based compensation, Credit Suisse First Boston has delivered on its pledge to create a more flexible cost base. All banking segment results benefited from lower credit provisions as a result of the continued improvement in the credit markets.
|
Going forward, we are concentrating on producing sound profitability and will continue to focus on cost management, efficiency and building our client franchise.
|
Oswald J. Grübel John J. Mack
November 2003
CREDIT SUISSE GROUP FINANCIAL HIGHLIGHTS Q3/2003
|
Consolidated income statement |
| | | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | | 9 months | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
in CHF m | | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Operating income | | | 6,531 | | 7,549 | | 5,666 | | (13) | | 15 | | 21,104 | | 21,643 | | (2) | |
Gross operating profit | | | 2,144 | | 2,478 | | 314 | | (13) | | | | 6,626 | | 3,225 | | 105 | |
Net profit/(loss) | | | 2,045 | | 1,346 | | (2,148) | | 52 | | | | 4,043 | | (2,359) | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Return on equity |
| | | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | | 9 months | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
in % | | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Return on equity | | | 26.3 | | 18.5 | | (26.9) | | 42 | | | | 18.2 | | (9.2) | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Consolidated balance sheet |
| | | | | | | | | Change | | Change | |
| | | | | | | | | in % from | | in % from | |
in CHF m | | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Total assets | | | 994,555 | | 1,016,645 | | 955,656 | | (2) | | 4 | |
Shareholders' equity | | | 34,873 | | 33,428 | | 31,394 | | 4 | | 11 | |
Minority interests in shareholders' equity | | | 2,971 | | 2,940 | | 2,878 | | 1 | | 3 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Capital data 1) |
| | | | | | | | | Change | | Change | |
| | | | | | | | | in % from | | in % from | |
in CHF m | | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
BIS risk-weighted assets | | | 197,412 | | 199,108 | | 196,486 | | (1) | | 0 | |
BIS tier 1 capital | | | 21,901 | | 20,487 | | 17,613 | | 7 | | 24 | |
of which non-cumulative perpetual preferred
securities |
| | 2,184 | | 2,167 | | 2,162 | | 1 | | 1 | |
BIS total capital | | | 32,010 | | 31,238 | | 28,311 | | 2 | | 13 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Capital ratios 1) |
in % | | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
BIS tier 1 ratio | Credit Suisse | | 7.6 | | 7.5 | | 7.4 | |
| Credit Suisse First Boston 2) | | 12.2 | | 11.0 | | 10.3 | |
| Credit Suisse Group 3) | | 11.1 | | 10.3 | | 9.0 | |
BIS total capital ratio | Credit Suisse Group | | 16.2 | | 15.7 | | 14.4 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Assets under management/client assets |
| | | | | | | | | Change | | Change | |
| | | | | | | | | in % from | | in % from | |
in CHF bn | | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Advisory assets under management | | | 615.1 | | 598.7 | | 577.9 | | 3 | | 6 | |
Discretionary assets under management | | | 584.1 | | 596.9 | | 582.1 | | (2) | | 0 | |
Total assets under management | | | 1,199.2 | | 1,195.6 | | 1,160.0 | | 0 | | 3 | |
Client assets | | | 1,299.4 | | 1,285.9 | | 1,757.9 | | 1 | | (26) | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Net
new assets |
|
|
|
|
|
|
|
|
|
Change |
|
Change |
|
|
|
|
|
Change |
|
|
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|
|
|
|
|
|
|
in
% from |
|
in
% from |
|
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|
in
% from |
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9
months |
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in
CHF bn |
|
|
3Q2003 |
|
2Q2003 |
|
3Q2002 |
|
2Q2003 |
|
3Q2002 |
|
2003 |
|
2002 |
|
2002 |
|
|
|
|
|
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|
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|
|
|
|
|
|
|
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|
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|
|
Net
new assets |
|
|
4.0 |
|
1.9 |
|
(13.6) |
|
110.5 |
|
|
|
1.9 |
|
4.9 |
|
(61) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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1) In
cooperation with the Swiss Federal Banking Commission, the capital
treatment of the Groups investment in Winterthur has been revised.
Previously published comparative figures have been restated to reflect
the new methodology. The Groups previously published figures
under the old methodology were 11.1% as of 30.06.03 and 9.7% as of
31.12.02 for the consolidated BIS tier 1 ratio, and 18.0% as of 30.06.03
and 16.5% as of 31.12.02 for the Groups BIS total capital ratio. |
2) Ratio
is based on a tier 1 capital of CHF 12.1 bn (30.06.03: CHF 11.3 bn;
31.12.02: CHF 10.6 bn), of which non-cumulative perpetual preferred
securities is CHF 1.0 bn (30.06.03: CHF 1.0 bn; 31.12.02: CHF 1.0 bn). |
3) Ratio
is based on a tier 1 capital of CHF 21.9 bn (30.06.03: CHF 20.5 bn;
31.12.02: CHF 17.6 bn), of which non-cumulative perpetual preferred
securities is CHF 2.2 bn (30.06.03: CHF 2.2 bn; 31.12.02: CHF 2.2 bn). |
Number of employees (full-time equivalents) |
| | | | | | | | | | Change | | Change | |
| | | | | | | | | | in % from | | in % from | |
| | | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Switzerland | banking | | | 20,042 | | 20,541 | | 21,270 | | (2) | | (6) | |
| insurance | | | 6,649 | | 6,797 | | 7,063 | | (2) | | (6) | |
Outside Switzerland | banking | | | 20,178 | | 20,108 | | 25,057 | | 0 | | (19) | |
| insurance | | | 14,463 | | 25,055 | | 25,067 | | (42) | | (42) | |
Total employees Credit Suisse Group | | | | 61,332 | | 72,501 | | 78,457 | | (15) | | (22) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Share data |
| | | | | | | | Change | | Change | |
| | | | | | | | in % from | | in % from | |
| | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Shares issued | | 1,194,682,330 | | 1,189,980,152 | | 1,189,891,720 | | 0 | | 0 | |
To be issued upon conversion of MCS 1) | | 40,413,838 | | 40,413,838 | | 40,413,838 | | 0 | | 0 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Shares outstanding | | 1,235,096,168 | | 1,230,393,990 | | 1,230,305,558 | | 0 | | 0 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Share price in CHF | | 42.25 | | 35.65 | | 30.00 | | 19 | | 41 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Market capitalization in CHF m | | 52,183 | | 43,864 | | 36,909 | | 19 | | 41 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Book value per share in CHF | | 25.83 | | 24.78 | | 23.18 | | 4 | | 11 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
1) Maximum number of shares related to Mandatory Convertible Securities (MCS) issued by Credit Suisse Group Finance (Guernsey) Ltd. in December 2002. |
Share price |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
in CHF | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
High (closing price) | | 48.65 | | 39.30 | | 48.85 | | 24 | | 0 | | 48.65 | | 73.60 | | (34) | |
Low (closing price) | | 34.75 | | 23.25 | | 26.80 | | 49 | | 30 | | 20.70 | | 26.80 | | (23) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Calculation of earnings per share (EPS) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net profit/(loss) in CHF m | | 2,045 | | 1,346 | | (2,148) | | 52 | | | | 4,043 | | (2,359) | | | |
Diluted net profit/(loss) in CHF m | | 2,045 | | 1,346 | | (2,148) | | 52 | | | | 4,043 | | (2,359) | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | 1,230,710,975 | | 1,230,330,673 | | 1,189,341,056 | 1) | 0 | | 3 | | 1,230,450,554 | | 1,189,212,967 | 1) | 3 | |
Dilutive impact 2) | | 19,673,449 | | 4,922,814 | | 0 | | 300 | | | | 9,814,553 | | 0 | | | |
Weighted average shares, diluted | | 1,250,384,424 | | 1,235,253,487 | | 1,189,341,056 | | 1 | | 5 | | 1,240,265,107 | | 1,189,212,967 | | 4 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Basic earnings per share in CHF | | 1.66 | | 1.09 | | (1.81) | | 52 | | | | 3.29 | | (1.98) | | | |
Diluted earnings per share in CHF | | 1.64 | | 1.09 | | (1.81) | | 50 | | | | 3.26 | | (1.98) | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
1) Adjusted for weighted average shares repurchased. |
2) The calculation for the diluted loss per share in 3Q2002 and for the 9 months 2002 excludes the effect of the potential exchange of convertible bonds and the potential exercise of options to purchase shares, as the effect would be anti-dilutive. |
AN OVERVIEW OF CREDIT SUISSE GROUP
|
Credit Suisse Group reported a net profit of CHF 2.0 billion in the third quarter of 2003 compared to CHF 1.3 billion in the previous quarter. The third quarter result includes an after-tax gain of CHF 1.3 billion net of related provisions from divestitures at Winterthur. Additionally, the Groups third quarter result includes the strengthening by CHF 383 million after tax of certain provisions related to Winterthurs current and former international business portfolio. Credit Suisse Financial Services substantially increased its third quarter net profit compared with the previous quarter, with strong results in the banking segments and continued improvements in the insurance segments in the course of the year. Credit Suisse First Boston reported a decrease in its third quarter results compared with the second quarter of 2003.
|
The Group reported a net profit of CHF 2.0 billion in the third quarter of 2003, a substantial increase from the previous quarters net profit of CHF 1.3 billion. The net profit of CHF 2.0 billion in the third quarter 2003 includes a gross after-tax gain of CHF 1.6 billion, or CHF 1.3 billion net of related provisions, from the divestitures of Winterthurs Republic operations in the US, its Churchill operations in the UK and Winterthur Italy . Additionally, the Groups net profit in the third quarter of 2003 includes the strengthening by CHF 383 million after tax of certain provisions related to Winterthurs current and former international business portfolio. The Groups third quarter performance was impacted by weaker trading income at Credit Suisse First Boston, which was partially compensated by improved results within the Credit Suisse Financial Services banking segments.
|
Net profit for the first nine months of 2003 was CHF 4.0 billion, compared to a net loss of CHF 2.4 billion in the same period of 2002. Earnings per share for the third quarter of 2003 were CHF 1.66, compared to CHF 1.09 for the second quarter of 2003. The Groups return on equity was 26.3% in the third quarter of 2003, compared to 18.5% in the second quarter of 2003.
|
The Groups third quarter result represents continued progress towards achieving sound profitability and restoring the capital base. It also reflects the realization of measures taken to reduce costs, increase the flexibility of the cost base, return Winterthur to profitability, reduce the impact of legacy assets at Credit Suisse First Boston and restructure European onshore Private Banking.
|
Credit Suisse Financial Services posted a net profit of CHF 1.8 billion in the third quarter of 2003, including the gain from the Winterthur divestitures and the additional provisions described above. This result compares with a net profit of CHF 851 million in the second quarter of 2003 and a net loss of CHF 1.2 billion in the third quarter of 2002. Although the third quarter has often proven to be a seasonally weak quarter, the banking segments in particular had a strong quarter, reflecting continued good margins and improvements in net new asset growth, thus demonstrating efficiency and the strength of the private banking franchise. Winterthurs results reflected the divestitures, as well as lower administration costs and good investment income, which together improved its capital base and strengthened its balance sheet.
|
Credit Suisse First Boston reported a net profit of CHF 308 million for the third quarter of 2003, which was below the previous quarters net profit of CHF 373 million, but significantly improved compared to a net loss of CHF 668 million reported in the third quarter of 2002. Credit Suisse First Boston continues to reduce expenses and focus on its client franchise. Its third quarter result, however, reflects a lower fixed income trading result, which was impacted by conservative risk positioning in light of US interest rate volatility, thus resulting in reduced Value-at-Risk. While both the Equity and Investment Banking divisions continued to see steady improvements in client flows and M&A activity, operating income in both divisions declined compared with the second quarter of 2003. CSFB Financial Services operating income increased slightly compared with the previous quarter, with modest improvements in both Credit Suisse Asset Management and Private Client Services. Credit Suisse Asset Management launched an alternative investment initiative in the third quarter of 2003.
|
Equity capital
The Groups consolidated BIS tier 1 ratio was 11.1% as of September 30, 2003, up from 10.3% as of June 30, 2003. These ratios reflect the new methodology for the BIS capital calculations as revised in cooperation with the Swiss Federal Banking Commission.
|
Winterthurs capital base was strengthened during the third quarter of 2003 as a result of earnings generation and the sale of Winterthurs Republic operations in the US, its Churchill operations in the UK and Winterthur Italy. In isolation, these divestitures increased Winterthurs EU Group solvency surplus capital by approximately CHF 3.5 billion, due to the combination of lowered required capital and higher available capital.
|
Net new assets
Credit Suisse Groups net new asset inflow in the third quarter of 2003 was dominated by an inflow from Private Banking of CHF 8.4 billion. Corporate & Retail Banking recorded an inflow of CHF 1.8 billion, whereas Life & Pensions had an outflow of CHF 0.7 billion. CSFB Financial Services recorded an outflow of CHF 5.6 billion, only slightly compensated by a net asset inflow of CHF 0.1 billion from the Institutional Securities segment. For Credit Suisse Group, a net new asset inflow of CHF 4.0 billion resulted in the third quarter of 2003, more than twice the net new asset inflow in the previous quarter. As of September 30, 2003, the Groups total assets under management amounted to CHF 1,199.2 billion, practically unchanged compared to June 30, 2003.
|
Operating income and expenses
The Groups operating income was CHF 6.5 billion in the third quarter of 2003, a decline of 13% from the previous quarter, but up 15% from the third quarter of 2002. The decrease compared with the second quarter of 2003 was mainly due to a decline in trading income, partially offset by increases in net interest and commission and service fee income.
|
The Groups operating expenses in the third quarter of 2003 decreased 13% from the previous quarter and 18% from the third quarter of 2002 to CHF 4.4 billion, reflecting continued progress on cost management. Personnel expenses declined 18% overall compared with the previous quarter. This decrease reflects lower incentive compensation accruals at Credit Suisse First Boston, in line with lower operating income, and the impact of reversing the first six months of 2003 accrual for stock compensation in the third quarter of 2003 due to the previously announced change in vesting of stock awards. At Credit Suisse Financial Services, the continued focus on cost reduction resulted in a decrease in operating expenses in the banking segments in the third quarter of 2003 and in a decline in administration costs in the insurance segments in the first nine months of 2003.
|
Valuation adjustments, provisions and losses
The Groups total valuation adjustments, provisions and losses were CHF 215 million in the third quarter of 2003, compared to CHF 131 million in the second quarter of 2003. In the third quarter of 2003, net credit-related valuation allowances and provisions decreased slightly to CHF 96 million from the already low level of CHF 99 million in the second quarter of 2003. Compared with the third quarter of 2002, valuation adjustments, provisions and losses decreased CHF 758 million, or 78%, primarily due to lower credit valuation allowances and provisions reflecting an improved credit environment, loan repayments and loan sales.
|
Business transfers
In the third quarter of 2003, the transfer of the securities and treasury execution platform in Switzerland from Credit Suisse First Boston to Credit Suisse Financial Services and the transfer of Credit Suisse First Bostons Private Client Services UK business from CSFB Financial Services to Private Banking were completed. All comparative figures have been restated to reflect these business transfers. The consolidated financial statements were not affected. Since September 1, 2003, Credit Suisse Financial Services has been executing securities and treasury transactions in Switzerland for its private banking, retail and corporate clients under its own name. Credit Suisse First Bostons investment banking and Swiss institutional coverage businesses in Switzerland remain unaffected by these changes.
|
Swiss GAAP accounting changes
Reported earnings in the fourth quarter will be affected by mandatory changes in Swiss GAAP for banks that are required to be applied at the end of the year. The changes of significance for Credit Suisse Group relate to the accounting for own shares and for derivatives. If these changes in accounting principles were to be applied in the current reporting period, the estimated impact on net profit (including the cumulative effect) for the first nine months of 2003 would be a decrease of approximately CHF 110 million, and the estimated impact on reported shareholders equity would be a decrease of CHF 0.6 billion. These changes have no impact on the Groups regulatory capital adequacy ratios.
|
Outlook
Credit Suisse Group is benefiting from the measures taken in 2002 and 2003. Going forward, the Group will continue to concentrate on enhancing efficiency and building its client franchise and remains focused on producing sound profitability.
|
In the Overview of Credit Suisse Group, the business unit results are presented in accordance with Swiss GAAP. Elsewhere in this Quarterly Report, business unit results are presented on an operating basis.
|
For a reconciliation of operating basis business unit results (reflecting the results of the separate segments comprising the business units) to the Swiss GAAP basis, a discussion of the material reconciling items and a discussion of the purpose of the operating basis results and the reasons why management believes they provide useful information for investors, please refer to Reconciliation of operating results to Swiss GAAP on pages 32 36.
Overview of Credit Suisse Group 1) |
| |
Credit Suisse Financial Services | |
Credit Suisse First Boston | |
Corporate Center | |
Credit Suisse Group | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
in CHF m | |
3Q2003 | |
2Q2003 | |
3Q2002 | |
3Q2003 | |
2Q2003 | |
3Q2002 | |
3Q2003 | |
2Q2003 | |
3Q2002 | |
3Q2003 | |
2Q2003 | |
3Q2002 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | |
3,387 | |
3,544 | |
2,497 | |
3,113 | |
3,886 | |
3,408 | |
31 | |
119 | |
(239) | |
6,531 | |
7,549 | |
5,666 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Personnel expenses | |
1,385 | |
1,434 | |
1,533 | |
1,681 | |
2,306 | |
2,231 | |
59 | |
84 | |
29 | |
3,125 | |
3,824 | |
3,793 | |
Other operating expenses | |
732 | |
744 | |
923 | |
594 | |
615 | |
723 | |
(64) | |
(112) | |
(87) | |
1,262 | |
1,247 | |
1,559 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Operating expenses | |
2,117 | |
2,178 | |
2,456 | |
2,275 | |
2,921 | |
2,954 | |
(5) | |
(28) | |
(58) | |
4,387 | |
5,071 | |
5,352 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gross operating profit | |
1,270 | |
1,366 | |
41 | |
838 | |
965 | |
454 | |
36 | |
147 | |
(181) | |
2,144 | |
2,478 | |
314 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation of non-current assets 2) | |
279 | |
194 | |
291 | |
125 | |
136 | |
207 | |
67 | |
145 | |
94 | |
471 | |
475 | |
592 | |
Amortization of acquired intangible assets and goodwill | |
25 | |
27 | |
31 | |
211 | |
201 | |
308 | |
2 | |
(5) | |
(2) | |
238 | |
223 | |
337 | |
Valuation adjustments, provisions and losses | |
104 | |
63 | |
122 | |
111 | |
63 | |
867 | |
0 | |
5 | |
(16) | |
215 | |
131 | |
973 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Profit/(loss) before extraordinary items and taxes | |
862 | |
1,082 | |
(403) | |
391 | |
565 | |
(928) | |
(33) | |
2 | |
(257) | |
1,220 | |
1,649 | |
(1,588) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Extraordinary income/(expenses), net | |
1,164 | |
8 | |
(127) | |
2 | |
0 | |
(1) | |
2 | |
53 | |
(3) | |
1,168 | |
61 | |
(131) | |
Taxes 3) | |
(256) | |
(229) | |
(681) | |
(65) | |
(173) | |
280 | |
4 | |
83 | |
(9) | |
(317) | |
(319) | |
(410) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net profit/(loss) before minority interests | |
1,770 | |
861 | |
(1,211) | |
328 | |
392 | |
(649) | |
(27) | |
138 | |
(269) | |
2,071 | |
1,391 | |
(2,129) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Minority interests | |
8 | |
(10) | |
17 | |
(20) | |
(19) | |
(19) | |
(14) | |
(16) | |
(17) | |
(26) | |
(45) | |
(19) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net profit/(loss) | |
1,778 | |
851 | |
(1,194) | |
308 | |
373 | |
(668) | |
(41) | |
122 | |
(286) | |
2,045 | |
1,346 | |
(2,148) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
1) Business unit results in accordance with Swiss GAAP. For a reconciliation of operating basis business unit results (reflecting the results of the separate segments comprising the business units) to Swiss GAAP basis, please refer to Reconciliation of operating results to Swiss GAAP. |
2) Includes amortization of Present Value of Future Profits (PVFP) from the insurance business within Credit Suisse Financial Services. |
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 3Q2002 for Credit Suisse Financial Services of CHF 582 m, for Credit Suisse First Boston of CHF 286 m, and for Credit Suisse Group of CHF 306 m. |
Assets under management/client assets 1) |
| |
| |
| |
| |
Change | |
Change | |
| |
| |
| |
| |
in % from | |
in % from | |
in CHF bn | |
30.09.03 | |
30.06.03 | |
31.12.02 | |
30.06.03 | |
31.12.02 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Credit Suisse Financial Services | |
|
|
| |
| |
| |
| |
Private Banking |
|
|
|
| |
| |
| |
| |
Assets under management |
|
505.1 | |
493.8 | |
465.7 | |
2.3 | |
8.5 | |
of which discretionary |
|
129.2 | |
128.3 | |
121.5 | |
0.7 | |
6.3 | |
Client assets |
|
532.3 | |
522.3 | |
494.8 | |
1.9 | |
7.6 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Corporate & Retail Banking |
|
|
|
| |
| |
| |
| |
Assets under management |
|
69.4 | |
66.8 | |
70.3 | |
3.9 | |
(1.3) | |
Client assets |
|
90.3 | |
85.7 | |
86.9 | |
5.4 | |
3.9 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Life & Pensions |
|
|
|
| |
| |
| |
| |
Assets under management (discretionary) |
|
112.3 | |
117.0 | |
110.8 | |
(4.0) | |
1.4 | |
Client assets |
|
112.3 | |
117.0 | |
110.8 | |
(4.0) | |
1.4 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Insurance |
|
|
|
| |
| |
| |
| |
Assets under management (discretionary) |
|
27.1 | |
32.6 | |
30.7 | |
(16.9) | |
(11.7) | |
Client assets |
|
27.1 | |
32.6 | |
30.7 | |
(16.9) | |
(11.7) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Credit Suisse Financial Services | |
|
|
|
|
|
|
|
|
|
|
Assets under management | |
713.9 | |
710.2 | |
677.5 | |
0.5 | |
5.4 | |
of which discretionary |
|
269.8 | |
279.1 | |
264.2 | |
(3.3) | |
2.1 | |
Client assets | |
762.0 | |
757.6 | |
723.2 | |
0.6 | |
5.4 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Credit Suisse First Boston | |
|
|
|
|
|
|
|
|
|
|
Institutional Securities |
|
|
|
| |
| |
| |
| |
Assets under management |
|
29.1 | |
31.0 | |
31.3 | |
(6.1) | |
(7.0) | |
of which Private Equity on behalf of clients
(discretionary) |
|
19.7 | |
20.6 | |
20.9 | |
(4.4) | |
(5.7) | |
Client assets |
|
73.3 | |
73.9 | |
83.3 | |
(0.8) | |
(12.0) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
CSFB Financial Services 2) |
|
|
|
| |
| |
| |
| |
Assets under management |
|
456.2 | |
454.4 | |
451.2 | |
0.4 | |
1.1 | |
of which discretionary |
|
288.9 | |
291.1 | |
289.6 | |
(0.8) | |
(0.2) | |
Client assets |
|
464.1 | |
454.4 | |
951.4 | |
2.1 | |
(51.2) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Credit Suisse First Boston | |
|
|
|
|
|
|
|
|
|
|
Assets under management | |
485.3 | |
485.4 | |
482.5 | |
0.0 | |
0.6 | |
of which discretionary |
|
314.3 | |
317.8 | |
317.9 | |
(1.1) | |
(1.1) | |
Client assets | |
537.4 | |
528.3 | |
1,034.7 | |
1.7 | |
(48.1) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Credit Suisse Group | |
|
|
|
|
|
|
|
|
|
|
Assets under management | |
1,199.2 | |
1,195.6 | |
1,160.0 | |
0.3 | |
3.4 | |
of which discretionary |
|
584.1 | |
596.9 | |
582.1 | |
(2.1) | |
0.3 | |
Client assets | |
1,299.4 | |
1,285.9 | |
1,757.9 | |
1.0 | |
(26.1) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. |
2) Excluding assets managed on behalf of other entities within Credit Suisse Group. |
Net new assets 1) |
| |
| |
| |
| |
Change | |
Change | |
| |
| |
Change | |
| |
| |
| |
| |
in % from | |
in % from | |
| |
| |
in % from | |
| |
| |
| |
| |
| |
| |
9 months | |
| |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
in CHF bn | |
3Q2003 | |
2Q2003 | |
3Q2002 | |
2Q2003 | |
3Q2002 | |
2003 | |
2002 | |
2002 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Credit Suisse Financial Services | |
|
|
| |
| |
| |
| |
| |
| |
| |
Private Banking |
|
8.4 | |
3.8 | |
3.4 | |
121.1 | |
147.1 | |
13.7 | |
18.2 | |
(24.7) | |
Corporate & Retail Banking |
|
1.8 | |
0.5 | |
(2.3) | |
260.0 | |
| |
(1.1) | |
(3.4) | |
(67.6) | |
Life & Pensions |
|
(0.7) | |
0.5 | |
0.4 | |
| |
| |
2.0 | |
4.7 | |
(57.4) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Credit Suisse Financial Services | |
9.5 | |
4.8 | |
1.5 | |
97.9 | |
| |
14.6 | |
19.5 | |
(25.1) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Credit Suisse First Boston | |
|
|
| |
| |
| |
| |
|
|
| |
| |
Institutional Securities |
|
0.1 | |
1.0 | |
(3.0) | |
(90.0) | |
| |
1.0 | |
1.9 | |
(47.4) | |
CSFB Financial Services 2) |
|
(5.6) | |
(3.9) | |
(12.1) | |
43.6 | |
(53.7) | |
(13.7) | |
(16.5) | |
(17.0) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Credit Suisse First Boston | |
(5.5) | |
(2.9) | |
(15.1) | |
89.7 | |
(63.6) | |
(12.7) | |
(14.6) | |
(13.0) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Credit Suisse Group | |
4.0 | |
1.9 | |
(13.6) | |
110.5 | |
| |
1.9 | |
4.9 | |
(61.2) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. |
2) Excluding assets managed on behalf of other entities within Credit Suisse Group. |
Credit Suisse Groups overall position risk measured on the basis of Economic Risk Capital (ERC) decreased by 4% in the third quarter of 2003 compared with the previous quarter, due mainly to lower foreign exchange, fixed income positions and insurance underwriting risks as well as lower international lending exposures. The more narrowly defined average Value-at-Risk (VaR) for the trading book of Credit Suisse First Boston decreased 20% in the third quarter of 2003, due mainly to lower interest rate positions and the introduction of a refined risk methodology for mortgages. The Groups credit-related balance sheet exposure decreased 3% as of September 30, 2003, compared to June 30, 2003.
|
Overall Risk Trends
Credit Suisse Groups 1-year, 99% position risk ERC decreased by 4% in the third quarter of 2003 compared with the previous quarter. The reduction was mainly due to lower foreign exchange exposures and lower insurance underwriting risks at Winterthur following the divestitures completed during the third quarter of 2003 as well as lower credit spread positions and lower international lending and counterparty exposures at Credit Suisse First Boston. At the end of the third quarter of 2003, 52% of the Groups position risk ERC was with Credit Suisse First Boston, 44% with Credit Suisse Financial Services (of which 66% was with the insurance units and 34% with the banking units) and 4% with the Corporate Center.
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Trading risks
The table below shows the trading-related market risk exposure for Credit Suisse First Boston, Credit Suisse Financial Services and Credit Suisse Group on a consolidated basis, as measured by 1-day, 99% VaR. At Credit Suisse First Boston, the average 1-day, 99% VaR in the third quarter of 2003 was CHF 69.3 million compared to CHF 87.0 million during the second quarter of 2003. This decrease was mainly due to lower interest rate positions and the introduction of a refined risk methodology for mortgages. The Credit Suisse First Boston VaR at the end of the third quarter of 2003 was 38% below the VaR at the end of the second quarter of 2003 adjusted for the methodology change. As shown on the backtesting chart, Credit Suisse First Boston had no backtesting exceptions over the last 12 months (on average, an accurate 1-day, 99% VaR model would have no more than 2.5 exceptions per annum). At Credit Suisse Financial Services, the average 1-day, 99% VaR in the third quarter of 2003 was CHF 15.0 million compared to CHF 15.7 million during the previous quarter. The decrease was mainly due to lower inventory positions in structured investment products, partially offset by the impact of the transfer of the securities and treasury execution platform in Switzerland from Credit Suisse First Boston to Credit Suisse Financial Services.
|
Credit risk exposure
Credit Suisse Groups total credit-related exposure was 3% lower at September 30, 2003, compared to June 30, 2003. Exposure at Credit Suisse Financial Services increased 4%, while exposure at Credit Suisse First Boston was largely unchanged. The reduction on a consolidated basis was primarily a result of increased intercompany exposure that appears in the business unit figures but is eliminated in the Credit Suisse Group consolidation.
|
Compared to June 30, 2003, non-performing and total impaired loans for Credit Suisse Group declined as of the end of the third quarter 2003, with reductions reported in both business units. Compared with the previous quarter, total non-performing loans declined 10% at both business units and on a consolidated basis. The reduction in total impaired loans during the third quarter of 2003 was 11% at Credit Suisse Financial Services and 10% at Credit Suisse First Boston. The decline in impaired assets is attributable to repayments, improved credit situations, loan sales and write-offs.
|
The net credit-related valuation allowances and provisions charged to the income statement for the third quarter of 2003 was CHF 96 million, a slight decrease from the second quarter of 2003, but significantly below that recorded for the third quarter of 2002, particularly at Credit Suisse First Boston. Presented on page 11 are the additions, releases and recoveries included in calculating the net credit-related valuation allowances and provisions.
|
Coverage of non-performing loans and impaired loans by the valuation allowances improved for both Credit Suisse Group and Credit Suisse First Boston, while coverage declined slightly for Credit Suisse Financial Services. The quality of the credit exposure for Credit Suisse Group, as measured by counterparty rating, was largely unchanged from the second quarter of 2003.
|
Key Position Risk Trends |
| |
| |
| |
| |
Change Analysis: Brief Summary |
| |
| |
Change in % from | |
|
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
in CHF m | |
3Q2003 | |
2Q2003 | |
3Q2002 | |
3Q2003 vs 2Q2003 |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Real Estate ERC & | |
|
|
| |
| |
|
Structured Asset ERC 1) |
|
3,992 | | (4%) | | (11%) | | Further reduction in legacy commercial real estate exposures at CSFB, partially offset by higher residential real estate exposures |
Developed Market Fixed Income & | |
|
|
| |
| |
|
Foreign Exchange ERC |
|
3,602 | | (11%) | | (5%) | | Lower foreign exchange exposures at Winterthur and lower credit spread exposures at CSFB |
Equity Investment ERC | |
3,177 | |
(2%) | |
(27%) | |
Lower equity positions at Winterthur, partially offset by higher equity trading exposures at CSFB and the CSFS banking segments |
International Lending ERC | |
2,797 | |
(10%) | |
(29%) | |
Loan sales to third parties and counterparty exposure reductions at CSFB |
Swiss & Retail Lending ERC | |
1,898 | |
(3%) | |
(9%) | |
Lower exposures with respect to Swiss corporates at Corporate & Retail Banking and lower mortgage exposures at Winterthur |
Emerging Markets ERC | |
1,576 | |
2% | |
(30%) | |
Higher Brazil, Turkey and Indonesia exposure, partially offset by lower Russia exposure |
Insurance Underwriting ERC | |
647 | |
(38%) | |
(22%) | |
Divestiture of Republic operations, Churchill and Winterthur Italy |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Simple sum across risk categories | |
17,689 | |
| |
| |
|
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Diversification benefit | |
(6,096) | |
| |
| |
|
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Total position risk ERC | |
11,593 | |
(4%) | |
(19%) | |
|
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
|
99%, 1-year position risk ERC, excluding foreign exchange translation risk. For an assessment of the total risk profile, operational risk ERC and business risk ERC have to be considered as well. Note that prior period risk data have been restated for methodology changes in order to maintain consistency over time. For a more detailed description of the Groups ERC model, please refer to Credit Suisse Group's Annual Report 2002, which is available on the website: www.credit-suisse.com. |
|
1) This category comprises the real estate investments of Winterthur, Credit Suisse First Bostons commercial real estate exposures, Credit Suisse First Bostons residential real estate exposures, Credit Suisse First Bostons asset-backed securities exposures as well as the real estate acquired at auction and real estate for own use in Switzerland. |
|
Trading exposures (1-day, 99% VaR) |
| | Credit Suisse | | Credit Suisse | | | | | |
| | Financial Services | | First Boston | 1) | Credit Suisse Group | 2) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2003 | | 2Q2003 | | 3Q2003 | | 2Q2003 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total VaR | | | | | | | | | | | | | |
Period end | | 19.1 | | 16.5 | | 50.4 | | 102.2 | | 55.1 | | 99.9 | |
Average | | 15.0 | | 15.7 | | 69.3 | | 87.0 | | 56.3 | | 82.7 | |
Maximum | | 19.7 | | 20.8 | | 152.5 | | 146.0 | | 58.7 | | 99.9 | |
Minimum | | 11.3 | | 13.9 | | 35.1 | | 64.2 | | 55.1 | | 69.0 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
in CHF m | | 30.09.03 | | 30.06.03 | | 30.09.03 | | 30.06.03 | | 30.09.03 | | 30.06.03 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
VaR by risk type | | | | | | | | | | | | | |
Interest rate | | 7.0 | | 2.7 | | 43.7 | | 118.0 | | 47.9 | | 119.5 | |
Foreign exchange | | 2.2 | | 2.1 | | 18.3 | | 14.8 | | 18.6 | | 14.3 | |
Equity | | 15.5 | | 15.4 | | 28.1 | | 25.7 | | 27.2 | | 25.5 | |
Commodity | | 0.5 | | 0.1 | | 1.5 | | 0.8 | | 1.3 | | 0.7 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Subtotal | | 25.2 | | 20.3 | | 91.6 | | 159.3 | | 95.0 | | 160.0 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Diversification benefit | | (6.1) | | (3.8) | | (41.2) | | (57.1) | | (39.9) | | (60.1) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total | | 19.1 | | 16.5 | | 50.4 | | 102.2 | | 55.1 | | 99.9 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
1) The CSFB VaR is calculated using the US dollar as the base currency. For the purpose of this disclosure, the CSFB VaR numbers are translated using the respective CSG currency translation closing rate. |
2) As Credit Suisse Group does not manage its trading portfolios on a consolidated level, consolidated VaR calculations are performed on a monthly basis only. The average, maximum and minimum values therefore refer to the three month-ends during the quarter. The consolidated VaR calculations for Credit Suisse Group are net of diversification benefits between Credit Suisse First Boston and Credit Suisse Financial Services. |
Total credit risk exposure 1) |
| | Credit Suisse Financial Services | | Credit Suisse First Boston | | Credit Suisse Group | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
in CHF m | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Due from banks 2) | | 42,512 | | 34,595 | | 33,306 | | 66,785 | | 65,924 | | 43,462 | | 58,511 | | 68,939 | | 39,469 | |
Due from customers and mortgages 2) | | 138,060 | | 136,180 | | 132,353 | | 70,175 | | 83,880 | | 82,395 | | 206,794 | | 219,270 | | 213,206 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total due from banks and customers, gross 2) | | 180,572 | | 170,775 | | 165,659 | | 136,960 | | 149,804 | | 125,857 | | 265,305 | | 288,209 | | 252,675 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Contingent liabilities | | 11,743 | | 12,330 | | 12,349 | | 38,147 | | 29,586 | | 27,862 | | 40,981 | | 41,056 | | 39,104 | |
Irrevocable commitments 3) | | 3,341 | | 3,670 | | 2,263 | | 77,676 | | 80,773 | | 81,884 | | 81,370 | | 85,036 | | 85,333 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total banking products | | 195,656 | | 186,775 | | 180,271 | | 252,783 | | 260,163 | | 235,603 | | 387,656 | | 414,301 | | 377,112 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Loans held for sale 4) | | 0 | | 0 | | | | 17,028 | | 16,338 | | | | 17,028 | | 16,338 | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Derivative instruments 5) | | 4,401 | | 4,452 | | 5,018 | | 54,283 | | 56,416 | | 51,600 | | 56,877 | | 59,618 | | 54,757 | |
Securities lending banks | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | |
Securities lending customers | | 0 | | 0 | | 0 | | 1,782 | | 69 | | 64 | | 1,782 | | 69 | | 64 | |
Reverse repurchase agreements banks | | 5,232 | | 6,717 | | 6,283 | | 168,498 | | 144,214 | | 154,531 | | 169,427 | | 146,443 | | 156,397 | |
Reverse repurchase agreements customers | | 7,745 | | 8,094 | | 14,528 | | 41,094 | | 52,724 | | 56,987 | | 48,767 | | 60,536 | | 71,384 | |
Forward reverse repurchase agreements | | 0 | | 0 | | 0 | | 10,115 | | 13,855 | | 7,617 | | 10,115 | | 13,855 | | 7,617 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total traded products | | 17,378 | | 19,263 | | 25,829 | | 275,772 | | 267,278 | | 270,799 | | 286,968 | | 280,521 | | 290,219 | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total credit risk exposure, gross | | 213,034 | | 206,038 | | 206,100 | | 545,583 | | 543,779 | | 506,402 | | 691,652 | | 711,160 | | 667,331 | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Loan valuation allowances and provisions | | (3,098) | | (3,480) | | (4,092) | | (2,831) | | (3,053) | | (3,817) | | (5,932) | | (6,532) | | (7,911) | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total credit risk exposure, net | | 209,936 | | 202,558 | | 202,008 | | 542,752 | | 540,726 | | 502,585 | | 685,720 | | 704,628 | | 659,420 | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services. Credit Suisse Financial Services/Credit Suisse First Boston reflect business unit amounts. Total consolidated Credit Suisse Group amounts include adjustments and Corporate Center. |
2) Excluding loans held for sale, securities lending and reverse repurchase transactions. |
3) Excluding forward reverse repurchase agreements. Prior periods restated. |
4) Effective 1Q2003, loans held for sale are presented net of the related loan valuation allowances. |
5) Positive replacement values considering netting agreements. |
Total loan portfolio exposure and allowances and provisions for credit risk 1) |
| | Credit Suisse Financial Services | | Credit Suisse First Boston | | Credit Suisse Group | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
in CHF m | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Non-performing loans | | 2,291 | | 2,600 | | 3,004 | | 1,679 | | 1,926 | | 3,351 | | 3,970 | | 4,526 | | 6,355 | |
Non-interest earning loans | | 1,577 | | 1,706 | | 2,108 | | 437 | | 437 | | 217 | | 2,015 | | 2,143 | | 2,325 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total non-performing loans | | 3,868 | | 4,306 | | 5,112 | | 2,116 | | 2,363 | | 3,568 | | 5,985 | | 6,669 | | 8,680 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Restructured loans | | 22 | | 63 | | 52 | | 327 | | 198 | | 229 | | 349 | | 261 | | 281 | |
Potential problem loans | | 1,448 | | 1,599 | | 1,723 | | 730 | | 965 | | 1,685 | | 2,178 | | 2,565 | | 3,408 | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total other impaired loans | | 1,470 | | 1,662 | | 1,775 | | 1,057 | | 1,163 | | 1,914 | | 2,527 | | 2,826 | | 3,689 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total impaired loans | | 5,338 | | 5,968 | | 6,887 | | 3,173 | | 3,526 | | 5,482 | | 8,512 | | 9,495 | | 12,369 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total due from banks and customers, gross | | 180,572 | | 170,775 | | 165,659 | | 136,960 | | 149,804 | | 125,857 | | 265,305 | | 288,209 | | 252,675 | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Valuation allowances | | 3,061 | | 3,446 | | 4,053 | | 2,727 | | 2,928 | | 3,647 | | 5,790 | | 6,373 | | 7,703 | |
of which on principal |
| 2,454 | | 2,749 | | 3,201 | | 2,466 | | 2,692 | | 3,416 | | 4,921 | | 5,441 | | 6,617 | |
of which on interest |
| 607 | | 697 | | 852 | | 261 | | 236 | | 231 | | 869 | | 932 | | 1,086 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total due from banks and customers, net | | 177,511 | | 167,329 | | 161,606 | | 134,233 | | 146,876 | | 122,210 | | 259,515 | | 281,836 | | 244,972 | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Provisions for contingent liabilities and irrevocable commitments | | 37 | | 34 | | 39 | | 104 | | 125 | | 170 | | 142 | | 159 | | 208 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total valuation allowances and provisions | | 3,098 | | 3,480 | | 4,092 | | 2,831 | | 3,053 | | 3,817 | | 5,932 | | 6,532 | | 7,911 | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Ratios | | | | | | | | | | | | | | | | | | | |
Valuation allowances as % of total non-performing loans | | 79.1% | | 80.0% | | 79.3% | | 128.9% | | 123.9% | | 102.2% | | 96.7% | | 95.6% | | 88.7% | |
Valuation allowances as % of total impaired loans | | 57.3% | | 57.7% | | 58.9% | | 85.9% | | 83.0% | | 66.5% | | 68.0% | | 67.1% | | 62.3% | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services. Credit Suisse Financial Services/Credit Suisse First Boston reflect business unit amounts. Total consolidated Credit Suisse Group amounts include adjustments and Corporate Center. |
Roll forward of loan valuation allowance 1) |
| | Credit Suisse Financial Services | | Credit Suisse First Boston | | Credit Suisse Group | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 3Q2003 | | 2Q2003 | | 3Q2002 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
At beginning of period | | 3,446 | | 3,776 | | 4,618 | | 2,928 | | 3,115 | | 3,244 | | 6,373 | | 6,891 | | 7,862 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Additions | | 213 | | 129 | | 212 | | 141 | | 139 | | 611 | | 353 | | 268 | | 821 | |
Releases | | (133) | | (80) | | (107) | | (105) | | (70) | | (49) | | (238) | | (150) | | (156) | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Net additions charged to income statement | | 80 | | 49 | | 105 | | 36 | | 69 | | 562 | | 115 | | 118 | | 665 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Gross write-offs | | (438) | | (408) | | (747) | | (239) | | (373) | | (362) | | (676) | | (778) | | (1,110) | |
Recoveries | | 8 | | 6 | | 7 | | 12 | | 6 | | 5 | | 21 | | 12 | | 11 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Net write-offs | | (430) | | (402) | | (740) | | (227) | | (367) | | (357) | | (655) | | (766) | | (1,099) | |
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Provisions for interest | | 1 | | 13 | | 21 | | 31 | | 13 | | 30 | | 31 | | 27 | | 52 | |
Foreign currency translation impact and other | | (36) | | 10 | | (3) | | (41) | | 98 | | (103) | | (74) | | 103 | | (102) | |
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At end of period | | 3,061 | | 3,446 | | 4,001 | | 2,727 | | 2,928 | | 3,376 | | 5,790 | | 6,373 | | 7,378 | |
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1) Credit Suisse Financial Services/Credit Suisse First Boston reflect business unit amounts. Total consolidated Credit Suisse Group amounts include adjustments and Corporate Center. |
Net credit-related valuation allowances and provisions 1) |
| | Credit Suisse Financial Services | | Credit Suisse First Boston | | Credit Suisse Group | |
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in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 3Q2003 | | 2Q2003 | | 3Q2002 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Net additions to loan valuation allowance | | 80 | | 49 | | 105 | | 36 | | 69 | | 562 | | 115 | | 118 | | 665 | |
Net additions to provisions for contingent liabilities and irrevocable commitments | | 6 | | (5) | | 1 | | (26) | | (16) | | 172 | | (19) | | (19) | | 153 | |
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| | | | | | | | | | | | | | | | | | | |
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Total net credit-related valuation allowances and provisions charged to income statement | | 86 | | 44 | | 106 | | 10 | | 53 | | 734 | | 96 | | 99 | | 818 | |
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1) Credit Suisse Financial Services/Credit Suisse First Boston reflect business unit amounts. Total consolidated Credit Suisse Group amounts include adjustments and Corporate Center. |
REVIEW OF BUSINESS UNITS | CREDIT SUISSE FINANCIAL SERVICES
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Credit Suisse Financial Services recorded a net profit of CHF 1.8 billion in the third quarter of 2003. This result includes an after-tax gain resulting from divestitures of Winterthur of CHF 1.3 billion, net of related provisions. Additionally, Credit Suisse Financial Services third quarter result includes the strengthening by CHF 383 million after tax of certain provisions related to its current and former international business portfolio. The banking segments improved their results for the third consecutive quarter, due mainly to slightly higher operating income and lower operating expenses. Assets under management remained stable at CHF 713.9 billion at the end of the third quarter of 2003, despite a negative impact from the Winterthur divestitures. Net new assets almost doubled to CHF 9.5 billion versus the previous quarter.
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In the third quarter of 2003, Credit Suisse Financial Services reported a net profit of CHF 1.8 billion versus a net loss of CHF 1.2 billion in the corresponding period of the previous year. The third quarter 2003 result includes an after-tax gain of CHF 1.3 billion, net of related provisions, from the divestitures of Winterthurs Republic operations in the US, its Churchill operations in the UK and Winterthur Italy . Additionally, Credit Suisse Financial Services third quarter result includes the strengthening by CHF 383 million after tax of certain provisions related to its current and former international business portfolio. In the first nine months of 2003, Credit Suisse Financial Services recorded a net profit of CHF 3.3 billion versus a net loss of CHF 891 million in the corresponding period of the previous year. The business units result in the third quarter of 2003 was also affected by the business transfers discussed in An overview of Credit Suisse Group Business transfers on page 7.
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Winterthurs capital base was strengthened during the third quarter of 2003 as a result of earnings generation and the above-mentioned divestitures. In isolation, these divestitures increased Winterthurs EU Group solvency surplus capital by approximately CHF 3.5 billion, due to the combination of lowered required capital and higher available capital.
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Assets under management for Credit Suisse Financial Services remained stable versus the end of the previous quarter and amounted to CHF 713.9 billion at the end of the third quarter of 2003, despite the CHF 13.7 billion negative impact of the Winterthur divestitures. Net new assets almost doubled in the third quarter of 2003 versus the previous quarter, amounting to CHF 9.5 billion for Credit Suisse Financial Services, with an especially strong contribution from Private Banking of CHF 8.4 billion.
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As noted on page 5, the results of the Credit Suisse Financial Services business unit and its segments are discussed on an operating basis. For a reconciliation of operating basis business unit results to Swiss GAAP and a discussion of the material reconciling items, the purpose of the operating basis results and the reasons why management believes they provide useful information for investors, please refer to the Reconciliation of operating results to Swiss GAAP on pages 32 36.
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Private Banking
In the third quarter of 2003, Private Banking reported a segment profit of CHF 519 million, an increase of 5% versus the previous quarter and 79% compared with the corresponding period of the previous year. Though the third quarter usually shows seasonal weakness, operating income increased 3%, to CHF 1.6 billion, versus the previous quarter. Compared with the third quarter of 2002, operating income rose 17%. Main drivers for this significant improvement since 2002 were higher commission and service fee income as a result of the higher average asset base and increased client activity.
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Operating expenses in the third quarter of 2003 decreased by CHF 33 million, or 4%, to CHF 819 million quarter-on-quarter, and were down CHF 41 million, or 5%, compared with the corresponding period of 2002, in line with headcount development. In the third quarter of 2003, the cost/income ratio improved for the sixth consecutive quarter, decreasing 4.0 percentage points to 55.1%. The gross margin decreased to 125 bp in the third quarter of 2003, compared to 128 bp in the previous quarter, and increased 13 bp compared to 112 bp in the third quarter of 2002. The decrease in the third quarter of 2003 versus the previous quarter was mainly due to the higher average underlying asset base.
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Net new assets more than doubled in the third quarter of 2003 to CHF 8.4 billion, compared to net inflows of CHF 3.8 billion in the second quarter of 2003. Assets under management were CHF 505.1 billion as of September 30, 2003, which reflects an increase of CHF 11.3 billion, or 2.3%, from June 30, 2003, and of CHF 39.4 billion, or 8.5%, versus December 31, 2002. Asian and European Private Banking again achieved good net new asset growth.
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Corporate & Retail Banking
Corporate & Retail Banking reported a segment profit of CHF 169 million in the third quarter of 2003. The segment profit increased 8% versus the previous quarter and 54% compared with the corresponding period of the previous year. Operating income decreased slightly quarter-on-quarter, down 2% to CHF 789 million. This decrease is mainly due to lower other ordinary income that in the second quarter of 2003 contained realized gains from the recovery portfolio. Compared with the third quarter of 2002, Corporate & Retail Banking reported almost flat operating income. The net interest margin was 215 bp in the third quarter of 2003, corresponding to an increase of 3 bp from 212 bp in the previous quarter.
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Operating expenses decreased CHF 20 million, or 4%, to CHF 483 million in the third quarter of 2003 versus the previous quarter, due mainly to lower personnel expenses in line with headcount development. Compared with the corresponding period of the previous year, operating expenses decreased CHF 56 million, or 10%, due to a reduction of both other operating expenses and personnel expenses.
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In the third quarter of 2003, the cost/income ratio improved further to 64.4%, compared to 65.8% in the previous quarter and 72.8% in the third quarter of 2002. In the third quarter of 2003, the actual credit-related provisions recorded were CHF 24 million above the statistical valuation adjustments, but were CHF 20 million below the statistical valuation adjustments for the first nine months of 2003. The actual net credit-related valuation allowances and provisions in the third quarter of 2003 amounted to CHF 84 million and CHF 173 million for the first nine months of 2003. Impaired loans were further reduced by CHF 0.6 billion to CHF 5.0 billion in the third quarter of 2003 compared to June 30, 2003. The return on average allocated capital increased from 12.9% in the second quarter to 13.6% in the third quarter of 2003.
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Net new assets of CHF 1.8 billion were recorded in the third quarter of 2003, compared to a net asset inflow of CHF 0.5 billion in the previous quarter. Assets under management were CHF 69.4 billion as of September 30, 2003, which reflects an increase of CHF 2.6 billion, or 3.9%, from June 30, 2003, and a decrease of 0.9 billion, or 1.3%, versus December 31, 2002.
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Life & Pensions
In the first nine months of 2003, Life & Pensions reported a segment profit of CHF 354 million, representing a significant improvement from the loss of CHF 1.5 billion in the corresponding period of the previous year. In the third quarter of 2003, the segment profit amounted to CHF 126 million, including an after-tax gain of CHF 57 million from the divestiture of the Italian operations.
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Life & Pensions reported a reduction in gross premiums written of 10%, or CHF 1.5 billion, to CHF 13.3 billion in the first nine months of 2003, compared with the same period of 2002. Adjusted for acquisitions, divestitures and exchange rate impacts, gross premiums written decreased 5%. The decline in reported gross premiums written in the first nine months of 2003 was primarily due to Life & Pensions ongoing selective underwriting policy and strong reported single premium growth during the first nine months of the previous year. Included in the gross premiums written for the first nine months of 2003 are premiums of the divested Winterthur Italy of CHF 692 million. Net new assets in the first nine months of 2003 amounted to CHF 2.0 billion.
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In the first nine months of 2003, administration costs decreased 18%, or CHF 192 million, to CHF 862 million, compared with the corresponding period of the previous year. The expense ratio decreased 0.3 percentage points in the first nine months of 2003 to 10.6%, compared to 10.9% in the corresponding period of the previous year. Total expenses in the third quarter of 2003 were affected by additional amortization and write-downs of deferred acquisition costs of CHF 201 million, with a net impact of CHF 75 million on the segment result, recognized due to the lowered expectations for long-term investment returns.
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Investment performance improved CHF 2.7 billion to CHF 3.8 billion in the first nine months of 2003, compared with the corresponding period of the previous year, primarily due to a significant decrease in equity impairments and realized losses. Reflecting the improved investment performance in the first nine months of 2003, the total return on invested assets amounted to 5.0%, compared to 1.5% in the corresponding period of 2002. Current income was 4.0% and realized gains/losses and other income/expenses were 1.0% in the first nine months of 2003.
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Insurance
In the first nine months of 2003, Insurance reported a segment profit of CHF 1.2 billion compared to a segment loss of CHF 1.0 billion in the corresponding period of the previous year. The strong recovery of the Insurance segment in the first nine months of 2003 was mainly driven by divestiture-related gains and a significant improvement in investment performance, as well as an improvement in its underwriting result, due mainly to the implementation of tariff increases and a continued strict underwriting policy.
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In the third quarter of 2003, the segment profit amounted to CHF 991 million, including an after-tax gain of CHF 1.3 billion, net of related provisions, from the divestiture of its US subsidiary Republic Financial Services, Churchill Insurance Group in the UK and Winterthur Italy. In addition, certain provisions of CHF 383 million after tax related to the current and former international business portfolio were recorded in the third quarter.
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In the first nine months of 2003, Insurances net premiums earned increased CHF 205 million, or 2%, to CHF 11.9 billion compared with the corresponding period of the previous year. Adjusted for acquisitions, divestitures and exchange rate impacts, net premiums earned increased 8%, primarily due to tariff increases across all major markets. Included in the net premiums earned in the first nine months of 2003 are premiums of the three divested Winterthur operations of CHF 4.5 billion.
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Insurance improved its net underwriting result before dividends to policyholders by CHF 218 million in the first nine months of 2003, reflecting a combined ratio improvement of 1.9 percentage points to 101.6% in the first nine months of 2003, compared to 103.5% in the first nine months of the previous year. This improvement resulted from a decrease in the claims ratio of 1.5 percentage points to 73.2% in the first nine months of 2003 versus the corresponding period of the previous year, mainly reflecting benefits from improved pricing and continued streamlining of the business portfolio. The reported combined ratio of 103.6% in the third quarter of 2003 includes CHF 117 million of certain provisions related to the current and former international business portfolio, which corresponds to 3.1 percentage points in the combined ratio.
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Administration costs decreased 8%, or CHF 123 million, to CHF 1.4 billion in the first nine months of 2003 compared with the corresponding period of the previous year, despite premium growth, reflecting continued progress in ongoing efficiency initiatives. Compared with the corresponding period of the previous year, the expense ratio improved 0.4% to 28.4% in the first nine months of 2003, with a reduction in administration costs offset by higher policy acquisition costs.
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In the first nine months of 2003, Insurance reported net investment income of CHF 952 million versus a net investment loss of CHF 69 million in the corresponding period of the previous year, primarily due to a significant decrease in equity impairments and realized losses. Reflecting the improved investment performance in the first nine months of 2003, the total return on invested assets amounted to 3.8%, compared to 0.3% in the corresponding period of 2002. Current income was 3.9% and realized gains/losses and other income/expenses were 0.1% in the first nine months of 2003.
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Credit Suisse Financial Services business unit income statement operating 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
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in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
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Operating income 2) | | 4,548 | | 3,544 | | 2,364 | | 28 | | 92 | | 11,594 | | 8,586 | | 35 | |
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Personnel expenses | | 1,385 | | 1,434 | | 1,486 | | (3) | | (7) | | 4,232 | | 4,500 | | (6) | |
Other operating expenses | | 732 | | 744 | | 884 | | (2) | | (17) | | 2,292 | | 2,691 | | (15) | |
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Operating expenses | | 2,117 | | 2,178 | | 2,370 | | (3) | | (11) | | 6,524 | | 7,191 | | (9) | |
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Gross operating profit | | 2,431 | | 1,366 | | (6) | | 78 | | | | 5,070 | | 1,395 | | 263 | |
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Depreciation of non-current assets | | 177 | | 156 | | 143 | | 13 | | 24 | | 503 | | 482 | | 4 | |
Amortization of Present Value of Future Profits (PVFP) | | 102 | | 38 | | 119 | | 168 | | (14) | | 192 | | 205 | | (6) | |
Valuation adjustments, provisions and losses | | 90 | | 90 | | 91 | | 0 | | (1) | | 261 | | 285 | | (8) | |
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Net operating profit/(loss) before extraordinary items, acquisition-related costs, exceptional items and taxes | | 2,062 | | 1,082 | | (359) | | 91 | | | | 4,114 | | 423 | | | |
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Extraordinary income/(expenses), net | | 3 | | 8 | | 6 | | (63) | | (50) | | 18 | | 24 | | (25) | |
Taxes 3) 4) | | (260) | | (223) | | (689) | | 17 | | (62) | | (742) | | (1,192) | | (38) | |
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Net operating profit/(loss) before acquisition-related costs, exceptional items and minority interests | | 1,805 | | 867 | | (1,042) | | 108 | | | | 3,390 | | (745) | | | |
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Amortization of acquired intangible assets and goodwill | | (25) | | (27) | | (27) | | (7) | | (7) | | (77) | | (102) | | (25) | |
Exceptional items | | 0 | | 0 | | (119) | | | | (100) | | 0 | | (119) | | (100) | |
Tax impact | | 1 | | 0 | | 1 | | | | 0 | | 2 | | 2 | | 0 | |
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Business unit result before minority interests | | 1,781 | | 840 | | (1,187) | | 112 | | | | 3,315 | | (964) | | | |
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Minority interests | | 8 | | (10) | | 17 | | | | (53) | | (10) | | 100 | | | |
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Business unit result 5) | | 1,789 | | 830 | | (1,170) | | 116 | | | | 3,305 | | (864) | | | |
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Increased/(decreased) credit-related valuation adjustments, net of tax 6) | | 11 | | (21) | | 24 | | | | (54) | | (28) | | 27 | | | |
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Net profit/(loss) | | 1,778 | | 851 | | (1,194) | | 109 | | | | 3,333 | | (891) | | | |
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Reconciliation to net operating profit/(loss) | | | | | | | | | | | | | | | | | |
Business unit result | | 1,789 | | 830 | | (1,170) | | 116 | | | | 3,305 | | (864) | | | |
Amortization of acquired intangible assets and goodwill, net of tax | | 24 | | 27 | | 26 | | (11) | | (8) | | 75 | | 80 | 7) | (6) | |
Exceptional items, net of tax | | 0 | | 0 | | 119 | | | | (100) | | 0 | | 119 | | (100) | |
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Net operating profit/(loss) | | 1,813 | | 857 | | (1,025) | | 112 | | | | 3,380 | | (665) | | | |
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1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. The operating basis business unit results reflect the results of the separate segments comprising the business unit. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill, and exceptional items, not allocated to the segments are included in the business unit results. Certain other items, including credit-related valuation adjustments resulting from the difference between the statistical and actual credit provisions and gains/losses from sales of investments within the insurance business are presented in the operating basis business unit results based on the Groups segment reporting principles. For a reconciliation and a discussion of the material reconciling items, please refer to Reconciliation of operating results to Swiss GAAP. |
2) For the purpose of the consolidated financial statements, operating income for the insurance business is defined as net premiums earned, less claims incurred and change in technical provisions and expenses for processing claims, less commissions, plus net investment income from the insurance business. |
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 3Q2002 and for the 9 months 2002 of CHF 590 m and CHF 875 m, respectively. |
4) Excluding tax impact on amortization of acquired intangible assets and goodwill. |
5) Represents net profit/(loss) excluding credit-related valuation adjustments resulting from the difference between the statistical and actual credit provisions, net of tax. |
6) Increased/(decreased) credit-related valuation adjustments before tax of CHF 14 m, CHF 27 m, CHF 31 m, CHF 37 m and CHF 35 m for 3Q2003, 2Q2003, 3Q2002, 9 months 2003 and 9 months 2002, respectively. |
7) Excluding a CHF 20 m write-off relating to a participation. |
Credit Suisse Financial Services business unit key information 1) |
| | | | | | | | 9 months |
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| | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | |
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Cost/income ratio 2) | | 70.7% | | 66.9% | | 110.0% | | 68.8% | | 92.3% | |
Cost/income ratio operating 3) 4) | | 50.4% | | 65.9% | | 106.3% | | 60.6% | | 89.4% | |
Cost/income ratio operating, banking 3) | | 58.2% | | 61.4% | | 70.9% | | 61.5% | | 64.6% | |
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Return on average allocated capital 2) | | 49.2% | | 25.8% | | (39.4%) | | 32.9% | | (10.6%) | |
Return on average allocated capital operating 3) | | 50.2% | | 26.0% | | (33.9%) | | 33.3% | | (8.2%) | |
Average allocated capital in CHF m | | 14,392 | | 13,326 | | 12,286 | | 13,566 | | 12,432 | |
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Growth in assets under management | | 0.5% | | 7.0% | | (3.8%) | | 5.4% | | (8.3%) | |
of which net new assets |
| 1.3% | | 0.7% | | 0.2% | | 2.2% | | 2.6% | |
of which market movement and structural effects |
| 1.1% | | 6.3% | | (4.1%) | | 5.3% | | (10.6%) | |
of which acquisitions/(divestitures) |
| (1.9%) | | (0.1%) | | 0.1% | | (2.1%) | | (0.3%) | |
of which discretionary |
| (1.3%) | | 2.6% | | (0.6%) | | 0.8% | | (1.3%) | |
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| | | | | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
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Assets under management in CHF bn | | | | | | 713.9 | | 710.2 | | 677.5 | |
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Number of employees (full-time equivalents) | | | | | | 41,834 | | 53,069 | | 54,378 | |
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1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. |
2) Based on the business unit results on a Swiss GAAP basis. |
3) Based on the operating basis business unit results, which exclude certain acquisition-related costs and exceptional items not allocated to the segments and reflect certain reclassifications discussed in the Reconciliation of operating results to Swiss GAAP. |
4) Excluding amortization of PVFP from the insurance business within Credit Suisse Financial Services. |
Overview of business unit Credit Suisse Financial Services operating 1) |
| | | | | | | | | | Credit | |
| | | | Corporate | | | | | | Suisse | |
| | Private | | & Retail | | Life & | | | | Financial | |
3Q2003, in CHF m | | Banking | | Banking | | Pensions | | Insurance | | Services | |
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Operating income 2) | | 1,571 | | 789 | | 599 | | 1,589 | | 4,548 | |
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Personnel expenses | | 560 | | 302 | | 182 | | 341 | | 1,385 | |
Other operating expenses | | 259 | | 181 | | 106 | | 186 | | 732 | |
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Operating expenses | | 819 | | 483 | | 288 | | 527 | | 2,117 | |
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Gross operating profit | | 752 | | 306 | | 311 | | 1,062 | | 2,431 | |
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Depreciation of non-current assets | | 47 | | 25 | | 60 | | 45 | | 177 | |
Amortization of Present Value of Future Profits (PVFP) | | | | | | 101 | | 1 | | 102 | |
Valuation adjustments, provisions and losses | | 25 | | 65 | | | | | | 90 | |
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| | | | | | | | | | | |
| | | | | | | | | | | |
Net operating profit before extraordinary items, acquisition-related costs and taxes | | 680 | | 216 | | 150 | | 1,016 | | 2,062 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Extraordinary income/(expenses), net | | 3 | | 0 | | 0 | | 0 | | 3 | |
Taxes 3) | | (164) | | (47) | | (24) | | (25) | | (260) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Net operating profit before acquisition-related costs and minority interests | | 519 | | 169 | | 126 | | 991 | | 1,805 | |
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| | | | | | | | | | | |
| | | | | | | | | | | |
Amortization of acquired intangible assets and goodwill | | | | | | | | | | (25) | |
Tax impact | | | | | | | | | | 1 | |
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| | | | | | | | | | | |
Business unit result before minority interests | | | | | | | | | | 1,781 | |
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| | | | | | | | | | | |
| | | | | | | | | | | |
Minority interests | | | | | | | | | | 8 | |
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Business unit result 4) | | | | | | | | | | 1,789 | |
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| | | | | | | | | | | |
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Other data: | | | | | | | | | | | |
Average allocated capital 5) | | 2,769 | | 4,975 | | 6,649 | | | | 14,392 | |
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| | | | | | | | | | | |
1) The operating basis business unit results reflect the results of the separate segments comprising the business unit. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. Certain other items, including credit-related valuation adjustments resulting from the difference between the statistical and actual credit provisions and gains/losses from sales of investments within the insurance business are presented in the operating basis business unit results based on the Groups segment reporting principles. For a reconciliation and a discussion of the material reconciling items, please refer to Reconciliation of operating results to Swiss GAAP. |
2) Operating income for the insurance business is defined as net premiums earned, less claims incurred and change in technical provisions and expenses for processing claims, less commissions, plus net investment income from the insurance business. Gains or losses related to divestitures and sales of investments within the insurance business are recorded as operating income at the business unit level and reclassified to extraordinary income/(expenses) in the consolidated financial statements in accordance with Swiss GAAP. |
3) Excluding tax impact on amortization of acquired intangible assets and goodwill. |
4) Represents net profit excluding credit-related valuation adjustments resulting from the difference between the statistical and actual credit provisions. |
5) Amount relating to Life & Pensions and Insurance segments represents the average shareholders' equity of Winterthur Swiss Insurance Company. |
Private Banking income statement 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
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in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
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| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net interest income | | 334 | | 365 | | 326 | | (8) | | 2 | | 1,025 | | 1,039 | | (1) | |
Net commission and service fee income | | 1,038 | | 986 | | 934 | | 5 | | 11 | | 2,932 | | 3,203 | | (8) | |
Net trading income | | 188 | | 159 | | 72 | | 18 | | 161 | | 503 | | 416 | | 21 | |
Other ordinary income | | 11 | | 9 | | 14 | | 22 | | (21) | | 29 | | 47 | | (38) | |
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| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating income | | 1,571 | | 1,519 | | 1,346 | | 3 | | 17 | | 4,489 | | 4,705 | | (5) | |
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| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Personnel expenses | | 560 | | 577 | | 543 | | (3) | | 3 | | 1,681 | | 1,730 | | (3) | |
Other operating expenses | | 259 | | 275 | | 317 | | (6) | | (18) | | 820 | | 981 | | (16) | |
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| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating expenses | | 819 | | 852 | | 860 | | (4) | | (5) | | 2,501 | | 2,711 | | (8) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Gross operating profit | | 752 | | 667 | | 486 | | 13 | | 55 | | 1,988 | | 1,994 | | (0) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Depreciation of non-current assets | | 47 | | 46 | | 79 | | 2 | | (41) | | 150 | | 182 | | (18) | |
Valuation adjustments, provisions and losses 2) | | 25 | | 19 | | 17 | | 32 | | 47 | | 48 | | 51 | | (6) | |
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| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit before extraordinary items, exceptional items and taxes | | 680 | | 602 | | 390 | | 13 | | 74 | | 1,790 | | 1,761 | | 2 | |
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| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Extraordinary income/(expenses), net | | 3 | | 7 | | 2 | | (57) | | 50 | | 17 | | 21 | | (19) | |
Taxes 3) | | (164) | | (117) | | (102) | | 40 | | 61 | | (401) | | (400) | | 0 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit before exceptional items and minority interests (segment result) | | 519 | | 492 | | 290 | | 5 | | 79 | | 1,406 | | 1,382 | | 2 | |
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Other data: | | | | | | | | | | | | | | | | | |
Increased/(decreased) credit-related valuation adjustments 2) | | (10) | | (7) | | 17 | | 43 | | | | (17) | | 10 | | | |
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| | | | | | | | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill, and exceptional items not allocated to the segments are included in the business unit results. |
2) Increased/(decreased) credit-related valuation adjustments resulting from the difference between the statistical and actual credit provisions. |
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 3Q2002 and for the 9 months 2002 of CHF 123 m and CHF 398 m, respectively. |
Private Banking balance sheet information 1) |
| | | | | | | | Change | | Change | |
| | | | | | | | in % from | | in % from | |
in CHF m | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.06.03 | | 31.12.02 | |
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| | | | | | | | | | | |
| | | | | | | | | | | |
Total assets | | 183,698 | | 175,451 | | 171,126 | | 5 | | 7 | |
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| | | | | | | | | | | |
| | | | | | | | | | | |
Due from customers | | 32,548 | | 31,958 | | 36,164 | | 2 | | (10) | |
Mortgages | | 25,695 | | 24,527 | | 22,935 | | 5 | | 12 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. |
Private Banking key information 1) |
| | | | | | | | 9 months |
| | | | | | | | | | | |
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| | | | | | | | | | | |
| | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | |
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Cost/income ratio 2) | | 55.1% | | 59.1% | | 69.8% | | 59.1% | | 61.5% | |
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Average allocated capital in CHF m | | 2,769 | | 2,671 | | 2,536 | | 2,657 | | 2,507 | |
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| | | | | | | | | | | |
| | | | | | | | | | | |
Pre-tax margin 2) | | 43.5% | | 40.1% | | 29.1% | | 40.3% | | 37.9% | |
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Fee income/operating income | | 66.1% | | 64.9% | | 69.4% | | 65.3% | | 68.1% | |
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Net new assets in CHF bn | | 8.4 | | 3.8 | | 3.4 | | 13.7 | | 18.2 | |
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| | | | | | | | | | | |
Growth in assets under management | | 2.3% | | 8.1% | | (4.4%) | | 8.5% | | (9.3%) | |
of which net new assets |
| 1.7% | | 0.8% | | 0.7% | | 2.9% | | 3.5% | |
of which market movement and structural effects |
| 0.6% | | 7.2% | | (5.1%) | | 5.5% | | (12.8%) | |
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| | | | | | | | | | | |
Gross margin 3) | | 124.8 bp | | 127.9 bp | | 111.8 bp | | 124.8 bp | | 123.7 bp | |
of which asset-driven |
| 78.6 bp | | 81.5 bp | | 79.7 bp | | 80.2 bp | | 82.0 bp | |
of which transaction-driven |
| 42.2 bp | | 42.3 bp | | 27.5 bp | | 40.5 bp | | 37.0 bp | |
of which other |
| 4.0 bp | | 4.1 bp | | 4.6 bp | | 4.1 bp | | 4.7 bp | |
Net margin 4) | | 41.2 bp | | 41.4 bp | | 24.1 bp | | 39.1 bp | | 36.3 bp | |
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| | | | | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
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Assets under management in CHF bn | | | | | | 505.1 | | 493.8 | | 465.7 | |
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Number of employees (full-time equivalents) | | | | | | 12,032 | | 12,318 | | 12,967 | |
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| | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. |
2) Based on the segment results, which exclude certain acquisition-related costs and exceptional items not allocated to the segment. |
3) Operating income/average assets under management. |
4) Net operating profit before exceptional items and minority interests (segment result)/average assets under management. |
Corporate & Retail Banking income statement 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
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in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
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Net interest income | | 530 | | 519 | | 538 | | 2 | | (1) | | 1,556 | | 1,615 | | (4) | |
Net commission and service fee income | | 165 | | 158 | | 177 | | 4 | | (7) | | 485 | | 547 | | (11) | |
Net trading income | | 73 | | 80 | | 69 | | (9) | | 6 | | 224 | | 212 | | 6 | |
Other ordinary income | | 21 | | 46 | | 0 | | (54) | | | | 81 | | 38 | | 113 | |
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Operating income | | 789 | | 803 | | 784 | | (2) | | 1 | | 2,346 | | 2,412 | | (3) | |
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Personnel expenses | | 302 | | 322 | | 313 | | (6) | | (4) | | 939 | | 943 | | (0) | |
Other operating expenses | | 181 | | 181 | | 226 | | 0 | | (20) | | 542 | | 684 | | (21) | |
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| | | | | | | | | | | | | | | | | |
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Operating expenses | | 483 | | 503 | | 539 | | (4) | | (10) | | 1,481 | | 1,627 | | (9) | |
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Gross operating profit | | 306 | | 300 | | 245 | | 2 | | 25 | | 865 | | 785 | | 10 | |
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Depreciation of non-current assets | | 25 | | 25 | | 32 | | 0 | | (22) | | 74 | | 78 | | (5) | |
Valuation adjustments, provisions and losses 2) | | 65 | | 71 | | 74 | | (8) | | (12) | | 213 | | 234 | | (9) | |
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Net operating profit before extraordinary items and taxes | | 216 | | 204 | | 139 | | 6 | | 55 | | 578 | | 473 | | 22 | |
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Extraordinary income/(expenses), net | | 0 | | 1 | | 4 | | (100) | | (100) | | 1 | | 3 | | (67) | |
Taxes 3) | | (47) | | (49) | | (33) | | (4) | | 42 | | (134) | | (112) | | 20 | |
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Net operating profit before minority interests (segment result) | | 169 | | 156 | | 110 | | 8 | | 54 | | 445 | | 364 | | 22 | |
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Other data: | | | | | | | | | | | | | | | | | |
Increased/(decreased) credit-related valuation adjustments 2) | | 24 | | (20) | | 14 | | | | 71 | | (20) | | 25 | | | |
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| | | | | | | | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. |
2) Increased/(decreased) credit-related valuation adjustments resulting from the difference between the statistical and actual credit provisions. |
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would not have had an impact on the taxes reported for 3Q2002 and for the 9 months 2002. |
Corporate & Retail Banking balance sheet information 1) |
| | | | | | | | Change | | Change | |
| | | | | | | | in % from | | in % from | |
in CHF m | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.06.03 | | 31.12.02 | |
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Total assets | | 96,425 | | 97,557 | | 94,757 | | (1) | | 2 | |
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Due from customers | | 25,318 | | 26,943 | | 28,048 | | (6) | | (10) | |
Mortgages | | 59,467 | | 58,616 | | 57,165 | | 1 | | 4 | |
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Due to customers in savings and investment deposits | | 28,080 | | 27,848 | | 27,081 | | 1 | | 4 | |
Due to customers, other | | 28,728 | | 28,228 | | 27,611 | | 2 | | 4 | |
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1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services. |
Corporate & Retail Banking key information 1) |
| | | | | | | | 9 months |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | |
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Cost/income ratio 2) | | 64.4% | | 65.8% | | 72.8% | | 66.3% | | 70.7% | |
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Return on average allocated capital 2) | | 13.6% | | 12.9% | | 8.7% | | 12.2% | | 9.5% | |
Average allocated capital in CHF m | | 4,975 | | 4,828 | | 5,080 | | 4,859 | | 5,103 | |
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Pre-tax margin 2) | | 27.4% | | 25.5% | | 18.2% | | 24.7% | | 19.7% | |
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Personnel expenses/operating income | | 38.3% | | 40.1% | | 39.9% | | 40.0% | | 39.1% | |
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Net interest margin | | 215 bp | | 212 bp | | 223 bp | | 213 bp | | 214 bp | |
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Loan growth | | (0.9%) | | (0.5%) | | (0.6%) | | (0.5%) | | 0.6% | |
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Net new assets in CHF bn | | 1.8 | | 0.5 | | (2.3) | | (1.1) | | (3.4) | |
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| | | | | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
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Deposit/loan ratio | | | | | | 67.0% | | 65.5% | | 64.2% | |
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Assets under management in CHF bn | | | | | | 69.4 | | 66.8 | | 70.3 | |
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Number of employees (full-time equivalents) | | | | | | 8,690 | | 8,899 | | 9,281 | |
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Number of branches | | | | | | 220 | | 221 | | 223 | |
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1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services. |
2) Based on the segment results, which exclude certain acquisition-related costs not allocated to the segment. |
Life & Pensions income statement 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
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in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
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Gross premiums written | | 3,312 | | 3,466 | | 4,543 | | (4) | | (27) | | 13,277 | | 14,801 | | (10) | |
Reinsurance ceded | | (33) | | (13) | | 171 | | 154 | | | | (69) | | (26) | | 165 | |
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Net premiums written | | 3,279 | | 3,453 | | 4,714 | | (5) | | (30) | | 13,208 | | 14,775 | | (11) | |
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| | | | | | | | | | | | | | | | | |
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Change in provision for unearned premiums | | 2 | | 0 | | 8 | | | | (75) | | (8) | | (33) | | (76) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net premiums earned | | 3,281 | | 3,453 | | 4,722 | | (5) | | (31) | | 13,200 | | 14,742 | | (10) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Death and other benefits incurred | | (3,791) | | (2,870) | | (2,672) | | 32 | | 42 | | (10,761) | | (9,319) | | 15 | |
Change in provision for future policyholder benefits (technical) | | 243 | | (1,098) | | (2,506) | | | | | | (3,726) | | (6,866) | | (46) | |
Change in provision for future policyholder benefits (separate account) 2) | | (435) | | (916) | | 1,104 | | (53) | | | | (1,140) | | 1,650 | | | |
Dividends to policyholders incurred | | (169) | | (202) | | 207 | | (16) | | | | (395) | | 1,020 | | | |
Policy acquisition costs (including change in DAC/PVFP) | | (305) | | (120) | | (358) | | 154 | | (15) | | (545) | | (556) | | (2) | |
Administration costs | | (263) | | (277) | | (333) | | (5) | | (21) | | (862) | | (1,054) | | (18) | |
Investment income general account | | 1,304 | | 1,296 | | 309 | | 1 | | 322 | | 3,821 | | 1,105 | | 246 | |
Investment income separate account 2) | | 435 | | 916 | | (1,104) | | (53) | | | | 1,140 | | (1,650) | | | |
Interest received and paid | | (28) | | (14) | | (30) | | 100 | | (7) | | (61) | | (53) | | 15 | |
Interest on bonuses credited to policyholders | | (32) | | (53) | | (29) | | (40) | | 10 | | (118) | | (105) | | 12 | |
Other income/(expenses), net | | (90) | | 25 | | 5 | | | | | | (78) | | 98 | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit/(loss) before taxes | | 150 | | 140 | | (685) | | 7 | | | | 475 | | (988) | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Taxes 3) | | (24) | | (23) | | (396) | | 4 | | (94) | | (121) | | (505) | | (76) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit/(loss) before minority interests (segment result) | | 126 | | 117 | | (1,081) | | 8 | | | | 354 | | (1,493) | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
1) The presentation of segment results differs from the presentation of the Group's consolidated results as it reflects the way the insurance business is managed, which is in line with peers in the insurance industry. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. |
2) This represents the market impact for separate account (or unit-linked) business, where the investment risk is borne by the policyholder. |
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 3Q2002 and for the 9 months 2002 of CHF 302 m and CHF 247 m, respectively. |
Life & Pensions key information |
| | | | | | | | 9 months |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Expense ratio 1) | | 17.1% | | 11.5% | | 15.2% | | 10.6% | | 10.9% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Growth in gross premiums written | | (27.1%) | | (0.9%) | | 44.8% | | (10.3%) | | 18.3% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Return on invested assets (excluding separate account business) | | | | | | | | | | | |
Current income |
| 4.0% | | 4.2% | | 3.6% | | 4.0% | | 4.0% | |
Realized gains/losses and other income/expenses |
| 1.0% | | 0.9% | | (2.4%) | | 1.0% | | (2.5%) | |
Total return on invested assets 2) |
| 5.0% | | 5.1% | | 1.2% | | 5.0% | | 1.5% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Net new assets in CHF bn 3) | | (0.7) | | 0.5 | | 0.4 | | 2.0 | | 4.7 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total sales in CHF m 4) | | 3,883 | | 4,164 | | 5,240 | | 15,419 | | 17,507 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Assets under management in CHF bn 5) | | | | | | 112.3 | | 117.0 | | 110.8 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Technical provisions in CHF m | | | | | | 107,437 | | 113,059 | | 105,939 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Number of employees (full-time equivalents) | | | | | | 7,392 | | 7,519 | | 7,815 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
1) Operating expenses (i.e. policy acquisition costs and administration costs)/gross premiums written. Previous periods restated to reflect change in calculation. |
2) Total return on invested assets includes depreciation on real estate and investment expenses as well as investment income and realized gains and losses. |
3) Based on change in technical provisions for traditional business, adjusted for technical interests, net inflow of separate account business and change in off-balance sheet business such as funds. |
4) Includes gross premiums written and off-balance sheet sales. |
5) Based on savings-related provisions for policyholders plus off-balance sheet assets. |
Insurance income statement 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Gross premiums written | | 3,385 | | 4,037 | | 3,755 | | (16) | | (10) | | 14,257 | | 14,545 | | (2) | |
Reinsurance ceded | | (236) | | (236) | | (232) | | 0 | | 2 | | (899) | | (851) | | 6 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net premiums written | | 3,149 | | 3,801 | | 3,523 | | (17) | | (11) | | 13,358 | | 13,694 | | (2) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Change in provision for unearned premiums and in provision for future policy benefits (health) | | 663 | | 285 | | 414 | | 133 | | 60 | | (1,482) | | (2,023) | | (27) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net premiums earned | | 3,812 | | 4,086 | | 3,937 | | (7) | | (3) | | 11,876 | | 11,671 | | 2 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Claims and annuities incurred, net | | (2,918) | | (2,945) | | (2,920) | | (1) | | 0 | | (8,689) | | (8,715) | | 0 | |
Dividends to policyholders incurred, net | | (95) | | (77) | | (53) | | 23 | | 79 | | (217) | | (3) | | | |
Policy acquisition costs (including change in DAC/PVFP) | | (582) | | (726) | | (630) | | (20) | | (8) | | (2,018) | | (1,882) | | 7 | |
Administration costs | | (450) | | (433) | | (496) | | 4 | | (9) | | (1,355) | | (1,478) | | (8) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Underwriting result, net | | (233) | | (95) | | (162) | | 145 | | 44 | | (403) | | (407) | | (1) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net investment income | | 348 | | 315 | | 110 | | 10 | | 216 | | 952 | | (69) | | | |
Interest received and paid | | (28) | | (27) | | (36) | | 4 | | (22) | | (102) | | (67) | | 52 | |
Other income/(expenses), net | | 929 | | (57) | | (115) | | | | | | 824 | | (280) | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit/(loss) before taxes | | 1,016 | | 136 | | (203) | | | | | | 1,271 | | (823) | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Taxes 2) | | (25) | | (34) | | (158) | | (26) | | (84) | | (86) | | (175) | | (51) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit/(loss) before minority interests (segment result) | | 991 | | 102 | | (361) | | | | | | 1,185 | | (998) | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
1) The presentation of segment results differs from the presentation of the Group's consolidated results as it reflects the way the insurance business is managed, which is in line with peers in the insurance industry. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. |
2) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 3Q2002 and for the 9 months 2002 of CHF 132 m and CHF 118 m, respectively. |
Insurance key information |
| | | | | | | | 9 months |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Combined ratio (excluding dividends to policyholders) | | 103.6% | | 100.5% | | 102.8% | | 101.6% | | 103.5% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Claims ratio 1) | | 76.5% | | 72.1% | | 74.2% | | 73.2% | | 74.7% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Expense ratio 2) | | 27.1% | | 28.4% | | 28.6% | | 28.4% | | 28.8% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Return on invested assets | | | | | | | | | | | |
Current income |
| 3.8% | | 4.1% | | 4.1% | | 3.9% | | 4.3% | |
Realized gains/losses and other income/expenses |
| 0.1% | | (0.1%) | | (2.5%) | | (0.1%) | | (4.6%) | |
Total return on invested assets 3) |
| 3.9% | | 4.0% | | 1.6% | | 3.8% | | (0.3%) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Assets under management in CHF bn | | | | | | 27.1 | | 32.6 | | 30.7 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Technical provisions in CHF m | | | | | | 22,764 | | 32,308 | | 28,745 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Number of employees (full-time equivalents) | | | | | | 13,720 | | 24,333 | | 24,315 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
1) Claims and annuities incurred, net/net premiums earned. |
2) Operating expenses (i.e. policy acquisition costs and administration costs)/net premiums earned. |
3) Total return on invested assets includes depreciation on real estate and investment expenses as well as investment income and realized gains and losses. |
REVIEW OF BUSINESS UNITS | CREDIT SUISSE FIRST BOSTON
|
Credit Suisse First Boston reported a net profit of USD 224 million (CHF 308 million) in the third quarter of 2003, down 21% compared with the second quarter of 2003. Institutional Securities segment profit declined primarily on lower Fixed Income results partially offset by lower expenses. CSFB Financial Services segment profit declined compared with the previous quarter. Credit Suisse First Bostons assets under management totaled USD 366.8 billion (CHF 485.3 billion) as of September 30, 2003.
|
Credit Suisse First Bostons net operating profit in the third quarter of 2003, which is net profit excluding the amortization of goodwill and acquired intangible assets, net of tax, decreased to USD 358 million (CHF 491 million) from USD 412 million (CHF 548 million) in the second quarter of 2003, and increased compared to a net loss of USD 250 million (CHF 415 million) in the third quarter of 2002. For the first nine months of 2003, net operating profit was USD 1.0 billion (CHF 1.4 billion).
|
As announced previously, in the third quarter Credit Suisse First Boston introduced a three-year vesting period for future stock awards in line with its long-term service and retention strategy and industry practice in investment banking. Accordingly, future stock awards will be expensed over a three-year period beginning in 2004. The net pre-tax impact of this change in the third quarter was USD 90 million (CHF 122 million), and USD 65 million (CHF 88 million) after tax. The reversal of the pre-tax accrual for the first six months of 2003 of USD 173 million (CHF 234 million) was partially offset by an incremental incentive compensation accrual to achieve full year compensation objectives. This resulted in a ratio of personnel expenses to operating income, calculated on an operating basis, of 48.5% in the third quarter. The business unit review below includes the effects of this change in the expensing of stock awards .
|
Operating income in the third quarter of 2003 decreased 22% to USD 2.4 billion (CHF 3.4 billion) compared with the second quarter of 2003, as conservative risk positioning in light of US interest rate volatility reduced fixed income trading results and resulted in lower Value-at-Risk. Operating income from the Equity and the Investment Banking divisions also declined quarter-on-quarter by 8% and 11%, respectively. Compared with the third quarter of 2002, operating income decreased 6% in the third quarter of 2003, due to declines in the Fixed Income division and the sale of Pershing, partially offset by better performance in the legacy portfolio within the Other division.
|
Cost control continued to be a key goal for Credit Suisse First Boston during the third quarter of 2003. Operating expenses of USD 1.8 billion (CHF 2.5 billion) for the third quarter of 2003 decreased 21% compared with the previous quarter. Personnel expenses decreased 28% to USD 1.2 billion (CHF 1.6 billion) in the third quarter of 2003, compared to USD 1.6 billion (CHF 2.2 billion) in the second quarter of 2003, due primarily to lower incentive compensation accruals in line with lower revenue and the change in the vesting period of stock awards. In the third quarter of 2003, other operating expenses were 4% less than the second quarter of 2003.
|
Compared with the third quarter of 2002, third quarter 2003 operating expenses declined 15%, reflecting a 14% decline in personnel expenses, due to the implementation of the new vesting arrangements for future stock awards, lower incentive compensation accruals in line with lower operating income and reduced headcount. The 17% decline in other operating expenses was principally a result of ongoing cost containment efforts.
|
Valuation adjustments, provisions and losses of USD 80 million (CHF 111 million) increased 63% in the third quarter of 2003 compared with the second quarter of 2003 and included net credit-related valuation allowances and provisions of USD 7 million (CHF 10 million). Non-performing loans decreased 8% to USD 1.6 billion (CHF 2.1 billion) from June 30, 2003, and the ratio of valuation allowances to non-performing loans increased modestly to 129% during the third quarter of 2003. Compared with the third quarter of 2002, valuation adjustments, provisions and losses declined 86% on substantially lower credit provisions.
|
The decline of USD 81 million (CHF 105 million) in the amortization of retention payments from the second quarter of 2003 reflected the substantial completion of the DLJ retention award plan in June 2003.
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The favorable resolution of certain outstanding tax matters resulted in a 16% effective income tax rate in the third quarter of 2003 compared to 27% in the second quarter of 2003.
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On September 1, 2003, Credit Suisse First Boston transferred its securities and treasury execution platform in Switzerland to Credit Suisse Financial Services . It also transferred its Private Client Services UK business from CSFB Financial Services to Private Banking. The results for all periods presented have been restated to reflect these transfers and are discussed in An overview of Credit Suisse Group Business transfers on page 7.
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As noted on page 5, the results of the Credit Suisse First Boston business unit and its segments are discussed on an operating basis. For a reconciliation of operating basis business unit results to Swiss GAAP and a discussion of the material reconciling items, the purpose of the operating basis results and the reasons why management believes they provide useful information for investors, please refer to Reconciliation of operating results to Swiss GAAP on pages 32 36.
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Institutional Securities
Institutional Securities reported a segment profit of USD 348 million (CHF 480 million) for the third quarter of 2003 compared to USD 453 million (CHF 604 million) in the second quarter of 2003 and a segment loss of USD 180 million (CHF 310 million) in the third quarter of 2002.
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Operating income decreased 24% to USD 2.1 billion (CHF 3.0 billion) in the third quarter of 2003, compared with the second quarter of 2003 as a result of conservative risk positioning in the Fixed Income division and declines in the Equity and Investment Banking divisions. Third quarter 2003 operating expenses decreased 24% compared with the second quarter of 2003, largely due to lower compensation accruals and continued focus on cost control. Third quarter 2003 operating income was comparable with the third quarter of 2002, reflecting a significant reduction in legacy portfolio write-downs, largely offset by a decline in the Fixed Income division primarily due to a less favorable US interest rate environment. Operating expenses in the third quarter of 2003 decreased 10% compared with the third quarter of 2002, due to a decline in personnel expenses consistent with the trends explained for Credit Suisse First Boston overall. Third quarter 2003 valuation adjustments, provisions and losses of USD 80 million (CHF 111 million) were 43% higher than the second quarter of 2003, despite a decline in credit provisions that were principally due to loan repayments and loan sales, mainly reflecting markedly improved credit conditions.
|
Fixed Income
s third quarter 2003 operating income of USD 819 million (CHF 1.1 billion) decreased 41% compared with the second quarter of 2003. Operating income was lower across most Fixed Income business lines. Structured products, most significantly residential mortgages, and the interest rate businesses were adversely impacted by lower volume, seasonal influences and conservative risk positioning in light of US interest rate volatility, resulting in reduced Value-at-Risk. Additionally, the level of securitizations declined compared with the robust second quarter of 2003. High yield operating income remained strong, although it was lower than the record-setting second quarter of 2003. Compared with the third quarter of 2002, operating income in the third quarter of 2003 decreased 26%, primarily due to declines in the interest rate and structured product businesses, offset in part by stronger high yield and credit trading results. Credit Suisse First Bostons research strength was again recognized by a #2 ranking in Institutional Investor All-America Fixed Income Research Team survey and a top ranking for leveraged finance research as published in September 2003 .
|
The
Equity division
s third quarter 2003 operating income declined 8% to USD 675 million (CHF 931 million) compared with the second quarter of 2003. While operating income from the cash trading activity increased in all regions compared with the second quarter of 2003, operating income generated from derivatives activities, particularly related to convertible securities, was lower than the results recorded in the second quarter of 2003. Operating income in the third quarter of 2003 was comparable to the third quarter of 2002, with declines in index, options and structured products largely offset by an improvement in the convertible securities business.
|
Investment Banking
s third quarter 2003 operating income, which includes private equity, decreased 11% to USD 572 million (CHF 790 million) compared with the second quarter of 2003. High yield and equity new issuance activity, particularly convertible securities, and private equity gains decreased in the third quarter of 2003 compared with the second quarter of 2003. Credit Suisse First Bostons mergers and acquisition fee income increased, while the industrys globally completed deals remained flat, based on US dollar volume, in the third quarter of 2003 compared with the second quarter of 2003. Investment Bankings operating income in the third quarter of 2003 was comparable to last years third quarter. The third quarter of 2003 included improved syndicated finance and high yield new issuance results. Credit Suisse First Boston continued to be ranked first in underwriting global high yield new issuances in the third quarter of 2003.
|
The
Other
division reported third quarter 2003 operating income of USD 69 million (CHF 95 million), compared to operating income of USD 57 million (CHF 77 million) in the second quarter of 2003 and an operating loss of USD 240 million (CHF 377 million) in the third quarter of 2002. These increases in operating income were principally related to gains on sales of several legacy investments. All non-continuing legacy businesses produced operating income of USD 73 million (CHF 99 million) in the third quarter of 2003, compared to operating losses of USD 10 million (CHF 12 million) and USD 346 million (CHF 536 million) in the second quarter of 2003 and third quarter of 2002, respectively. Credit Suisse First Boston continues to reduce its net exposure of non-continuing legacy investments, totaling USD 2.4 billion (CHF 3.2 billion), including unfunded commitments on the real estate portfolio, as of September 30, 2003, down USD 60 million (CHF 154 million) from June 30, 2003.
|
CSFB Financial Services
CSFB Financial Services reported a segment profit of USD 34 million (CHF 46 million) for the third quarter of 2003, a decrease of 15% from the second quarter of 2003, predominantly due to an increase in personnel expenses. Compared with the third quarter of 2002, the segment profit decreased 11%. Operating income for the third quarter of 2003 was USD 287 million (CHF 395 million), up 3% compared with the second quarter of 2003 and down 40% compared with the third quarter of 2002. Operating expenses increased 4% compared with the second quarter of 2003 and decreased 40% compared with the third quarter of 2002. Excluding Pershing, operating income increased 6% compared with the third quarter of 2002, mainly as a result of higher Credit Suisse Asset Management results. Excluding Pershing, operating expenses increased 7% compared with the third quarter of 2002. Pershings third quarter 2002 operating income and operating expenses were USD 210 million (CHF 312 million) and USD 173 million (CHF 258 million), respectively. Pershings operating income for the first nine months of 2003 and 2002 was USD 15 million (CHF 21 million) and USD 650 million (CHF 1.0 billion), respectively, and operating expenses for the first nine months of 2002 were USD 506 million (CHF 805 million).
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Credit Suisse Asset Management
s operating income in the third quarter of 2003 was comparable with the second quarter of 2003. Total assets under management as of September 30, 2003 increased 0.4% compared with June 30, 2003, to USD 312.7 billion (CHF 413.7 billion), reflecting a USD 4.0 billion (CHF 5.5 billion) net outflow of assets, primarily related to institutional clients, offset by improved market performance and a favorable foreign exchange impact when expressed in US dollars. Compared with the third quarter of 2002, operating income increased 7%.
|
Private Client Services
operating income for the third quarter of 2003 increased 9% compared with the second quarter of 2003. Assets under management as of September 30, 2003 increased 2.9% to USD 49.2 billion (CHF 65.1 billion) compared to June 30, 2003, despite a USD 1.1 billion (CHF 1.5 billion) net outflow of assets. Compared with the third quarter of 2002, operating income decreased 7% in the third quarter of 2003, mainly reflecting declines in customer debit balances and reduced trading activity.
|
Credit Suisse First Boston business unit income statement operating 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
in USD m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
| | | | | | | | | | | | | | | | | |
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Operating income | | 2,422 | | 3,103 | | 2,588 | | (22) | | (6) | | 8,363 | | 9,233 | | (9) | |
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Personnel expenses | | 1,173 | | 1,619 | | 1,369 | | (28) | | (14) | | 4,272 | | 5,044 | | (15) | |
Other operating expenses | | 619 | | 647 | | 745 | | (4) | | (17) | | 1,895 | | 2,192 | | (14) | |
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Operating expenses | | 1,792 | | 2,266 | | 2,114 | | (21) | | (15) | | 6,167 | | 7,236 | | (15) | |
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Gross operating profit | | 630 | | 837 | | 474 | | (25) | | 33 | | 2,196 | | 1,997 | | 10 | |
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Depreciation of non-current assets | | 89 | | 104 | | 137 | | (14) | | (35) | | 286 | | 375 | | (24) | |
Valuation adjustments, provisions and losses | | 80 | | 49 | | 560 | | 63 | | (86) | | 257 | | 1,022 | | (75) | |
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Net operating profit/(loss) before extraordinary items, acquisition-related costs and taxes | | 461 | | 684 | | (223) | | (33) | | | | 1,653 | | 600 | | 176 | |
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Extraordinary income/(expenses), net | | 1 | | 0 | | 0 | | | | | | 1 | | 16 | | (94) | |
Taxes 2) 3) | | (80) | | (191) | | 81 | | (58) | | | | (411) | | (109) | | 277 | |
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Net operating profit/(loss) before acquisition-related costs | | 382 | | 493 | | (142) | | (23) | | | | 1,243 | | 507 | | 145 | |
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Acquisition interest | | (40) | | (48) | | (68) | | (17) | | (41) | | (151) | | (266) | | (43) | |
Amortization of retention payments | | 4 | | (77) | | (99) | | | | | | (153) | | (316) | | (52) | |
Amortization of acquired intangible assets and goodwill | | (154) | | (150) | | (207) | | 3 | | (26) | | (455) | | (626) | | (27) | |
Tax impact | | 32 | | 64 | | 96 | | (50) | | (67) | | 166 | | 318 | | (48) | |
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Net profit/(loss) 4) | | 224 | | 282 | | (420) | | (21) | | | | 650 | | (383) | | | |
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Reconciliation to net operating profit | | | | | | | | | | | | | | | | | |
Net profit/(loss) | | 224 | | 282 | | (420) | | (21) | | | | 650 | | (383) | | | |
Amortization of acquired intangible assets and goodwill, net of tax | | 134 | | 130 | | 170 | | 3 | | (21) | | 395 | | 512 | | (23) | |
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Net operating profit/(loss) | | 358 | | 412 | | (250) | | (13) | | | | 1,045 | | 129 | | | |
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See page 23 for footnotes. |
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Credit Suisse First Boston business unit income statement operating 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
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in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
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Operating income | | 3,352 | | 4,131 | | 3,784 | | (19) | | (11) | | 11,373 | | 14,682 | | (23) | |
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Personnel expenses | | 1,627 | | 2,156 | | 1,994 | | (25) | | (18) | | 5,809 | | 8,021 | | (28) | |
Other operating expenses | | 854 | | 863 | | 1,110 | | (1) | | (23) | | 2,578 | | 3,484 | | (26) | |
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Operating expenses | | 2,481 | | 3,019 | | 3,104 | | (18) | | (20) | | 8,387 | | 11,505 | | (27) | |
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Gross operating profit | | 871 | | 1,112 | | 680 | | (22) | | 28 | | 2,986 | | 3,177 | | (6) | |
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Depreciation of non-current assets | | 125 | | 136 | | 207 | | (8) | | (40) | | 389 | | 596 | | (35) | |
Valuation adjustments, provisions and losses | | 111 | | 63 | | 867 | | 76 | | (87) | | 350 | | 1,625 | | (78) | |
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Net operating profit/(loss) before extraordinary items, acquisition-related costs and taxes | | 635 | | 913 | | (394) | | (30) | | | | 2,247 | | 956 | | 135 | |
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Extraordinary income/(expenses), net | | 2 | | 0 | | (1) | | | | | | 2 | | 25 | | (92) | |
Taxes 2) 3) | | (111) | | (257) | | 139 | | (57) | | | | (559) | | (173) | | 223 | |
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Net operating profit/(loss) before acquisition-related costs | | 526 | | 656 | | (256) | | (20) | | | | 1,690 | | 808 | | 109 | |
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Acquisition interest | | (56) | | (64) | | (99) | | (13) | | (43) | | (206) | | (424) | | (51) | |
Amortization of retention payments | | 3 | | (102) | | (146) | | | | | | (208) | | (503) | | (59) | |
Amortization of acquired intangible assets and goodwill | | (211) | | (201) | | (308) | | 5 | | (31) | | (618) | | (995) | | (38) | |
Tax impact | | 46 | | 84 | | 141 | | (45) | | (67) | | 226 | | 505 | | (55) | |
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Net profit/(loss) 4) | | 308 | | 373 | | (668) | | (17) | | | | 884 | | (609) | | | |
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Reconciliation to net operating profit | | | | | | | | | | | | | | | | | |
Net profit/(loss) | | 308 | | 373 | | (668) | | (17) | | | | 884 | | (609) | | | |
Amortization of acquired intangible assets and goodwill, net of tax | | 183 | | 175 | | 253 | | 5 | | (28) | | 537 | | 814 | | (34) | |
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Net operating profit/(loss) | | 491 | | 548 | | (415) | | (10) | | | | 1,421 | | 205 | | | |
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1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. The operating basis business unit results reflect the results of the separate segments comprising the business unit. Certain acquisition-related costs, including acquisition interest, amortization of retention payments and amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. Certain other items, including brokerage, execution and clearing expenses, contractor and recruitment costs and expenses related to certain redeemable preferred securities classified as minority interests are presented in the operating basis business unit results based on the Groups segment reporting principles. For a reconciliation and a discussion of the material reconciling items, please refer to Reconciliation of operating results to Swiss GAAP. |
2) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 3Q2002 and for the 9 months 2002 of CHF 144 m (USD 88 m) and CHF 24 m (USD 15 m), respectively. |
3) Excluding tax impact on acquisition-related costs. |
4) Net profit/(loss) is identical on an operating and Swiss GAAP basis. |
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Credit Suisse First Boston business unit key information 1) |
| | | | | | | | 9 months |
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based on CHF amounts | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | |
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Cost/income ratio 2) | | 77.1% | | 78.7% | | 92.8% | | 78.9% | | 87.4% | |
Cost/income ratio operating 3) | | 77.7% | | 76.4% | | 87.5% | | 77.2% | | 82.4% | |
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Return on average allocated capital 2) | | 11.3% | | 12.8% | | (18.1%) | | 10.3% | | (5.0%) | |
Return on average allocated capital operating 3) | | 16.9% | | 18.0% | | (11.6%) | | 15.5% | | 1.9% | |
Average allocated capital in CHF m | | 11,615 | | 12,210 | | 14,332 | | 12,204 | | 14,564 | |
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Pre-tax margin 2) | | 12.6% | | 14.5% | | (27.3%) | | 12.0% | | (6.5%) | |
Pre-tax margin operating 3) | | 17.4% | | 18.1% | | (16.9%) | | 16.1% | | 0.4% | |
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Personnel expenses/operating income 2) | | 54.0% | | 59.3% | | 65.5% | | 58.0% | | 64.6% | |
Personnel expenses/operating income operating 3) | | 48.5% | | 52.2% | | 52.7% | | 51.1% | | 54.6% | |
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| | | | | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
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Number of employees (full-time equivalents) | | | | | | 18,195 | | 18,137 | | 22,801 | |
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1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. |
2) Based on the business unit results on a Swiss GAAP basis. |
3) Based on the operating basis business unit results, which exclude certain acquisition-related costs not allocated to the segments and reflect certain other reclassifications discussed in the Reconciliation of operating results to Swiss GAAP. |
Overview of business unit Credit Suisse First Boston operating 1) |
| | in USD m | | in CHF m | |
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| | | | CSFB | | | | | | CSFB | | | |
| | Institutional | | Financial | | Credit Suisse | | Institutional | | Financial | | Credit Suisse | |
3Q2003 | | Securities | | Services | | First Boston | | Securities | | Services | | First Boston | |
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Operating income | | 2,135 | | 287 | | 2,422 | | 2,957 | | 395 | | 3,352 | |
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Personnel expenses | | 1,016 | | 157 | | 1,173 | | 1,411 | | 216 | | 1,627 | |
Other operating expenses | | 542 | | 77 | | 619 | | 748 | | 106 | | 854 | |
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Operating expenses | | 1,558 | | 234 | | 1,792 | | 2,159 | | 322 | | 2,481 | |
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Gross operating profit | | 577 | | 53 | | 630 | | 798 | | 73 | | 871 | |
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Depreciation of non-current assets | | 84 | | 5 | | 89 | | 117 | | 8 | | 125 | |
Valuation adjustments, provisions and losses | | 80 | | 0 | | 80 | | 111 | | 0 | | 111 | |
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Net operating profit before extraordinary items, acquisition-related costs and taxes | | 413 | | 48 | | 461 | | 570 | | 65 | | 635 | |
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Extraordinary income/(expenses), net | | 1 | | 0 | | 1 | | 2 | | 0 | | 2 | |
Taxes 2) | | (66) | | (14) | | (80) | | (92) | | (19) | | (111) | |
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Net operating profit before acquisition-related costs | | 348 | | 34 | | 382 | | 480 | | 46 | | 526 | |
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Acquisition interest | | | | | | (40) | | | | | | (56) | |
Amortization of retention payments | | | | | | 4 | | | | | | 3 | |
Amortization of acquired intangible assets and goodwill | | | | | | (154) | | | | | | (211) | |
Tax impact | | | | | | 32 | | | | | | 46 | |
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Net profit 3) | | | | | | 224 | | | | | | 308 | |
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Other data: | | | | | | | | | | | | | |
Average allocated capital | | 8,349 | | 370 | | 8,679 | | 11,173 | | 495 | | 11,615 | |
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1) The operating basis business unit results reflect the results of the separate segments comprising the business unit. Certain acquisition-related costs, including acquisition interest, amortization of retention payments and amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. Certain other items, including brokerage, execution and clearing expenses, contractor and recruitment costs and expenses related to certain redeemable preferred securities classified as minority interests are presented in the operating basis business unit results based on the Groups segment reporting principles. For a reconciliation and a discussion of the material reconciling items, please refer to Reconciliation of operating results to Swiss GAAP. |
2) Excluding tax impact on acquisition-related costs. |
3) Net profit is identical on an operating and Swiss GAAP basis. |
Institutional Securities income statement 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
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in USD m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
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Fixed Income | | 819 | | 1,390 | | 1,110 | | (41) | | (26) | | 3,599 | | 3,596 | | 0 | |
Equity | | 675 | | 732 | | 682 | | (8) | | (1) | | 1,982 | | 2,259 | | (12) | |
Investment Banking | | 572 | | 644 | | 556 | | (11) | | 3 | | 1,761 | | 2,204 | | (20) | |
Other | | 69 | | 57 | | (240) | | 21 | | | | 173 | | (354) | | | |
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Operating income | | 2,135 | | 2,823 | | 2,108 | | (24) | | 1 | | 7,515 | | 7,705 | | (2) | |
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Personnel expenses | | 1,016 | | 1,473 | | 1,126 | | (31) | | (10) | | 3,829 | | 4,303 | | (11) | |
Other operating expenses | | 542 | | 568 | | 596 | | (5) | | (9) | | 1,665 | | 1,743 | | (4) | |
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Operating expenses | | 1,558 | | 2,041 | | 1,722 | | (24) | | (10) | | 5,494 | | 6,046 | | (9) | |
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Gross operating profit | | 577 | | 782 | | 386 | | (26) | | 49 | | 2,021 | | 1,659 | | 22 | |
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Depreciation of non-current assets | | 84 | | 96 | | 115 | | (13) | | (27) | | 266 | | 309 | | (14) | |
Valuation adjustments, provisions and losses | | 80 | | 56 | | 549 | | 43 | | (85) | | 248 | | 1,000 | | (75) | |
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Net operating profit/(loss) before extraordinary items, acquisition-related costs and taxes | | 413 | | 630 | | (278) | | (34) | | | | 1,507 | | 350 | | 331 | |
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Extraordinary income/(expenses), net | | 1 | | 0 | | 0 | | | | | | 1 | | 16 | | (94) | |
Taxes 2 | | (66) | | (177) | | 98 | | (63) | | | | (374) | | (37) | | | |
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Net operating profit/(loss) before acquisition-related costs and minority interests (segment result) | | 348 | | 453 | | (180) | | (23) | | | | 1,134 | | 329 | | 245 | |
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1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services. Certain acquisition-related costs, including acquisition interest, amortization of retention payments and amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. |
2) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 3Q2002 and for the 9 months 2002 of USD 105 m and USD 87 m, respectively. |
Institutional Securities income statement 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
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in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
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Fixed Income | | 1,141 | | 1,849 | | 1,640 | | (38) | | (30) | | 4,894 | | 5,718 | | (14) | |
Equity | | 931 | | 977 | | 1,007 | | (5) | | (8) | | 2,696 | | 3,592 | | (25) | |
Investment Banking | | 790 | | 857 | | 802 | | (8) | | (1) | | 2,395 | | 3,505 | | (32) | |
Other | | 95 | | 77 | | (377) | | 23 | | | | 236 | | (564) | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating income | | 2,957 | | 3,760 | | 3,072 | | (21) | | (4) | | 10,221 | | 12,251 | | (17) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Personnel expenses | | 1,411 | | 1,961 | | 1,631 | | (28) | | (13) | | 5,207 | | 6,842 | | (24) | |
Other operating expenses | | 748 | | 757 | | 890 | | (1) | | (16) | | 2,265 | | 2,771 | | (18) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating expenses | | 2,159 | | 2,718 | | 2,521 | | (21) | | (14) | | 7,472 | | 9,613 | | (22) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Gross operating profit | | 798 | | 1,042 | | 551 | | (23) | | 45 | | 2,749 | | 2,638 | | 4 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Depreciation of non-current assets | | 117 | | 127 | | 174 | | (8) | | (33) | | 362 | | 492 | | (26) | |
Valuation adjustments, provisions and losses | | 111 | | 73 | | 850 | | 52 | | (87) | | 338 | | 1,589 | | (79) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit/(loss) before extraordinary items, acquisition-related costs and taxes | | 570 | | 842 | | (473) | | (32) | | | | 2,049 | | 557 | | 268 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Extraordinary income/(expenses), net | | 2 | | 0 | | (1) | | | | | | 2 | | 25 | | (92) | |
Taxes 2) | | (92) | | (238) | | 164 | | (61) | | | | (509) | | (58) | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit/(loss) before acquisition-related costs and minority interests (segment result) | | 480 | | 604 | | (310) | | (21) | | | | 1,542 | | 524 | | 194 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services. Certain acquisition-related costs, including acquisition interest, amortization of retention payments and amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. |
2) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 3Q2002 and for the 9 months 2002 of CHF 169 m and CHF 139 m, respectively. |
Active
private equity investments |
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USD
m |
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CHF
m |
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3Q2003 |
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2Q2003 |
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3Q2002 |
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3Q2003 |
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2Q2003 |
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3Q2002 |
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Net
gains (realized and unrealized gains and losses) |
|
8 |
|
59 |
|
(13) |
|
12 |
|
79 |
|
(20) |
|
Management
and performance fees |
|
50 |
|
45 |
|
53 |
|
69 |
|
60 |
|
78 |
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USD
bn |
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CHF
bn |
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30.09.03 |
|
30.06.03 |
|
31.12.02 |
|
30.09.03 |
|
30.06.03 |
|
31.12.02 |
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Book
value |
|
0.9 |
|
0.9 |
|
1.0 |
|
1.2 |
|
1.2 |
|
1.3 |
|
Fair
value |
|
1.0 |
|
0.9 |
|
1.0 |
|
1.3 |
|
1.3 |
|
1.4 |
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Institutional Securities balance sheet information 1) |
in CHF m | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Total assets | | 625,767 | | 614,435 | | 573,628 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Total assets in USD m | | 473,027 | | 454,195 | | 412,623 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Due from banks | | 233,811 | | 209,179 | | 193,944 | |
of which securities lending and reverse repurchase
agreements |
| 168,498 | | 144,214 | | 152,221 | |
Due from customers | | 111,211 | | 134,789 | | 114,191 | |
of which securities lending and reverse repurchase
agreements |
| 42,876 | | 52,793 | | 56,851 | |
Mortgages | | 14,599 | | 13,701 | | 14,825 | |
Securities and precious metals trading portfolios | | 179,442 | | 170,515 | | 157,320 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Due to banks | | 313,915 | | 307,193 | | 281,510 | |
of which securities borrowing and repurchase
agreements |
| 113,590 | | 87,651 | | 112,733 | |
Due to customers, other | | 115,317 | | 126,807 | | 109,980 | |
of which securities borrowing and repurchase
agreements |
| 60,544 | | 64,390 | | 66,864 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services. |
Institutional Securities key information 1) |
| | | | | | | | 9 months |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
based on CHF amounts | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Cost/income ratio 2) | | 77.0% | | 75.7% | | 87.7% | | 76.6% | | 82.5% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Average allocated capital in CHF m | | 11,173 | | 11,848 | | 13,802 | | 11,798 | | 13,937 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Pre-tax margin 2) | | 19.3% | | 22.4% | | (15.4%) | | 20.1% | | 4.8% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Personnel expenses/operating income 2) | | 47.7% | | 52.2% | | 53.1% | | 50.9% | | 55.8% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Number of employees (full-time equivalents) | | | | | | 15,578 | | 15,454 | | 16,018 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services. |
2) Based on the segment results, which exclude certain acquisition-related costs not allocated to the segment. |
CSFB Financial Services income statement 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
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in USD m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net interest income | | 9 | | 11 | | 52 | | (18) | | (83) | | 29 | | 160 | | (82) | |
Net commission and service fee income | | 245 | | 240 | | 389 | | 2 | | (37) | | 712 | | 1,243 | | (43) | |
Net trading income | | 17 | | 30 | | 26 | | (43) | | (35) | | 71 | | 88 | | (19) | |
Other ordinary income | | 16 | | (1) | | 13 | | | | 23 | | 36 | | 37 | | (3) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating income | | 287 | | 280 | | 480 | | 3 | | (40) | | 848 | | 1,528 | | (45) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Personnel expenses | | 157 | | 146 | | 243 | | 8 | | (35) | | 443 | | 741 | | (40) | |
Other operating expenses | | 77 | | 79 | | 149 | | (3) | | (48) | | 230 | | 449 | | (49) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating expenses | | 234 | | 225 | | 392 | | 4 | | (40) | | 673 | | 1,190 | | (43) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Gross operating profit | | 53 | | 55 | | 88 | | (4) | | (40) | | 175 | | 338 | | (48) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Depreciation of non-current assets | | 5 | | 8 | | 22 | | (38) | | (77) | | 20 | | 66 | | (70) | |
Valuation adjustments, provisions and losses | | 0 | | (7) | | 11 | | (100) | | (100) | | 9 | | 22 | | (59) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit before acquisition-related costs and taxes | | 48 | | 54 | | 55 | | (11) | | (13) | | 146 | | 250 | | (42) | |
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| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Taxes 2) | | (14) | | (14) | | (17) | | 0 | | (18) | | (37) | | (72) | | (49) | |
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| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit before acquisition-related costs and minority interests (segment result) | | 34 | | 40 | | 38 | | (15) | | (11) | | 109 | | 178 | | (39) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. Certain acquisition-related costs, including acquisition interest, amortization of retention payments and amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. |
2) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would not have had an impact on the taxes reported for 3Q2002 and for the 9 months 2002. |
CSFB Financial Services income statement 1) |
| | | | | | | | Change | | Change | | | | | | Change | |
| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net interest income | | 13 | | 15 | | 79 | | (13) | | (84) | | 40 | | 255 | | (84) | |
Net commission and service fee income | | 337 | | 319 | | 575 | | 6 | | (41) | | 968 | | 1,976 | | (51) | |
Net trading income | | 24 | | 39 | | 38 | | (38) | | (37) | | 96 | | 141 | | (32) | |
Other ordinary income | | 21 | | (2) | | 20 | | | | 5 | | 48 | | 59 | | (19) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating income | | 395 | | 371 | | 712 | | 6 | | (45) | | 1,152 | | 2,431 | | (53) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Personnel expenses | | 216 | | 195 | | 363 | | 11 | | (40) | | 602 | | 1,179 | | (49) | |
Other operating expenses | | 106 | | 106 | | 220 | | 0 | | (52) | | 313 | | 713 | | (56) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating expenses | | 322 | | 301 | | 583 | | 7 | | (45) | | 915 | | 1,892 | | (52) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Gross operating profit | | 73 | | 70 | | 129 | | 4 | | (43) | | 237 | | 539 | | (56) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Depreciation of non-current assets | | 8 | | 9 | | 33 | | (11) | | (76) | | 27 | | 104 | | (74) | |
Valuation adjustments, provisions and losses | | 0 | | (10) | | 17 | | (100) | | (100) | | 12 | | 36 | | (67) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit before acquisition-related costs and taxes | | 65 | | 71 | | 79 | | (8) | | (18) | | 198 | | 399 | | (50) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Taxes 2) | | (19) | | (19) | | (25) | | 0 | | (24) | | (50) | | (115) | | (57) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net operating profit before acquisition-related costs and minority interests (segment result) | | 46 | | 52 | | 54 | | (12) | | (15) | | 148 | | 284 | | (48) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. Certain acquisition-related costs, including acquisition interest, amortization of retention payments and amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. |
2) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would not have had an impact on the taxes reported for 3Q2002 and for the 9 months 2002. |
CSFB Financial Services key information 1) |
| | | | | | | | 9 months | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
based on CHF amounts | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Cost/income ratio 2) | | 83.5% | | 83.6% | | 86.5% | | 81.8% | | 82.1% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Average allocated capital in CHF m | | 495 | | 553 | | 984 | | 532 | | 1,041 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Pre-tax margin 2) | | 16.5% | | 19.1% | | 11.1% | | 17.2% | | 16.4% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Personnel expenses/operating income 2) | | 54.7% | | 52.6% | | 51.0% | | 52.3% | | 48.5% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Net new assets Credit Suisse Asset Management in CHF bn (discretionary) 3) | | (5.5) | | (1.7) | | (12.2) | | (12.4) | | (22.6) | |
Net new assets Private Client Services in CHF bn | | (1.5) | | (1.7) | | | | (1.7) | | 5.3 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Growth in assets under management 3) | | (1.5%) | | 5.8% | | (7.6%) | | (0.2%) | | (22.1%) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Growth in discretionary assets under management Credit Suisse Asset Management 3) | | (1.2%) | | 6.6% | | (9.3%) | | 0.2% | | (19.8%) | |
of which net new assets 3) |
| (1.9%) | | (0.6%) | | (3.8%) | | (4.4%) | | (6.2%) | |
of which market movement and structural effects |
| 0.7% | | 7.2% | | (5.5%) | | 4.6% | | (13.6%) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Growth in net new assets Private Client Services | | (2.3%) | | (2.7%) | | | | (2.5%) | | 5.7% | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Assets under management in CHF bn 3) | | | | | | 481.2 | | 488.4 | | 482.2 | |
of which Credit Suisse Asset Management 3) |
| | | | | 413.7 | | 421.3 | | 412.8 | |
of which Private Client Services |
| | | | | 65.1 | | 64.6 | | 67.5 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Discretionary assets under management in CHF bn 3) | | | | | | 295.9 | | 299.7 | | 297.0 | |
of which Credit Suisse Asset Management 3) |
| | | | | 279.5 | | 282.8 | | 278.7 | |
of which mutual funds distributed |
| | | | | 112.6 | | 113.3 | | 106.5 | |
of which Private Client Services |
| | | | | 16.4 | | 16.9 | | 18.3 | |
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Advisory assets under management in CHF bn 3) | | | | | | 185.3 | | 188.7 | | 185.2 | |
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Number of employees (full-time equivalents) | | | | | | 2,617 | | 2,683 | | 6,783 | |
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1) Comparative figures have been restated to reflect the transfer of the securities and treasury execution platform transactions of Credit Suisse First Boston in Switzerland to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. |
2) Based on the segment results, which exclude certain acquisition-related costs not allocated to the segment. |
3) Credit Suisse Asset Management figures for Assets under Management and Net New Assets include assets managed on behalf of other entities within Credit Suisse Group. This differs from the presentation in the overview of Credit Suisse Group, where such assets are eliminated. |
RECONCILIATION OF OPERATING RESULTS TO SWISS GAAP
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Introduction
The Groups consolidated results are prepared in accordance with Swiss GAAP, while the Groups segment reporting principles are applied to the presentation of segment results. For a description of these reporting principles, please refer to Operating and Financial Review Reporting Principles in the Groups 2002 Annual Report. The operating basis business unit results reflect the results of the separate segments constituting the respective business units and certain acquisition-related costs that are not allocated to the segments. The Groups consolidated results reflect the operating basis business unit results adjusted for certain reclassifications associated with the business units and consolidation adjustments in the Corporate Center in accordance with Swiss GAAP.
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The tables below reconcile the operating basis business unit results to Swiss GAAP. The Reclassifications columns include acquisition-related costs and reclassifications related to management reporting policies as described below. Acquisition-related costs are excluded from the operating basis business unit results because management believes that this enables them and investors to better assess the results and key performance indicators of the business. The operating basis business unit results in managements view provide a more useful indication of the financial performance of the operating business as they reflect the core businesses operating performance for the periods under review unaffected by the amortization of costs related to historical acquisitions.
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Credit Suisse Financial Services business unit
The Credit Suisse Financial Services operating basis column reflects the results of the respective segments, excluding amortization of acquired intangible assets and goodwill, which are reflected in the reclassifications column. The Credit Suisse Financial Services operating basis business unit results are also adjusted for credit-related valuation adjustments, resulting from the difference between the statistical credit provisions recorded by its banking segments and actual credit provisions on a Swiss GAAP basis. In addition, gains or losses related to divestitures and sales of investments within the insurance business are recorded as operating income at the insurance segments and the business unit level and reclassified to extraordinary income/expenses in the reconciliation in accordance with Swiss GAAP.
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Credit Suisse First Boston business unit
The Credit Suisse First Boston operating basis column reflects the results of the respective segments, excluding acquisition interest, amortization of retention payments and amortization of acquired intangible assets and goodwill, which are reflected in the reclassifications column. The Credit Suisse First Boston operating basis business unit results also deduct brokerage, execution and clearing expenses from other operating expenses (reclassified as a reduction in operating income in the consolidated results); deduct from other operating expenses contractor and certain staff recruitment costs (reclassified as an addition to personnel expenses in the consolidate results); and add to operating income expenses related to certain redeemable preferred securities (reclassified as minority interests in the consolidated results). This presentation brings Credit Suisse First Boston in line with its US competitors in the investment banking industry and facilitates comparison to its peers, which management believes is useful for investors. Swiss GAAP does not permit brokerage, execution or clearing expenses, contractor costs and certain staff recruitment costs to be reported as part of other operating expenses. The presentation of redeemable preferred securities of Credit Suisse First Boston issued by consolidated special purpose entities as an expense reducing its operating income is intended to present more fairly the operating results from its core businesses because they reflect the operating performance for the periods under review unaffected by the funding costs related to historical acquisitions.
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| | Credit Suisse Financial Services | | Credit Suisse First Boston | | | | | |
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| | | | Re- | | Swiss | | | | Re- | | Swiss | | | | Credit | |
| | Operating | | classifi- | | GAAP | | Operating | | classifi- | | GAAP | | Corporate | | Suisse | |
3Q2003, in CHF m | | basis | | cations | | basis | | basis | | cations | | basis | | Center | 1) | Group | |
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Operating income | | 4,548 | | (1,161) | 2) | 3,387 | | 3,352 | | (239) | 3) 4) 6) | 3,113 | | 31 | | 6,531 | |
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Personnel expenses | | 1,385 | | | | 1,385 | | 1,627 | | 54 | 3) 4) | 1,681 | | 59 | | 3,125 | |
Other operating expenses | | 732 | | | | 732 | | 854 | | (260) | 4) | 594 | | (64) | | 1,262 | |
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Operating expenses | | 2,117 | | | | 2,117 | | 2,481 | | | | 2,275 | | (5) | | 4,387 | |
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Gross operating profit | | 2,431 | | | | 1,270 | | 871 | | | | 838 | | 36 | | 2,144 | |
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Depreciation of non-current assets | | 279 | | | | 279 | | 125 | | | | 125 | | 67 | | 471 | |
Amortization of acquired intangible assets and goodwill | | | | 25 | | 25 | | | | 211 | 3) | 211 | | 2 | | 238 | |
Valuation adjustments, provisions and losses | | 90 | | 14 | 5) | 104 | | 111 | | | | 111 | | 0 | | 215 | |
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Profit before extraordinary items and taxes | | 2,062 | | | | 862 | | 635 | | | | 391 | | (33) | | 1,220 | |
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Extraordinary income/(expenses), net | | 3 | | 1,161 | | 1,164 | | 2 | | | | 2 | | 2 | | 1,168 | |
Taxes | | (260) | | 4 | | (256) | | (111) | | 46 | | (65) | | 4 | | (317) | |
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Net profit before minority interests | | 1,805 | | | | 1,770 | | 526 | | | | 328 | | (27) | | 2,071 | |
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Minority interests | | 8 | | | | 8 | | 0 | | (20) | 6) | (20) | | (14) | | (26) | |
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Net profit | | 1,813 | | | | 1,778 | | 526 | | | | 308 | | (41) | | 2,045 | |
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Reconciliation to business unit results | | | | | | | | | | | | | | | | | |
Acquisition interest | | | | | | | | (56) | | 56 | | | | | | | |
Amortization of retention payments | | | | | | | | 3 | | (3) | | | | | | | |
Amortization of acquired intangible assets and goodwill | | (25) | | 25 | | | | (211) | | 211 | | | | | | | |
Tax impact | | 1 | | (1) | | | | 46 | | (46) | | | | | | | |
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Business unit result | | 1,789 | | | | | | 308 | | | | | | | | | |
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1) Corporate Center includes the parent company operations, including Group financing initiatives, centrally managed, own-use real estate, consisting mainly of bank premises within Switzerland and consolidation adjustments. |
2) Reflects net gains/(losses) from sales of investments and other reclassifications within the insurance business of CHF 1,161 m reclassified from operating income to extraordinary income/(expenses). |
3) Reflects acquisition interest of CHF 56 m allocated to operating income, amortization of retention payments of CHF -3 m allocated to personnel expenses and amortization of acquired intangible assets and goodwill of CHF 211 m. |
4) Reflects brokerage, execution and clearing expenses of CHF 203 m reclassified from other operating expenses to a reduction of operating income and contractor costs of CHF 40 m and staff recruitment costs of CHF 17 m reclassified from other operating expenses to personnel expenses. |
5) Reflects an increase/(decrease) in credit-related valuation adjustments resulting from the difference between statistical and actual credit provisions of CHF 14 m. |
6) Reflects expenses of CHF 20 m related to certain redeemable preferred securities reclassified from operating income to minority interests. |
| | Credit Suisse Financial Services | | Credit Suisse First Boston | | | | | |
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| | | | Re- | | Swiss | | | | Re- | | Swiss | | | | Credit | |
| | Operating | | classifi- | | GAAP | | Operating | | classifi- | | GAAP | | Corporate | | Suisse | |
2Q2003, in CHF m | | basis | | cations | | basis | | basis | | cations | | basis | | Center | 1) | Group | |
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Operating income | | 3,544 | | | | 3,544 | | 4,131 | | (245) | 2) 3) 5) | 3,886 | | 119 | | 7,549 | |
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Personnel expenses | | 1,434 | | | | 1,434 | | 2,156 | | 150 | 2) 3) | 2,306 | | 84 | | 3,824 | |
Other operating expenses | | 744 | | | | 744 | | 863 | | (248) | 3) | 615 | | (112) | | 1,247 | |
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Operating expenses | | 2,178 | | | | 2,178 | | 3,019 | | | | 2,921 | | (28) | | 5,071 | |
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Gross operating profit | | 1,366 | | | | 1,366 | | 1,112 | | | | 965 | | 147 | | 2,478 | |
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Depreciation of non-current assets | | 194 | | | | 194 | | 136 | | | | 136 | | 145 | | 475 | |
Amortization of acquired intangible assets and goodwill | | | | 27 | | 27 | | | | 201 | 2) | 201 | | (5) | | 223 | |
Valuation adjustments, provisions and losses | | 90 | | (27) | 4) | 63 | | 63 | | | | 63 | | 5 | | 131 | |
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Profit before extraordinary items and taxes | | 1,082 | | | | 1,082 | | 913 | | | | 565 | | 2 | | 1,649 | |
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Extraordinary income/(expenses), net | | 8 | | | | 8 | | 0 | | | | 0 | | 53 | | 61 | |
Taxes | | (223) | | (6) | | (229) | | (257) | | 84 | | (173) | | 83 | | (319) | |
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Net profit before minority interests | | 867 | | | | 861 | | 656 | | | | 392 | | 138 | | 1,391 | |
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Minority interests | | (10) | | | | (10) | | 0 | | (19) | 5) | (19) | | (16) | | (45) | |
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Net profit | | 857 | | | | 851 | | 656 | | | | 373 | | 122 | | 1,346 | |
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Reconciliation to business unit results | | | | | | | | | | | | | | | | | |
Acquisition interest | | | | | | | | (64) | | 64 | | | | | | | |
Amortization of retention payments | | | | | | | | (102) | | 102 | | | | | | | |
Amortization of acquired intangible assets and goodwill | | (27) | | 27 | | | | (201) | | 201 | | | | | | | |
Tax impact | | 0 | | | | | | 84 | | (84) | | | | | | | |
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Business unit result | | 830 | | | | | | 373 | | | | | | | | | |
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1) Corporate Center includes the parent company operations, including Group financing initiatives, centrally managed, own-use real estate, consisting mainly of bank premises within Switzerland and consolidation adjustments. |
2) Reflects acquisition interest of CHF 64 m allocated to operating income, amortization of retention payments of CHF 102 m allocated to personnel expenses and amortization of acquired intangible assets and goodwill of CHF 201 m. |
3) Reflects brokerage, execution and clearing expenses of CHF 200 m reclassified from other operating expenses to a reduction of operating income and contractor costs of CHF 36 m and staff recruitment costs of CHF 12 m reclassified from other operating expenses to personnel expenses. |
4) Reflects an increase/(decrease) in credit-related valuation adjustments resulting from the difference between statistical and actual credit provisions of CHF 27 m. |
5) Reflects expenses of CHF 19 m related to certain redeemable preferred securities reclassified from operating income to minority interests. |
| | Credit Suisse Financial Services | | Credit Suisse First Boston | | | | | |
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| | | | Re- | | Swiss | | | | Re- | | Swiss | | | | Credit | |
| | Operating | | classifi- | | GAAP | | Operating | | classifi- | | GAAP | | Corporate | | Suisse | |
3Q2002, in CHF m | | basis | | cations | | basis | | basis | | cations | | basis | | Center | 1) | Group | |
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Operating income | | 2,364 | | 133 | 2) | 2,497 | | 3,784 | | (376) | 3) 4) 6) | 3,408 | | (239) | | 5,666 | |
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Personnel expenses | | 1,486 | | 47 | 5) | 1,533 | | 1,994 | | 237 | 3) 4) | 2,231 | | 29 | | 3,793 | |
Other operating expenses | | 884 | | 39 | 5) | 923 | | 1,110 | | (387) | 4) | 723 | | (87) | | 1,559 | |
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Operating expenses | | 2,370 | | | | 2,456 | | 3,104 | | | | 2,954 | | (58) | | 5,352 | |
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Gross operating profit | | (6) | | | | 41 | | 680 | | | | 454 | | (181) | | 314 | |
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Depreciation of non-current assets | | 262 | | 29 | 5) | 291 | | 207 | | | | 207 | | 94 | | 592 | |
Amortization of acquired intangible assets and goodwill | | | | 31 | 5) | 31 | | | | 308 | 3) | 308 | | (2) | | 337 | |
Valuation adjustments, provisions and losses | | 91 | | 31 | 7) | 122 | | 867 | | | | 867 | | (16) | | 973 | |
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Profit/(loss) before extraordinary items and taxes | | (359) | | | | (403) | | (394) | | | | (928) | | (257) | | (1,588) | |
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Extraordinary income/(expenses), net | | 6 | | (133) | 2) | (127) | | (1) | | | | (1) | | (3) | | (131) | |
Taxes | | (689) | | 8 | | (681) | | 139 | | 141 | | 280 | | (9) | | (410) | |
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Net profit/(loss) before minority interests | | (1,042) | | | | (1,211) | | (256) | | | | (649) | | (269) | | (2,129) | |
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Minority interests | | 17 | | | | 17 | | 0 | | (19) | 6) | (19) | | (17) | | (19) | |
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Net profit/(loss) | | (1,025) | | | | (1,194) | | (256) | | | | (668) | | (286) | | (2,148) | |
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Reconciliation to business unit results | | | | | | | | | | | | | | | | | |
Acquisition interest | | | | | | | | (99) | | 99 | | | | | | | |
Amortization of retention payments | | | | | | | | (146) | | 146 | | | | | | | |
Amortization of acquired intangible assets and goodwill | | (27) | | 27 | | | | (308) | | 308 | | | | | | | |
Exceptional items | | (119) | | 119 | | | | | | | | | | | | | |
Tax impact | | 1 | | (1) | | | | 141 | | (141) | | | | | | | |
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Business unit result | | (1,170) | | | | | | (668) | | | | | | | | | |
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1) Corporate Center includes the parent company operations, including Group financing initiatives, centrally managed, own-use real estate, consisting mainly of bank premises within Switzerland and consolidation adjustments. |
2) Reflects net gains/(losses) from sales of investments within the insurance business of CHF -133 m reclassified from operating income to extraordinary income/(expenses). |
3) Reflects acquisition interest of CHF 99 m allocated to operating income, amortization of retention payments of CHF 146 m allocated to personnel expenses and amortization of acquired intangible assets and goodwill of CHF 308 m. |
4) Reflects brokerage, execution and clearing expenses of CHF 296 m reclassified from other operating expenses to a reduction of operating income and contractor costs of CHF 62 m and staff recruitment costs of CHF 29 m reclassified from other operating expenses to personnel expenses. |
5) Reflects exceptional items allocated to personnel expenses of CHF 47 m, to other operating expenses of CHF 39 m, to depreciation of non-current assets of CHF 29 m and to amortization of acquired intangible assets and goodwill of CHF 4 m. |
6) Reflects expenses of CHF 19 m related to certain redeemable preferred securities reclassified from operating income to minority interests. |
7) Reflects an increase/(decrease) in credit-related valuation adjustments resulting from the difference between statistical and actual credit provisions of CHF 31 m. |
| | Credit Suisse Financial Services | | Credit Suisse First Boston | | | | | |
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| | | | Re- | | Swiss | | | | Re- | | Swiss | | | | Credit | |
| | Operating | | classifi- | | GAAP | | Operating | | classifi- | | GAAP | | Corporate | | Suisse | |
9 months 2003, in CHF m | | basis | | cations | | basis | | basis | | cations | | basis | | Center | 1) | Group | |
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Operating income | | 11,594 | | (1,103) | 2) | 10,491 | | 11,373 | | (731) | 3) 4) 6) | 10,642 | | (29) | | 21,104 | |
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Personnel expenses | | 4,232 | | | | 4,232 | | 5,809 | | 365 | 3) 4) | 6,174 | | 182 | | 10,588 | |
Other operating expenses | | 2,292 | | | | 2,292 | | 2,578 | | (740) | 4) | 1,838 | | (240) | | 3,890 | |
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Operating expenses | | 6,524 | | | | 6,524 | | 8,387 | | | | 8,012 | | (58) | | 14,478 | |
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Gross operating profit | | 5,070 | | | | 3,967 | | 2,986 | | | | 2,630 | | 29 | | 6,626 | |
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Depreciation of non-current assets | | 695 | | | | 695 | | 389 | | | | 389 | | 282 | | 1,366 | |
Amortization of acquired intangible assets and goodwill | | | | 77 | | 77 | | | | 618 | 3) | 618 | | (2) | | 693 | |
Valuation adjustments, provisions and losses | | 261 | | (37) | 5) | 224 | | 350 | | | | 350 | | 5 | | 579 | |
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Profit before extraordinary items and taxes | | 4,114 | | | | 2,971 | | 2,247 | | | | 1,273 | | (256) | | 3,988 | |
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Extraordinary income/(expenses), net | | 18 | | 1,103 | 2) | 1,121 | | 2 | | | | 2 | | 57 | | 1,180 | |
Taxes | | (742) | | (7) | | (749) | | (559) | | 226 | | (333) | | 68 | | (1,014) | |
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Net profit before minority interests | | 3,390 | | | | 3,343 | | 1,690 | | | | 942 | | (131) | | 4,154 | |
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Minority interests | | (10) | | | | (10) | | 0 | | (58) | 6) | (58) | | (43) | | (111) | |
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Net profit | | 3,380 | | | | 3,333 | | 1,690 | | | | 884 | | (174) | | 4,043 | |
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Reconciliation to business unit results | | | | | | | | | | | | | | | | | |
Acquisition interest | | | | | | | | (206) | | 206 | | | | | | | |
Amortization of retention payments | | | | | | | | (208) | | 208 | | | | | | | |
Amortization of acquired intangible assets and goodwill | | (77) | | 77 | | | | (618) | | 618 | | | | | | | |
Tax impact | | 2 | | (2) | | | | 226 | | (226) | | | | | | | |
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Business unit result | | 3,305 | | | | | | 884 | | | | | | | | | |
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1) Corporate Center includes the parent company operations, including Group financing initiatives, centrally managed, own-use real estate, consisting mainly of bank premises within Switzerland and consolidation adjustments. |
2) Reflects net gains/(losses) from sales of investments and other reclassifications within the insurance business of CHF 1,103 m reclassified from operating income to extraordinary income/(expenses). |
3) Reflects acquisition interest of CHF 206 m allocated to operating income, amortization of retention payments of CHF 208 m allocated to personnel expenses and amortization of acquired intangible assets and goodwill of CHF 618 m. |
4) Reflects brokerage, execution and clearing expenses of CHF 583 m reclassified from other operating expenses to a reduction of operating income and contractor costs of CHF 119 m and staff recruitment costs of CHF 38 m reclassified from other operating expenses to personnel expenses. |
5) Reflects an increase/(decrease) in credit-related valuation adjustments resulting from the difference between statistical and actual credit provisions of CHF 37 m. |
6) Reflects expenses of CHF 58 m related to certain redeemable preferred securities reclassified from operating income to minority interests. |
| | Credit Suisse Financial Services | | Credit Suisse First Boston | | | | | |
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| | | | Re- | | Swiss | | | | Re- | | Swiss | | | | Credit | |
| | Operating | | classifi- | | GAAP | | Operating | | classifi- | | GAAP | | Corporate | | Suisse | |
9 months 2002, in CHF m | | basis | | cations | | basis | | basis | | cations | | basis | | Center | 1) | Group | |
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Operating income | | 8,586 | | 70 | 2) | 8,656 | | 14,682 | | (1,044) | 3) 4) 6) | 13,638 | | (651) | | 21,643 | |
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Personnel expenses | | 4,500 | | 47 | 5) | 4,547 | | 8,021 | | 786 | 3) 4) | 8,807 | | 92 | | 13,446 | |
Other operating expenses | | 2,691 | | 39 | 5) | 2,730 | | 3,484 | | (963) | 4) | 2,521 | | (279) | | 4,972 | |
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Operating expenses | | 7,191 | | | | 7,277 | | 11,505 | | | | 11,328 | | (187) | | 18,418 | |
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Gross operating profit | | 1,395 | | | | 1,379 | | 3,177 | | | | 2,310 | | (464) | | 3,225 | |
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Depreciation of non-current assets | | 687 | | 29 | 5) | 716 | | 596 | | | | 596 | | 227 | | 1,539 | |
Amortization of acquired intangible assets and goodwill | | | | 106 | 5) | 106 | | | | 995 | 3) | 995 | | (5) | | 1,096 | |
Valuation adjustments, provisions and losses | | 285 | | 35 | 7) | 320 | | 1,625 | | | | 1,625 | | 61 | | 2,006 | |
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Profit/(loss) before extraordinary items and taxes | | 423 | | | | 237 | | 956 | | | | (906) | | (747) | | (1,416) | |
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Extraordinary income/(expenses), net | | 24 | | (70) | 2) | (46) | | 25 | | | | 25 | | (5) | | (26) | |
Taxes | | (1,192) | | 10 | | (1,182) | | (173) | | 505 | | 332 | | (64) | | (914) | |
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Net profit/(loss) before minority interests | | (745) | | | | (991) | | 808 | | | | (549) | | (816) | | (2,356) | |
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Minority interests | | 100 | | | | 100 | | 0 | | (60) | 6) | (60) | | (43) | | (3) | |
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Net profit/(loss) | | (645) | | | | (891) | | 808 | | | | (609) | | (859) | | (2,359) | |
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Reconciliation to business unit results | | | | | | | | | | | | | | | | | |
Acquisition interest | | | | | | | | (424) | | 424 | | | | | | | |
Amortization of retention payments | | | | | | | | (503) | | 503 | | | | | | | |
Amortization of acquired intangible assets and goodwill | | (102) | | 102 | | | | (995) | | 995 | | | | | | | |
Exceptional items | | (119) | | 119 | | | | | | | | | | | | | |
Tax impact | | 2 | | (2) | | | | 505 | | (505) | | | | | | | |
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Business unit result | | (864) | | | | | | (609) | | | | | | | | | |
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1) Corporate Center includes the parent company operations, including Group financing initiatives, centrally managed, own-use real estate, consisting mainly of bank premises within Switzerland and consolidation adjustments. |
2) Reflects net gains/(losses) from sales of investments within the insurance business of CHF -70 m reclassified from operating income to extraordinary income/(expenses). |
3) Reflects acquisition interest of CHF 424 m allocated to operating income, amortization of retention payments of CHF 503 m allocated to personnel expenses and amortization of acquired intangible assets and goodwill of CHF 995 m. |
4) Reflects brokerage, execution and clearing expenses of CHF 680 m reclassified from other operating expenses to a reduction of operating income and contractor costs of CHF 223 m and staff recruitment costs of CHF 60 m reclassified from other operating expenses to personnel expenses. |
5) Reflects exceptional items allocated to personnel expenses of CHF 47 m, to other operating expenses of CHF 39 m, to depreciation of non-current assets of CHF 29 m and to amortization of acquired intangible assets and goodwill of CHF 4 m. |
6) Reflects expenses of CHF 60 m related to certain redeemable preferred securities reclassified from operating income to minority interests. |
7) Reflects an increase/(decrease) in credit-related valuation adjustments resulting from the difference between statistical and actual credit provisions of CHF 35 m. |
CONSOLIDATED RESULTS | CREDIT SUISSE GROUP
|
Consolidated income statement |
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| | | | | | | | in % from | | in % from | | | | | | in % from | |
| | | | | | | | | | | | 9 months | | |
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in CHF m | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 2Q2003 | | 3Q2002 | | 2003 | | 2002 | | 2002 | |
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Interest and discount income | | 3,227 | | 3,513 | | 4,233 | | (8) | | (24) | | 10,081 | | 13,511 | | (25) | |
Interest and dividend income from trading portfolios | | 2,481 | | 2,445 | | 2,495 | | 1 | | (1) | | 6,952 | | 7,753 | | (10) | |
Interest and dividend income from financial investments | | 181 | | 172 | | 298 | | 5 | | (39) | | 528 | | 577 | | (8) | |
Interest expenses | | (3,877) | | (4,268) | | (4,945) | | (9) | | (22) | | (12,036) | | (15,731) | | (23) | |
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Net interest income | | 2,012 | | 1,862 | | 2,081 | | 8 | | (3) | | 5,525 | | 6,110 | | (10) | |
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Commission income from lending activities | | 224 | | 243 | | 152 | | (8) | | 47 | | 672 | | 559 | | 20 | |
Commission income from securities and investment transactions | | 2,921 | | 2,641 | | 2,925 | | 11 | | 0 | | 8,117 | | 10,759 | | (25) | |
Commission income from other services | | 277 | | 258 | | 399 | | 7 | | (31) | | 776 | | 1,315 | | (41) | |
Commission expenses | | (199) | | (182) | | (174) | | 9 | | 14 | | (568) | | (599) | | (5) | |
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Net commission and service fee income | | 3,223 | | 2,960 | | 3,302 | | 9 | | (2) | | 8,997 | | 12,034 | | (25) | |
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Net trading income | | 72 | | 1,327 | | 40 | | (95) | | 80 | | 2,672 | | 2,145 | | 25 | |
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Premiums earned, net | | 7,126 | | 7,585 | | 8,672 | | (6) | | (18) | | 25,187 | | 26,502 | | (5) | |
Claims incurred and actuarial provisions | | (7,207) | | (8,143) | | (6,853) | | (11) | | 5 | | (25,034) | | (22,365) | | 12 | |
Commission expenses, net | | (619) | | (624) | | (708) | | (1) | | (13) | | (1,832) | | (1,727) | | 6 | |
Investment income from the insurance business | | 2,167 | | 2,523 | | (636) | | (14) | | | | 6,022 | | (486) | | | |
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Net income from the insurance business | | 1,467 | | 1,341 | | 475 | | 9 | | 209 | | 4,343 | | 1,924 | | 126 | |
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Income from the sale of financial investments | | 102 | | 147 | | 381 | | (31) | | (73) | | 324 | | 895 | | (64) | |
Income from investments in associates | | 8 | | (2) | | (1) | | | | | | 49 | | 83 | | (41) | |
Income from other non-consolidated participations | | 3 | | 15 | | 2 | | (80) | | 50 | | 19 | | 24 | | (21) | |
Real estate income | | 41 | | 45 | | 76 | | (9) | | (46) | | 129 | | 164 | | (21) | |
Sundry ordinary income | | 219 | | 237 | | 284 | | (8) | | (23) | | 666 | | 730 | | (9) | |
Sundry ordinary expenses 1) | | (616) | | (383) | | (974) | | 61 | | (37) | | (1,620) | | (2,466) | | (34) | |
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Other ordinary income/(expenses), net | | (243) | | 59 | | (232) | | | | 5 | | (433) | | (570) | | (24) | |
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Operating income | | 6,531 | | 7,549 | | 5,666 | | (13) | | 15 | | 21,104 | | 21,643 | | (2) | |
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Personnel expenses | | 3,125 | | 3,824 | | 3,793 | | (18) | | (18) | | 10,588 | | 13,446 | | (21) | |
Other operating expenses | | 1,262 | | 1,247 | | 1,559 | | 1 | | (19) | | 3,890 | | 4,972 | | (22) | |
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Operating expenses | | 4,387 | | 5,071 | | 5,352 | | (13) | | (18) | | 14,478 | | 18,418 | | (21) | |
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Gross operating profit | | 2,144 | | 2,478 | | 314 | | (13) | | | | 6,626 | | 3,225 | | 105 | |
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Depreciation of non-current assets 2) | | 471 | | 475 | | 592 | | (1) | | (20) | | 1,366 | | 1,539 | | (11) | |
Amortization of acquired intangible assets | | 84 | | 78 | | 162 | | 8 | | (48) | | 243 | | 528 | | (54) | |
Amortization of goodwill | | 154 | | 145 | | 175 | | 6 | | (12) | | 450 | | 568 | | (21) | |
Valuation adjustments, provisions and losses from the banking business 1) | | 215 | | 131 | | 973 | | 64 | | (78) | | 579 | | 2,006 | | (71) | |
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Depreciation, valuation adjustments and losses | | 924 | | 829 | | 1,902 | | 11 | | (51) | | 2,638 | | 4,641 | | (43) | |
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Profit/(loss) before extraordinary items and taxes | | 1,220 | | 1,649 | | (1,588) | | (26) | | | | 3,988 | | (1,416) | | | |
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Extraordinary income | | 1,568 | | 120 | | (5) | | | | | | 1,697 | | 120 | | | |
Extraordinary expenses | | (400) | | (59) | | (126) | | | | 217 | | (517) | | (146) | | 254 | |
Taxes 3) | | (317) | | (319) | | (410) | | (1) | | (23) | | (1,014) | | (914) | | 11 | |
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Net profit/(loss) before minority interests | | 2,071 | | 1,391 | | (2,129) | | 49 | | | | 4,154 | | (2,356) | | | |
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Minority interests | | (26) | | (45) | | (19) | | (42) | | 37 | | (111) | | (3) | | | |
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Net profit/(loss) | | 2,045 | | 1,346 | | (2,148) | | 52 | | | | 4,043 | | (2,359) | | | |
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1) Effective in the first quarter 2003, declines in value of debt securities and loans available for sale due to deterioration in creditworthiness are reported in Sundry ordinary expenses. In previous years they were recorded in Valuation adjustments, provisions and losses from the banking business. |
2) Includes amortization of Present Value of Future Profits (PVFP) from the insurance business. |
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 3Q2002 and for the 9 months 2002 of CHF 306 m and CHF 400 m, respectively. |
Consolidated balance sheet |
| | | | | | | | Change | | Change | |
| | | | | | | | in % from | | in % from | |
in CHF m | | 30.09.03 | | 30.06.03 | | 31.12.02 | | 30.06.03 | | 31.12.02 | |
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Assets | | | | | | | | | | | |
Cash and other liquid assets | | 3,618 | | 4,016 | | 2,551 | | (10) | | 42 | |
Money market papers | | 17,851 | | 21,283 | | 25,125 | | (16) | | (29) | |
Due from banks | | 227,853 | | 215,292 | | 195,778 | | 6 | | 16 | |
Receivables from the insurance business | | 8,870 | | 12,359 | | 12,290 | | (28) | | (28) | |
Due from customers | | 168,935 | | 193,115 | | 182,143 | | (13) | | (7) | |
Mortgages | | 99,732 | | 96,816 | | 94,896 | | 3 | | 5 | |
Securities and precious metals trading portfolios | | 196,314 | | 187,358 | | 173,133 | | 5 | | 13 | |
Financial investments from the banking business | | 40,466 | | 35,053 | | 33,394 | | 15 | | 21 | |
Investments from the insurance business | | 127,707 | | 140,045 | | 128,450 | | (9) | | (1) | |
Non-consolidated participations | | 1,568 | | 1,594 | | 1,792 | | (2) | | (13) | |
Tangible fixed assets | | 7,179 | | 7,726 | | 8,152 | | (7) | | (12) | |
Intangible assets | | 14,654 | | 15,447 | | 18,359 | | (5) | | (20) | |
Accrued income and prepaid expenses | | 12,322 | | 14,742 | | 13,882 | | (16) | | (11) | |
Other assets | | 67,486 | | 71,799 | | 65,711 | | (6) | | 3 | |
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Total assets | | 994,555 | | 1,016,645 | | 955,656 | | (2) | | 4 | |
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Subordinated assets | | 6,743 | | 6,361 | | 5,479 | | 6 | | 23 | |
Receivables due from non-consolidated participations | | 942 | | 864 | | 728 | | 9 | | 29 | |
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Liabilities and shareholders' equity | | | | | | | | | | | |
Money market papers issued | | 36,986 | | 26,967 | | 22,178 | | 37 | | 67 | |
Due to banks | | 313,363 | | 325,887 | | 287,884 | | (4) | | 9 | |
Payables from the insurance business | | 8,376 | | 8,556 | | 10,218 | | (2) | | (18) | |
Due to customers in savings and investment deposits | | 42,794 | | 42,398 | | 39,739 | | 1 | | 8 | |
Due to customers, other | | 256,786 | | 262,342 | | 258,244 | | (2) | | (1) | |
Medium-term notes (cash bonds) | | 1,938 | | 2,161 | | 2,599 | | (10) | | (25) | |
Bonds and mortgage-backed bonds | | 82,021 | | 80,701 | | 81,839 | | 2 | | 0 | |
Accrued expenses and deferred income | | 16,536 | | 16,774 | | 17,463 | | (1) | | (5) | |
Other liabilities | | 57,827 | | 57,812 | | 56,070 | | 0 | | 3 | |
Valuation adjustments and provisions | | 11,147 | | 12,508 | | 11,557 | | (11) | | (4) | |
Technical provisions for the insurance business | | 131,908 | | 147,111 | | 136,471 | | (10) | | (3) | |
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Total liabilities | | 959,682 | | 983,217 | | 924,262 | | (2) | | 4 | |
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Reserve for general banking risks | | 1,733 | | 1,733 | | 1,739 | | 0 | | 0 | |
Share capital | | 1,195 | | 1,190 | | 1,190 | | 0 | | 0 | |
Capital reserve | | 20,720 | | 20,713 | | 20,710 | | 0 | | 0 | |
Revaluation reserves for the insurance business | | 1,186 | | 1,704 | | 1,504 | | (30) | | (21) | |
Reserve for own shares | | 1,950 | | 1,950 | | 1,950 | | 0 | | 0 | |
Retained earnings | | 1,075 | | 1,200 | | 4,732 | | (10) | | (77) | |
Minority interests | | 2,971 | | 2,940 | | 2,878 | | 1 | | 3 | |
Net profit/(loss) | | 4,043 | | 1,998 | | (3,309) | | 102 | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total shareholders' equity | | 34,873 | | 33,428 | | 31,394 | | 4 | | 11 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total liabilities and shareholders' equity | | 994,555 | | 1,016,645 | | 955,656 | | (2) | | 4 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Subordinated liabilities | | 19,386 | | 20,186 | | 20,932 | | (4) | | (7) | |
Liabilities due to non-consolidated participations | | 2,090 | | 1,390 | | 1,164 | | 50 | | 80 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Off-balance sheet and fiduciary business |
in CHF m | | 30.09.03 | | 31.12.02 | |
| | | | | |
| | | | | |
| | | | | |
Credit guarantees in form of bills of exchange and other guarantees 1) | | 30,505 | | 27,745 | |
Bid bonds, delivery and performance bonds, letters of indemnity, other performance-related guarantees | | 4,648 | | 4,680 | |
Irrevocable commitments in respect of documentary credits | | 3,131 | | 3,242 | |
Other contingent liabilities | | 2,697 | | 3,437 | |
| | | | | |
| | | | | |
| | | | | |
Contingent liabilities | | 40,981 | | 39,104 | |
| | | | | |
| | | | | |
| | | | | |
Irrevocable commitments | | 91,485 | | 92,950 | |
Liabilities for calls on shares and other equity instruments | | 46 | | 43 | |
Confirmed credits | | 13 | | 32 | |
| | | | | |
| | | | | |
| | | | | |
Total off-balance sheet | | 132,525 | | 132,129 | |
| | | | | |
| | | | | |
| | | | | |
Fiduciary transactions | | 34,237 | | 37,703 | |
| | | | | |
| | | | | |
| | | | | |
At 30.09.03, market value guarantees reported as derivatives totaled CHF 217.8 bn (31.12.02: CHF 170.4 bn) (nominal value). The associated replacement value reported on-balance sheet totaled CHF 5.9 bn (31.12.02: CHF 10.3 bn). |
|
|
|
|
|
1) Including credit guarantees of securities lent as arranger: 30.09.03: CHF 22.8 bn (31.12.02: CHF 20.7 bn). |
Derivative instruments |
| | | | Positive | | Negative | | | | Positive | | Negative | |
| | | | gross | | gross | | | | gross | | gross | |
| | Nominal | | replacement | | replacement | | Nominal | | replacement | | replacement | |
| | value | | value | 1) | value | 1) | value | | value | 1) | value | 1) |
in CHF bn | | 30.09.03 | | 30.09.03 | | 30.09.03 | | 31.12.02 | | 31.12.02 | | 31.12.02 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Interest rate products | | 11,884.9 | | 192.3 | | 181.8 | | 10,647.2 | | 185.4 | | 181.0 | |
Foreign exchange products | | 1,640.6 | | 39.5 | | 40.2 | | 1,376.7 | | 34.8 | | 36.1 | |
Precious metals products | | 14.6 | | 0.9 | | 3.0 | | 19.8 | | 0.9 | | 2.5 | |
Equity/index-related products | | 459.9 | | 15.5 | | 21.9 | | 347.5 | | 12.6 | | 13.0 | |
Other products | | 252.7 | | 4.2 | | 5.0 | | 179.4 | | 4.3 | | 5.0 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total derivative instruments | | 14,252.7 | | 252.4 | | 251.9 | | 12,570.6 | | 238.0 | | 237.6 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
1) Including replacement values for traded derivatives (futures and traded options) subject to daily margining requirements. Total positive and negative replacement values of traded derivatives amount to CHF 5.0 bn (31.12.02: CHF 1.5 bn) and CHF 2.8 bn (31.12.02: CHF 1.1 bn). |
Currency translation rates | |
| | Average rate year-to-date | | Closing rate used in the | |
| | used in the income statement | | balance sheet as of | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
in CHF | | 3Q2003 | | 2Q2003 | | 3Q2002 | | 30.09.03 | | 30.06.03 | | 31.12.02 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
1 USD | | 1.36 | | 1.35 | | 1.59 | | 1.3229 | | 1.3528 | | 1.3902 | |
1 EUR | | 1.51 | | 1.49 | | 1.47 | | 1.5382 | | 1.5461 | | 1.4550 | |
1 GBP | | 2.19 | | 2.18 | | 2.34 | | 2.2089 | | 2.2357 | | 2.2357 | |
100 JPY | | 1.15 | | 1.14 | | 1.26 | | 1.1923 | | 1.1290 | | 1.1722 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Income statement of the banking and insurance business 1) |
| | Banking business | | | | | | | | | |
| | (incl. Corporate Center) | | Insurance business | 2) | Credit Suisse Group | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
9 months, in CHF m | | 2003 | | 2002 | | 2003 | | 2002 | | 2003 | | 2002 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Net interest income | | 5,528 | | 6,072 | | | | | | 5,525 | | 6,110 | |
Net commission and service fee income | | 8,981 | | 12,043 | | | | | | 8,997 | | 12,034 | |
Net trading income | | 2,718 | | 2,145 | | | | | | 2,672 | | 2,145 | |
Net income from the insurance business 3) | | | | | | 4,320 | | 1,934 | | 4,343 | | 1,924 | |
Other ordinary income/(expenses), net | | 220 | | (180) | | (668) | | (399) | | (433) | | (570) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Operating income | | 17,447 | | 20,080 | | 3,652 | | 1,535 | | 21,104 | | 21,643 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Personnel expenses | | 9,060 | | 11,733 | | 1,528 | | 1,713 | | 10,588 | | 13,446 | |
Other operating expenses | | 2,875 | | 3,804 | | 1,013 | | 1,138 | | 3,890 | | 4,972 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Operating expenses | | 11,935 | | 15,537 | | 2,541 | | 2,851 | | 14,478 | | 18,418 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Gross operating profit/(loss) | | 5,512 | | 4,543 | | 1,111 | | (1,316) | | 6,626 | | 3,225 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Depreciation of non-current assets | | 896 | | 1,112 | | 470 | | 427 | | 1,366 | | 1,539 | |
Amortization of acquired intangible assets | | 243 | | 528 | | 0 | | 0 | | 243 | | 528 | |
Amortization of goodwill | | 402 | | 519 | | 48 | | 50 | | 450 | | 568 | |
Valuation adjustments, provisions and losses from the banking business | | 579 | | 2,005 | | | | | | 579 | | 2,006 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Depreciation, valuation adjustments and losses | | 2,120 | | 4,164 | | 518 | | 477 | | 2,638 | | 4,641 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Profit/(loss) before extraordinary items, taxes and minority interests | | 3,392 | | 379 | | 593 | | (1,793) | | 3,988 | | (1,416) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Extraordinary income | | 110 | | 70 | | 1,587 | | 50 | | 1,697 | | 120 | |
Extraordinary expenses | | (33) | | (26) | | (484) | | (120) | | (517) | | (146) | |
Taxes | | (808) | | (234) | | (206) | | (680) | | (1,014) | | (914) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Net profit/(loss) before minority interests | | 2,661 | | 189 | | 1,490 | | (2,543) | | 4,154 | | (2,356) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Minority interests | | (114) | | (116) | | 2 | | 113 | | (111) | | (3) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Net profit/(loss) | | 2,547 | | 73 | | 1,492 | | (2,430) | | 4,043 | | (2,359) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
1) Income statements for the banking and insurance business are presented on a stand-alone basis. |
2) Represents Winterthur Swiss Insurance Company. |
3) Insurance business: expenses due to the handling of both claims and investments are allocated to the income from the insurance business, of which CHF 405 m (9 months 2002: CHF 428 m) are related to personnel expenses and CHF 341 m (9 months 2002: CHF 330 m) to other operating expenses. |
Statement of shareholders' equity |
| | 9 months | |
| | | | | |
| | | | | |
| | | | | |
in CHF m | | 2003 | | 2002 | |
| | | | | |
| | | | | |
| | | | | |
At beginning of financial year | | 31,394 | | 38,921 | |
Repayment out of share capital | | 0 | | (2,379) | |
Dividends paid | | (123) | | 0 | |
Dividends paid to minority interests | | (109) | | (120) | |
Capital increases, par value and capital surplus | | 14 | | 198 | |
Cancellation of repurchased shares | | 0 | | (542) | |
Changes in scope of consolidation affecting minority interests | | (19) | | (95) | |
Foreign exchange impact | | (143) | | (1,745) | |
Change in revaluation reserves from the insurance business, net | | (289) | | 579 | |
Change in reserve for general banking risks, net | | (6) | | 0 | |
Minority interests in net profit | | 111 | | 3 | |
Net profit/(loss) | | 4,043 | | (2,359) | |
| | | | | |
| | | | | |
| | | | | |
At end of period | | 34,873 | | 32,461 | |
| | | | | |
| | | | | |
| | | | | |
Due from banks |
in CHF m | | 30.09.03 | | 31.12.02 | |
| | | | | |
| | | | | |
| | | | | |
Due from banks, gross | | 227,938 | | 195,866 | |
Valuation allowance | | (85) | | (88) | |
| | | | | |
| | | | | |
| | | | | |
Total due from banks, net | | 227,853 | | 195,778 | |
| | | | | |
| | | | | |
| | | | | |
Due from customers and mortgages |
in CHF m | | 30.09.03 | | 31.12.02 | |
| | | | | |
| | | | | |
| | | | | |
Due from customers, gross 1) | | 173,217 | | 187,617 | |
Valuation allowance | | (4,282) | | (5,474) | |
| | | | | |
| | | | | |
| | | | | |
Due from customers, net | | 168,935 | | 182,143 | |
| | | | | |
| | | | | |
| | | | | |
Mortgages, gross 1) | | 101,155 | | 97,037 | |
Valuation allowance | | (1,423) | | (2,141) | |
| | | | | |
| | | | | |
| | | | | |
Mortgages, net | | 99,732 | | 94,896 | |
| | | | | |
| | | | | |
| | | | | |
Total due from customers and mortgages, net | | 268,667 | | 277,039 | |
| | | | | |
| | | | | |
| | | | | |
1) Effective 1Q2003, loans held for sale are presented net of the related loan valuation allowances. |
Due from customers and mortgages by sector |
in CHF m | | 30.09.03 | | 31.12.02 | |
| | | | | |
| | | | | |
| | | | | |
Financial services | | 50,298 | | 43,553 | |
Real estate companies | | 15,995 | | 16,472 | |
Other services including technology companies | | 15,073 | | 15,316 | |
Manufacturing | | 11,190 | | 13,273 | |
Wholesale and retail trade | | 9,890 | | 11,165 | |
Construction | | 4,099 | | 4,314 | |
Transportation | | 3,881 | | 4,149 | |
Telecommunications | | 1,918 | | 2,333 | |
Health and social services | | 1,883 | | 2,340 | |
Hotels and restaurants | | 2,533 | | 2,390 | |
Agriculture and mining | | 2,301 | | 2,317 | |
Non-profit and international organizations | | 189 | | 191 | |
| | | | | |
| | | | | |
| | | | | |
Commercial | | 119,250 | | 117,813 | |
| | | | | |
| | | | | |
| | | | | |
Consumers | | 95,258 | | 87,145 | |
Public authorities | | 5,956 | | 5,023 | |
Lease financings | | 3,297 | | 3,158 | |
Professional securities transactions and securitized loans | | 50,611 | | 71,515 | |
| | | | | |
| | | | | |
| | | | | |
Due from customers and mortgages, gross | | 274,372 | | 284,654 | |
| | | | | |
| | | | | |
| | | | | |
Valuation allowance | | (5,705) | | (7,615) | |
| | | | | |
| | | | | |
| | | | | |
Total due from customers and mortgages, net | | 268,667 | | 277,039 | |
| | | | | |
| | | | | |
| | | | | |
Collateral of due from customers and mortgages |
| | Mortgage | | Other | | Without | | Total | |
in CHF m | | collateral | | collateral | | collateral | | 30.09.03 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Due from customers | | 5,438 | | 117,467 | | 46,030 | | 168,935 | |
Residential properties | | 73,001 | | | | | | | |
Business and office properties | | 11,370 | | | | | | | |
Commercial and industrial properties | | 12,115 | | | | | | | |
Other properties | | 3,246 | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Mortgages | | 99,732 | | | | | | 99,732 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Total collateral | | 105,170 | | 117,467 | | 46,030 | | 268,667 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
As of 31.12.02 | | 100,002 | | 129,300 | | 47,737 | | 277,039 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Loan valuation allowance |
in CHF m | | 30.09.03 | | 31.12.02 | |
| | | | | |
| | | | | |
| | | | | |
Due from banks | | 85 | | 88 | |
Due from customers | | 4,282 | | 5,474 | |
Mortgages | | 1,423 | | 2,141 | |
| | | | | |
| | | | | |
| | | | | |
Total loans valuation allowance 1) 2) | | 5,790 | | 7,703 | |
| | | | | |
| | | | | |
| | | | | |
of which on principal |
| 4,921 | | 6,617 | |
of which on interest |
| 869 | | 1,086 | |
| | | | | |
| | | | | |
| | | | | |
1) Of which are CHF 4,816 m specific allowances for impaired loans (31.12.02: CHF 6,778 m). |
2) Effective 1Q2003, valuation allowances related to loans held for sale are netted directly with such loans, and are not presented separately in the total loan valuation allowance. |
Roll forward of loan valuation allowance |
| | 9 months |
| | | | | |
| | | | | |
| | | | | |
in CHF m | | 2003 | | 2002 | |
| | | | | |
| | | | | |
| | | | | |
At beginning of financial year | | 7,703 | | 9,264 | |
| | | | | |
| | | | | |
| | | | | |
Additions | | 948 | | 2,028 | |
Releases | | (548) | | (584) | |
| | | | | |
| | | | | |
| | | | | |
Net additions charged to income statement | | 400 | | 1,444 | |
| | | | | |
| | | | | |
| | | | | |
Gross write-offs | | (2,033) | | (3,221) | |
Recoveries | | 42 | | 34 | |
| | | | | |
| | | | | |
| | | | | |
Net write-offs | | (1,991) | | (3,187) | |
| | | | | |
| | | | | |
| | | | | |
Reclassified to loans held for sale | | (355) | | | |
Provisions for interest | | 100 | | 161 | |
Foreign currency translation impact and other | | (67) | | (304) | |
| | | | | |
| | | | | |
| | | | | |
At end of period | | 5,790 | | 7,378 | |
| | | | | |
| | | | | |
| | | | | |
Impaired loans 1) |
in CHF m | | 30.09.03 | | 31.12.02 | |
| | | | | |
| | | | | |
| | | | | |
With a specific allowance | | 7,738 | | 11,714 | |
Without a specific allowance | | 774 | | 655 | |
| | | | | |
| | | | | |
| | | | | |
Total impaired loans, gross | | 8,512 | | 12,369 | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Non-performing loans | | 3,970 | | 6,355 | |
Non-interest earning loans | | 2,015 | | 2,325 | |
Restructured loans | | 349 | | 281 | |
Potential problem loans 2) | | 2,178 | | 3,408 | |
| | | | | |
| | | | | |
| | | | | |
Total impaired loans, gross | | 8,512 | | 12,369 | |
| | | | | |
| | | | | |
| | | | | |
1) Effective 1Q2003, loans classified as held for sale are excluded from presentation as impaired. |
2) Potential problem loans consist of loans where interest payments are being made but where, in the credit officer's assessment, some doubt exists as to the timing and/or certainty of the repayment of contractual principal. |
Securities and precious metals trading portfolios |
| | | | | |
in CHF m | | 30.09.03 | | 31.12.02 | |
| | | | | |
| | | | | |
| | | | | |
Listed on stock exchange | | 67,749 | | 58,661 | |
Unlisted | | 75,638 | | 76,083 | |
| | | | | |
| | | | | |
| | | | | |
Debt instruments | | 143,387 | | 134,744 | |
| | | | | |
| | | | | |
| | | | | |
of which own bonds and medium-term notes |
| 914 | | 1,520 | |
| | | | | |
| | | | | |
| | | | | |
Listed on stock exchange | | 45,937 | | 33,208 | |
Unlisted | | 5,735 | | 3,935 | |
| | | | | |
| | | | | |
| | | | | |
Equity instruments | | 51,672 | | 37,143 | |
| | | | | |
| | | | | |
| | | | | |
of which own shares |
| 2,584 | | 2,254 | |
| | | | | |
| | | | | |
| | | | | |
Precious metals | | 1,255 | | 1,246 | |
| | | | | |
| | | | | |
| | | | | |
Total securities and precious metals trading portfolios | | 196,314 | | 173,133 | |
| | | | | |
| | | | | |
| | | | | |
of which securities rediscountable or pledgeable
with central banks |
| 33,522 | | 27,426 | |
| | | | | |
| | | | | |
| | | | | |
Investments from the insurance business |
| | | | | | Gross | | Gross | | | |
| | | | Amortized | | unrealized | | unrealized | | | |
As of 30.09.03, in CHF m | | Book value | | cost | | gains | | losses | | Fair value | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Debt securities issued by Swiss Federal Government, cantonal or local governmental entities | | 7,157 | | 7,157 | | 0 | | 160 | | 6,997 | |
Corporate debt securities | | 1,199 | | 1,199 | | 0 | | 19 | | 1,180 | |
Other | | 1,851 | | 1,851 | | 0 | | 30 | | 1,821 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total debt securities held to maturity | | 10,207 | | 10,207 | | 0 | | 209 | | 9,998 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Debt securities issued by Swiss Federal Government, cantonal or local governmental entities | | 4,258 | | 4,090 | | 184 | | 16 | | 4,258 | |
Debt securities issued by foreign governments | | 16,842 | | 16,255 | | 679 | | 92 | | 16,842 | |
Corporate debt securities | | 38,735 | | 37,246 | | 1,733 | | 244 | | 38,735 | |
Other | | 6,988 | | 6,658 | | 349 | | 19 | | 6,988 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Debt securities | | 66,823 | | 64,249 | | 2,945 | | 371 | | 66,823 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity securities | | 5,485 | | 5,147 | | 482 | | 144 | | 5,485 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total securities available-for-sale | | 72,308 | | 69,396 | | 3,427 | | 515 | | 72,308 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Debt securities | | 234 | | | | | | | | | |
Equity securities | | 81 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total securities trading | | 315 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Own shares | | 7 | | | | | | | | | |
Mortgage loans | | 10,932 | | | | | | | | | |
Other loans | | 4,407 | | | | | | | | | |
Real estate | | 7,572 | | | | | | | | 9,944 | |
Short-term investments and other | | 6,764 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Investments from the insurance business | | 112,512 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity securities | | 10,883 | | | | | | | | | |
Debt securities | | 2,565 | | | | | | | | | |
Short-term investments | | 1,572 | | | | | | | | | |
Real estate | | 175 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Investments where the investment risk is borne by the policyholder | | 15,195 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Investments from the insurance business | | 127,707 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
As of 31.12.02, in CHF m | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Debt securities issued by Swiss Federal Government, cantonal or local governmental entities | | 10,814 | | 9,951 | | 863 | | 0 | | 10,814 | |
Debt securities issued by foreign governments | | 27,110 | | 26,337 | | 871 | | 98 | | 27,110 | |
Corporate debt securities | | 29,042 | | 27,478 | | 1,717 | | 153 | | 29,042 | |
Other | | 9,685 | | 9,157 | | 552 | | 24 | | 9,685 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Debt securities | | 76,651 | | 72,923 | | 4,003 | | 275 | | 76,651 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity securities | | 9,052 | | 9,171 | | 336 | | 455 | | 9,052 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total securities available-for-sale | | 85,703 | | 82,094 | | 4,339 | | 730 | | 85,703 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Debt securities | | 246 | | | | | | | | | |
Equity securities | | 31 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total securities trading | | 277 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Own shares | | 44 | | | | | | | | | |
Mortgage loans | | 10,175 | | | | | | | | | |
Other loans | | 4,305 | | | | | | | | | |
Real estate | | 7,431 | | | | | | | | 10,057 | |
Short-term investments and other | | 7,120 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Investments from the insurance business | | 115,055 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity securities | | 9,288 | | | | | | | | | |
Debt securities | | 2,841 | | | | | | | | | |
Short-term investments | | 1,069 | | | | | | | | | |
Real estate | | 197 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Investments where the investment risk is borne by the policyholder | | 13,395 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Investments from the insurance business | | 128,450 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
INFORMATION FOR INVESTORS
|
Financial calendar |
| |
Fourth quarter/full-year results 2003 | Thursday, February 12, 2004 |
| |
| |
| |
Annual General Meeting | Friday, April 30, 2004 |
| |
| |
| |
Credit Suisse Group shares |
Ticker symbols | | | | |
Stock exchange listings | | Bloomberg | Reuters | Telekurs |
| | | | |
| | | | |
| | | | |
SWX Swiss Exchange/virt-x | | CSGN VX | CSGN.VX | CSGN,380 |
Frankfurt | | CSX GR | CSGN.DE | CSX,013 |
New York (ADS) 1) | | CSR US | CSR.N | CSR,065 |
| | | | |
| | | | |
| | | | |
1) 1 ADS represents 1 registered share. |
| | | | |
| | | | |
| | | | |
| | | | |
Swiss security number | | 1213853 | | |
ISIN number | | CH0012138530 | | |
German security number | | DE 876 800 | | |
CUSIP number | | 225 401 108 | | |
| | | | |
| | | | |
| | | | |
Ratings |
| | Moodys | | Standard & Poors | | Fitch Ratings | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Credit Suisse Group | | | | | | | |
Short term | | | | A-1 | | F1+ | |
Long term | | Aa3 | | A | | AA- | |
Outlook | | Negative | | Stable | | Negative | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Credit Suisse | | | | | | | |
Short term | | P-1 | | A-1 | | F1+ | |
Long term | | Aa3 | | A+ | | AA- | |
Outlook | | Negative | | Stable | | Negative | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Credit Suisse First Boston | | | | | | | |
Short term | | P-1 | | A-1 | | F1+ | |
Long term | | Aa3 | | A+ | | AA- | |
Outlook | | Negative | | Stable | | Negative | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Winterthur | | | | | | | |
Insurer Financial Strength | | A1 | | A | | AA | |
Credit | | A2 | | A | | AA- | |
Outlook | | Negative | | Negative | | Negative | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Enquiries
Credit Suisse Group
Investor Relations
Gerhard Beindorff, Marc Buchheister
Tel. +41 1 333 4570/+41 1 333 3169
Fax +41 1 333 2587
Credit Suisse Group
Media Relations
Karin Rhomberg Hug, Claudia Kraaz
Tel. +41 1 333 8844
Fax +41 1 333 8877
Financial Publications
Printed financial publications may be ordered from:
Credit Suisse
KIDM 23
Uetlibergstrasse 231
8070 Zurich
Switzerland
Fax +41 1 332 7294
www.credit-suisse.com/results/order.html
In this years corporate reports, we have chosen the work of Swiss artist Daniel Grobet to represent Credit Suisse Groups 360° approach to finance. In his hand-crafted iron sculptures, Daniel achieves a harmonious balance by carefully combining static and dynamic elements.
Credit Suisse Group
Paradeplatz 8
P.O. Box 1
8070 Zurich
Switzerland
Tel. +41 1 212 1616
Fax +41 1 333 2587
www.credit-suisse.com
PRESENTATION
|
|
Slide 1 |
Back to Contents
RESULTS OVERVIEW
in
CHF m |
Q3/03 |
|
Q2/03 |
|
Q3/02 |
|
|
9M/03 |
|
9M/02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Suisse |
|
|
|
|
|
|
|
|
|
|
|
Financial Services |
1,778 |
|
851 |
|
(1,194 |
) |
|
3,333 |
|
(891 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Credit Suisse |
|
|
|
|
|
|
|
|
|
|
|
First Boston |
308 |
|
373 |
|
(668 |
) |
|
884 |
|
(609 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Center & adjustments |
(41 |
) |
122 |
|
(286 |
) |
|
(174 |
) |
(859 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net profit/(loss) |
2,045 |
|
1,346 |
|
(2,148 |
) |
|
4,043 |
|
(2,359 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible |
|
|
|
|
|
|
|
|
|
|
|
assets and goodwill, net of tax (1) |
208 |
|
197 |
|
396 |
|
|
609 |
|
1,008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating profit/(loss) |
2,253 |
|
1,543 |
|
(1,752 |
) |
|
4,652 |
|
(1,351 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (in CHF) |
1.66 |
|
1.09 |
|
(1.81 |
) |
|
3.29 |
|
(1.98 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity (annualized) |
26.3% |
|
18.5% |
|
(26.9% |
) |
|
18.2% |
|
(9.2% |
) |
(1) Q3/02 ans 9M/02 include exceptional items of
CHF 119 m, net of tax
|
|
Slide 2 |
Back to Contents
KEY TRENDS IN Q3/03
|
Further progress achieved in
our efforts to produce sound profitability |
|
|
|
Divestitures and
provisions at Winterthur significantly strengthened capital position and
balance sheet |
|
|
|
|
|
After-tax gain of CHF 1.6 bn gross, or CHF 1.3 bn net of related provisions |
|
|
|
|
|
Additionally, provisions of
CHF 383 m after tax related to its international business portfolio |
|
|
|
Private Banking with better
results than seasonally expected and a strong increase in net new assets |
|
|
|
Corporate & Retail Banking benefited from efficiency improvements
and stable revenue trends |
|
|
|
Both insurance segments benefited
from strong investment results, lower administration costs and tariff increases |
|
|
|
CSFB performance was dampened
by lower fixed income results reflecting conservative risk positioning
in light of interest rate volatility, while the business unit demonstrated
expense flexibility and continued to experience low credit charges |
|
|
Slide
3
|
Back to Contents
PRESENTATION
|
|
Slide
4
|
Back to Contents
OPERATING INCOME
|
|
|
|
|
|
|
|
|
9
months |
|
|
|
in
CHF m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3/03 |
|
Q2/03 |
|
in % |
|
|
2003 |
|
2002 |
|
in % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
2,012 |
|
1,862 |
|
8 |
|
|
5,525 |
|
6,110 |
|
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net commission & fee
income |
|
3,223 |
|
2,960 |
|
9 |
|
|
8,997 |
|
12,034 |
|
(25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net trading income |
|
72 |
|
1,327 |
|
(95 |
) |
|
2,672 |
|
2,145 |
|
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from the |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
insurance
business |
|
1,467 |
|
1,341 |
|
9 |
|
|
4,343 |
|
1,924 |
|
126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income (1) |
|
6,531 |
|
7,549 |
|
(13 |
) |
|
21,104 |
|
21,643 |
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
including "Other ordinary income/(expenses),
net" |
|
|
Slide
5 |
Back to Contents
OPERATING EXPENSES, DEPRECIATION AND TAXES
|
|
|
|
|
|
|
|
|
9
months |
|
|
|
in CHF m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3/03 |
|
Q2/03 |
|
in % |
|
|
2003 |
|
2002 |
|
in
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel expenses |
|
3,125 |
(1) |
3,824 |
|
(18 |
) |
|
10,588 |
|
13,446 |
|
(21 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses |
|
1,262 |
|
1,24 7 |
|
1 |
|
|
3,890 |
|
4,972 |
|
(22 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
4,387 |
|
5,071 |
|
(13 |
) |
|
14,478 |
|
18,418 |
|
(21 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
471 |
|
475 |
|
(1 |
) |
|
1,366 |
|
1,539 |
|
(11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost/income ratio, reported (2) |
|
74 |
% |
73 |
% |
|
|
|
75 |
% |
92 |
% |
|
|
Cost/income ratio, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
banking
business only (2)(3) |
|
70 |
% |
73 |
% |
|
|
|
74 |
% |
83 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes |
|
317 |
|
319 |
|
(1 |
) |
|
1,014 |
|
914 |
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax rate |
|
13 |
% |
19 |
% |
|
|
|
20 |
% |
(63 |
%) |
|
|
|
|
(1) |
includes positive net impact of CHF 122 m from change in vesting of share-based compensation and related incremental incentive compensation at CSFB |
(2) |
operating expenses plus depreciation of non-current assets divided by operating income |
(3) |
including results from Corporate Center and adjustments |
|
Slide
6 |
Back to Contents
PROVISIONS
Note: Totals include Corporate Center
and adjustments but exclude exceptional provisions of CHF 984 m in Q4/02 |
|
Slide
7 |
Back to Contents
IMPAIRED LOANS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.0 |
|
|
4.6 |
|
4.9 |
|
4.1 |
|
3.3 |
|
3.0 |
|
Impaired loans as % of due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from banks
and customers (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59.5 |
|
|
60.0 |
|
62.3 |
|
63.8 |
|
67.1 |
|
68.0 |
|
Valuation allowance as % of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
impaired loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) due from banks and customers
and mortgages (excluding securities lending and reverse repurchase agreements) |
|
Slide
8 |
Back to Contents
BIS CAPITAL RATIOS
AS OF SEPTEMBER 30, 2003
|
|
|
|
|
|
|
Credit Suisse |
|
|
Credit |
|
Credit Suisse |
|
|
Group |
in CHF m |
|
Suisse(1) |
|
First Boston(1) |
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book equity |
|
7,701 |
|
19,914 |
|
|
34,873 |
|
Deduction of goodwill |
|
(254 |
) |
(7,727 |
) |
|
(9,462 |
) |
Deduction of 50% of Winterthur's |
|
|
|
|
|
|
|
|
adjusted
net asset value |
|
|
|
|
|
|
(2,682 |
) |
Other tier 1 adjustments |
|
(399 |
) |
(75 |
) |
|
(828 |
) |
|
|
|
|
|
|
|
|
|
Tier 1 capital |
|
7,049 |
|
12,112 |
|
|
21,901 |
|
|
|
|
|
|
|
|
|
|
Acquired intangible assets |
|
62 |
|
1,731 |
(2) |
|
1,795 |
(2) |
Hybrid capital |
|
|
|
1,003 |
|
|
2,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk-weighted assets |
|
92,269 |
|
99,308 |
|
|
197,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital ratio |
|
7.6% |
|
12.2% |
|
|
11.1% |
|
excl. acquired intangible assets |
|
7.6% |
|
10.7% |
|
|
10.3% |
|
|
|
|
|
|
|
|
|
|
(1) consolidated banking entities Credit Suisse and Credit Suisse First Boston (2) net of tax liability
|
|
|
Slide
9 |
Back to Contents
YEAR-END 2003 PREVIEW
IMPLEMENTATION OF REVISED RRV-EBK*
|
Announced by EBK in December 2002, effective
as of January 1, 2003 |
|
Changes to be applied prospectively, i.e.
no restatement |
|
Credit Suisse Group will implement full-year
impact in Q4/2003 |
|
Impact predominantly from business unit
CSFB |
|
|
Change |
|
Description |
|
Pro-forma impact |
Accounting for own shares |
|
|
Income related
to treasury shares to be recorded directly in equity |
|
|
For nine months 2003:
decrease
of CHF 120 m to net profit |
|
|
Treasury shares and share award-related
liabilities to be recorded directly in equity |
|
|
At September 30, 2003: net decrease of
CHF 0.6 bn to shareholders' equity |
|
|
In line with US GAAP treatment |
|
|
No impact on regulatory capital adequacy
ratios |
|
|
|
|
|
|
|
Accounting
for derivatives |
|
|
Revised hedge accounting
principles and
documentation
requirements |
|
|
For nine months 2003:
decrease of CHF 180 m to net profit (before cumulative effect) |
|
|
Freestanding derivative valuations are
marked to market |
|
|
Cumulative positive effect from prior
years of CHF 190 m, net of tax |
|
|
Strategic hedges disallowed |
|
|
|
|
|
|
|
|
|
|
* EBK = Swiss Federal Banking Commission RRV = Swiss Banking GAAP as promulgated by the EBK
|
|
|
Slide
10 |
Back to Contents
US GAAP PREVIEW
DIVESTITURES TRIGGER ASSESSMENT OF US GAAP GOODWILL
US GAAP |
|
Merger accounted
for under the purchase method |
|
|
assets and liabilities valued at fair
market value at transaction date |
|
Difference between the net fair value
of assets / liabilities acquired and the market capitalization of Winterthur
recorded as |
|
|
goodwill, with corresponding |
|
|
increase in shareholders' equity |
|
At January 1, 2003, the remaining additional
US GAAP goodwill amounted to CHF 3.5 bn |
|
Net result of
recent divestitures under US GAAP significantly lower due to the higher
book values and allocated goodwill |
|
|
|
|
|
|
Slide
11 |
Back to Contents
US GAAP PREVIEW
DIVESTITURES TRIGGER ASSESSMENT OF US GAAP GOODWILL
in CHF billion |
|
Swiss GAAP |
|
US GAAP |
|
Winterthur-related goodwill recorded in CSG |
|
|
|
|
|
consolidated accounts at December 31, 2002 |
|
1.0 |
|
4.5 |
|
|
|
|
|
|
|
Q2/03 Q3/03 goodwill allocation and write-off |
|
|
|
|
|
related to divestitures |
|
(0.1 |
) |
(1.7 |
) |
Q2/2003
goodwill impairment charge (Life & Pensions) |
|
|
|
(1.5 |
) |
|
|
|
|
|
|
YTD 2003 goodwill amortization charge |
|
(0.1 |
) |
|
|
|
|
|
|
|
|
Winterthur-related goodwill recorded in CSG |
|
|
|
|
|
consolidated accounts at September 30, 2003 |
|
0.8 |
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2002: |
|
|
|
|
|
Winterthur shareholders' equity(1) |
|
5.6 |
|
10.8 |
|
Winterthur shareholders' equity(1), net of goodwill |
|
4.6 |
|
6.3 |
|
|
|
|
|
|
|
|
|
Relevant 2003 |
|
|
|
|
|
reporting |
|
|
|
|
|
standard |
|
|
|
|
|
|
|
|
|
(1) including minority interests |
|
|
|
|
|
|
Slide
12 |
Back to Contents
PRESENTATION
|
Slide
13 |
Back to Contents
CREDIT SUISSE FINANCIAL
SERVICES |
|
OVERVIEW |
(1/2) |
Results |
|
|
Third
quarter net profit of CHF 1.8 bn vs a net profit of CHF
851 m in Q2/03 |
|
|
|
|
|
|
|
|
Winterthurs Q3/03 results include |
|
|
|
|
|
|
|
an after-tax gain from divestitures
of CHF 1.6 bn, or CHF 1.3 bn |
|
|
|
net of related provisions |
|
|
|
|
|
|
|
additionally: provisions of CHF 383 m after tax related to its |
|
|
|
current and former international business portfolio |
|
|
|
|
|
|
YTD
2003 net profit of CHF 3.3 bn, vs a loss of CHF 0.9 bn in the first
nine months of 2002 |
|
|
|
|
|
|
|
Highlights
banking
segments |
|
|
Quarterly
operating income slightly improved, although the third quarter
usually shows seasonal weakness |
|
|
|
|
|
|
|
|
Results
clearly reflect the impact of efficieny measures taken (YTD
costs down CHF 356 m or 8% vs. 9M/02) |
|
|
|
|
|
|
|
|
Lowest cost/income ratio in the past seven quarters |
|
|
|
|
|
|
Private
Banking net new assets more than doubled to CHF
8.4 bn in Q3/03 |
|
|
|
Slide
14 |
Back to Contents
CREDIT SUISSE FINANCIAL SERVICES |
|
|
OVERVIEW |
(2/2) |
|
|
Highlights
insurance
segments |
|
|
Significantly improved
investment results 9M/03 |
|
|
(Life & Pensions up CHF 2.7 bn; Insurance
up CHF 1.0 bn) |
|
|
|
|
Steady progress in the underlying performance vs 9M/02 due to |
|
|
|
|
|
tariff increases, selective business renewals |
|
|
|
|
|
|
lower administration costs (in total down by CHF 315 m or 12%) |
|
|
|
|
Finalized sales of Churchill (UK), Winterthur Italy and |
|
Republic (US) |
|
|
|
|
|
In isolation, these divestitures increased Winterthur Groups |
|
|
EU solvency surplus capital by approximately CHF 3.5 bn |
|
|
|
|
|
|
|
Slide 15 |
Back to Contents
WINTERTHUR SEGMENT PROFITS
in CHF m |
|
Non-Life |
|
Life |
|
Total |
|
|
|
|
|
|
|
|
|
|
Segment profit Q3, including |
|
991 |
|
|
126 |
|
|
1,117 |
|
|
|
|
|
|
|
|
|
|
|
after-tax gains from divestitures, |
|
|
|
|
|
|
|
|
|
net of related provisions (1) |
|
1,268 |
|
|
57 |
|
|
1,325 |
|
|
|
|
|
|
|
|
|
|
|
additional provisions after tax (2) |
|
(383 |
) |
|
|
|
|
(383 |
) |
|
|
|
|
|
|
|
|
|
|
of which recognized in claims |
|
(117 |
) |
|
|
|
|
(117 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Churchill (UK), Winterthur Italy, Republic (US) |
(2) |
certain provisions related to Winterthurs current and former international business portfolio |
|
|
|
|
Slide 16 |
Back to Contents
PRIVATE BANKING
Segment result |
|
|
|
|
|
|
|
|
|
|
Gross |
|
|
|
|
|
|
|
|
margin |
128 |
|
125 |
|
124 |
|
125 |
|
(bp) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C/I |
59.1 |
|
55.1 |
|
61.5 |
|
59.1 |
|
ratio (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net new assets |
|
|
|
|
|
|
|
(CHF bn) |
3.8 |
|
8.4 |
|
18.2 |
|
13.7 |
|
|
|
|
|
|
|
|
|
|
|
Q2 |
|
Q3 |
|
2002 |
|
2003 |
|
|
|
|
|
|
|
|
|
|
|
2003 |
|
9 months |
|
Key profit & loss
items |
|
|
|
|
|
|
|
|
|
|
|
|
vs |
|
|
|
vs |
|
in CHF m |
Q3/03 |
|
Q2/03 |
|
9M/03 |
|
9M/02 |
|
|
|
|
|
|
|
|
|
|
Operating income |
1,571 |
|
3% |
|
4,489 |
|
(5% |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
819 |
|
(4% |
) |
2,501 |
|
(8% |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income up 3% vs Q2/03, gross margin |
|
down 3 bp (to 125 bp) vs Q2/03 |
|
|
|
Operating expenses 4% below Q2/03, in line with |
|
headcount development |
|
|
|
Improved cost/income ratio of 55.1%, lowest ratio |
|
in the past six quarters |
|
|
|
Net new assets more than doubled to CHF 8.4 bn |
|
in Q3/03, higher AuM base |
|
|
Slide 17 |
Back to Contents
CORPORATE & RETAIL BANKING
Segment result |
|
Key
profit & loss
items |
|
|
|
|
|
|
|
vs |
|
|
|
vs |
|
in CHF m |
|
Q3/03 |
|
Q2/03 |
|
9M/03 |
|
9M/02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
789 |
|
(2 |
%) |
2,346 |
|
(3% |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
483 |
|
(4 |
%) |
1,481 |
|
(9% |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions (1) |
|
65 |
|
(8 |
%) |
213 |
|
(9% |
) |
|
|
|
|
|
|
|
|
|
|
Net interest
margin(bp) |
212 |
215 |
|
214 |
213 |
|
|
|
|
Stable
underlying operating income, net interest
margin up 3 bp vs Q2/03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost/income |
|
|
|
|
|
|
|
|
|
Operating expenses
4% below Q2/03, in line with |
ratio (%) |
65.8 |
64.4 |
|
70.7 |
66.3 |
|
|
|
|
headcount development |
|
|
|
|
|
|
|
|
|
|
|
ROE (%) |
12.9 |
13.6 |
|
9.5 |
12.2 |
|
|
|
|
Improved cost/income ratio of 64.4%, lowest
ratio
in the past seven quarters |
|
|
|
|
|
|
|
|
|
|
|
|
Q2 |
Q3 |
|
2002 |
2003 |
|
|
|
|
Further reduced impaired loans |
|
|
|
|
|
|
|
|
|
|
2003 |
|
9
months |
|
|
|
(1) |
valuation adjustments, provisions and losses
(provisions based on expected credit losses derived from statistical model) |
|
|
|
Slide 18 |
Back to Contents
LIFE & PENSIONS
Segment result |
|
Key
profit & loss
items |
|
|
|
|
|
|
vs |
|
|
in CHF m |
9M/03 |
|
9M/02 |
|
|
|
|
|
|
|
|
Gross
premiums written |
13,277 |
|
(10% |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits & claims
(1) |
(14,487 |
) |
(10% |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy
acquisition costs |
(545 |
) |
(2% |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration
costs |
(862 |
) |
(18% |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
income (2) |
3,821 |
|
246% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
ratio (%) |
11.5 |
17.1 |
|
10.9 |
10.6 |
|
|
Segment result of CHF 126
m including after-tax
gain from divestitures of CHF 57M |
|
|
|
|
|
|
|
|
|
Return on
invested |
5.1 |
5.0 |
|
1.5 |
5.0 |
|
|
Premiums down 5.0% (organic)
vs 9M/02 due to
selective underwriting |
assets (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration costs
down 18% vs 9M/02 |
|
Q2 |
Q3 |
|
2002 |
2003 |
|
|
|
|
|
|
|
|
|
Q3/03 acquisition costs
and expense ratio |
|
2003 |
|
9 months |
|
|
impacted by DAC unlocking
of CHF 201 m |
(1) death
and other benefits incurred & change in provision for |
|
|
(segment result impact
of CHF 75 m) |
future policyholder
benefits |
|
|
|
(2) excluding
separate account business |
|
|
|
|
|
|
Slide 19 |
Back to Contents
INSURANCE
Segment
result
|
|
Key
profit & loss
items
|
|
|
|
|
|
|
|
|
|
|
|
vs |
|
|
|
|
|
|
|
|
|
|
|
in
CHF m |
|
|
|
|
|
9M/03 |
|
9M/02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
|
|
|
11,876 |
|
2% |
|
|
|
|
|
|
|
|
|
|
|
Claims & annuities |
|
|
|
|
|
(8,689 |
) |
0% |
|
|
|
|
|
|
|
|
|
|
|
Policy acquisition
costs |
|
|
|
|
|
(2,018 |
) |
7% |
|
|
|
|
|
|
|
|
|
|
|
Administration costs |
|
|
|
|
|
(1,355 |
) |
(8% |
) |
|
|
|
|
|
|
|
|
|
|
Investment income |
|
|
|
|
|
952 |
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
result of CHF 991 m including |
|
|
|
|
|
|
|
|
|
|
|
|
Combined |
|
|
|
|
|
|
|
|
|
|
an after-tax gain from divestitures
of CHF 1.6 bn, or CHF 1.3 bn net of related provisions |
ratio (%)
|
100.5
|
103.6
|
|
103.5
|
|
101.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
additional provisions
of CHF 383 m after tax |
Return on |
|
|
|
|
|
|
|
|
|
|
Invested |
|
|
|
|
|
|
|
|
|
Premiums up 8.1%
(organic) vs 9M/02, largely driven by tariff increases |
assets
(%) |
4.0
|
3.9
|
|
(0.3
|
) |
3.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration costs down 8% vs 9M/02 |
|
Q2
|
Q3
|
|
2002
|
|
2003
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3/03 reported combined ratio of 103.6%
includes CHF 117 m additional provisions (corresponding to 3.1 ppt combined
ratio) |
|
2003
|
|
9
months
|
|
|
|
|
|
|
Slide 20 |
Back to Contents
CREDIT SUISSE FINANCIAL SERVICES
OUTLOOK
|
|
|
CSFS expects a good overall result in 2003: |
|
|
|
|
|
|
|
|
Overall: |
- Efficiency improvements |
|
|
|
|
|
|
|
|
|
|
|
|
|
Banking: |
- Higher AuM base |
|
|
|
|
|
|
|
|
|
- Stable credit trend |
Outlook |
|
|
|
|
for 2003 |
|
|
|
- Seasonally higher costs in fourth quarter |
|
|
|
|
|
|
|
|
Winterthur: |
- Improved technical results |
|
|
|
|
|
|
|
|
|
- No contribution from divested businesses |
|
|
|
|
going forward |
|
|
|
|
|
|
|
Life & Pensions remains exposed to volatility of the capital markets |
|
|
|
Slide 21 |
Back to Contents
PRESENTATION
|
|
|
Slide 22 |
Back to Contents
CREDIT SUISSE FIRST BOSTON
OVERVIEW
|
|
|
Net operating profit(1) of USD 358 m, down 13% from USD 412 m |
|
|
|
|
|
|
|
|
|
Net profit down 21% to USD 224 m |
|
|
|
|
|
|
|
Operating income of USD 2.4 bn, down 22% primarily as |
|
|
|
conservative risk positioning dampened fixed income trading results |
Results Q3/03 vs
Q2/03 |
|
|
|
|
|
Operating
expenses reduced by 21% to USD 1.8 bn due to |
|
lower compensation
accruals |
|
|
|
|
|
Compensation/revenue
ratio(2) reduced
to 48.5% from 52.2%
due |
|
|
|
|
to positive net impact of USD 90 m from change in vesting of stock |
|
|
|
|
awards and related incremental incentive compensation accruals |
|
|
|
Pre-tax operating margin(2) comparable at 17.4% |
|
|
|
|
|
|
|
Return on average allocated capital(2) of 16.9% vs 18.0% |
|
|
|
|
|
|
|
Cost containment continues to be a key goal |
|
|
|
|
Highlights |
|
|
Credit provisions continue to be at historically low levels |
|
|
|
|
|
Amortization of retention payments substantially completed |
|
|
|
|
|
|
|
|
(1) |
excluding amortization of acquired intangible assets and goodwill, net of tax |
(2) |
excluding certain acquisition-related costs not allocated to the segments and reflecting certain other reclassifications |
|
|
|
Slide 23 |
Back to Contents
CREDIT SUISSE FIRST BOSTON
KEY FINANCIAL RESULTS
in USD m |
Q3/03 |
|
Q2/03 |
|
|
9M/03 |
|
9M/02 |
|
Operating income |
2,422 |
|
3,103 |
|
|
8,363 |
|
9,233 |
|
pro forma excluding Pershing |
|
|
|
|
|
8,348 |
|
8,583 |
|
Operating expenses |
1,792 |
|
2,266 |
|
|
6,167 |
|
7,236 |
|
pro forma excluding Pershing |
|
|
|
|
|
|
|
6,730 |
|
Valuation adjustments, provisions and losses |
80 |
|
49 |
|
|
257 |
|
1,022 |
|
|
|
|
|
|
|
|
|
|
|
Net operating profit (1) |
358 |
|
412 |
|
|
1,045 |
|
129 |
|
pro forma excluding Pershing |
|
|
|
|
|
1,030 |
|
57 |
|
|
|
|
|
|
|
|
|
|
|
Operating ROE (2) |
16.9 |
% |
18.0 |
% |
|
15.5 |
% |
1.9 |
% |
Operating pre-tax margin (2) |
17.4 |
% |
18.1 |
% |
|
16.1 |
% |
0.4 |
% |
Personnel expenses/operating income (2) |
48.5 |
% |
52.2 |
% |
|
51.1 |
% |
54.6 |
% |
Number of employees (3) |
18,195 |
|
18,137 |
|
|
|
|
|
|
|
|
(1) |
excluding amortization of acquired intangible
assets and goodwill, net of tax |
(2) |
excluding certain acquisition-related
costs not allocated to the segments and reflecting certain other reclassifications |
(3) |
full-time equivalents |
|
|
Slide
24
|
Back to Contents
INSTITUTIONAL SECURITIES
OVERVIEW
Segment
result |
|
Key
profit & loss items |
|
|
|
|
|
|
vs |
|
|
|
vs |
|
|
in USD m |
|
Q3/03 |
|
Q2/03 |
|
9M/03 |
|
9M/02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
2,135 |
|
(24 |
%) |
7,515 |
|
(2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Personnel expenses |
|
1,016 |
|
(31 |
%) |
3,829 |
|
(11 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Other operating exp. |
|
542 |
|
(5 |
%) |
1,665 |
|
(4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
Provisions (3) |
|
80 |
|
43 |
% |
248 |
|
(75 |
%) |
|
|
|
|
|
|
|
|
|
|
|
Value-at-Risk (1-day,
99%) in USD m |
|
|
Operating income lower across
Fixed Income |
Average |
43.7 |
39.4 |
|
49.2 |
64.2 |
37.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Positive expense trends |
NPL (1) |
1.6 |
2.6 |
|
2.2 |
1.7 |
1.6 |
|
|
|
|
(USD bn) |
|
|
|
|
|
|
|
|
|
change in vesting of stock awards |
|
|
|
|
|
|
|
|
|
|
|
Allowance/ |
142 |
102 |
|
103 |
124 |
129 |
|
|
Continued favorable credit trends |
NPL (%)(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leading franchise in leveraged finance |
|
Q3 |
Q4 |
|
Q1 |
Q2 |
Q3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
VaR decreased on reduced interest
rate/mortgage exposure,
|
|
2002 |
|
2003 |
|
|
updated models |
(1) |
non-performing loans |
(2) |
ratio of valuation allowances
to non-performing loans |
(3) |
valuation adjustments, provisions
and losses |
|
|
|
|
Slide
25
|
Back to Contents
INSTITUTIONAL SECURITIES
OPERATING INCOME
• |
41% decline, as the residential
and commercial mortgages
and the interest rate businesses were adversely
impacted
by lower volumes, fewer securitizations,
seasonal influences
and a lower risk profile |
|
|
|
|
• |
Strong in high yield but lower than record-setting Q2/03 |
|
|
|
|
|
|
• |
Down 8%, but cash trading activities improved
in
all regions |
|
|
• |
Results generated from derivatives activities,
particularly
related to convertible securities, lower
than the results
recorded in previous quarter |
|
|
|
|
|
|
• |
11% decrease, driven by less significant
private equity
investment sales |
|
|
• |
Mergers and acquisitions fee income increased,
while
industry dollar volume of completed deals
remains
comparable to previous quarter |
|
|
|
|
Slide
26
|
Back to Contents
CSFB FINANCIAL SERVICES
OVERVIEW
|
Net new assets (USD bn) |
CSAM |
(7.8 |
) |
(5.9 |
) |
(3.8 |
) |
(1.3 |
) |
(4.0 |
) |
PCS |
0.1 |
|
1.8 |
|
1.0 |
|
(1.2 |
) |
(1.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total |
(7.7 |
) |
(4.1 |
) |
(2.8 |
) |
(2.5 |
) |
(5.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AuM
(USD bn) |
333 |
|
347 |
|
339 |
|
361 |
|
364 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2002 |
|
2003 |
|
Key profit & loss items |
|
|
|
|
|
|
|
|
|
|
|
|
vs |
|
|
|
vs |
|
in USD m |
Q3/03 |
|
Q2/03 |
|
9M/03 |
|
9M/02 |
|
|
|
|
|
|
|
|
|
|
Operating income |
287 |
|
3 |
% |
848 |
|
(45 |
%) |
pro forma excl. Pershing |
|
|
|
|
832 |
|
(5 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
234 |
|
4 |
% |
673 |
|
(43 |
%) |
pro forma excl. Pershing |
|
|
|
|
673 |
|
(2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
CSAM operating income and assets under
management comparable to Q2/03 |
|
|
|
Alternative investment initiative launched
by CSAM in the third quarter of 2003 |
|
|
|
Comparability of results impacted by sale
of Pershing on May 1, 2003 |
|
|
(1) excluding certain acquisition-related
costs |
|
|
|
|
Slide
27 |
Back to Contents
CREDIT SUISSE FIRST BOSTON
OUTLOOK
Outlook
for 2003 |
|
|
Outlook remains optimistic, despite
seasonally lower revenues expected for the fourth quarter |
|
|
|
|
|
|
|
Progress towards sustained profitability |
|
|
|
|
|
|
|
Continued focus on client needs |
|
|
|
|
|
|
Core businesses remain challenging, with
many of our markets operating at historically low levels |
|
|
|
|
|
|
While making continued progress, profitability
still not satisfactory |
|
|
|
Slide
28 |
Back to Contents
|
|
|
Slide
29 |
Back to Contents
ADDITIONAL INFORMATION
INDEX
Winterthur |
|
|
|
|
|
- Additional information on divestitures at Winterthur |
|
(Slides 31 to 32) |
- Investment result general account |
|
(Slide 33) |
- Investment portfolio - asset allocation |
|
(Slide 34) |
- Equity base development |
|
(Slide 35) |
|
|
|
|
|
|
Credit Suisse Private Banking |
|
|
|
|
|
- Development of gross margin |
|
(Slide 36) |
- AuM by product and currency |
|
(Slide 37) |
|
|
|
|
|
|
Credit Suisse First Boston |
|
|
|
|
|
- Operating income detail Investment Banking |
|
(Slide 38) |
- "Legacy" assets |
|
(Slides 39 to 40) |
- Counterparty exposure by industry |
|
(Slide 41) |
|
|
|
Slide 30 |
Back to Contents
ADDITIONAL INFORMATION ON |
|
|
DIVESTITURES AT WINTERTHUR |
(1/2 |
) |
|
|
|
|
|
|
|
|
|
Non-life |
|
|
Life |
|
|
|
2002 |
|
2003 |
|
|
2002 |
|
2003 |
|
in CHF m |
|
|
|
(9 months*) |
|
|
|
|
(9 months) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written |
|
7,624 |
|
5,228 |
|
|
1,158 |
|
692 |
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
|
5,885 |
|
4,455 |
|
|
1,151 |
|
688 |
|
|
|
|
|
|
|
|
|
|
|
|
Segment result |
|
177 |
|
54 |
|
|
(20 |
) |
47 |
|
|
|
|
|
|
|
|
|
|
|
|
Technical reserves |
|
8,606 |
|
9,429 |
|
|
4,372 |
|
5,046 |
|
|
|
|
|
|
|
|
|
|
|
|
AuM |
|
7,907 |
|
8,803 |
|
|
4,251 |
|
4,933 |
|
|
|
|
|
|
|
|
|
|
|
|
FTE |
|
9,524 |
|
10,353 |
|
|
129 |
|
122 |
|
* Churchill (UK) and Republic (US) 8 months, Winterthur Italy 9 months
|
|
|
Slide 31 |
Back to Contents
ADDITIONAL INFORMATION ON |
|
|
DIVESTITURES AT WINTERTHUR |
(2/2 |
) |
|
|
|
|
|
|
|
|
|
|
in CHF m |
|
Non-Life |
|
|
Life |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Sales proceeds (1) |
|
4,376 |
|
|
434 |
|
|
4,810 |
|
|
|
|
|
|
|
|
|
|
|
./. Book value |
|
(2,575 |
) |
|
(369 |
) |
|
(2,944 |
) |
|
|
|
|
|
|
|
|
|
|
./. Goodwill |
|
(90 |
) |
|
|
|
|
(90 |
) |
|
|
|
|
|
|
|
|
|
|
./. Tax impact |
|
(135 |
) |
|
(8 |
) |
|
(143 |
) |
|
|
|
|
|
|
|
|
|
|
Gross gains on sales, after tax |
|
1,576 |
|
|
57 |
|
|
1,633 |
|
|
|
|
|
|
|
|
|
|
|
./. Sales related provisions |
|
|
|
|
|
|
|
|
|
booked as other expenses |
|
(275 |
) |
|
|
|
|
(275 |
) |
|
|
|
|
|
|
|
|
|
|
./. Sales related provisions |
|
|
|
|
|
|
|
|
|
booked as claims (technical) |
|
(97 |
) |
|
|
|
|
(97 |
) |
|
|
|
|
|
|
|
|
|
|
Tax impact |
|
64 |
|
|
|
|
|
64 |
|
|
|
|
|
|
|
|
|
|
|
After-tax gains on sales, |
|
|
|
|
|
|
|
|
|
net of related provisions |
|
1,268 |
|
|
57 |
|
|
1,325 |
|
(1) Churchill (UK), Winterthur Italy, Republic (US)
|
|
|
Slide 32 |
Back to Contents
WINTERTHUR GROUP
INVESTMENT RESULT GENERAL ACCOUNT
in CHF m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2002(1) |
|
|
|
|
|
2003(1) |
|
|
|
|
|
|
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income |
1,236 |
|
1,435 |
|
1,203 |
|
1,222 |
|
1,255 |
|
1,394 |
|
1,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized gains |
1,346 |
|
1,389 |
|
2,353 |
|
333 |
|
1,327 |
|
821 |
|
688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized losses |
(647 |
) |
(2,129 |
) |
(1,589 |
) |
(373 |
) |
(633 |
) |
(411 |
) |
(193 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairments |
(942 |
) |
(857 |
) |
(1,413 |
) |
(675 |
) |
(328 |
) |
(52 |
) |
(75 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
(114 |
) |
(100 |
) |
(135 |
) |
(115 |
) |
(111 |
) |
(141 |
) |
(127 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income (P&L) |
879 |
|
(262 |
) |
419 |
|
392 |
|
1,510 |
|
1,611 |
|
1,652 |
|
|
Note: |
Q1 to Q3 2002 reclassified to the current
presentation format, including real estate for own use, interest paid
from current income
and realized gains/losses |
|
Slide 33 |
Back to Contents
WINTERTHUR GROUP
INVESTMENT PORTFOLIO ASSET ALLOCATION
(1) |
all investments incl. real estate at market value; excluding separate account (i.e. unit-linked) business |
(2) |
reduced by CHF 4.5 bn vs reported figures due to trade accounting on purchased bonds and maturing money market transactions (settlement date) |
|
Slide
34 |
Back to Contents
WINTERTHUR GROUP
EQUITY BASE DEVELOPMENT IN 2003
|
Significant increase of CHF 1.4 billion
in shareholders' equity in 9M/03 |
(1) |
net of tax and policyholder participation |
|
Slide
35 |
Back to Contents
PRIVATE BANKING
DEVELOPMENT OF GROSS MARGIN
|
|
|
Slide 36 |
Back to Contents
PRIVATE BANKING
AUM BY PRODUCT AND CURRENCY
|
|
|
Slide 37 |
Back to Contents
CREDIT SUISSE FIRST BOSTON
OPERATING INCOME DETAIL INVESTMENT BANKING
Investment Banking Division (1) |
|
|
2002 |
|
2003 |
|
|
|
|
|
|
in USD m |
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity |
133 |
|
186 |
|
141 |
|
397 |
|
77 |
|
111 |
|
72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt capital markets |
100 |
|
94 |
|
28 |
|
64 |
|
85 |
|
95 |
|
68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity capital markets |
117 |
|
153 |
|
74 |
|
92 |
|
29 |
|
119 |
|
74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory |
344 |
|
444 |
|
280 |
|
357 |
|
296 |
|
283 |
|
291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
47 |
|
30 |
|
33 |
|
26 |
|
58 |
|
36 |
|
67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
741 |
|
907 |
|
556 |
|
936 |
|
545 |
|
644 |
|
572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: results reflect the impact of various divisional sharing arrangements regarding operating income amongst the divisions
|
|
|
Slide 38 |
Back to Contents
CREDIT SUISSE FIRST BOSTON
"LEGACY" ASSETS |
|
(1/2) |
|
|
|
|
|
in USD m |
|
"Legacy" assets
net exposure |
|
12/1999 |
|
11,925 |
|
8,964 |
|
Real estate |
|
|
|
|
|
|
|
|
|
1,975 |
|
Distressed |
|
|
|
|
|
|
|
|
|
986 |
|
Private equity (1,228 unfunded commitment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/2000 |
|
8,026 |
|
4,805 |
|
Real estate |
|
|
|
|
|
|
|
|
|
1,498 |
|
Distressed |
|
|
|
|
|
|
|
|
|
1,724 |
|
Private equity (984 unfunded commitment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/2001 |
|
5,357 |
|
2,925 |
|
Real estate |
|
|
|
|
|
|
|
|
|
1,107 |
|
Distressed |
|
|
|
|
|
|
|
|
|
1,325 |
|
Private equity (857 unfunded commitment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,535 |
|
Real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/2002 |
|
3,031 |
512 |
|
Distressed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
984 |
|
Private equity (785 unfunded commitment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,052 |
|
Real estate |
|
Note: |
|
|
|
|
|
|
|
|
– |
Unfunded commitments excluded for private
equity |
|
06/2003 |
|
2,498 |
539 |
|
Distressed |
|
|
|
|
|
|
|
|
|
|
|
– |
Unfunded commitments included for real estate |
|
|
|
|
907 |
|
Private equity (863 unfunded commitment) |
|
|
|
|
|
|
|
|
|
|
|
|
– |
Private equity unfunded commitments include
employee commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
978 |
|
Real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
09/2003 |
|
2,438 |
532 |
|
Distressed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
928 |
|
Private equity (778 unfunded commitment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Slide 39 |
Back to Contents
CREDIT SUISSE FIRST BOSTON
"LEGACY" ASSETS |
|
(2/2 |
) |
|
Charges
related to "legacy" assets
in CSFB's income statement |
in USD m |
Real
estate |
|
Distressed
portfolio |
|
Private
equity |
|
Total |
|
|
|
|
|
|
|
|
|
|
Q3/03 |
|
|
|
|
|
|
|
|
Operating
income |
8 |
|
20 |
|
45 |
|
73 |
|
|
|
|
|
|
|
|
|
|
Provisions |
— |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
Total charges |
8 |
|
20 |
|
45 |
|
73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9M/03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
14 |
|
(9 |
) |
17 |
|
23 |
|
|
|
|
|
|
|
|
|
|
Provisions |
(1 |
) |
— |
|
— |
|
(1 |
) |
|
|
|
|
|
|
|
|
|
Total charges |
13 |
|
(9 |
) |
17 |
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Slide
40 |
Back to Contents
CREDIT SUISSE FIRST BOSTON
COUNTERPARTY EXPOSURE BY INDUSTRY
Selected
CSFB exposure as of September
30, 2003 (1) |
in USD m |
Current
exposure |
|
Undrawn
commitments |
|
Reserves |
|
Net
exposure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications |
1,347 |
|
1,717 |
|
(321 |
) |
2,743 |
|
Telecommunications |
|
|
|
|
|
|
|
|
manufacturers |
39 |
|
201 |
|
(14 |
) |
226 |
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Merchant energy |
789 |
|
130 |
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(151 |
) |
768 |
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Airlines |
625 |
|
39 |
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(202 |
) |
462 |
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Note: |
(1) |
Current exposure equals committed amount
(includes only drawn commitments) for lending plus mark-to-market for
counterparty trading
less credit protection. |
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Slide
41 |
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Back to Contents
DISCLAIMER
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Cautionary Statement regarding forward-looking information |
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This presentation contains forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. |
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Forward-looking statements involve inherent
risks and uncertainties, and we might not be able to achieve the predictions,
forecasts, projections and other outcomes we describe or imply in forward-looking statements. A
number of important factors could cause results to differ materially from the plans, objectives,
expectations, estimates and intentions we express in these forward-looking statements,
including those we identify in "Risk Factors" in our Annual Report on Form 20-F for the
fiscal year ended December 31, 2002 filed with the US Securities and Exchange Commission, and in other public filings and press releases. |
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We do not intend to update these forward-looking
statements except as may be required by applicable laws. |
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Quarterly Report 2003/Q3 Non-GAAP Financial Information |
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For additional information with respect
to our results for the third quarter, we refer you to our Quarterly Report 2003/Q3,
posted on our website at www.credit-suisse.com. This presentation may contain non-GAAP financial
information. A reconciliation of such non-GAAP financial information to the most
directly comparable measures under Swiss generally accepted accounting principles
(as well other related information), is also included in our Quarterly Report 2003/Q3. |
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Slide 42 |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
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CREDIT SUISSE
GROUP
(Registrant) |
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Date November 4, 2003 |
By: |
/s/ David Frick |
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(Signature)* |
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*Print the name and title of
the signing officer under his signature |
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Member of the Executive Board |
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/s/ Karin Rhomberg Hug |
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Managing Director |
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