credit-suisse Annual Report Part 2
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Transcript of credit-suisse Annual Report Part 2
FINANCIAL REPORT
44 Comments to the financial statements
46 Consolidated income statement
48 Consolidated balance sheet
50 Consolidated statement of source
and application of funds
51 Consolidated off-balance sheet business
53 Notes to the consolidated financial statements
61 Notes to the banking and insurance business
63 Notes to the banking business
65 Notes to the insurance business
68 Notes to the consolidated financial statements
93 Report of the Group’s auditors
94 Income statement (parent company)
95 Balance sheet before allocation of
retained earnings (parent company)
96 Notes to the financial statements (parent company)
100 Proposed allocation of retained earnings
101 Report of the statutory auditors
43
COMMENTS TO THE FINANCIAL STATEMENTS
44
Credit Suisse Group’s Annual Report contains two sets of financial statements: the
consolidated annual financial statements of Credit Suisse Group at 31 December 1997
and the annual financial statements of Credit Suisse Group, parent company, for the
financial year ended 31 March 1998. It is the latter set of statements which forms the
basis for resolutions voted on by the Annual General Meeting of Shareholders. Both
sets of statements have been examined by independent auditors. Their reports are pre-
sented on pages 93 and 101.
The consolidated financial statements include the Credit Suisse First Boston sub-
group, the Credit Suisse sub-group, Neue Aargauer Bank, the Private Banks, the
Winterthur sub-group, CS Life and the financial subsidiaries and long-term holdings of
Credit Suisse Group. The consolidated financial statements include individual reporting for
the banking and insurance units. The merger of “Winterthur” Swiss Insurance Company
(Winterthur) was treated as a “pooling of interests”; its financial results have been in-
cluded in the consolidated income statement and balance sheet. Income statement and
balance sheet notes relating specifically to insurance activity are also detailed separately.
The 1997 financial year The closing of the announced merger with Winterthur oc-
curred on 15 December 1997. As at 31 December 1997, Credit Suisse Group owned
99.9% of the outstanding shares of Winterthur. Former Winterthur shareholders re-
ceived 7.3 shares of Credit Suisse Group for each registered share of “Winterthur”
Swiss Insurance Company. As a result, the share capital of Credit Suisse Group was
increased by the issuance of 70,714,107 registered shares at a nominal value of
CHF 20 per share. Winterthur is included in the consolidated reporting of Credit Suisse
Group under the “pooling of interests method”.
As of the 1997 financial year, Credit Suisse Group applied a new dynamic
provisioning method for the management of credit risks. It was originally intended to
include the dynamic credit provisions in the annual income statement. However, the
final regulatory guidelines for applying dynamic credit provisioning methods to the finan-
cial statements has led to the decision that this method will be used only for
management accounting. Because the credit situation in the Swiss market remains
difficult, especially in the real estate area, it was necessary to make a provision of
around CHF 1.1 bn for pre-existing non-performing loans. In 1997, CHF 1,186 m was
released from the reserves for general banking risks and included in the income state-
ment as extraordinary income. Extraordinary expense of CHF 1,629 m was also added
to the reserves for general banking risks during the year.
A reserve of CHF 1 bn was created in 1996 for the expected restructuring costs
of Credit Suisse Group. Costs of CHF 298 m in 1996 and CHF 450 m in 1997 were
incurred and charged to this reserve. Additional obligations incurred in connection with
the restructuring required an additional extraordinary provision of CHF 349 m, leaving
a reserve balance of CHF 467 m as at 31 December 1997. At Credit Suisse First
Boston, an extraordinary provision of CHF 332 m (CHF 237 m after tax) was created
for expected restructuring costs associated with the acquisition of the European
investment banking business of BZW. An extraordinary provision of CHF 115 m
(CHF 82 m after tax) was created to implement the new organisational structure at
Bank Leu, which became effective 1 January 1998. An extraordinary provision of
CHF 488 m (CHF 401 m after tax) was created for technology, primarily for expenses
related to the additional data processing requirements associated with the introduction
of the euro and the modification of systems to prepare for the year 2000. The provision
consisted of CHF 220 m (CHF 147 m after tax) for the international banking business,
CHF 198 m for the Swiss banking business and CHF 70 m (CHF 56 m after tax) for
the insurance business. A provision of CHF 375 m (CHF 300 m after tax) was made
for integration and restructuring costs for the insurance business. Total extraordinary
restructuring costs amounted to CHF 1,659 m (CHF 1,369 m after tax).
The sale of Electrowatt Ltd. contracted last year was completed on 29 December
1997. After obtaining an additional 53.3% of the remaining Electrowatt Ltd. shares
existing in the market through a public offering at a price of CHF 550 per share, Credit
Suisse Group held 99% of the outstanding shares. These shares were tendered to the
buyers, Siemens AG and an energy consortium consisting of Nordostschweizerische
Kraftwerke, Bayernwerk AG, Energie Baden-Württemberg AG and Credit Suisse
Group. Credit Suisse Group holds a 20% stake in this consortium.
On 30 September 1997, Fides Informatik was sold to EDS, an international infor-
mation services firm. Credit Suisse Group retained a 67% stake in Fides Information
Services, which was spun off from Fides Informatik at the same time and which is
active in electronic banking and financial information services.
The annual financial statement for Credit Suisse Asset Management International
Fund Holding, Zurich, includes approximately CHF 29 m in non-recurring after-tax pro-
fit, which is a result of moving the closing dates of all the company’s mutual fund
management subsidiaries to 31 December 1997.
A provision of CHF 27.5 m was made for Göhner Merkur to reflect continued
stagnating economic activity in Switzerland and pressure from the increased number of
foreclosures in the real estate market.
CS Life has been fully consolidated in the income statement for 1997 and prior
years.
Events after year-end As of 1 January 1998, the business activities of Bank Leu
Ltd. were focused on private banking. Commercial relationships and individual
customers were transferred to the responsibility of Credit Suisse.
45
Notes 1997 1996 Change Change(p. 61 ff) in CHF m in CHF m in CHF m in %
RESULT FROM INTEREST BUSINESS
Interest and discount income 18,761 17,829 932 5
Interest and dividend income from trading portfolios 5,764 6,108 –344 –6
Interest and dividend income from financial investments from banking activities 406 318 88 28
Interest expenses from banking activities 20,352 20,767 –415 –2
NET INTEREST INCOME 1, 2, 6 4,579 3,488 1,091 31
RESULT FROM COMMISSION AND SERVICE FEE BUSINESS
Commission income from lending activities 387 313 74 24
Commissions from securities and investment transactions 6,389 4,751 1,638 34
Commissions from other services 307 320 –13 –4
Commission expenses 491 442 49 11
NET COMMISSION AND SERVICE FEE INCOME 1, 2 6,592 4,942 1,650 33
NET TRADING INCOME 1, 2, 7 5,312 3,901 1,411 36
NET INCOME FROM INSURANCE BUSINESS
Premiums earned, net 25,258 24,307 951 4
Claims incurred and actuarial provisions 25,557 23,866 1,691 7
Commission expenses, net 2,277 2,192 85 4
Investment income from insurance business 7,395 5,890 1,505 26
NET INCOME FROM INSURANCE BUSINESS 1, 2, 9, 10 4,819 4,139 680 16
OTHER ORDINARY INCOME
Income from the sale of financial investments 82 256 –174 –68
Income from investment activities 81 130 –49 –38
– of which from participations valued according to the equity method 30 77 –47 –61
– of which from other non-consolidated participations 51 53 –2 –4
Real estate income 45 27 18 67
Sundry ordinary income 407 442 –35 –8
Sundry ordinary expenses 893 658 235 36
OTHER ORDINARY INCOME 1, 2 –278 197 –475 –
NET OPERATING INCOME 1, 2 21,024 16,667 4,357 26
CONSOLIDATED INCOME STATEMENT
46
Notes 1997 1996 Change Change(p. 61 ff) in CHF m in CHF m in CHF m in %
NET OPERATING INCOME CONTINUED 1, 2 21,024 16,667 4,357 26
Personnel expenses 9,901 8,087 1,814 22
Other operating expenses 3,847 3,244 603 19
TOTAL OPERATING EXPENSES 1, 2 13,748 11,331 2,417 21
GROSS OPERATING PROFIT 7,276 5,336 1,940 36
Depreciation and write-offs on non-current assets 1 590 676 –86 –13
Valuation adjustments, provisions and losses from banking business 1, 8 2,624 1,251 1,373 110
DEPRECIATION, VALUATION ADJUSTMENTS, LOSSES 3,214 1,927 1,287 67
GROUP PROFIT BEFORE EXTRAORDINARY ITEMS AND TAXES 4,062 3,409 653 19
Extraordinary income 1, 3 1,323 1,340 –17 –1
Extraordinary expenses 1, 4 3,534 5,407 –1,873 –35
Taxes 1, 2 1,250 1,172 78 7
GROUP PROFIT/GROUP LOSS 601 –1,830 2,431 –
Minority interests 204 252 –48 –19
NET PROFIT/NET LOSS (AFTER MINORITY INTERESTS) 397 –2,082 2,479 –
47
Notes 31 Dec. 1997 31 Dec. 1996 Change Change(p. 61 ff) in CHF m in CHF m in CHF m in %
ASSETS
Cash and other liquid assets 33 3,404 2,932 472 16
Money market claims 12, 33 24,013 20,077 3,936 20
Due from banks 33 145,778 122,645 23,133 19
Claims from the insurance business 33 6,424 6,017 407 7
Due from customers 13, 14, 33, 34 144,491 159,291 –14,800 –9
Mortgages 14, 33 78,904 78,073 831 1
Securities and precious metals trading portfolios 15, 16, 33 103,826 85,380 18,446 22
Financial investments from the banking business 17, 19 15,770 11,581 4,189 36
Investments from the insurance business 18, 19 93,387 81,113 12,274 15
Non-consolidated participations 20, 21 1,192 1,990 –798 –40
Tangible fixed assets 21 6,271 6,239 32 1
Intangible assets 21 181 110 71 65
Accrued income and prepaid expenses 9,419 7,503 1,916 26
Other assets 23 56,508 41,445 15,063 36
TOTAL ASSETS 24, 25, 35, 36 689,568 624,396 65,172 10
Total subordinated claims 2,566 1,616 950 59
Total due from non-consolidated participations 43 128 –85 –66
CONSOLIDATED BALANCE SHEET
48
Notes 31 Dec. 1997 31 Dec.1996 Change Change(p. 61 ff) in CHF m in CHF m in CHF in %
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities in respect of money market paper 33 12,520 11,236 1,284 11
Due to banks 33 180,236 194,572 –14,336 –7
Commitments from the insurance business 33 6,045 5,012 1,033 21
Due to customers in savings and investment accounts 33 48,533 47,296 1,237 3
Due to customers, other 26, 33 195,571 166,563 29,008 17
Medium-term notes (cash bonds) 33 7,216 8,681 –1,465 –17
Bonds and mortgage-backed bonds 27, 33 45,594 27,580 18,014 65
Accrued expenses and deferred income 11,677 8,749 2,928 33
Other liabilities 28 58,168 43,176 14,992 35
Valuation adjustments and provisions 29 7,129 4,820 2,309 48
Technical provisions for the insurance business 30 91,228 83,850 7,378 9
Reserves for general banking risks 29, 31 2,890 2,388 502 21
Share capital 31 5,322 3,886 1,436 37
Capital reserve 31 9,366 10,200 –834 –8
Revaluation reserves from the insurance business 31 5,337 3,163 2,174 69
Retained earnings 31 334 3,462 –3,128 –90
Minority interests in shareholders’ equity 31 1,801 1,592 209 13
Group profit/Group loss 31 601 –1,830 2,431 –
– of which minority interests 31 204 252 –48 –19
Total shareholders’ equity 31 25,651 22,861 2,790 12
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 35, 36 689,568 624,396 65,172 10
Total subordinated liabilities 16,636 13,397 3,239 24
Total liabilities due to non-consolidated participations 567 263 304 116
49
1997 1996Source Application Net in/outflow Source Application Net in/outflow
in CHF m in CHF m in CHF m in CHF m in CHF m in CHF m
FROM OPERATIONS, EQUITY TRANSACTIONS AND INVESTMENTS –24 365
OPERATING ACTIVITIES 8,317 7,672
Net profit for the year/net loss for the year 601 1,830
Provisions for credit and other risks 2,617 1,132
Losses 133 180
Provisions for taxes 1,250 1,101
Depreciation and write-offs 617 661
Creation of extraordinary valuation adjustments and provisions 3,330 5,016
Extraordinary income 1,213 0
Income from participations valued according to the equity method 30 77
Accrued income and prepaid expenses 1,916 1,692
Accrued expenses and deferred income 2,928 3,181
EQUITY TRANSACTIONS 1,746 551
Share capital 1,436 115
Capital surplus and retained earnings 1,358 582
Dividends paid 1,114 1,055
Foreign exchange differences 38 1,164
Minority interests 104 255
INVESTMENTS IN LONG-TERM ASSETS 93 –486
Investments in companies 813 411
Real estate 280 209
Other tangible and intangible fixed assets 1,000 688
FINANCIAL INVESTMENTS, PROVISIONS, OTHER ASSETS AND LIABILITIES –10,180 –7,372
Investments from banking business 4,189 4,263
Investments from insurance business 12,274 16,170
Valuation adjustments and provisions 1,198 866
Technical provisions1 7,378 13,767
Other assets 14,889 13,763
Other liabilities 14,992 13,923
FROM OTHER BALANCE SHEET ITEMS 18,942 23,646
ASSETS –15,833 –71,422
Money market claims 3,936 6,723
Due from banks 23,133 8,566
Claims from the insurance business 407 929
Due from customers 13,870 47,740
Mortgages 2,227 7,464
LIABILITIES 34,775 95,068
Liabilities in respect of money market paper 1,284 4,488
Due to banks 14,336 49,032
Commitments from the insurance business 1,033 919
Due to customers in savings and inv. accounts 1,237 3,462
Due to customers, other 29,008 36,767
Bonds and medium-term notes 16,549 400
CHANGE IN LIQUID ASSETS 18,918 24,011
Securities and precious metals trading portfolios 18,446 23,156
Cash and accounts with central banks 472 855
1 In line with insurance practice, the change in the technical provisions is shown as a total amount under changes in provisions affecting the cash flow.
CONSOLIDATED STATEMENT OF SOURCE AND APPLICATION OF FUNDS
50
31 Dec. 1997 31 Dec. 1996 Change Changein CHF m in CHF m in CHF m in %
CONTINGENT LIABILITIES
Credit guarantees in form of avals, guarantees and indemnity liabilities 9,852 9,703 149 2
Bid bonds, delivery and performance bonds, letters of indemnity, other performance-related guarantees 4,965 6,738 –1,773 –26
Irrevocable commitments in respect of documentary credits 3,112 3,491 –379 –11
Other contingent liabilities 5,508 3,320 2,188 66
TOTAL CONTINGENT LIABILITIES 23,437 23,252 185 1
IRREVOCABLE COMMITMENTS 64,490 59,545 4,945 8
LIABILITIES FOR CALLS ON SHARES AND OTHER EQUITY 63 76 –13 –17
CONFIRMED CREDITS 473 510 –37 –7
CONSOLIDATED OFF-BALANCE SHEET BUSINESS
Mortgage Other Withoutcollateral collateral collateral Total
ANALYSIS OF COLLATERAL AT 31 DECEMBER 1997 in CHF m in CHF m in CHF m in CHF m
CONTINGENT LIABILITIES
Credit guarantees in form of avals, guarantees and indemnity liabilities 37 4,586 5,229 9,852
Bid bonds, delivery and performance bonds, letters of indemnity, other performance-related guarantees 161 1,366 3,438 4,965
Irrevocable commitments in respect of documentary credits 0 313 2,799 3,112
Other contingent liabilities 108 546 4,854 5,508
TOTAL CONTINGENT LIABILITIES 306 6,811 16,320 23,437
At 31 December 1996 221 7,431 15,600 23,252
IRREVOCABLE COMMITMENTS 383 25,151 38,956 64,490
At 31 December 1996 160 25,139 34,246 59,545
LIABILITIES FOR CALLS ON SHARES AND OTHER EQUITY 0 0 63 63
At 31 December 1996 0 0 76 76
CONFIRMED CREDITS 0 10 463 473
At 31 December 1996 0 0 510 510
31 Dec. 1997 31 Dec. 1996 Change Changein CHF m in CHF m in CHF m in %
FIDUCIARY TRANSACTIONS 32,581 29,162 3,419 12
51
31 Dec. 1997 31 Dec. 1997 31 Dec. 1996 31 Dec. 199631 Dec. 1997 Positive gross Negative gross 31 Dec. 1996 Positive gross Negative gross
Notional replacement replacement Notional replacement replacementamount value value amount value value
in CHF bn in CHF bn in CHF bn in CHF bn in CHF bn in CHF bn
DERIVATIVE INSTRUMENTS
INTEREST RATE PRODUCTS
Forward rate agreements 193.7 0.3 0.1 163.9 0.1 0.3
Swaps 1,551.1 39.5 38.2 1,141.1 34.0 30.7
Options bought and sold (OTC) 598.3 5.1 5.0 357.8 3.1 3.3
Forwards 0.1 0.0 0.0 16.3 0.1 0.0
Futures 420.8 0.0 0.0 195.2 0.0 0.0
Options bought and sold (traded) 219.0 0.0 0.0 82.1 0.0 0.0
TOTAL INTEREST RATE PRODUCTS 2,983.0 44.9 43.3 1,956.4 37.3 34.3
FOREIGN EXCHANGE PRODUCTS
Forwards 667.6 19.2 17.7 792.9 15.8 16.9
Swaps 212.9 9.2 10.3 165.6 7.7 8.8
Options bought and sold (OTC) 534.2 5.3 5.7 351.8 2.4 2.7
Futures 0.4 0.0 0.0 0.0 0.0 0.0
Options bought and sold (traded) 0.1 0.0 0.0 0.7 0.0 0.0
TOTAL FOREIGN EXCHANGE PRODUCTS 1,415.2 33.7 33.7 1,311.0 25.9 28.4
PRECIOUS METALS PRODUCTS
Forwards 26.3 1.6 2.0 15.7 0.5 0.6
Options bought and sold (OTC) 8.6 0.5 0.7 9.7 0.0 0.6
Futures 1.8 0.0 0.0 7.0 0.0 0.0
Options bought and sold (traded) 0.0 0.0 0.0 1.1 0.0 0.0
TOTAL PRECIOUS METALS PRODUCTS 36.7 2.1 2.7 33.5 0.5 1.2
EQUITY/INDEX-RELATED PRODUCTS
Forwards 1.1 0.1 0.0 0.1 0.0 0.0
Options bought and sold (OTC) 203.2 10.1 10.2 117.9 3.9 4.2
Futures 20.6 0.0 0.0 12.5 0.0 0.0
Options bought and sold (traded) 63.4 0.0 0.0 48.7 0.0 0.0
TOTAL EQUITY/INDEX-RELATED PRODUCTS 288.3 10.2 10.2 179.2 3.9 4.2
OTHER PRODUCTS
Forwards 0.0 0.0 0.0 0.0 0.0 0.0
Options bought and sold (OTC) 3.1 0.1 0.0 3.1 0.1 0.0
Futures 9.5 0.0 0.0 0.6 0.0 0.0
Options bought and sold (traded) 0.6 0.0 0.0 2.8 0.0 0.0
TOTAL OTHER PRODUCTS 13.2 0.1 0.0 6.5 0.1 0.0
OVERALL TOTAL, GROSS 4,736.4 91.0 89.9 3,486.6 67.7 68.1
TOTAL REPLACEMENT VALUESACCORDING TO THE BALANCE SHEET 49.8 1 50.7 1 36.0 1 37.1
1 positive replacement value after deduction of CHF 3.1 bn (1996: CHF 2.1 bn) of assets pledged as security: negative replacement values of CHF 1.0 bn for traded derivatives
CONSOLIDATED OFF-BALANCE SHEET BUSINESS
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SCOPE AND METHOD OF CONSOLIDATION
The assets and liabilities, off-balance sheet transactions and income and expenses of
all the banking, insurance and financial institutions in which Credit Suisse Group has a
direct or an indirect interest of more than 50% as of the balance sheet date are fully
consolidated in the financial statements. For the “Winterthur” Swiss Insurance Company,
Winterthur, legal entity, the capital is consolidated according to the pooling-of-interests
method. For the other Group companies the capital is consolidated according to the
purchase method as of 1 January 1990 (or later, if acquired thereafter). Inter-company
transactions and unrealised gains therefrom are eliminated. Minority interests in share-
holders’ equity and net profit are indicated separately, but are viewed as forming an
integral part of the corporate base. Other companies in which the Group has a stake of
20% or more are accounted for using the equity method. Long-term holdings which are
designated for resale are booked as “Financial investments”. Subsidiaries and long-term
holdings outside of the core business and less significant holdings are not consolidated.
GENERAL PRINCIPLES
The Group financial statements are drawn up in accordance with the accounting rules
of the Implementing Ordinance to the Swiss Federal Law on Banks and Savings Banks
of 1 February 1995 and the Federal Banking Commission guidelines of 14 December
1994 (with the amendments of 14 November 1996 and 22 October 1997), supple-
mented by the pooling-of-interests method and the provisions of the Swiss accounting
and reporting recommendations with respect to insurance companies (FER 14). As
required by the pooling-of-interests method, the consolidated financial statement of
Credit Suisse Group shows the combined results of Credit Suisse Group and Winterthur
as if the merger had been effective for all previous periods shown. In addition, the con-
solidation and valuation policies reflect the accounting principles set out in the Swiss
stock exchange listing regulations; they also largely conform to the provisions of the
4th and 7th EU directives and the EU directive governing the financial statements of
banks. The financial year for the Group ends on 31 December. Group companies with
a different closing date prepare interim financial statements as of 31 December for
consolidation purposes. Goodwill (the amount paid in excess of the equity acquired
when purchasing an interest in a company) was directly written off to shareholders’
equity until the end of 1996. Winterthur charges such goodwill (accumulated amount
1997: CHF 1,480 m) against revaluation reserves from insurance business. Credit
Suisse Group has restated this treatment and charged the accumulated amount to
retained earnings. For subsidiaries acquired after 1 January 1997, goodwill is stated in
the balance sheet under “Intangible assets” and written off over its estimated useful life
(not exceeding 20 years) on the income statement.
53
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CHANGES TO THE SCOPE OF CONSOLIDATION
The scope of consolidation has undergone the following changes:
“Winterthur” Swiss Insurance Company, Winterthur
In accordance with the agreement of 10 August 1997 between Credit Suisse Group
and Winterthur, the merger was accounted for on the basis of the pooling-of-interests
method. The figures for all applicable previous periods have been adjusted accordingly.
CS Life, Zurich
CS Life has been fully consolidated retroactively. The figures for all applicable previous
periods have been adjusted accordingly.
Banque Hottinguer, Paris
Purchased as of 2 October 1997 and subsequently merged with Credit Suisse
(France) SA, Paris, to form Credit Suisse Hottinguer.
FOREIGN CURRENCY TRANSLATIONS
In the annual accounts of the individual Group companies, income and expense items
denominated in foreign currencies are translated into the relevant local reporting curren-
cies on the basis of the exchange rate as of the transaction date. Assets, liabilities and
off-balance sheet items are translated as of the year-end rate. Hedged assets and liabi-
lities are carried at their forward hedging rates. For the purposes of consolidation, the
balance sheets of foreign Group companies are translated into Swiss francs at the
year-end exchange rate, and their income statements are translated using the average
exchange rate for the financial year. Translation differences are credited or debited to
shareholders’ equity and are shown separately in the statement of shareholders’ equity.
The key foreign exchange rates are listed in the notes to the consolidated financial state-
ments on page 60.
DEVIATIONS FROM THE RELEVANT EU DIRECTIVES
The Swiss accounting rules for banks conform in essence to EU directives and guidelines.
The areas in which Group accounting policies deviate from the accounting principles set
out in the directives of the European Union (4th and 7th EU directives and the EU
directive governing the financial statements of banks) can be summarised as follows:
– The classification criteria used in the balance sheet and the income statement differ
from those set out in the EU directive governing the financial statements of banks.
– The proportions of overall income and expenditure for operations outside Switzerland
are not detailed by geographical location but are provided as combined totals.
– No specific information is given concerning compensation or liabilities towards
Members of the Board of Directors or Members of the Executive Board of Credit
Suisse Group.
– Securities and precious metals treated as trading positions are valued at market.
Historical differences between cost and current market values are not disclosed in
the notes to the consolidated financial statements.
– Subsidiaries and long-term holdings which are not in the banking, finance or insur-
ance sectors are not consolidated.
– There is no formal management report on the business year.
The following are significant deviations from the EU directives governing the financial
statements of insurance companies:
– The classification and presentation used in the financial statements have been ad-
justed from those set out in the EU directives governing the financial statements of
insurance companies. Winterthur Group publishes an annual report which focuses on
the presentation of the result of the insurance business.
– Unrealised gains on life business investments are taken to revaluation reserves as
part of shareholders’ equity and not to funds for future distribution to shareholders
and policyholders.
GENERAL ACCOUNTING AND VALUATION PRINCIPLES
REPO BUSINESS
Transactions involving monetary assets Repurchase and reverse repurchase trans-
actions are accounted for on the balance sheet as advances against securities serving
as collateral or as cash deposits against own pledged securities. These transactions are
shown in the balance sheet in the same way as those involving non-monetary assets.
Transactions involving non-monetary assets Claims and liabilities from lending and
borrowing transactions of non-monetary assets such as money market paper, precious
metals or commodities and those arising from securities lending and borrowing are marked
to market and, depending on the counterparty, are shown as claims on, or liabilities
towards, banks or customers. Securities positions arising as a result of securities lend-
ing and borrowing are included in the securities and precious metals trading portfolios.
55
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cash, bank balances, money market paper and loans These positions are carried
at nominal value. The necessary provisions for recognisable risks and potential losses
are normally deducted from the appropriate asset items in the balance sheet. Interest
and commission income from customers and banks which is more than 90 days in
arrears is not booked as “Interest from income business”. Instead, it is only included in
the income statement following payment. Provisions with regard to claims subject to
country risk, default risks and other bank risks are booked to “Valuation adjustments
and provisions”. This position contains no undisclosed reserves.
Leasing All leased items (capital goods, vehicles and real estate) are valued using the
annuity method and are stated as a separate item under lendings. The depreciation
charges contained in the rental income are set off directly against the book values of
the corresponding leased assets, so that only the interest portion of the rental income
is shown in the income statement.
Real estate Real estate is valued at the cost (including capital improvements) less
depreciation over its useful life (40–67 years). No depreciation is charged on land
except where valuation adjustments have been made to allow for a reduction in the
market value.
Other tangible fixed assets Other tangible fixed assets such as computers, machin-
ery, furnishings, vehicles and other equipment, as well as alterations and improvements
to rented premises, are depreciated using the straight line method over their estimated
useful life (3–5 years).
Intangible assets The goodwill included in this balance sheet position arises from
the majority holdings acquired from 1 January 1997 in connection with the capital
consolidation. This goodwill is written down over its estimated useful life (maximum
20 years).
Pension fund As a rule, employees are affiliated to legally autonomous staff pension
funds which are independent of the Group. The requisite contributions are made to the
pension funds and posted under “Personnel expenses”.
Taxes Tax expense is calculated on the basis of the annual results posted in the indi-
vidual financial statements of the Group companies. Deferred tax assets and liabilities
are established for the expected future tax implications of temporary differences be-
tween the carrying amounts and the tax bases of assets and liabilities. Deferred tax
assets and liabilities calculated at the expected tax rate on the basis of adjustments in
the valuation of assets and liabilities for Group purposes are charged to tax expense
and recorded as other assets or provisions. No provision is made for non-recoverable
withholding taxes on undistributed profits of Group companies outside Switzerland nor is
a deferred tax asset recognised arising from tax losses brought forward in the case of
Swiss Group companies.
Claims and liabilities of related companies Claims and liabilities in respect of
related companies towards Group companies which are accounted for using the equity
method are reported in the notes to the consolidated financial statements.
VALUATION AND ACCOUNTING POLICIES IN RELATION
TO BANK-SPECIFIC POSITIONS
Securities trading portfolio The trading portfolio consists of balances held in
connection with the trading of readily realisable securities, securities acquired as a
result of underwriting activities and holdings of precious metals. Securitised and non-
securitised options are shown under “Other assets”.
Trading balances in bonds, shares and similar securities and precious metal
accounts and holdings are marked to market as of the balance sheet date. Balances
for which there is no representative market are valued according to the lowest value
principle. Profits and losses from the valuation of the trading portfolio and realised
gains and losses on these positions are shown under “Income from trading”. Interest
and dividend income from the trading portfolio is credited to “Result from interest
business”.
Financial investments from the banking business This balance sheet item com-
prises securities and precious metal positions purchased as a long-term investment. It
also includes real estate and holdings assumed from the lending business and desig-
nated for resale. Fixed-interest debt securities which are being held until final maturity
are valued according to the accrual method. In this case, premiums and discounts are
accrued or deferred over the term of the instrument until final maturity in the relevant
balance sheet position. Realised profits or losses which are interest related and which
arise from the early disposal or redemption of the instrument are accrued or deferred
over the remaining term of the instrument, i.e. to the original final maturity, and credited
to or debited from “Result from interest business” as appropriate. Investment holdings
of equities and debt securities which are designated for resale and which do not consti-
tute trading balances are valued according to the lowest value principle. The notes to
the consolidated financial statements include details of both the cost price and the
market value of these holdings. Real estate assumed from the lending business and
designated for resale is valued according to the lowest value principle.
Reserves for general banking risks Reserves for general banking risks are pre-
cautionary reserves charged to “Extraordinary expenses” to hedge against latent risks in
the bank’s operating activities.
57
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Derivatives These transactions are marked to market as of the year end. Unrealised
gains or losses are booked to the income statement as trading income, with the
counter-positions shown in “Other assets” or “Other liabilities” as appropriate. Hedging
transactions are valued using the same procedures as for the underlying transactions
they hedge.
Derivative financial instruments which form part of the trading portfolio are marked
to market provided they are traded on a stock exchange or form part of a representa-
tive market. If this is not the case, they are valued according to the lowest value prin-
ciple. Strategic positions are valued according to the lowest value principle.
Derivative financial instruments which are deployed in the context of interest rate
risk management are valued according to the accrual method. The interest component
is accrued or deferred over the term of the instrument according to the annuity method.
Realised profits or losses which are interest related and which arise from the early
disposal or redemption of the instrument are also accrued or deferred over the re-
maining term of the instrument, i.e. to the original final maturity.
CHANGES AGAINST 1996
Balance sheet, income statement, off-balance sheet business
Federal Banking Commission guidelines of 14 December 1994, with amendments of
14 November 1996 and 22 October 1997, apply to the annual financial statement for
1997. The changes primarily affect the following positions.
FINANCIAL INVESTMENTS
Fixed-interest deposits Fixed-interest deposits constituting financial investments are
valued according to the accrual method. Debt securities which were not acquired with
the intention of being held until final maturity are now valued according to the lowest
value principle. As the implications for the Group financial statement are minimal, the
figures for the previous year have not been adjusted.
Real estate taken over from lending business and designated for resale Real
estate taken over from lending business and designated for resale is now stated under
“Financial investments” rather than under “Tangible fixed assets”. The figures for the
previous year have been adjusted accordingly for the following positions of the Group
financial statement.
Adjustments 1996 in CHF m
Tangible fixed assets –1,137
Financial investments 1,137
Sundry ordinary expenses 158
Depreciation and write-offs on non-current assets –158
OTHER
Intangible assets As of 1 January 1997, purchased goodwill is no longer charged
against shareholders’ equity, but is stated in the balance sheet under “Intangible
assets”.
Securities and precious metals trading portfolios Holdings of precious metals are
no longer valued at the average price for December but are marked to market as of the
year-end balance sheet date. No adjustment has been made to the figures for the pre-
vious year since the amount involved is insignificant.
VALUATION AND ACCOUNTING POLICIES IN RELATION
TO INSURANCE-SPECIFIC POSITIONS
INVESTMENTS IN RESPECT OF INSURANCE BUSINESS
Real estate Real estate is valued at the market price. The market value of a property
is calculated as its capitalised rental income at the interest rate applied in the country
or market in question. Undeveloped plots of land and buildings under construction are
carried at cost.
Bonds and loans Bonds and loans are valued according to the amortised cost
method. The difference between the purchase price and the redemption value is
distributed over the remaining life so that a constant yield is achieved. The correspond-
ing valuation adjustment is shown under the position “Net investment income from
insurance business”. Default risk is accounted for through the use of write-downs.
Inter-company transactions and unrealised gains have been eliminated, with the
exception of assets booked as investments from insurance business.
Shares Listed shares are marked to market at year-end. Unlisted shares are valued
at cost. If the yield or intrinsic value is endangered, a valuation adjustment is made.
Derivatives Derivatives and other financial instruments are generally used to hedge
the exposure to changes in the fair value of recognised assets, liabilities and firm
commitments. Any gains and losses are therefore recognised in the income statement
together with the offsetting loss or gain on the hedged item.
Investments for the benefit of life insurance policyholders who bear the invest-
ment risk Investments for the benefit of life insurance policyholders who bear the
investment risk are carried at their market value.
59
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Statement of higher and lower values arising from the uniform valuation of
investments in the Group accounts and revaluation reserves Higher or lower
values arising from the uniform valuation of investments in the Group accounts in com-
parison with the figures contained in the statutory accounts are recorded as follows:
Valuation differences resulting from the revaluation of fixed-interest securities and
mortgages, unlisted shares and non-consolidated long-term holdings are included in
the income statement (under “Net investment income from insurance business”).
In the case of listed shares and real estate, compensated write-downs in respect
of the difference between the balance sheet value in the statutory accounts and the
cost value are stated in the income statement (“Net investment income from insurance
business”). Valuation differences between cost and market values are allocated to
shareholders’ equity (“Revaluation reserves from the insurance business”) directly, with-
out affecting the income statement, after deferred tax has been taken into account. In
the life insurance business, policyholders normally share in the gains realised on the
basis of statutory accounts.
Technical provisions The valuation of technical provisions is determined by pre-
sumed liabilities in respect of policyholders and claimants. As a rule, calculations are
made individually, i.e. per insurance contract or claim. Statistical or mathematical
calculation methods are applied if these produce approximately the same results and if
they conform to the procedures approved by the supervisory authorities of the individual
countries in question. Technical provisions for life business are calculated with regard
to local regulations. The surplus due to policyholders is accounted for on the basis of
the resolutions passed by the individual companies as to the distribution of profit.
Year-end rate used Average rate usedin the balance sheet 31 Dec. in the income statement
FOREIGN CURRENCY TRANSLATION RATES IN CHF 1997 1996 1997 1996
1 US dollar (USD) 1.44 1.34 1.44 1.22
1 British pound sterling (GBP) 2.41 2.27 2.35 1.90
1 Canadian dollar (CAD) 1.01 0.98 1.04 0.89
1 Singapore dollar (SGD) 0.854 0.96 0.97 0.87
1 Hong Kong dollar (HKD) 0.1852 0.1700 0.185 0.1575
100 Deutsche marks (DEM) 80.90 86.60 82.90 81.30
100 Dutch guilders (NLG) 71.36 76.46 73.65 72.50
100 French francs (FRF) 24.02 25.45 24.60 23.90
100 Italian lire (ITL) 0.0817 0.0870 0.0840 0.0790
100 Japanese yen (JPY) 1.11 1.16 1.19 1.12
100 Spanish pesetas (ESP) 0.9455 1.0135 0.977 0.961
1 SPLIT OF INCOME STATEMENT INTO BANKING Banking business Insurance business TotalAND INSURANCE BUSINESS 1997 1996 1997 1996 1997 1996
Net interest income 4,579 3,488 0 0 4,579 3,488
Net commission and service income 6,592 4,942 0 0 6,592 4,942
Net trading income 5,312 3,901 0 0 5,312 3,901
Net income from insurance business 0 0 4,819 4,139 4,819 4,139
Other ordinary income 346 393 –624 –196 –278 197
NET OPERATING INCOME 16,829 12,724 4,195 3,943 21,024 16,667
Salaries and other compensation 6,967 5,191 1,371 1,509 8,338 6,700
Employee benefits 632 582 310 264 942 846
Other personnel expenses 412 348 209 193 621 541
Personnel expenses 8,011 6,121 1,890 1,966 9,901 8,087
Premises and real estate expenses 531 480 242 243 773 723
Expenses for IT, machinery, furnishing,vehicles and other equipment 689 396 166 166 855 562
Sundry operating expenses 1,600 1,341 619 618 2,219 1,959
Other operating expenses 2,820 2,217 1,027 1,027 3,847 3,244
Total operating expenses 10,831 8,338 2,917 2,993 13,748 11,331
GROSS OPERATING PROFIT 5,998 4,386 1,278 950 7,276 5,336
Depreciation and write-offs on non-current assets 573 675 17 1 590 676
Valuation adjustments, provisions and losses 2,624 1,251 0 0 2,624 1,251
Total depreciation, valuation adjustments,losses 3,197 1,926 17 1 3,214 1,927
GROUP PROFIT BEFORE EXTRAORDINARYITEMS AND TAXES 2,801 2,460 1,261 949 4,062 3,409
Extraordinary income 1,323 1,340 0 0 1,323 1,340
Extraordinary expenses 3,089 5,407 445 0 3,534 5,407
Taxes 842 833 408 339 1,250 1,172
GROUP PROFIT/GROUP LOSS 193 –2,440 408 610 601 –1,830
Minority interests 114 157 90 95 204 252
NET PROFIT/NET LOSS (AFTER MINORITY INTERESTS) 79 –2,597 318 515 397 –2,082
NOTES TO THE BANKING AND INSURANCE BUSINESS
61
1997 1996 Change2 INCOME AND EXPENSES FROM Switzerland Abroad Switzerland Abroad Switzerland Abroad
ORDINARY ACTIVITIES BY ORIGIN in CHF m in CHF m in CHF m in CHF m in CHF m in CHF m
Net interest income 2,539 2,040 2,443 1,045 96 995
Net commission and service income 3,539 3,053 2,883 2,059 656 994
Net trading income 883 4,429 958 2,943 –75 1,486
Income from insurance business 1,768 3,051 1,226 2,913 542 138
Other ordinary income –124 –154 349 –152 –473 –2
NET OPERATING INCOME 8,605 12,419 7,859 8,808 746 3,611
Personnel expenses 3,489 6,412 3,583 4,504 –94 –1,908
Other operating expenses 1,620 2,227 1,480 1,764 140 463
TOTAL OPERATING EXPENSES 5,109 8,639 5,063 6,268 46 2,371
GROSS OPERATING PROFIT BEFORE TAXES 3,496 3,780 2,796 2,540 700 1,240
% of total 48% 52% 52% 48%
Taxes 194 1,056 289 883 –95 173
% of total 16% 84% 25% 75%
GROSS OPERATING PROFIT AFTER TAXES 3,302 2,724 2,507 1,657 795 1,067
% of total 55% 45% 60% 40%
1997 1996 Change Change3 ANALYSIS OF EXTRAORDINARY INCOME in CHF m in CHF m in CHF m in %
Gains from the disposal of participations 27 1,255 –1,228 –98
Other extraordinary income 1,296 85 1,211 –
– of which reclassification of reserves for general banking risks 1,186 0 1,186 –
TOTAL EXTRAORDINARY INCOME 1,323 1,340 –17 –1
1997 1996 Change Change4 ANALYSIS OF EXTRAORDINARY EXPENSES in CHF m in CHF m in CHF m in %
Realised losses from the disposal of participations 42 0 42 –
Restructuring cost CREDIT SUISSE GROUP 839 1,000 –161 –16
Restructuring cost BZW 332 0 332 –
Restructuring cost due to merger CS/SVB, CSFB Inc. 0 97 –97 –100
Information technology, year 2000, euro 488 0 488 –
Creation of reserves for general banking risks 1,629 1,763 –134 –8
Creation of provisions for risks from lending and emerging market trading 0 1,446 –1,446 –100
Depreciation on real estate acquired at auction, bank premises and IT 0 859 –859 –100
Other extraordinary expenses 204 242 –38 –16
TOTAL EXTRAORDINARY EXPENSES 3,534 5,407 –1,873 –35
NOTES TO THE BANKING AND INSURANCE BUSINESS
62
1997 1996 Change Change5 INCOME STATEMENT OF BANKING BUSINESS Notes in CHF m in CHF m in CHF m in %
NET INTEREST INCOME 6 4,579 3,488 1,091 31
RESULT FROM COMMISSION AND SERVICE FEE ACTIVITIES
Commission income from lending activities 387 313 74 24
Commissions from securities and investment transactions 6,389 4,751 1,638 34
Commissions from other services 307 320 –13 –4
Commission expenses 491 442 49 11
NET COMMISSION AND SERVICE FEE INCOME 6,592 4,942 1,650 33
NET TRADING INCOME 7 5,312 3,901 1,411 36
OTHER ORDINARY INCOME
Income from the sale of financial investments 82 256 –174 –68
Income from investment activities 57 89 –32 –36
– of which from participations valued according to the equity method 30 77 –47 –61
– of which from other non-consolidated participations 27 12 15 125
Real estate income 45 27 18 67
Sundry ordinary income 282 257 25 10
Sundry ordinary expenses 120 236 –116 –49
OTHER ORDINARY INCOME 346 393 –47 –12
NET OPERATING INCOME 16,829 12,724 4,105 32
Personnel expenses 8,011 6,121 1,890 31
Other operating expenses 2,820 2,217 603 27
TOTAL OPERATING EXPENSES 10,831 8,338 2,493 30
GROSS OPERATING PROFIT 5,998 4,386 1,612 37
Depreciation and write-offs on non-current assets 573 675 –102 –15
– of which on real estate 120 123 –3 –2
– of which on other tangible fixed assets 453 538 –85 –16
– of which on non-consolidated participations 0 14 –14 –
Valuation adjustments, provisions and losses 8 2,624 1,251 1,373 110
DEPRECIATION, VALUATION ADJUSTMENTS, LOSSES 3,197 1,926 1,271 66
GROUP PROFIT BEFORE EXTRAORDINARY ITEMS AND TAXES 2,801 2,460 341 14
Extraordinary income 1,323 1,340 –17 –1
Extraordinary expenses 3,089 5,407 –2,318 –43
Taxes 842 833 9 1
GROUP PROFIT/GROUP LOSS 193 –2,440 2,633 –
Minority interests 114 157 –43 –27
NET PROFIT/NET LOSS (AFTER MINORITY INTERESTS) 79 –2,597 2,676 –
NOTES TO THE BANKING BUSINESS
63
NOTES TO THE BANKING BUSINESS
6 ANALYSIS OF THE RESULT FROM 1997 1996 Change ChangeINTEREST BUSINESS in CHF m in CHF m in CHF m in %
Interest and discount income
Interest income on claims due from customers 9,634 9,463 171 2
Interest income on claims due from banks 7,934 7,415 528 7
Interest income from money market claims 775 597 178 30
Credit commissions treated as interest earnings 330 264 66 25
Interest income from leasing operations 79 90 –11 –12
Total interest and discount income 18,761 17,829 932 5
Interest and dividend income from trading portfolios
Interest income 5,685 5,990 –305 –5
Dividend income 79 118 –39 –33
Total interest and dividend income from trading portfolios 5,764 6,108 –344 –6
Interest and dividend income from financial investments
Interest income 389 245 144 59
Dividend income 17 73 –56 –77
Total interest and dividend income from financial investments 406 318 88 28
Interest expense
Interest expenses for liabilities due to customers 11,900 8,956 2,944 33
Interest expenses for liabilities due to banks 8,452 11,811 –3,359 –28
Total interest expense 20,352 20,767 –415 –2
– of which interest expenses for subordinated liabilities 757 497 260 52
NET INTEREST INCOME 4,579 3,488 1,091 31
1997 1996 Change Change7 ANALYSIS OF TRADING INCOME in CHF m in CHF m in CHF m in %
Income from securities and commodities trading 3,115 2,373 742 31
Income from foreign exchange and banknote trading 1,014 844 170 20
Income from precious metals trading 210 97 113 116
Income from trading in interest rate instruments 973 587 386 66
NET TRADING INCOME 5,312 3,901 1,411 36
8 ANALYSIS OF VALUATION ADJUSTMENTS, 1997 1996 Change ChangePROVISIONS AND LOSSES in CHF m in CHF m in CHF m in %
For default risks (credit and country risks) 2,193 908 1,285 142
For other business risks 298 163 135 83
Losses 133 180 –47 –26
– of which losses from lending activities 64 109 –45 –41
VALUATION ADJUSTMENTS, PROVISIONS AND LOSSES 2,624 1,251 1,373 110
64
1997 1996 Change Change9 INCOME STATEMENT OF INSURANCE BUSINESS Notes in CHF m in CHF m in CHF m in %
NON-LIFE BUSINESS
Premiums written 10 13,694 13,414 280 2
Change in provisions for unearned premiumsand in actuarial provisions (health) –397 –343 –54 16
PREMIUMS EARNED 13,297 13,071 226 2
Claims and annuities paid –8,940 –8,605 –335 4
Change in provision for claims and annuities outstanding –1,214 –1,182 –32 3
CLAIMS INCURRED –10,154 –9,787 –367 4
Dividends paid –189 –245 56 –23
Change in provision for dividend –106 –144 38 –26
DIVIDENDS TO POLICYHOLDERS INCURRED –295 –389 94 –24
OPERATING EXPENSES –3,955 –3,998 43 –1
UNDERWRITING RESULT NON-LIFE –1,107 –1,103 –4 0
Net investment income 11 2,144 1,614 530 33
Interest on deposits and bank accounts (incl. exchange rate differences) 128 129 –1 –1
Other interest paid –71 –64 –7 11
Other income and expenses –190 42 –232 –
PROFIT BEFORE TAX AND MINORITY INTERESTS 904 618 286 46
LIFE BUSINESS
Premiums written 10 12,072 11,279 793 7
Change in provisions for claims outstanding –111 –43 –68 158
PREMIUMS EARNED 11,961 11,236 725 6
Claims paid –6,038 –5,538 –500 9
Change in provisions for claims outstanding –113 –20 –93 465
CLAIMS INCURRED –6,151 –5,558 –593 11
CHANGE IN ACTUARIAL PROVISIONS –7,305 –6,582 –723 11
Bonus allocation –1,420 –1,402 –18 1
Change in participation fund –208 –130 –78 60
ALLOCATION TO PARTICIPATION –1,628 –1,532 –96 6
OPERATING EXPENSES –1,251 –1,187 –64 5
Net investment income 11 5,029 4,079 950 23
Interest on deposits and bank accounts 118 109 9 8
Interest on bonuses credited to policyholders –124 –159 35 –22
Other interest paid –189 –151 –38 25
Other income and expenses (incl. exchange rate differences) –61 120 –181 –
PROFIT BEFORE TAX AND MINORITY INTERESTS 399 375 24 6
NOTES TO THE INSURANCE BUSINESS
65
NOTES TO THE INSURANCE BUSINESS
1997 1996 Change Change9 INCOME STATEMENT OF INSURANCE BUSINESS Notes in CHF m in CHF m in CHF m in %
SUMMARY
Profit before tax and minority interests (non-life business) 904 618 286 46
Profit before tax and minority interests (life business) 399 375 24 6
PROFIT BEFORE TAX, MINORITY INTERESTS, EXTRAORDINARYEXPENSES AND INTEREST ON BONDS 1,303 993 310 31
Interest on convertible bonds and warrant issues –42 –44 2 –4Extraordinary expenses –445 0 –445 –Tax –408 –339 –69 20
ANNUAL PROFIT BEFORE MINORITY INTERESTS 408 610 –202 –33
Minority interests –90 –95 5 –5
ANNUAL PROFIT AFTER MINORITY INTERESTS 318 515 –197 –38
10 ANALYSIS OF DIRECT BUSINESS, 1997 1996 Change ChangeGEOGRAPHICAL DISTRIBUTION in CHF m in CHF m in CHF m in %
Europe
Non-life 10,064 10,046 18 0Life 11,587 10,968 619 6
EUROPE, TOTAL 21,651 21,014 637 3
North America
Non-life 2,498 2,179 319 15Life 17 5 12 240
NORTH AMERICA, TOTAL 2,515 2,184 331 15
Asia-Pacific
Non-life 1,559 1,454 105 7Life 54 36 18 50
ASIA-PACIFIC, TOTAL 1,613 1,490 123 8
Other regions
Non-life 48 48 0 0Life 0 0 0 0
OTHER REGIONS, TOTAL 48 48 0 0
DIRECT BUSINESS, GROSS, TOTAL 25,827 24,736 1,091 4
Reinsurance assumed, gross
Non-life 1,309 1,722 –413 –24Life 472 416 56 13
REINSURANCE ASSUMED, GROSS, TOTAL 1,781 2,138 –357 –17
TOTAL BUSINESS, GROSS 27,608 26,874 734 3
Reinsurance ceded
Non-life –1,784 –2,035 251 –12Life –58 –146 88 –60
REINSURANCE CEDED, TOTAL –1,842 –2,181 339 –16
Business, net
Non-life 13,694 13,414 280 2Life 12,072 11,279 793 7
TOTAL BUSINESS, NET 25,766 24,693 1,073 4
Home market Switzerland
Non-life 2,820 2,801 19 1Life 6,489 6,221 268 4
HOME MARKET SWITZERLAND, TOTAL 9,309 9,022 287 3
66
1997 1996 Change Change11 ANALYSIS OF NET INVESTMENT INCOME in CHF m in CHF m in CHF m in %
Real estate
Non-life 201 199 2 1
Life 366 372 –6 –2
REAL ESTATE, TOTAL 567 571 –4 –1
Mortgages
Non-life 60 66 –6 –9
Life 389 405 –16 –4
MORTGAGES, TOTAL 449 471 –22 –5
Bonds and loans
Non-life 1,011 955 56 6
Life 2,541 2,383 158 7
BONDS AND LOANS, TOTAL 3,552 3,338 214 6
Shares
Non-life 120 125 –5 –4
Life 323 294 29 10
SHARES, TOTAL 443 419 24 6
Non-consolidated participations
Non-life 13 24 –11 –46
Life 11 17 –6 –35
NON-CONSOLIDATED PARTICIPATIONS, TOTAL 24 41 –17 –41
Short-term investments
Non-life 78 60 18 30
Life 48 58 –10 –17
SHORT-TERM INVESTMENTS, TOTAL 126 118 8 7
NON-LIFE 1,483 1,429 54 4
LIFE 3,678 3,529 149 4
INVESTMENT INCOME, TOTAL 5,161 4,958 203 4
Profits and losses on investments
Realised gains on real estate 1 10 –9 –90
Realised losses on real estate –9 –9 0 0
Realised gains (+)/realised losses (–) on other investments 865 280 585 209
Depreciation (–)/appreciation (+) on investments –96 –26 –70 269
NON-LIFE 761 255 506 198
Realised gains on real estate 17 21 –4 –19
Realised losses on real estate –5 –1 –4 400
Realised gains (+)/realised losses (–) on other investments 1,545 547 998 182
Depreciation (–)/appreciation (+) on investments –108 77 –185 –
LIFE 1,449 644 805 125
PROFITS AND LOSSES ON INVESTMENTS, TOTAL 2,210 899 1,311 146
Investment expenses
Non-life –100 –70 –30 43
Life –98 –94 –4 4
INVESTMENT EXPENSES, TOTAL –198 –164 –34 21
NON-LIFE 2,144 1,614 530 33
LIFE 5,029 4,079 950 23
TOTAL 7,173 5,693 1,480 26
67
31 Dec. 1997 31 Dec. 1996 Change Change12 MONEY MARKET CLAIMS in CHF m in CHF m in CHF m in %
Bills of exchange and money market paperrediscountable or pledgeable at central banks 8,585 13,488 –4,903 –36
– of which treasury bills 3,691 8,831 –5,140 –58
Other bills of exchange and money market paper 15,428 6,589 8,839 134
TOTAL MONEY MARKET CLAIMS 24,013 20,077 3,936 20
31 Dec. 1997 31 Dec. 1996 Change Change13 DUE FROM CUSTOMERS FROM FINANCIAL LEASES in CHF m in CHF m in CHF m in %
TOTAL 817 1,240 –423 –34
Mortgage Other Withoutcollateral collateral collateral Total
14 ANALYSIS OF LOAN COLLATERAL AT 31 DECEMBER 1997 in CHF m in CHF m in CHF m in CHF m
Due from customers 7,950 92,370 44,171 144,491
Mortgages 78,904 78,904
Residential properties 51,112
Business and office properties 9,216
Commercial and industrial properties 10,057
Other properties 8,519
TOTAL LOAN COLLATERAL 86,854 92,370 44,171 223,395
At 31 December 1996 85,793 105,848 45,723 237,364
31 Dec. 1997 31 Dec. 1996 Change Change15 SECURITIES AND PRECIOUS METALS TRADING PORTFOLIOS in CHF m in CHF m in CHF m in %
Interest bearing securities and rights 72,597 57,323 15,274 27
listed on stock exchange 41,009 47,960 –6,951 –14
unlisted 31,588 9,363 22,225 237
– of which own bonds and medium-term notes 1,185 23 1,162 –
Equities 29,624 26,085 3,539 14
– of which own shares 1,951 1,893 58 3
Precious metals 1,605 1,972 –367 –19
TOTAL SECURITIES AND PRECIOUS METALS TRADING PORTFOLIOS 103,826 85,380 18,446 22
– of which securities rediscountable or pledgeable at central banks 29,508 22,022 7,486 34
Substantial claims and liabilities included in other balance-sheetpositions. These are valued at market rates and any profit/loss on themis shown under trading income.
Lent trading positions (Due from banks and customers) 34,244 16,758 17,486 104
Borrowed trading positions (Due to banks and customers) 31,120 6,721 24,399 363
Positive replacement values of derivative instruments from tradingactivities (Other assets) 51,384 37,804 13,580 36
Negative replacement values of derivative instruments from trading activities (Other liabilities) 51,316 36,988 14,328 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
68
1997 1997 1996 199616 OWN SHARES INCLUDED IN SECURITIES TRADING PORTFOLIOS No. of shares in CHF m No. of shares in CHF m
In registered shares equivalents, including derivatives
at beginning of financial year 296,514 41 3,885,372 459
at end of financial year 477,971 108 296,514 41
17 FINANCIAL INVESTMENTS FROM THE Book value Cost Market valueBANKING BUSINESS 31 Dec. 1997 31 Dec. 1996 31 Dec. 1997 31 Dec. 1996 31 Dec. 1997 31 Dec. 1996
Interest bearing securities and rights 9,861 8,274 – – – –
listed on stock exchange 6,112 7,214 – – – –
unlisted 3,749 1,060 – – – –
– of which valued according to the accrual method 5,661 0 1 – – – –
– of which valued at lower of cost or market 4,200 0 1 4,201 01 4,203 0 1
– of which own bonds and medium-term notes 379 22 – – – –
Equities 4,342 2,158 4,480 01 7,132 0 1
– of which own shares 2 2 – – – –
– of which qualifying participations 706 4 – – – –
Precious metals 9 12 9 01 9 0 1
Real estate 1,558 1,137 1,805 01 1,558 0 1
TOTAL FINANCIAL INVESTMENTS FROM THEBANKING BUSINESS 15,770 11,581 – – – –
– of which valued at lower of cost or market 10,109 0 1 10,495 01 12,902 0 1
– of which securities rediscountable or – pledgeable at central banks 9,150 2,231 – – – –
Borrowed financial investments 2 2,726 0 – – 0 0
1 not available2 shown in the consolidated balance sheet as due to banks or customers
31 Dec. 1997 31 Dec. 1996 Change Change18 INVESTMENTS FROM THE INSURANCE BUSINESS in CHF m in CHF m in CHF m in %
Real estate at market value
Non-life 4,139 4,267 –128 –3
Life 8,406 8,166 240 3
REAL ESTATE AT MARKET VALUE, TOTAL 12,545 12,433 112 1
Mortgages at redemption value
Non-life 1,261 1,260 1 0
Life 6,787 6,672 115 2
MORTGAGES AT REDEMPTION VALUE, TOTAL 8,048 7,932 116 1
continued 20,593 20,365
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 Dec. 1997 31 Dec. 1996 Change Change18 INVESTMENTS FROM THE INSURANCE BUSINESS in CHF m in CHF m in CHF m in %
continued 20,593 20,365
Bonds and loans at amortised cost
Non-life 15,197 13,616 1,581 12
Life 40,047 36,728 3,319 9
BONDS AND LOANS AT AMORTISED COST, TOTAL 55,244 50,344 4,900 10
Shares at market value
Non-life 5,640 4,165 1,475 35
Life 17,287 11,444 5,843 51
SHARES AT MARKET VALUE, TOTAL 22,927 15,609 7,318 47
Non-consolidated participations at cost
Non-life 402 917 –515 –56
Life 282 439 –157 –36
NON-CONSOLIDATED PARTICIPATIONS AT COST, TOTAL 684 1,356 –672 –50
Short-term investments at par value
Non-life 1,483 1,462 21 1
Life 1,188 1,265 –77 –6
SHORT-TERM INVESTMENTS AT PAR VALUE, TOTAL 2,671 2,727 –56 –2
Less mortgages and non-consolidated participations not included in investments from the insurance business 8,732 9,288 –556 –6
TOTAL INVESTMENTS FROM THE INSURANCE BUSINESS 93,387 81,113 12,274 15
Investments in life business where the investment risk isborne by policyholders, total 2,756 1,843 913 50
ADDITIONAL DATA ON INVESTMENTS
Real estate at cost value
Non-life 3,508 3,572 –64 –2
Life 7,502 6,979 532 7
REAL ESTATE AT COST VALUE, TOTAL 11,010 10,551 459 4
Shares at cost value
Non-life 4,318 3,541 777 22
Life 12,819 9,964 2,855 29
SHARES AT COST VALUE, TOTAL 17,137 13,505 3,632 27
Bonds and loans at market value
Non-life 15,850 14,158 1,692 12
Life 41,944 38,283 3,661 10
BONDS AND LOANS AT MARKET VALUE, TOTAL 57,794 52,441 5,353 10
70
19 OWN SHARES INCLUDED IN FINANCIAL INVESTMENTS 1997 1997 1996 1996FROM THE BANKING AND INSURANCE BUSINESS No. of shares in CHF m No. of shares in CHF m
Registered shares, at beginning of financial year 2,442,401 321 1,941,849 217
Additions (purchase price) 239,776 35 2,952,000 377
Disposals (selling price) 2,492,969 501 2,451,448 313
Registered shares, at end of financial year 189,208 18 2,442,401 321
31 Dec. 1997 31 Dec. 1996 Change Change20 NON-CONSOLIDATED PARTICIPATIONS in CHF m in CHF m in CHF m in %
Participations valued according to the equity method 458 521 –63 –12
Other non-consolidated participations 734 1,469 –735 –50
TOTAL NON-CONSOLIDATED PARTICIPATIONS 1,192 1,990 –798 –40
With market value 244 859 –615 –72
Without market value 948 1,131 –183 –16
Foreign ex- BookWrite-offs/ Change in change diff. value at
21 ANALYSIS OF CAPITAL Historical accumulated Book value at scope of Write-offs/ and reclassifi- 31 Dec.ASSETS IN CHF M value depreciation 31 Dec. 1996 consolidation Additions Disposals depreciation 1 cations 1997
Participations valued according to the equity method 521 0 521 –15 4 –66 0 14 458
Other non-consolidatedparticipations 1,469 0 1,469 0 89 –407 0 –417 734
Non-consolidatedparticipations 1,990 0 1,990 –15 93 –473 0 –403 1,192
Bank premises 4,839 –744 4,095 41 142 –286 –105 –247 3,640
Other real estate 524 –28 496 –3 10 –28 –19 91 547
Real estate 5,363 –772 4,591 38 152 –314 –124 –156 4,187
Other tangible fixed assets 3,572 –1,924 1,648 104 831 –84 –477 62 2,084
Leasing assets 0 0 0 0 0 0 0 0 0
Intangible assets 152 –42 110 0 102 –10 –16 –5 181
TOTAL 11,077 –2,738 8,339 127 1,178 –881 –617 –502 7,644
1 write-offs in the amount of CHF 27 million in extraordinary expenses
31 Dec. 1997 31 Dec. 1996 Change Change22 ADDITIONAL INFORMATION ON FIXED ASSETS in CHF m in CHF m in CHF m in %
Fire insurance value of real estate 15,347 16,886 –1,539 –9
Fire insurance value of other tangible fixed assets 2,358 2,098 260 12
Future leasing installments from operating leases 197 1,089 –892 –82
31 Dec. 1997 31 Dec. 1996 Change Change23 OTHER ASSETS in CHF m in CHF m in CHF m in %
Positive replacement value of derivative instruments 52,913 38,166 14,747 39
– of which trading 51,384 37,804 13,580 36
– of which other 1,529 362 1,167 322
Compensation account 24 0 24 –
Other 3,571 3,279 292 9
TOTAL OTHER ASSETS 56,508 41,445 15,063 36
71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 Dec. 1997 31 Dec. 1997 31 Dec. 1996 31 Dec. 199624 ANALYSIS OF ASSETS BY COUNTRY/GROUPS OF COUNTRIES in CHF m in % in CHF m in %
Switzerland 183,361 27 179,131 29
EU 195,485 28 228,812 37
United States 176,459 26 138,013 22
Canada 3,464 1 5,039 1
Mexico 2,078 0 1,312 0
Japan 39,264 6 26,926 4
Other industrialised countries 14,645 2 10,699 2
Financial centres outside the industrialised countries 37,678 5 13,435 2
– of which Hong Kong 3,991 1 3,962 1
Singapore 8,045 1 2,616 0
Other 25,642 3 6,857 1
Oil-producing countries 4,369 1 1,849 0
Newly industrialised countries 29,551 4 16,552 3
– of which Eastern Europe and Commonwealth of Independent States 13,020 2 7,762 1
Asia 5,521 1 3,336 1
South America 9,285 1 4,637 1
Other 1,725 0 817 0
Other countries 3,214 0 2,628 0
TOTAL ASSETS 689,568 100 624,396 100
31 Dec. 1997 31 Dec. 199625 ASSETS PLEDGED OR ASSIGNED AND 31 Dec. 1997 actual commit- 31 Dec. 1996 actual commit-
ASSETS SUBJECT TO OWNERSHIP commitment ment secured commitment ment securedRESERVATION in CHF m in CHF m in CHF m in CHF m
Total assets not at free disposal 51,740 23,752 20,823 16,037
– of which due from banks/customers 1,387 1,368 888 848
– of which securities (trading and investment) 6,231 2,228 3,745 1,173
– of which mortgages 1,842 1,387 4,063 3,643
– of which other 1 42,280 18,769 12,127 10,373
Assets under retention of ownership 0 0 0 0
TOTAL 51,740 23,752 20,823 16,037
1 notably, assets pledged as security for CSFB’s international business activities in compliance with local regulations
31 Dec. 1997 31 Dec. 1996 Change Change26 LIABILITIES TO OWN PENSION FUNDS in CHF m in CHF m in CHF m in %
TOTAL 1,263 976 287 29
72
31 Dec. 1997 31 Dec. 1996 Change Change27 OUTSTANDING BONDS ISSUED – SUMMARY in CHF m in CHF m in CHF m in %
Bonds 44,131 25,994 18,137 70
Bonds issued by the central issuing office 160 271 –111 –41
Mortgage bonds issued by the central mortgage bond institutions 1,303 1,315 –12 –1
TOTAL 45,594 27,580 18,014 65
27a BONDS ISSUED BY CREDIT SUISSE GROUP
Year Earliest date Par valueRedemption Interest rate of issue callable in m
20.07.1998 3.50% 1989 CHF 300
23.02.2000 7.00% 1990 CHF 200
28.02.2000 2.25% Convertible Bond 1997 CHF 400 1
06.08.2001 2.25% 1993 CHF 500
15.12.2003 6.00% 1994 CHF 250 1
31.10.2006 4.00% 1997 CHF 800
23.05.2007 4.00% 1997 CHF 1,000
27b BONDS ISSUED BY SUBSIDIARIES
Year Earliest date Par valueRedemption Interest rate of issue callable in m
Credit Suisse Group Finance (Guernsey) Ltd., Guernsey
16.02.1998 8.00% 1995 USD 200
29.07.1999 6.75% 1994 DEM 400
19.11.2002 4.88% Convertible Bond 1992 USD 31 1
All bonds issued by Credit Suisse Group Finance (Guernsey) Ltd. are guaranteed by Credit Suisse Group.
Credit Suisse First Boston, Zurich
01.02.1998 4.75% 1988 CHF 80 1
10.04.1998 7.00% 1990 CHF 6
05.07.1998 7.00% 1990 CHF 4
10.1998 6.09% 1997 USD 1,498 2
24.10.1998 7.25% 1990 CHF 3
21.12.1998 7.50% 1990 CHF 5
11.03.1999 7.00% 1991 CHF 5
15.05.1999 6.50% 1991 CHF 5
08.09.1999 5.00% 1994 CHF 200
16.09.1999 6.75% 1991 CHF 4
31.01.2000 7.25% 1990 CHF 150 1
31.01.2000 6.75% 1990 31.01.1998 CHF 40
15.09.2000 3.25% 1986 15.09.1998 CHF 100 1
15.09.2000 4.50% 1995 CHF 250
10.2000 6.09% 1997 USD 1,994 2
26.10.2000 5.00% 1988 26.10.1998 CHF 230 1
26.10.2000 5.00% 1988 26.10.1998 CHF 70 1
05.06.2001 7.25% 1990 CHF 170
31.07.2001 7.00% 1991 CHF 150 1
15.09.2001 6.00% 1989 15.09.1999 CHF 200 1
15.01.2002 7.00% 1992 CHF 100
20.02.2002 7.50% 1991 CHF 75 1
15.05.2002 6.75% 1992 CHF 60
73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
BONDS ISSUED BY SUBSIDIARIES (continued)Year Earliest date Par value
Redemption Interest rate of issue callable in m
10.2002 6.09% 1997 USD 1,495 2
31.03.2003 3.50% 1993 CHF 75 1
31.03.2003 3.50% 1993 CHF 125 1
29.09.2003 6.13% 1993 USD 200 1
18.11.2003 6.25% 1993 DEM 600 1
20.02.2004 5.00% 1989 20.02.1999 CHF 180 1
22.04.2004 4.38% 1996 CHF 200 1
18.11.2004 8.50% 1994 USD 300 1
30.12.2004 6.13% 1994 DEM 100 1
31.03.2005 5.75% 1995 CHF 225 1
16.11.2005 2.00% 1997 11.2000 USD 200
17.11.2005 2.00% 1997 11.2000 USD 100
30.03.2006 7.21% 1996 USD 238 1
30.03.2006 6.84% 1997 USD 95 1,4
06.07.2007 5.25% 1995 CHF 150 1
06.07.2007 5.25% 1995 CHF 100 1
10.03.2016 5.00% 1986 10.03.2006 CHF 200 1
perpetual 7.90% 1997 05.2007 USD 500 1,3
perpetual 6.50% 1997 06.2007 FRF 1,250 1,3
perpetual 7.74% 1997 06.2007 USD 100 1
perpetual 4.38% 1997 07.2007 CHF 500 1,3
perpetual 8.25% 1997 07.2009 GBP 150 1,3
Credit Suisse, Zurich
10.08.1998 7.00% 1990 CHF 100 1
15.09.1998 3.00% 1988 CHF 100 1
15.01.1999 7.50% 1991 CHF 100
05.05.1999 4.50% 1994 CHF 100
31.10.1999 5.50% 1994 CHF 100
18.04.2000 7.25% 1990 CHF 110 1
20.02.2001 7.50% 1991 CHF 150 1
28.07.2001 5.00% 1994 CHF 200
17.09.2001 7.00% 1991 CHF 150 1
17.12.2001 2.75% 1993 CHF 125
20.02.2002 7.50% 1991 CHF 125 1
16.03.2002 6.75% 1992 CHF 200
30.03.2002 7.25% 1990 30.03.2000 CHF 150 1
30.06.2002 7.25% 1992 CHF 100
25.09.2002 7.75% 1992 CHF 100 1
15.01.2003 7.75% 1991 CHF 100 1
15.01.2003 7.25% 1992 CHF 100 1
01.02.2003 5.00% 1988 01.02.2000 CHF 100 1
01.02.2003 5.00% 1988 01.02.2000 CHF 70 1
31.03.2003 5.25% 1993 CHF 250
20.02.2004 5.00% 1989 20.02.1999 CHF 120 1
02.02.2005 5.50% 1995 CHF 100
28.04.2005 5.75% 1995 CHF 120 1
74
BONDS ISSUED BY SUBSIDIARIES (continued)Year Earliest date Par value
Redemption Interest rate of issue callable in m
12.10.2005 5.00% 1995 CHF 125 1
12.10.2005 5.00% 1995 CHF 25 1
13.11.2005 3.13% 1995 CHF 300 1
05.01.2006 4.35% 1996 CHF 150 1
08.02.2008 4.50% 1996 CHF 200 1
31.07.2009 4.00% 1997 CHF 200 1
1998–2009 3.3%–7.4% Mortgage bonds issued by the Swiss Mortgage 1983–1997 CHF 509Bond Bank, Zurich
Neue Aargauer Bank, Aarau
28.06.2002 4.25% 1996 CHF 100
11.07.1998 4.63% Central issuing office of the Association of Swiss Regional Banks 1988 CHF 5 1
26.06.1999 6.13% Central issuing office of the Association of Swiss Regional Banks 1989 CHF 7 1
10.04.2000 7.13% Central issuing office of the Association of Swiss Regional Banks 1990 CHF 5 1
11.03.2001 7.25% Central issuing office of the Association of Swiss Regional Banks 1991 CHF 5 1
1998–2001 4.5%–7.6% Central issuing office of the Association of Swiss Regional Banks 1988–1993 CHF 138
1998–2007 3.3%–7.4% Mortgage bonds issued by the Swiss Mortgage 1983–1997 CHF 735Bond Bank, Zurich
Credit Suisse (Luxembourg) S.A., Luxembourg
31.12.2001 9.13% 1991 LUF 2,500 1
06.08.2003 7.25% 1993 LUF 1,500 1
Credit Suisse First Boston Finance (Guernsey) Ltd., Guernsey
01.02.2000 0.00% 1990 CAD 500
22.10.2002 0.00% 1992 DEM 500
Credit Suisse First Boston International (Guernsey) Ltd., Guernsey
01.10.1998 5.61% 1997 USD 500
07.10.1998 5.62% 1997 USD 300
09.11.1998 5.62% 1997 USD 125
18.11.1998 5.71% 1997 USD 200
Credit Suisse First Boston Finance B.V., Amsterdam (The Netherlands)
13.11.1998 9.00% 1992 USD 67
31.03.1999 6.07% 1993 USD 250
22.03.1999 5.25% 1993 USD 103
21.09.1999 6.05% 1992 USD 56
22.09.1999 6.05% 1992 USD 85
22.02.2000 7.50% 1992 USD 173
15.06.2000 7.75% 1993 USD 54 1
01.07.2003 7.75% 1993 USD 81 1
26.05.2003 5.88% 1993 USD 200 1
25.08.2003 5.50% 1993 USD 200 1
perpetual 5.69% 1986 USD 150 1
75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
BONDS ISSUED BY SUBSIDIARIES (continued)Year Earliest date Par value
Redemption Interest rate of issue callable in m
Credit Suisse First Boston Inc., New York
09.02.1998 6.81% 1993 USD 5
17.02.1998 5.93% 1996 USD 5
02.03.1998 7.25% 1992 USD 5
09.03.1998 6.22% 1993 USD 2
02.04.1998 5.72% 1996 USD 250
29.04.1998 5.83% 1996 USD 5
15.05.1998 8.18% 1992 USD 4
01.07.1998 6.63% 1992 USD 10
07.07.1998 5.90% 1995 USD 25
27.07.1998 6.42% 1995 DEM 107 1
07.10.1998 6.37% 1994 USD 150 1
08.10.1998 6.19% 1993 USD 50 1
09.11.1998 0.92% 1994 JPY 9
13.11.1998 8.28% 1992 USD 4
15.01.1999 6.01% 1995 USD 35
15.01.1999 6.01% 1996 USD 15
15.01.1999 5.98% 1997 USD 25
27.01.1999 6.26% 1994 USD 8 1
15.06.1999 9.25% 1992 USD 170 1
01.07.1999 5.65% 1997 USD 2
01.10.1999 6.55% 1992 USD 5
15.10.1999 7.23% 1992 USD 5 1
15.10.1999 6.50% 1992 USD 10
04.01.2000 6.45% 1994 USD 25 1
03.03.2000 6.43% 1993 USD 10
03.05.2000 6.41% 1995 DEM 147 1
02.11.2000 6.25% 1994 PTE 32 1
14.02.2001 6.40% 1996 DEM 136 1
15.03.2001 6.49% 1996 USD 8
26.03.2001 6.41% 1996 USD 5 1
17.04.2001 6.30% 1996 USD 20 1
30.04.2001 6.39% 1992 USD 200 1
22.05.2001 6.13% 1996 USD 17
06.06.2001 6.48% 1994 USD 52 1
07.06.2001 6.09% 1996 USD 8 1
08.08.2001 6.28% 1996 USD 10 1
08.08.2001 6.08% 1996 USD 2 1
16.08.2001 6.23% 1995 FRF 156 1
21.12.2001 6.59% 1995 USD 20 1
01.08.2002 6.48% 1994 USD 5 1
03.09.2002 7.83% 1992 USD 3
15.01.2003 7.23% 1993 USD 5 1
03.02.2003 7.19% 1993 USD 5 1
10.02.2003 6.33% 1993 USD 35
07.04.2003 6.76% 1992 USD 7
76
BONDS ISSUED BY SUBSIDIARIES (continued)Year Earliest date Par value
Redemption Interest rate of issue callable in m
27.04.2003 6.60% 1993 USD 21 1
28.05.2003 6.05% 1996 USD 11
11.02.2004 6.44% 1994 USD 150 1
08.03.2004 8.95% 1992 USD 11
09.03.2004 8.75% 1992 USD 42
15.03.2004 6.42% 1994 USD 165 1
05.04.2004 6.41% 1995 DEM 107
30.04.2004 9.30% 1992 USD 100
27.10.2005 6.51% 1993 USD 200 1
07.11.2005 6.95% 1995 USD 5 1
15.05.2006 6.56% 1996 USD 337 1
27.02.2007 6.61% 1995 USD 15 1
27.02.2007 6.58% 1995 USD 15 1
28.02.2007 6.61% 1995 USD 15 1
28.02.2007 6.58% 1995 USD 15 1
15.02.2013 8.50% 1993 USD 3
02.04.2018 7.71% 1993 USD 5 1
various 6.50% var. USD 6 1
various variable 1993 USD 156 1
various variable 1993–1995 USD 10 1
various variable 1995–1996 USD 56 1
various variable 1994 USD 40 1
Credit Suisse Financial Products, London
1998 various 1996–1997 CHF 75
30.09.1998 0.00% Zero Coupon Notes 1996 DEM 19
23.10.1998 variable Floating Rate Notes 1995 FRF 400
15.01.1998 0.00% Zero Coupon Notes 1997 HKD 18
29.05.1998 0.00% Zero Coupon Notes 1997 ITL 40,000 1
1998 various 1995–1997 JPY 33,633
1998 various 1997 PTE 14,500
1998 various 1997 SEK 359
1998 various 1992–1997 USD 276
31.08.1998 0.00% Zero Coupon Notes 1991 USD 109 1
1999 various 1996–1997 CHF 23
1999 various 1995–1997 DEM 91
1999 1.25% 1994 GBP 60
1999 various 1996–1997 ITL 17,000
1999 various 1996–1997 JPY 1,085
1999 various 1994 NLG 46
1999 various 1997 SEK 210
1999 various 1992–1997 USD 291
30.04.1999 7.75% 1992 XEU 47 1
10.08.2000 4.00% 1997 DEM 28
21.12.2000 3.00% Index–linked Notes 1995 21.12.1999 FIM 25
77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
BONDS ISSUED BY SUBSIDIARIES (continued)Year Earliest date Par value
Redemption Interest rate of issue callable in m
06.11.2000 7.50% 1997 GBP 25
2000 various 1997 ITL 110,000
2000 various 1995–1997 JPY 20,717
27.09.2000 0.00% Zero Coupon Index–linked Notes 1994 NLG 25
11.07.2000 variable Floating Rate Notes 1997 PTE 5,000
2000 various 1992–1997 USD 279
13.06.2001 6.50% 1997 BEF 100
07.03.2001 variable Floating Rate Notes 1997 09.03.1998 CHF 10
2001 various 1997 ITL 108,000
2001 various 1995–1997 JPY 15,569
2001 various 1994–1997 USD 545
10.05.2001 variable Floating Rate Notes 1994 XEU 15
31.10.2002 variable Floating Rate Notes 1997 CHF 75 1
2002 various 1996–1997 DEM 83
19.12.2002 0.00% Zero Coupon Notes 1997 ITL 20,000 1
2002 various 1996–1997 JPY 163,940
2002 various 1992 LUF 3,500 1
2002 various 1996–1997 USD 490
30.07.2002 0.00% Zero Coupon Notes 1997 XEU 10
13.06.2003 8.00% 1997 BEF 200
06.11.2003 0.00% Zero Coupon Notes 1995 FRF 25
04.02.2003 0.00% Zero Coupon Notes 1997 GBP 19
31.10.2003 2.00% 1997 ITL 30,000
2003 various 1997 JPY 1,700
19.03.2003 7.63% 1993 LUF 1,500 1
2003 various 1994–1997 USD 215
2004 0.00% Zero Coupon Notes 1994 CHF 13 1
2004 variable Floating Rate Notes 1997 DEM 25
2004 various 1996–1997 ITL 293,000
2004 0.00% Zero Coupon Notes 1997 ITL 35,000 1
2004 various 1995–1997 JPY 12,300
2004 0.00% Zero Coupon Notes 1997 NOK 110
2004 various 1995–1997 USD 116
16.06.2004 8.50% 1997 XEU 3
01.12.2004 0.00% Zero Coupon Notes 1994 XEU 10 1
08.06.2005 8.25% 1995 BEF 200 1
27.09.2005 variable Floating Rate Notes 1995 DEM 47 1
08.12.2005 0.00% Zero Coupon Bonds 1997 FRF 200
2005 0.00% Zero Coupon Notes 1997 ITL 90,000
01.12.2005 0.00% Zero Coupon Notes 1997 ITL 60,000 1
2005 various 1996–1997 JPY 8,400
19.12.2005 0.00% Zero Coupon Notes 1997 07.06.1999 NOK 160
2005 0.00% Zero Coupon Notes 1997 PTE 9,362 1
2005 various 1995–1997 USD 272
78
BONDS ISSUED BY SUBSIDIARIES (continued)Year Earliest date Par value
Redemption Interest rate of issue callable in m
27.09.2006 variable Floating Rate Notes 1996 DEM 9 1
06.11.2006 0.00% Zero Coupon Notes 1997 17.04.1998 FIM 50
2006 various 1997 ITL 64,280
19.12.2006 5.70% Dual Currency Bonds 1996 JPY 500
2006 various 1995–1997 USD 83
28.07.2006 0.00% Zero Coupon Bonds 1994 USD 40 1
2007 various 1996–1997 CHF 120
2007 various 1997 DEM 70
23.05.2007 variable Floating Rate Notes 1997 DEM 80 1
06.11.2007 0.00% Zero Coupon Notes 1997 17.10.2000 FIM 50
2007 various 1997 ITL 113,600
2007 various 1996–1997 JPY 9,500
2007 various 1995–1997 USD 193
02.07.2007 variable Floating Rate Notes 1997 USD 40 1
2008 0.00% Zero Coupon Notes 1993–1994 DEM 153 1
2008 various 1997 ITL 63,000
15.10.2008 variable Floating Rate Notes 1997 02.1998 ITL 15,000 1
2008 various 1997 JPY 600
2008 various 1995–1997 USD 64
2009 various 1997 DEM 92
2009 0.00% Zero Coupon Notes 1994–1996 DEM 213 1
30.05.2009 variable Floating Rate Notes 1997 ITL 17,000
2009 various 1996–1997 JPY 4,500
2009 0.00% Zero Coupon Notes 1997 USD 85
06.01.2010 0.00% Zero Coupon Notes 1997 DEM 20
20.06.2010 0.00% Zero Coupon Bonds 1997 DEM 60 1
01.03.2010 0.00% Zero Coupon Bonds 1995 ITL 30,000 1
2010 0.00% Zero Coupon Notes 1997 USD 67
2011 various 1993–1997 USD 147
2012 0.00% Zero Coupon Notes 1997 DEM 35
2012 various 1996–1997 USD 27
2013 various 1995–1997 USD 67
20.12.2014 0.00% Zero Coupon Bonds 1994 ITL 250,000 1
30.10.2014 0.00% Zero Coupon Notes 1995 USD 29
12.06.2015 variable Floating Rate Notes 1997 USD 42
15.09.2017 0.00% Zero Coupon Notes 1997 DEM 15
15.05.2017 variable Floating Rate Notes 1997 JPY 5,000
01.09.2017 0.00% Zero Coupon Bonds 1997 PTE 1,700
30.08.2017 0.00% Zero Coupon Bonds 1997 USD 28
15.01.2018 variable Floating Rate Notes 1997 ITL 50,000
07.01.2020 variable Floating Rate Notes 1996 CAD 162
19.09.2021 variable Floating Rate Notes 1996 19.09.1999 JPY 10,000
15.12.2021 0.00% Zero Coupon Bonds 1995 USD 81 1
02.10.2022 0.00% Zero Coupon Bonds 1997 DEM 40
08.10.2027 0.00% Zero Coupon Bonds 1997 DEM 50
79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
BONDS ISSUED BY SUBSIDIARIES (continued)Year Earliest date Par value
Redemption Interest rate of issue callable in m
perpetual various 1995 CHF 80 1
perpetual 10.25% 1995 17.08.2015 GBP 100 1
perpetual variable Floating Rate Notes 1993–1995 JPY 20,000 1
perpetual various 1995–1997 NLG 60 1
perpetual variable Floating Rate Notes 1992–1997 USD 220 1
Bank Leu Ltd., Zurich
17.11.2006 5.00% 1986 CHF 100 1
23.01.1998 0.00% 1996 CHF 10
23.01.1998 0.00% 1996 CHF 14
1998–2006 4.2%–7.3% Mortgage bonds issued by the Swiss Mortgage 1983–1996 CHF 59Bond Bank, Zurich
“Winterthur” Swiss Insurance Company, Winterthur
1998 4.25% Issue of bonds with warrants 1990 CHF 507
Winterthur Finance Ltd., British Virgin Islands
1999 2.25% Issue of bonds with warrants 1994 CHF 300
HIH Winterthur International Holdings Ltd., Sydney
2001 8.00% Convertible bond issue 1996 AUD 123
1 subordinated bonds2 issued by Credit Suisse First Boston Guernsey branch3 issued by Credit Suisse First Boston London branch4 issued by Credit Suisse First Boston Nassau branch
80
31 Dec. 1997 31 Dec. 1996 Change Change28 OTHER LIABILITIES in CHF m in CHF m in CHF m in %
Negative replacement value of derivative instruments 52,684 37,060 15,624 42
– of which trading 51,316 36,988 14,328 39
– of which other 1,368 72 1,296 –
Other 5,484 6,116 –632 –10
TOTAL OTHER LIABILITIES 58,168 43,176 14,992 35
Change in Recoveries,definition of doubtful New creation Releases
29 VALUATION ADJUSTMENTS AND Specific purpose interest, charged to New creation credited toPROVISIONS/RESERVES FOR Balance at usage and (reclassifi- currency income charged to income Balance atGENERAL BANKING RISKS IN CHF M 31 Dec. 1996 releases cation) 2 differences statement equity statement 31 Dec. 1997
Valuation adjustments and provisions for default risks (credit and country risk) 10,586 –1,106 278 552 2,193 0 0 12,503
Valuation adjustments and provisions for other business risks 835 –54 –509 9 641 0 0 922
Provisions for taxes and deferredtaxes1 2,094 –1,449 363 100 1,424 699 0 3,231
Provisions for restructuring 702 –498 37 1 1,179 0 0 1,421
Other provisions 322 –70 258 –7 263 0 0 766
Total 14,539 –3,177 427 655 5,700 699 0 18,843
Less valuation adjustments directlynetted with assets –9,719 –11,714
TOTAL VALUATION ADJUSTMENTS ANDPROVISIONS AS PER BALANCE SHEET 4,820 7,129
RESERVES FOR GENERALBANKING RISKS 2,388 0 59 0 1,629 0 –1,186 2,890
1 CHF 174 m deviation to tax expense due to deferred tax assets that are not included in the provisions 2 CHF 486 m reclassified from other balance sheet positions
81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 TECHNICAL PROVISIONS FOR 31 Dec. 1997 31 Dec. 1997 31 Dec. 1996 31 Dec. 1996 Change ChangeTHE INSURANCE BUSINESS IN CHF M gross net gross net gross net
NON-LIFE
Provision for unearned premiums 4,835 4,162 4,852 4,186 –17 –24
Actuarial provisions (health) 2,012 2,003 1,809 1,800 203 203
Provisions for claims outstanding 1 18,791 16,406 17,717 15,597 1,074 809
Actuarial provision for annuities 614 599 551 540 63 59
Provision for dividends to policyholders 700 700 640 640 60 60
Equalisation reserve prescribed by law 335 335 316 316 19 19
NON-LIFE, TOTAL 27,287 24,205 25,885 23,079 1,402 1,126
LIFE
Provisions for unearned premiums 746 735 712 725 34 10
Actuarial provisions 61,269 60,584 55,294 54,527 5,975 6,057
Provisions for claims outstanding 430 393 441 397 –11 –4
Participation fund 2,155 2,142 2,070 2,067 85 75
Bonuses left on deposit 3,169 3,169 3,055 3,055 114 114
LIFE, TOTAL 2 67,769 67,023 61,572 60,771 6,197 6,252
TECHNICAL PROVISIONS FOR THEINSURANCE BUSINESS, TOTAL 95,056 91,228 87,457 83,850 7,599 7,378
1 of which undiscounted provisions for claims outstanding 3,065 2,224 841
impact of discounting –439 –367 –72
Discounted provisions for claims outstanding 2,626 1,857 769
2 of which technical provisions in life businesswhere the investment risk is borne by policyholders 2,846 2,846 1,827 1,827 1,019 1,019
82
1997 1996 Change Change31 STATEMENT OF SHAREHOLDERS’ EQUITY in CHF m in CHF m in CHF m in %
SHAREHOLDERS’ EQUITY AT BEGINNING OF FINANCIAL YEAR
Share capital 3,886 3,771 115 3
Capital reserve 10,455 10,381 74 1
Retained earnings 4,713 2,970 1,743 59
Revaluation reserves from the insurance business 3,249 2,796 453 16
Reserves for general banking risks 2,388 432 1,956 453
Group loss/Group profit –1,830 2,027 –3,857 –
TOTAL SHAREHOLDERS’ EQUITY AT BEGINNING OF FINANCIAL YEAR 22,861 22,377 484 2
Reclassification from valuation adjustments and provisions 59 193 –134 –69
Creation of reserves for general banking risks, net 443 1,763 –1,320 –75
Dividends paid –1,114 –1,055 –59 6
Capital increases, par value and capital surplus 1,508 606 902 149
Capital increases, minority interests 87 2 85 –
Acquisition of minority interests –238 –475 237 –50
Pooling adjustment –1,298 0 –1,298 –
Goodwill 0 –330 330 –100
Foreign exchange differences –38 1,164 –1,202 –
Change in revaluation reserves from the insurance business 2,539 453 2,086 460
Valuation adjustments relating to subsidiaries –151 –7 –144 –
Capital surplus increase in Winterthur prior to merger 392 0 392 –
Group profit/Group loss 601 –1,830 2,431 –
TOTAL SHAREHOLDERS’ EQUITY AT END OF FINANCIAL YEAR 25,651 22,861 2,790 12
of which: Share capital 5,322 3,886 1,436 37
Capital reserve 9,366 10,200 –834 –8
Minority interests in capital reserve 104 255 –151 –59
Retained earnings –266 2,862 –3,128 –
Minority interests in retained earnings 1,246 1,251 –5 0
Revaluation reserves from the insurance business 5,337 3,163 2,174 69
Minority interests in insurance revaluation reserves 451 86 365 424
Reserves for own shares 600 600 0 0
Reserves for general banking risks 2,890 2,388 502 21
Group profit/Group loss 601 –1,830 2,431 –
– of which minority interests 204 252 –48 –19
31 Dec. 1997 31 Dec. 1996 Change Change32 LOANS TO THE BANK’S GOVERNING BODIES in CHF m in CHF m in CHF m in %
Loans to the bank’s governing bodies 86 257 –171 –67
Loans to the bank’s governing bodies comprise advances to members of the Board of Directors, the Executive Board as well as the Statutory Auditors andcompanies controlled by these individuals or legal entities.
83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
33 MATURITY STRUCTURE OFCURRENT ASSETS, FINANCIAL Due Due Due within DueINVESTMENTS AND BORROWED Redeemable within 3 within 3 to 12 months afterFUNDS AT 31 DECEMBER IN CHF M At sight by notice months 12 months to 5 years 5 years Real estate Total
CURRENT ASSETS
Cash and other liquid assets 3,404 – – – – – 3,404
Money market claims 3 0 17,361 6,592 57 0 24,013
Due from banks 5,514 2,966 123,932 9,926 3,350 90 145,778
Claims from the insurance business 105 6,319 0 0 0 0 6,424
Due from customers 4,472 11,752 95,293 18,187 10,293 4,494 144,491
Mortgages – 21,651 11,687 17,707 25,846 2,013 78,904
Securities and precious metalstrading portfolios 103,826 – – – – – 103,826
TOTAL CURRENT ASSETS 117,324 42,688 248,273 52,412 39,546 6,597 0 506,840
At 31 December 1996 111,673 41,026 206,562 69,693 36,868 8,593 0 474,415
TOTAL FINANCIAL INVESTMENTS 1 4,351 1,230 3,224 1,497 3,222 688 1,558 15,770
At 31 December 1996 2,282 0 1,426 1,743 3,569 1,424 1,137 11,581
BORROWED FUNDS
Liabilities in respect of money market paper 0 0 9,236 3,051 233 0 12,520
Due to banks 47,462 3,682 116,911 10,067 2,044 70 180,236
Commitments from insurance business 25 6,020 0 0 0 0 6,045
Due to customers in savings andinvestment accounts 0 48,257 276 0 0 0 48,533
Due to customers, other 31,204 2,206 136,905 17,529 4,816 2,911 195,571
Medium-term bank notes – – 449 1,285 5,061 421 7,216
Bonds and mortgage-backed bonds – – 1,735 4,591 23,430 15,838 45,594
TOTAL BORROWED FUNDS 78,691 60,165 265,512 36,523 35,584 19,240 0 495,715
At 31 December 1996 69,111 64,722 260,320 31,731 21,761 13,295 0 460,940
1 excluding investments from the insurance business
34 SECURITIES BORROWING AND LENDING 31 Dec. 1997 31 Dec. 1996 Change ChangeAND REPURCHASE AGREEMENTS in CHF m in CHF m in CHF m in %
Due from banks 29,556 13,011 16,545 127
Due from customers 5,618 4,587 1,031 22
SECURITIES LENDING 35,174 17,598 17,576 100
Due from banks 74,663 69,302 5,361 8
Due from customers 56,861 81,198 –24,337 –30
REVERSE REPURCHASE AGREEMENTS 131,524 150,500 –18,976 –13
Due to banks 10,100 8,083 2,017 25
Due to customers 21,832 5,263 16,569 315
SECURITIES BORROWING 31,932 13,346 18,586 139
Due to banks 71,076 81,969 –10,893 –13
Due to customers 46,365 46,801 –436 –1
REPURCHASE AGREEMENTS 117,441 128,770 –11,329 –9
84
35 BALANCE SHEET BY ORIGIN Switzerland Abroad Switzerland Abroad Switzerland AbroadIN CHF M 31 Dec. 1997 31 Dec. 1997 31 Dec. 1996 31. Dec. 1996 Change Change
ASSETS
Cash and other liquid assets 2,316 1,088 2,571 361 –252 724
Money market claims 3,155 20,858 4,051 16,026 –896 4,832
Due from banks 4,633 141,145 4,642 120,831 –9 20,314
Claims from the insurance business 3,048 3,376 2,334 3,681 878 –469
Due from customers 26,781 117,710 29,836 129,455 –3,055 –11,745
Mortgages 67,484 11,420 68,087 9,987 –603 1,433
Securities and precious metalstrading portfolios 11,190 92,636 8,826 76,554 2,364 16,082
Financial investments from the banking business 4,589 11,181 3,173 7,271 1,416 3,910
Investments from the insurance business 42,655 50,732 34,820 43,464 8,029 7,074
Non-consolidated participations 583 609 1,184 807 –601 –198
Tangible fixed assets 4,775 1,496 5,414 2,072 –639 –576
Intangible assets 0 181 0 0 0 181
Accrued income and prepaid expenses 1,726 7,693 1,448 6,056 278 1,637
Other assets 10,426 46,082 12,745 28,700 –2,319 17,382
TOTAL ASSETS 183,361 506,207 179,131 445,265 4,591 60,581
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities in respect of money market paper 503 12,017 499 10,737 4 1,280
Due to banks 17,544 162,692 16,822 177,750 722 –15,058
Commitments from the insurance business 3,124 2,921 2,514 2,499 610 422
Due to customers in savings and investment accounts 44,290 4,243 43,403 3,893 887 350
Due to customers, other 63,567 132,004 43,797 122,766 19,770 9,238
Medium-term notes 7,216 0 8,681 0 –1,465 0
Bonds and mortgage-backed bonds 12,771 32,823 12,665 14,915 106 17,908
Accrued expenses and deferred income 3,496 8,181 1,878 6,871 1,618 1,310
Other liabilities 9,441 48,727 12,753 30,422 –3,312 18,305
Valuation adjustments and provisions 3,712 3,417 3,382 1,438 330 1,979
Technical provisions for the insurance business 43,802 47,426 40,001 43,849 3,801 3,577
Shareholders’ equity (excluding minority interests) 11,289 12,357 11,992 9,025 –703 3,332
Minority interests 47 1,958 45 1,799 2 159
TOTAL LIABILITIES 220,802 468,766 198,432 425,964 22,370 42,802
85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
36 BALANCE SHEET BY CURRENCIES AT 31 DECEMBER 1997 IN CHF M Swiss francs US dollars Other currencies Total
ASSETS
Cash and other liquid assets 2,007 893 504 3,404
Money market claims 3,235 8,477 12,301 24,013
Due from banks 11,037 63,334 71,407 145,778
Claims from the insurance business 2,031 570 3,823 6,424
Due from customers 32,211 62,233 50,047 144,491
Mortgages 68,197 6,768 3,939 78,904
Securities and precious metals trading portfolios 22,273 39,423 42,130 103,826
Financial investments from the banking business 5,148 3,973 6,649 15,770
Investments from the insurance business 35,014 5,935 52,438 93,387
Non-consolidated participations 429 138 625 1,192
Tangible fixed assets 4,164 901 1,206 6,271
Intangible assets 0 0 181 181
Accrued income and prepaid expenses 1,661 3,256 4,502 9,419
Other assets 12,482 42,456 1,570 56,508
TOTAL ASSETS 199,889 238,357 251,322 689,568
At 31 December 1996 180,360 264,265 179,771 624,396
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities in respect of money market paper 28 10,055 2,437 12,520
Due to banks 17,010 68,104 95,122 180,236
Commitments from the insurance business 2,945 196 2,904 6,045
Due to customers in savings and investment accounts 48,257 261 15 48,533
Due to customers, other 47,746 85,855 61,970 195,571
Medium-term notes 7,216 0 0 7,216
Bonds and mortgage-backed bonds 13,865 19,626 12,103 45,594
Accrued expenses and deferred income 3,620 4,993 3,064 11,677
Other liabilities 16,417 30,301 11,450 58,168
Valuation adjustments and provisions 3,615 2,010 1,504 7,129
Technical provisions for the insurance business 39,650 4,697 46,881 91,228
Shareholders’ equity (excluding minority interests) 5,957 7,472 10,217 23,646
Minority interests 56 387 1,562 2,005
TOTAL LIABILITIES 206,382 233,957 249,229 689,568
At 31 December 1996 187,541 273,113 163,742 624,396
86
37 PARTICIPATIONS, principal fully consolidated participations at 31 December 1997Company(% of equity capital held by the company exercising control) Domicile Capital in m Business unit
Credit Suisse Group Zurich
99.98 Credit Suisse Zurich CHF 3,114.7 CS/CSPB
99.99 Credit Suisse First Boston Zurich CHF 3,148.8 CSFB/CSAM
99.90 “Winterthur” Swiss Insurance Company Winterthur CHF 193.7 Winterthur
98.63 Neue Aargauer Bank Aarau CHF 273.8 CS
100.00 Bank Leu Ltd. Zurich CHF 400.0 CSPB
100.00 Bank Hofmann AG Zurich CHF 20.0 CSPB
86.69 Clariden Holding AG Zurich CHF 6.5 CSPB
100.00 Affida Bank Zurich CHF 7.0 CSPB
100.00 Bank Heusser & Cie AG Basle CHF 10.0 CSPB
100.00 Banque Leu (Luxembourg) SA Luxembourg CHF 25.0 CSPB
100.00 CS Life Zurich CHF 25.0 Winterthur
100.00 Credit Suisse Fides Zurich CHF 5.0 CSPB
100.00 Credit Suisse Trust AG Zurich CHF 5.0 CSPB
100.00 Credit Suisse Trust Holdings Ltd. St. Peter Port GBP 5.0 CSPB
66.67 IT Services AG Dübendorf CHF 2.4
100.00 Credit Suisse First Boston Private Equity Zug CHF 0.1 CSFB
100.00 Merban Equity Zug CHF 0.1 CSFB
100.00 CSFB IGP Zug CHF 0.1 CSFB
99.98 Credit Suisse Zurich CHF 3,114.7 CS/CSPB
89 City Bank Zurich CHF 5.0 CS
100 Denaro-Hypo Bank Aarau CHF 5.0 CS
100 Schweizerische Schiffshypothekenbank Basle CHF 15.0 CS
100 CS Leasing AG Zurich CHF 31.0 CS
100 CS Immobilien Leasing AG Zurich CHF 3.0 CS
90 Innoventure Capital AG Zurich CHF 10.0 CS
100 WECO Inkasso AG Zurich CHF 0.5 CS
100 ABZ Finanz- und Beteiligungsgesellschaft AG Zug CHF 4.0 CS
100 Bank für Handel und Effekten Zurich CHF 30.0 CSPB
100 Credit Suisse (UK) Ltd. London GBP 16.5 CSPB
100 Credit Suisse (Guernsey) Ltd. St. Peter Port GBP 3.0 CSPB
100 Credit Suisse (Gibraltar) Ltd. Gibraltar GBP 5.0 CSPB
100 Credit Suisse (Bahamas) Ltd. Nassau USD 12.0 CSPB
87 Credit Suisse Hottinguer Paris FRF 346.9 CSPB
100 Credit Suisse (Deutschland) AG Frankfurt DEM 10.0 CSPB
100 Credit Suisse (Italia) S.p.A. Milan ITL 25,000.0 CSPB
100 Credit Suisse Securities Ltd. London GBP 10.0 CSPB
100 Swiss American Corporation New York USD 38.9 CSPB
100 Credit Suisse Asset Management Inc. New York USD 19.3 CSAM
93 Swiss American Securities, Inc. New York USD 8.3 CSPB
87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Principal fully consolidated participations (continued)Company(% of equity capital held by the company exercising control) Domicile Capital in m Business unit
99.99 Credit Suisse First Boston Zurich CHF 3,148.8 CSFB/CSAM
100 Credit Suisse First Boston, Inc. New York USD 2.2 CSFB
100 Credit Suisse First Boston (International) AG Zug CHF 37.5 CSFB
100 Credit Suisse First Boston Canada Toronto CAD 157.3 CSFB
100 Credit Suisse First Boston Aktiengesellschaft Frankfurt DEM 155.0 CSFB
99 Credit Suisse First Boston (Moscow) A/O Moscow USD 20.0 CSFB
100 Credit Suisse First Boston Custody (Moscow) Ltd. Moscow USD 0.5 CSFB
100 Credit Suisse (Luxembourg) S.A. Luxembourg LUF 624.0 CSFB
100 Credit Suisse First Boston (Cyprus) Limited Limassol USD 60.0 CSFB
75 Credit Suisse First Boston (India) Securities Private Ltd. Mumbai INR 238.5 CSFB
100 Credit Suisse First Boston (Ukraine) Kiev USD 15.0 CSFB
100 Finanz AG Zurich CHF 15.0 CSFB
100 Credit Suisse First Boston Bullion (Japan) Ltd. Tokyo JPY 1,000.0 CSFB
51 Finorafa AG Chiasso CHF 4.0 CSFB
100 Credit Suisse First Boston Finanziaria S.p.A. Milan ITL 1,000.0 CSFB
80 Credit Suisse Financial Products London USD 482.3 CSFB
100 Credit Suisse First Boston International (Guernsey) Ltd. St. Peter Port USD 350.1 CSFB
100 CSFB Investment (Guernsey) Limited St. Peter Port USD 200.0 CSFB
100 CSFB (Latin America) Holdings LLC Grand Cayman USD 84.6 CSFB
100 Credit Suisse First Boston Australia (Finance) Ltd. Melbourne AUD 10.0 CSFB
100 Boomskill Limited London GBP 2.5 CSFB
100 Credit Suisse First Boston Finance Ltd. Hong Kong USD 1.9 CSFB
100 Veryfinance AG Zug CHF 0.5 CSFB
100 Credit Suisse First Boston Finance (Panama) S.A. Panama City USD 0.3 CSFB
100 Credit Suisse First Boston Finance (Gibraltar) Ltd. Marina Bay GBP 0.1 CSFB
100 Credit Suisse First Boston Finance (Guernsey) Ltd. St. Peter Port USD 0.2 CSFB
100 Limpa AG Zurich CHF 0.1 CSFB
100 Credit Suisse Financial Services Inc. Wilmington USD ~ CSFB
100 Credit Suisse First Boston Finance B.V. Amsterdam NLG ~ CSFB
100 Credit Suisse First Boston Australia (Holdings) Ltd. Sydney AUD 42.6 CSFB
100 Credit Suisse Asset Management International Fund Holding Zurich CHF 20.0 CSAM
100 Credit Suisse Trust & Banking Co. Ltd. Tokyo JPY 9,000.0 CSAM
100 Credit Suisse Asset Management (UK) Holding Ltd. London GBP 11.0 CSAM
100 Credit Suisse Asset Management Ltd. London GBP ~ CSAM
100 Credit Suisse Gestion SGIIC, S.A. Madrid ESP 200.0 CSAM
100 Credit Suisse Asset Management (Guernsey) Ltd. St. Peter Port GBP 1.0 CSAM
100 Credit Suisse Asset Management (Nederland) Holding B.V. Amsterdam NLG 1.7 CSAM
100 Credit Suisse Asset Management (Polska) Sp.z.o.o. Warsaw USD 0.9 CSAM
100 Credit Suisse Asset Management (Praha) s.r.o. Prague CZK 1.0 CSAM
100 Credit Suisse Asset Management (Australia) Sydney AUD 0.3 CSAM
100 Credit Suisse Investment Corporation Wilmington USD ~ CSAM
100 Credit Suisse Capital Corporation New York USD ~ CSAM
100 BEA Associates New York USD 6.7 CSAM
88
Principal fully consolidated participations (continued)Company(% of equity capital held by the company exercising control) Domicile Capital in m Business unit
99.90 “Winterthur” Swiss Insurance Company Winterthur CHF 193.7 Winterthur
Switzerland
100 Winterthur Life Winterthur CHF 150.0 Winterthur
100 The Federal Zurich CHF 10.0 Winterthur
100 Winterthur Legal Assistance Winterthur CHF 6.0 Winterthur
100 Vitodurum Insurance Winterthur CHF 40.0 Winterthur
100 Vitodurum Holding Winterthur CHF 5.0 Winterthur
100 Swissline Wallisellen CHF 0.5 Winterthur
67 Winterthur Columna Winterthur CHF 1.5 Winterthur
100 Winterthur International Winterthur CHF 1.0 Winterthur
Germany
100 Winterthur Beteiligungsgesellschaft m.b.H. Wiesbaden DEM 70.0 Winterthur
75 WINCOM Versicherungs-Holding AG Wiesbaden DEM 102.7 Winterthur
61 DBV-Winterthur Group Wiesbaden DEM 169.4 Winterthur
Italy
100 Winterthur Holding Italia Milan ITL 10,000.0 Winterthur
100 Winterthur Assicurazioni Milan ITL 345,000.0 Winterthur
100 Winterthur Vita S.p.A. Milan ITL 81,500.0 Winterthur
Spain
100 Hispanowin S.A. Barcelona ESP 11,798.5 Winterthur
100 Winterthur Seguros Generales Barcelona ESP 5,744.3 Winterthur
80 Winterthur Asistencia Barcelona ESP 420.0 Winterthur
100 Winterthur Vida Espanola Barcelona ESP 5,819.0 Winterthur
100 Winterthur Salud de Seguros Madrid ESP 1,205.7 Winterthur
100 Equitativa Riesgos Diversos Madrid ESP 2,322.6 Winterthur
100 Winterthur Pensiones Barcelona ESP 600.0 Winterthur
Belgium
85 Winterthur-Europe Assurances Brussels BEF 1.9 Winterthur
100 Assurance Group Josi Brussels BEF 291.3 Winterthur
100 ASG Accidents du Travail Brussels BEF 60.0 Winterthur
Luxembourg
100 Winterthur-Europe Life Luxembourg LUF 132.0 Winterthur
UK
100 Winterthur (UK) Holdings London GBP 42.6 Winterthur
100 Churchill Insurance Bromley GBP 60.0 Winterthur
100 Winterthur Life UK Holdings Basingstoke GBP ~ Winterthur
100 Winterthur Life UK Basingstoke GBP 26.4 Winterthur
100 Winterthur International London GBP 35.0 Winterthur
Austria
100 Winterthur Versicherungen Vienna ATS 127.5 Winterthur
100 Winterthur Pensionskassen Vienna ATS 70.0 Winterthur
100 Wintisa Vienna ATS 1.0 Winterthur
Portugal
100 Europeia Seguros Lisbon PTE 2,220.0 Winterthur
89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Principal fully consolidated participations (continued)Company(% of equity capital held by the company exercising control) Domicile Capital in m Business unit
“Winterthur” Swiss Insurance Company (continued)
France
50 Assurcrédit Paris FRF 75.0 Winterthur
75 Rhodia Assurance Lyon FRF 60.0 Winterthur
Czech Republic
65 Winterthur pojist’ouna, a.s. Prague CZK 363.0 Winterthur
65 Winterthur penzijní fond, a.s. Brno CZK 61.5 Winterthur
Hungary
65 Winterthur Pénztárszolgáltató Rt. Budapest HUF 370.0 Winterthur
100 Winterthur Biztosito Rt. Budapest HUF 1,000.0 Winterthur
Poland
45 Azur Ostoja Warsaw PLN 1.0 Winterthur
45 Azur Zycie Warsaw PLN 7.5 Winterthur
USA
100 Winterthur U.S. Holdings Wilmington USD 30.0 Winterthur
100 Blue Ridge Simsbury USD 6.1 Winterthur
100 General Casualty Sun Prairie USD 3.0 Winterthur
100 Republic Financial Services Dallas USD 5.0 Winterthur
100 Southern Guaranty Montgomery USD 2.0 Winterthur
100 Unigard Bellevue USD 3.0 Winterthur
100 Winterthur Reinsurance of America New York USD 3.0 Winterthur
100 Winterthur Life U.S. Holdings Wilmington USD 30.0 Winterthur
100 Winterthur Life Re Dallas USD 1.5 Winterthur
Canada
100 Winterthur Canada Financial Toronto CAD ~ Winterthur
100 The Citadel General Toronto CAD 34.1 Winterthur
100 L’Unique Quebec CAD 7.0 Winterthur
Other countries
100 Winterthur Empreendimentos e Participações São Paulo BRL 1.6 Winterthur
100 Winterthur International (SA) Johannesburg ZAR 37.0 Winterthur
100 Winterthur International Argentina S.A. Buenos Aires USD 0.5 Winterthur
100 Winterthur Holdings Australia Sydney AUD 54.1 Winterthur
51 HIH Winterthur International Holdings Ltd. Sydney AUD 78.5 Winterthur
97 Winterthur Insurance (Far East) Singapore SGD 17.5 Winterthur
100 Winterthur Swiss Insurance (Asia) Hong Kong HKD 150.0 Winterthur
100 Winterthur Insurance (Asia) Hong Kong HKD 150.0 Winterthur
60 Winterthur Life Indonesia Jakarta IDR 16,500.0 Winterthur
91 Winterthur International Hamilton, Bermuda USD 2.4 Winterthur
92 Winterthur Overseas Hamilton, Bermuda USD 0.3 Winterthur
100 Windsor Parc Ltd. Hamilton, Bermuda USD 1.0 Winterthur
29 Harrington Holdings Hamilton, Bermuda USD 70.0 Winterthur
100 Winterthur Finance Ltd. British Virgin Islands GBP ~ Winterthur
90
Principal participations at 31 December 1997 valued according to the equity methodCompany Domicile Capital in m Equity interest in %
Credit Suisse Group
Inreska Ltd. St. Peter Port GBP 3.0 100.0
Göhner Merkur AG Zurich CHF 80.0 33.2
Credit Suisse
Winterthur-Columna Zurich CHF 1.5 33.3
Cornèr Bank Ltd. Lugano CHF 12.0 27.3
Innoventure Equity Partners AG Zurich CHF ~ 30.0
Credit Suisse First Boston
Valcambi S.A. Balerna CHF 12.0 100.0
Innovent Capital Ltd. Grand Cayman CHF 36.3 38.6
Premex AG Zurich CHF 1.5 33.3
Reinsurance Finance Consultants AG Zurich CHF 0.8 33.3
“Winterthur” Swiss Insurance Company
Norwich Winterthur Holdings Norwich GBP 54.5 48.5
Norwich Winterthur Reinsurance Corp. Norwich GBP 57.8 86.4
Commonwealth Insurance Grand Cayman USD 0.1 91.0
Winterthur Internacional Brasil S.A. São Paulo BRL 2,300.0 100.0
91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Principal participations at 31 December 1997 valued at costCompany Domicile Capital in m Equity interest in %
Credit Suisse Group
Fides Information Services Zurich CHF 1.0 66.7
Capital Union Dubai USD 30.0 25.0
Credit Suisse
Swiss Mortgage Bond Bank Zurich CHF 300.0 16.8
Credit Suisse First Boston
Banco General de Negocios Buenos Aires ARS 38.0 19.7
Banco Exterior Suiza S.A. Zurich CHF 115.0 10.0
Banco Comercial S.A. Montevideo UYU 215.9 17.4
Telekurs Holding AG Zurich CHF 45.0 17.4
Intersettle Swiss Corp. Zurich CHF 36.0 9.5
SEGA Schweiz. Effekten Giro Olten CHF 10.0 19.8
SNOC Swiss Nominee Company Zurich CHF 2.0 25.0
Swiss Online AG Zurich CHF 5.0 6.0
Euro-Clear Clearance System Ltd. London GBP 2.5 6.0
NCO Dealer Soc. Fin. Lisbon PTE 500.0 18.0
San Luis Financial and Investment Co. Ltd. Panama City PAB 0.5 12.1
Cedel Luxembourg USD 78.5 0.7
Link Telecom Ltd. St. Peter Port USD ~ 50.0
SWIFT La Hulpe BEF 439.9 1.6
“Winterthur” Swiss Insurance Company
Auto-Bestandteil-Wiederverwertung AG Grolley CHF 0.2 50.0
Expertisa Vorsorge-Beratungen Winterthur CHF 0.1 100.0
Gartenhotel Winterthur CHF 2.5 100.0
Intershop Holding Zurich CHF 137.2 24.2
Intershop Properties USA AG Zurich CHF 62.0 10.0
IT Services AG Dübendorf CHF 2.4 33.3
Lehr-und Versuchswerkstätte Volketswil CHF 0.3 100.0
RFC Reinsurance Finance Consultants Zurich CHF 0.8 33.3
Tertianum Management AG Herrenschwanden CHF 0.5 14.9
Technopark Immobilien Zurich CHF 40.0 25.0
Wincare Versicherungen Winterthur CHF 0.1 100.0
Winterthur Financial Services Winterthur CHF 0.5 100.0
Zürcher Freilager AG Zurich CHF 4.0 36.1
DBV Allgemeine Dilbeek near Brussels BEF 500.0 100.0
Winterthur Financial Services Luxembourg LUF 25.0 100.0
Winterthur Fund Management Co. Luxembourg LUF 5.0 100.0
Winterthur Research SA Barcelona ESP 15.0 100.0
Winterthur-Service SA Barcelona ESP 25.0 100.0
Chiyoda Fire & Marine Insurance Tokyo JPY 18,390.8 6.3
Winterthur International Services Hamilton, Bermuda USD ~ 100.0
Seguros ATLAS Mexico City MXN 50.0 30.0
92
REPORT OF THE GROUP’S AUDITORS TO THE ANNUAL GENERAL MEETING OF CREDIT SUISSE GROUP, ZURICH
As auditors of the Group, we have audited the consolidated financial statements (income statement, balance sheet, statement of source and
application of funds and notes) of Credit Suisse Group for the year ended 31 December 1997.
These consolidated financial statements are the responsibility of the Board of Directors. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit. We confirm that we meet the legal requirements concerning professional
qualification and independence.
Our audit was conducted in accordance with auditing standards promulgated by the profession in Switzerland and with the
International Standards on Auditing issued by the International Federation of Accountants (IFAC), which require that an audit be planned and
performed to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. We
have examined on a test basis evidence supporting the amounts and disclosures in the consolidated financial statements. We have also
assessed the accounting principles used, significant estimates made and the overall consolidated financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the financial position, results of operations and the
source and application of funds in accordance with Swiss accounting rules for banks, modified for the use of pooling-of-interests method of
accounting for a business combination and the Swiss accounting and reporting recommendations (ARR) for the insurance business of the
Group, both of which are explained in the notes to the consolidated financial statements, and comply with Swiss law and the Listing Rules of
the Swiss Exchange. Furthermore, the consolidated financial statements comply with European Union directives (4th, 7th and directive for
banks), except for the deviations described in the notes to the consolidated financial statements.
We recommend that the consolidated financial statements submitted to you be approved.
KPMG Klynveld Peat Marwick Goerdeler SA
Brendan Nelson Bruce A. Mathers
Chartered Accountant Chartered Accountant
Auditors in Charge
Zurich,16 March 1998
93