credit-suisse Quarterly Report Q1/2002
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Transcript of credit-suisse Quarterly Report Q1/2002
QUARTERLY REPORT 2002 Q1
Credit Suisse Group is a leading global financial services company headquartered in Zurich.
Credit Suisse Financial Services provides private clients and small and medium-sized companies with
private banking and financial advisory services, banking products, and pension and insurance solutions from
Winterthur. Credit Suisse First Boston, the investment bank, serves global institutional, corporate,
government and individual clients in its role as a financial intermediary. Credit Suisse Group’s registered
shares (CSGN) are listed in Switzerland, Frankfurt and Tokyo, and in the form of American Depositary
Shares (CSR) in New York. The Group employs around 80,000 staff worldwide. As of March 31, 2002,
it reported assets under management of CHF 1,407.0 billion.
1 Editorial 2 Financial highlights Q1/2002 4 An overview of Credit Suisse Group 7 Review of business units 7 Credit Suisse Financial Services 15 Credit Suisse First Boston 23 Consolidated results Credit Suisse Group 23 Consolidated income statement 24 Consolidated balance sheet 25 Selected notes 29 Risk Management Information for investors
This symbol is used to indicate topics on which further information is available on our website. Go to www.credit-suisse.com/q1results2002/bookmarks.html to findlinks to the relevant information. This additional information indicated is openly accessible and does not form part of the Quarterly Report. Some areas of CreditSuisse Group’s websites are only available in English.
Cautionary statement regarding forward-looking informationThis Quarterly Report contains statements that constitute forward-looking statements. In addition, in the future we, and others on our behalf, may make statements that con-stitute forward-looking statements. Such forward-looking statements may include, without limitation, statements relating to our plans, objectives or goals; our future economicperformance or prospects; the potential effect on our future performance of certain contingencies; and assumptions underlying any such statements.
Words such as “believes,” “anticipates,” “expects,” “intends” and “plans” and similar expressions are intended to identify forward-looking statements but are not the exclu-sive means of identifying such statements. We do not intend to update these forward-looking statements except as may be required by applicable laws.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projectionsand other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differmaterially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include (i) market and interest ratefluctuations; (ii) the strength of the global economy in general and the strength of the economies of the countries in which we conduct our operations in particular; (iii) the abilityof counterparties to meet their obligations to us; (iv) the effects of, and changes in, fiscal, monetary, trade and tax policies, and currency fluctuations; (v) political and socialdevelopments, including war, civil unrest or terrorist activity; (vi) the possibility of foreign exchange controls, expropriation, nationalization or confiscation of assets in countries inwhich we conduct our operations; (vii) the ability to maintain sufficient liquidity and access capital markets; (viii) operational factors such as systems failure, human error, or thefailure to properly implement procedures; (ix) actions taken by regulators with respect to our business and practices in one or more of the countries in which we conduct ouroperations; (x) the effects of changes in laws, regulations or accounting policies or practices; (xi) competition in geographic and business areas in which we conduct our opera-tions; (xii) the ability to retain and recruit qualified personnel; (xiii) the ability to maintain our reputation and promote our brands; (xiv) the ability to increase market share and con-trol expenses; (xv) technological changes; (xvi) the timely development and acceptance of our new products and services and the perceived overall value of these products andservices by users; (xvii) acquisitions, including the ability to integrate successfully acquired businesses; and (xviii) our success at managing the risks involved in the foregoing.
We caution you that the foregoing list of important factors is not exclusive; when evaluating forward-looking statements, you should carefully consider the foregoing factorsand other uncertainties and events, as well as the risks identified in our Form 20-F and reports on Form 6-K filed with the US Securities and Exchange Commission.
EDITORIAL
Lukas MühlemannChairman and Chief Executive Officer
Dear shareholders, clients and colleagues
Credit Suisse Group marked a return to profitability in thefirst quarter of 2002 despite continuing challengingmarket conditions.
The Group reported a net profit of CHF 368 million,compared with a net loss of CHF 830 million in the fourthquarter 2001. Our net operating profit, excluding theamortization of acquired intangible assets and goodwill,amounted to CHF 686 million, up 11% from the previousquarter, as operating expenses declined 6%.
These results were achieved despite unfavorableresults from the Group’s insurance businesses, where the income statement recognition of lower equity valua-tions had a negative impact of CHF 455 million whencompared with the investment return in the first quarter2001. In addition, the Group recognized another write-down of its investment in Swiss Life, amounting toCHF 154 million.
At Credit Suisse Financial Services, the PrivateBanking and Corporate & Retail Banking businessesperformed well. The Group’s insurance businessesachieved above-average growth and improved their tech-nical results. However, the continuing weak equitymarkets impacted their investment income and net profit.The strategy to invest in building our European onshoredistribution capability proved even more critical given theItalian tax amnesty. Our efforts in Italy, Germany andSpain are central to our European wealth managementfranchise.
At Credit Suisse First Boston, we saw a substantialimprovement in results due in large part to the unit’s costreduction efforts and continued strong market shares.
Credit Suisse First Boston had a number one ranking inM&A and high yield debt, and ranked fourth in equity newissuance and in debt capital markets.
The whole Group benefited from synergies andimproved efficiency as a result of the streamlining of itsstructure with the creation of two business units – CreditSuisse Financial Services, which combines our PrivateBanking, Corporate & Retail Banking, Life & Pensionsand Insurance businesses, and Credit Suisse FirstBoston, which now also includes the Group’s assetmanagement business.
Going forward, we intend to continue focusing onachieving further progress in our cost-control efforts andmaintaining our momentum in terms of growth andmarket share.
Lukas Mühlemann
May 2002
www.credit-suisse.com 1
CREDIT SUISSE GROUP F INANCIAL HIGHLIGHTS Q1/2002
Share data
Shares issued Shares repurchased
Shares outstanding
Share price in CHF
Market capitalization in CHF m
Book value per share in CHF
Share price in CHF
High Low
Earnings per share in CHF
Basic earnings per share Basic earnings per share – operating 1)
Diluted earnings per shareDiluted earnings per share – operating 1)
All share-related data have been adjusted for the 4-for-1 share split effective as of August 15, 2001.1) Excluding amortization of acquired intangible assets and goodwill as well as exceptional items of CHF 1,092 m in 4Q2001, all net of tax.
Change in %from 31.12.01
00
0
(10
(10
0
Change in %from 1Q2001
(15 (19
Change in %from 1Q2001
(74(60(74(60
)
)
) )
))))
4Q2001
71.3051.60
4Q2001
(0.700.52
(0.690.52
31.03.02
1,196,874,4647,730,000
1,189,144,464
63.75
75,808
29.99
1Q2001
87.0069.75
1Q2001
) 1.191.44
) 1.181.42
1Q2002
73.6056.50
1Q2002
0.310.580.310.57
31.12.01
1,196,609,8117,730,000
1,188,879,811
70.80
84,173
29.92
Change in %from 4Q2001
3 9
Change in %from 4Q2001
–12
–10
Share performanceSwiss Market Index (rebased) Credit Suisse Group
19981997 1999 200 2001 2002
1009080
70
60
50
40
30
20
2
Market capitalizationAs of end of reporting period (in CHF bn)
90
100
80
70
50
30
20
60
40
10
091 92 93 94 95 96 97 98 99 00 Q1/02
Financial calendar
Annual General Meeting 2002 Friday, May 31, 2002
Second quarter results 2002 Wednesday, August 14, 2002
Proposed distribution of par value reduction Wednesday, August 14, 2002
Third quarter results 2002 Thursday, November 14, 2002
Consolidated income statement in CHF m
Operating incomeGross operating profitNet operating profit 1)
Net profitCash flow
Return on equity (ROE) in %
Reported ROEOperating ROE 1)
Consolidated balance sheet in CHF m
Total assetsShareholders’ equityMinority interests in shareholders’ equity
BIS data in CHF m
BIS risk-weighted assets BIS tier 1 capital
of which non-cumulative perpetual preferred securitiesBIS total capital
BIS capital ratios in %
BIS tier 1 ratio Credit SuisseCredit Suisse First Boston 2)
Credit Suisse Group 3)
BIS total capital ratio Credit Suisse Group
Assets under management/client assets 4)in CHF bn
Advisory assets under managementDiscretionary assets under managementTotal assets under managementClient assets
Net new assets 4)in CHF bn
Net new assets
Number of employees
Switzerland bankinginsurance
Outside Switzerland banking insurance
Total employees Credit Suisse Group
1) Excluding amortization of acquired intangible assets and goodwill as well as exceptional items of CHF 1,092 m in 4Q2001, all net of tax. / 2) Ratio is based on a tier 1capital of CHF 15.1 bn (December 31, 2001: CHF 15.2 bn), of which non-cumulative perpetual preferred securities is CHF 1.1 bn (for both dates). / 3) Ratio is based on atier 1 capital of CHF 20.8 bn (December 31, 2001: CHF 21.2 bn), of which non-cumulative perpetual preferred securities is CHF 2.1 bn (for both dates). / 4) Certainrestatements have been made to prior-period amounts to conform to the current presentation.
Change in %from 1Q2001
(25(41(60(74
) (31
Change in %from 1Q2001
(71(54
Change in %from 31.12.01
50
(1
Change in %from 31.12.01
4(1(1(1
31.12.01
6.912.99.5
15.7
Change in %from 31.12.01
(40
(21
Change in %from 1Q2001
) (46
Change in %from 31.12.01
0(1(43
(1
)))))
))
)
)))
)
)
)
))
)
Change in %from 4Q2001
24511
–(3
Change in %from 4Q2001
–17
31.12.01
1,022,51338,9213,121
31.12.01
222,87421,1552,076
34,888
31.03.02
7.1 12.4 9.0
14.8
31.12.01
723.5707.1
1,430.62,138.2
Change in %from 4Q2001
(27
31.12.01
21,7726,871
28,41522,64179,699
4Q2001
8,1611,264
616(830
1,802
4Q2001
) 6.1(9.3 6.6
4Q2001
18.5
1Q2001
11,0913,1071,726
) 1,4282,535
1Q2001
) 13.916.7
31.03.02
1,070,28038,9753,077
31.03.02
232,41920,8412,058
34,366
31.03.02
696.4710.6
1,407.02,161.4
1Q2001
24.9
31.03.02
21,7636,835
27,26523,36979,232
8,1611,264
616(830
1,802
(9.36.6(12
.55.2
14.516.57.8
17.9
8,161
1,264616
(8301,802
1Q2002
8,3301,832
686368
1,745
1Q2002
4.17.7
1Q2002
13.5
www.credit-suisse.com 3
AN OVERVIEW OF CREDIT SUISSE GROUP
Credit Suisse Group returned to profitability in the first quarter of 2002. The results reflecta strong performance in the Private Banking and Corporate & Retail Banking businesses,progress in costs and revenues at Credit Suisse First Boston, and good growth and good technical results in insurance offset by valuation adjustments in investment income. Net operating profit, excluding the amortization of acquired intangible assets and goodwill, totaled CHF 686 million, up 11% versus the previous quarter. The Group’s overall operating expenses decreased 6%. The Group’s asset gathering businesses recorded CHF 13.5 billion in net new assets from strong private banking flows.
In the first quarter of 2002, the Group posted a net oper-ating profit of CHF 686 million, excluding the amortizationof acquired intangible assets and goodwill, representingan increase of 11% from the fourth quarter of 2001.When compared with the first quarter 2001, a periodcharacterized by better financial market conditions, netoperating profit declined 60%. Net profit stood at CHF368 million, compared with a net profit of CHF 1.4 billionin the first quarter 2001 and a net loss of CHF 830million in the previous quarter that primarily reflectedexceptional items at Credit Suisse First Boston.
4
The Group recognized another writedown of its investmentin Swiss Life amounting to CHF 154 million.
Operating earnings per share for the first quarter of2002 stood at CHF 0.58. This compared with CHF 0.52in the fourth quarter and CHF 1.44 in the first quarter of2001. Credit Suisse Group’s annualized operating returnon equity was 7.7% in the first quarter of 2002,compared with 6.6% in the previous quarter and 16.7%in the corresponding period of 2001.
Overview of business unit results in CHF m
Operating income
Personnel expensesOther operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets 1)
Amortization of acquired intangible assets and goodwill
Valuation adjustments, provisions and losses
Profit before extraordinary items and taxes
Extraordinary income/(expenses), net Taxes
Net profit before minority interests
Minority interests
Net profit
Reconciliation to net operating profit
Amortization of acquired intangible assets and goodwill
Exceptional itemsTax impact
Net operating profit
The Group’s consolidated results are prepared in accordance with Swiss GAAP while the Group’s segment reporting principles are applied for the presentation of thebusiness unit results. For a detailed description of the Group’s segment reporting principles please refer to our Annual Report 2001, which is available on our websitewww.credit-suisse.com, and to the footnotes to the business unit results. This presentation of the business unit results is provided to assist in evaluating the operatingperformance of the business units, which should be considered in the context of the Group’s consolidated financial statements. The difference between the business unittotals and the Credit Suisse Group figure represents the consolidation adjustments including the Corporate Center. 1) Includes amortization of Present Value of Future Profits (PVFP) from the insurance businesses within Credit Suisse Financial Services.
1Q2001
11,091
6,0301,954
7,984
3,107
483
361
238
) 2,025
) 22(572
) 1,475
(47
) 1,428
3610
) (63
1,726
)
)
)
4Q2001
8,161
4,6252,272
6,897
1,264
699
427
1,289
(1,151
) (257) 538
(870
) 40
(830
4271,428
) (409
616
1Q2002
8,330
4,8371,661
6,498
1,832
481
385
471
495
(5(87
403
(35
368
3850
(67
686
1Q2001
7,121
4,4291,451
5,880
) 1,241
220
345
92
) 584
(2)(137)
) 445
) 0
) 445
3450
) (63)
) 727
4Q2001
4,572
3,1741,747
4,921
(349
282
379
1,207
) (2,217
0633
) (1,584
(1
) (1,585
3791,428
) (410
(188
1Q2002
5,338
3,2161,302
4,518
820
207
357
338
(82
050
(32
0
(32
3570
(66
259
1Q2001
4,041
1,427874
2,301
1,740
142
17
128
1,453
2) (370)
1,085
(29)
1,056
170
) 0
1,073
4Q2001
3,582
1,2441,065
2,309
1,273
296
52
48
877
) 8) (150
735
) 22
757
520
) (1
808
1Q2002
3,306
1,443814
2,257
1,049
205
29
99
716
(3(119
594
(2
592
290
(1
620
Credit Suisse GroupCredit Suisse First BostonCredit Suisse Financial Services
274.2
Assets under management/client assets in CHF bn
Credit Suisse Financial ServicesPrivate BankingAssets under management
of which discretionaryClient assets
Corporate & Retail Banking Assets under managementClient assets
Life & Pensions Assets under management (discretionary)Client assets
InsuranceAssets under management (discretionary)Client assets
Credit Suisse Financial Services Assets under management
of which discretionaryClient assets
Credit Suisse First BostonInvestment Banking Assets under management
of which Private Equity on behalf of clients (discretionary)Client assets
CSFB Financial Services Assets under management
of which discretionaryClient assets
Credit Suisse First BostonAssets under management
of which discretionaryClient assets
Credit Suisse GroupAssets under management
of which discretionaryClient assets
Net new assets in CHF bn
Credit Suisse Financial ServicesPrivate Banking Corporate & Retail Banking Life & Pensions
Credit Suisse Financial Services
Credit Suisse First BostonInvestment Banking 1)
CSFB Financial Services 1) 2)
Credit Suisse First Boston
Credit Suisse Group
2001 figures have been restated to reflect the realignment effective as of January 1, 2002. 1) For the Investment Banking and Private Client Services businesses, measured as the balance from accounts opened minus accounts closed. / 2) Net new discretionaryassets for institutional asset management.
Change in %from 31.12.01
274.21442.0
5.61.7
(2.7 (5.3
(0.2 (0.2
(4.6 (4.6
1.02.00.5
6.74.80.0
(5.3(1.4 1.6
(4.6 (0.5 1.4
(1.6 0.51.1
Change in %from 1Q2001
0.0–
30.4
) (18.2
––
) (76.9
) (45.8
))
))
))
))
))
)
)
)
)
31.12.01
546.8131.5583.3
55.973.3
115.2115.2
30.530.5
748.4278.9802.3
41.729.3
121.7
640.5393.6
1,214.2
682.2428.2
1,335.9
1,430.6707.1
2,138.2
Change in %from 4Q2001
7.0–
66.7
(4.4
––
(62.5
(27.0
31.03.02
557.6138.8593.0
54.469.4
115.0115.0
29.129.1
756.1284.5806.5
44.530.7
121.7
606.4388.2
1,233.2
650.9426.1
1,354.9
1,407.0710.6
2,161.4
1Q2001
9.21.72.3
13.2
–11.7
11.7
24.9
4Q2001
8.6) 0.9
1.8
11.3
0.5) 6.7
7.2
18.5
1Q2002
9.2(1.4 3.0
10.8
3.5(0.8
2.7
13.5
www.credit-suisse.com 5
AN OVERVIEW OF CREDIT SUISSE GROUP
Continued net new asset growthThe Group’s asset gathering businesses maintained theirgrowth momentum in the first quarter, reporting net newassets of CHF 13.5 billion or 0.9% of assets undermanagement, compared with CHF 18.5 billion or 1.4% inthe fourth quarter 2001. The Private Banking business ofCredit Suisse Financial Services accounted for CHF 9.2 billion (CHF 8.6 billion in the fourth quarter 2001).The Group’s total assets under management stood atCHF 1,407.0 billion as of March 31, 2002, a decline of1.6% from December 31, 2001, reflecting the overallweakness in the global financial markets.
Operating income and expensesOperating income amounted to CHF 8.3 billion for thefirst quarter of 2002, up 2% from the fourth quarter anddown 25% from the strong first quarter of 2001.
Operating expenses decreased 6% from the previousquarter to CHF 6.5 billion, and declined 19% from thefirst quarter 2001, reflecting a Group-wide commitmentto reducing costs. At Credit Suisse Financial Services,synergies derived from the new structure — whichcombines Private Banking, Corporate & Retail Banking,Life & Pensions and Insurance into a single business unit— contributed to a 2% decrease in operating expensesfrom the fourth quarter 2001. Compared with the firstquarter 2001, Credit Suisse First Boston’s overall operat-ing expenses were down 26% in US dollar terms.
Main drivers of business unit results Within Credit Suisse Financial Services, the Private Bank-ing business performed well in the first quarter, reportingCHF 9.2 billion in net new assets and a 9% increase innet operating profit before minority interests to CHF 634million quarter-on-quarter. This was achieved in spite ofchallenging market conditions and a lower volume ofsecurities transactions. The Corporate & Retail Bankingbusiness also achieved good results, with net operatingprofit before minority interests up 167% from the fourthquarter, to CHF 120 million, and an improvement in theoperating cost/income ratio to 60.6%. The Life &Pensions and Insurance businesses continued their solidgrowth momentum in the first quarter, reporting organicpremium growth rates of 11% and 10%, respectively,compared with the first quarter 2001 and improving theirtechnical results. First quarter results were, however,negatively impacted by lower investment income. Thiswas due to the income statement recognition of lowervaluations over the past three quarters of equity securitiesheld in the investment portfolios. Life & Pensionsreported a net operating profit before minority interests of CHF 15 million and Insurance recorded a net operatingloss before minority interests of CHF 147 million in thefirst quarter. The Credit Suisse Financial Services busi-ness unit recorded a net operating profit, excluding theamortization of acquired intangible assets and goodwill, ofCHF 620 million in the first quarter of 2002, representing
6
a decrease of 23% compared with the previous quarter. Credit Suisse First Boston successfully maintained itsmarket shares in the first quarter. The strict implementationof cost reduction measures – including headcount reduc-tions and reduced incentive compensation in particular –as well as increased revenues, produced a significantimprovement in Credit Suisse First Boston’s results versusthe previous quarter. The business unit had a net operatingprofit, excluding the amortization of acquired intangibleassets and goodwill as well as exeptional items, of USD155 million (CHF 259 million) versus a net operating lossof USD 114 million (CHF 188 million) in the previousquarter. The Investment Banking segment – comprising theFixed Income, Equity and Investment Banking divisions –reported a healthy increase in operating income of 27%quarter-on-quarter to USD 2.7 billion (CHF 4.6 billion). TheCSFB Financial Services segment reported operatingincome of USD 536 million (CHF 901 million) in the firstquarter, down 10% from the fourth quarter and down 19%from the first quarter 2001, partly reflecting its divestitureof non-core businesses. Credit Suisse Asset Management,which has been integrated into this segment, also sawrevenues decline in comparison with the strong fourthquarter of 2001.
Capital allocation As of January 1, 2002, the Group changed its capitalallocation methodology for its banking businesses to bemore closely aligned with the capital used in the respec-tive segments. Capital is allocated based on the higher ofthe capital adequacy rules set by regulators, the require-ments to maintain certain ratings and the correspondingexpectations of other market constituencies (respectabilitycapital), or the capital requirement as defined in our ownEconomic Risk Capital model. The goodwill associatedwith the acquisitions is held at Corporate Center level.The Group expects to further refine the capital methodol-ogy for insurance during the year.
OutlookAs the challenging market conditions continue into 2002,Credit Suisse Group remains cautious in its outlook for theremainder of the year and expects revenue levels at CreditSuisse First Boston to be lower than in 2001 and earningsat Credit Suisse Financial Services not to exceed 2001levels. However, the Group is confident about the long-termprospects for its core businesses and will continue to focuson controlling costs and achieving growth in key markets.
REVIEW OF BUSINESS UNITS CREDIT SUISSE FINANCIAL SERVICES
Credit Suisse Financial Services performed well across all businesses in the first quarter of2002. The business unit reported a net operating profit, excluding the amortization ofacquired intangible assets and goodwill, of CHF 620 million, down 23% versus the previousquarter and down 42% versus the first quarter 2001. This decline is primarily attributable to an unusually low investment income from the insurance units. Net profit totaled CHF 592million. Assets under management rose 1.0% to CHF 756.1 billion in the first quarter as aresult of CHF 10.8 billion in net new assets.
As of January 1, 2002, Credit Suisse Financial Servicescomprises the Group’s global Private Banking businessand Corporate & Retail Banking business in Switzerland,as well as the two insurance units, Life & Pensions andInsurance.
Credit Suisse Financial Services recorded a net oper-ating profit, excluding the amortization of acquired intangi-ble assets and goodwill, of CHF 620 million in the firstquarter 2002. The business unit’s Private Banking andCorporate & Retail Banking segments performed well,and the Life & Pensions and Insurance segments main-tained their growth momentum while, at the same time,improving their technical results.
The decline in net operating profit, excluding theamortization of acquired intangible assets and goodwill, of23% versus the fourth quarter and of 42% versus the
first quarter 2001 is primarily attributable to an unusuallylow investment return from the insurance businesses.This was due to the income statement recognition oflower valuations over the past three quarters of equitysecurities held in the investment portfolios. This resultedin a CHF 643 million decline in operating income and aCHF 455 million decline in net operating profit, excludingthe amortization of acquired intangible assets and good-will, compared with the first quarter 2001. As the currentvalue of securities holdings are already reflected in thebalance sheet of the insurance unit, the above describedincome statement recognition of lower equity valuationsdoes not impact insurance or Group capital.
The synergies arising from the new structure of CreditSuisse Financial Services, as well as lower provisions forincentive compensation and cost reduction measures, led
Credit Suisse Financial Services business unit income statement in CHF m
Operating income
Personnel expensesOther operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Amortization of Present Value of Future Profits (PVFP)Valuation adjustments, provisions and losses
Net operating profit before extraordinary items and taxes
Extraordinary income/(expenses), net Taxes 1)
Net operating profit before minority interests
Amortization of acquired intangible assets and goodwillTax impact
Net profit before minority interests
Minority interests
Net profit
Reconciliation to net operating profitAmortization of acquired intangible assets and goodwillTax impact
Net operating profit
For further information on the presentation of business unit results, please refer to the “Overview of business unit results” on page 4. 2001 figures have been restated toreflect the realignment effective as of January 1, 2002. The business unit income statement differs from the presentation of the Group’s consolidated results in excludingamortization of Present Value of Future Profits (PVFP) from depreciation of non-current assets.1) Excluding tax impact on amortization of acquired intangible assets and goodwill.
Change in %from 1Q2001
) (18
1) (7
) (2
) (40
) 62) 2
(23
) (49
–) (68
) (44
) 71–
) (45
(93
) (44
) 71–
) (42
)
)
)
)
)
)
)
)
)
)
)
)
Change in %from 4Q2001
3,23(8
16(24
(2
(18
(26(45106
(20
–) (21
(21
) (44 –
(19
) –
(22
(44 –
(23
1Q2001
4,041
1,427874
2,301
1,740
10042
128
1,470
2) (370
1,102
) (17 0
1,085
(29
1,056
17) 0
1,073
4Q2001
3,582
1,2441,065
2,309
1,273
2187848
929
) 8) (151
786
) (52 1
735
) 22
757
52) (1
808
1Q2002
3,306
1,443814
2,257
1,049
1624399
745
(3 (120
622
(29 1
594
(2
592
29(1
620
www.credit-suisse.com 7
REVIEW OF BUSINESS UNITS CREDIT SUISSE FINANCIAL SERVICES
Overview of Credit Suisse Financial Services business unit in CHF m
1Q2002
Operating income 1)
Personnel expenses Other operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Amortization of Present Value of Future Profits (PVFP)Valuation adjustments, provisions and losses
Net operating profit before extraordinary items and taxes
Extraordinary income/(expenses), net Taxes 2)
Net operating profit before minority interests
Amortization of acquired intangible assets and goodwillTax impact
Net profit before minority interests
Minority interests
Net profit
Reconciliation to net operating profitAmortization of acquired intangible assets and of goodwillTax impact
Net operating profit
Average allocated capital 3)
For further information on the presentation of business unit results, please refer to the “Overview of business unit results” on page 4. The presentation of segment results differs fromthe presentation of business unit results by excluding acquisition-related costs and minority interests, and reporting these items at business unit level only.1) Operating income for the insurance business is defined as net premiums earned, less claims incurred and change in technical provisions and expenses for processing claims, lesscommissions, plus net investment income from insurance business. Expenses for handling both claims and investments include: personnel expenses Life & Pensions: CHF 30 m,Insurance CHF 138 m; other operating expenses Life & Pensions: CHF 14 m, Insurance: CHF 69 m. / 2) Excluding tax impact on amortization of acquired intangible assets and good-will. / 3) New definition based on revised capital allocation methodology, as described on page 6.
Credit Suisse Financial Services key information
Cost/income ratio (operating) 1) 2)
Cost/income ratio, (operating) banking 1)
Return on average allocated capitalReturn on average allocated capital (operating) 1)
Average allocated capital in CHF m 3)
Growth in net operating profit 1)
Growth in assets under managementof which net new assetsof which market movement and structural effectsof which acquisitionof which discretionary
Assets under management in CHF bn
Number of employees
1) Excluding amortization of acquired intangible assets and goodwill. / 2) Excluding amortization of Present Value of Future Profits (PVFP) from the insurance businesses withinCredit Suisse Financial Services. / 3) New definition based on revised capital allocation methodology, as described on page 6.
4Q2001
70.5%
65.7%
24.2%25.8%12,170
) (20.2%
5.8%1.6%3.8%
) 0.4%2.6%
31.03.02
756.1
52,053
1Q2002
73.2%
56.9%
19.1%20.0%12,431
(42.2%
1.0%1.4%
–(0.4%0.7%
1Q2001
59.4%
56.5%
28.6%29.0%15,177
) (10.1%
2.0%1.8%
(0.4%0.6%
n/a
31.12.01
748.4
51,206
)
)
Insurance
441
385197
582
(141
4620
) (189
042
(147
Credit Suisse
Financial Services
3,306
1,443814
2,257
) 1,049
1624399
) 745
(3 (120
) 622
(29 1
594
(2
592
29(1
620
12,431
))
)
)
)
)
Life &Pensions
415
211140
351
64
45410
(22
) 0) 37
15
Corporate &Retail
Banking
616
223132
355
261
18–
85
158
) (1 ) (37
120
3,972
Private Banking
1,834
624345
969
865
53–
14
798
(2 (162
634
3,484 4,975
8
Private Banking income statement in CHF m
Net interest incomeNet commission and service fee incomeNet trading incomeOther ordinary income
Operating income
Personnel expensesOther operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Valuation adjustments, provisions and losses 1)
Net operating profit before extraordinary items and taxes
Extraordinary income/(expenses), net Taxes
Net operating profit before minority interests
Increased/(decreased) credit-related valuation adjustments 1)
2001 figures have been restated to reflect the realignment effective as of January 1, 2002. The presentation of segment results differs from the presentation of businessunit results by excluding acquisition-related costs and minority interests, and reporting these items at business unit level only. 1) Increased/decreased valuation adjustments taken at Group level resulting from the difference between the statistical and actual credit provisions.
4Q2001
5001,060
15322
1,735
570420
990
745
99(41
687
) 8) (116
579
(6
Changes in %from 1Q2001
) (14 4
(13 ) (91
(6
(2 ) (4
) (3
(9
) 43(73
(7
–(25
(2 1
)
))
)
))
)
)
)
)
)
)
Changes in %from 4Q2001
(12 161
(73
6
9(18
(2
16
(46
–16
–) 40
9
) 152
1Q2001
5101,186
17967
1,942
636358
994
948
37) 51
860
0) (216
644
) (4
1Q2002
4401,233
1556
1,834
624345
969
865
5314
798
(2 (162
634
2
Private Banking balance sheet information in CHF m
Total assets
Due from customersMortgages
31.12.01
170,364
31,41042,008
31.03.02
168,361
31,26141,808
Change in %from 31.12.01
(1
00
)
to a decrease in operating expenses of 2% versus both theprevious quarter and the corresponding period of 2001.About 40% of the previously announced CHF 350 millionto CHF 400 million in potential improvements to results for2002 had already been realized in the first quarter.
Assets under management rose by 1.0% to CHF756.1 billion as of end-March 2002. Due to the success-ful launch of innovative products, net new assets of CHF 10.8 billion were recorded, exceeding the quarterlyaverage for 2001. This corresponded to 5.8% growth ofassets under management on an annualized basis.
Private BankingAs of January 1, 2002, the Private Banking segment alsoincludes Personal Finance, which was previously reportedseparately, as well as the “affluent clients” segment inSwitzerland. In markets within Europe (the UK, France,Germany, Spain and Italy), Credit Suisse brought thePersonal Finance unit and traditional onshore privatebanking business together under joint management in theform of the European Financial Services Initiative. Prior-period figures have been restated accordingly.
The Private Banking segment posted a net operatingprofit before minority interests of CHF 634 million in thefirst quarter of 2002. This corresponded to a rise of 9%
compared with the previous quarter and a decline of 2%on the corresponding period of 2001. Operating incomerose 6% quarter-on-quarter, but was down 6% versus thestrong first quarter 2001 as the successful sale of newstructured financial products did not fully offset thereduced income from the lower securities transactionvolumes. Operating expenses decreased 2% versus thefourth quarter 2001 due to a reduction in other operatingexpenses, more than offsetting an increase in personnelcosts. Operating expenses were down 3% compared withthe first quarter 2001. The net margin on assets undermanagement rose to 46.0 basis points from 43.6 in theprevious quarter (47.6 basis points in the first quarter2001). Net new assets totaled CHF 9.2 billion or 6.7%of assets under management on an annualized basis andwere thus above the previous year’s quarterly average.Assets under management rose 2.0% versus year-end2001, to CHF 557.6 billion.
The business unit opened new branches inGermany, Spain and Italy, and now has a presence in 63locations within these three countries. The Italian taxamnesty program has resulted in a movement of assetsfrom offshore Switzerland to onshore Italy. With thewealth management program developed over the pastthree years in Italy, Credit Suisse has been well positioned
www.credit-suisse.com 9
REVIEW OF BUSINESS UNITS CREDIT SUISSE FINANCIAL SERVICES
Private Banking key information
Cost/income ratio (operating) 1)
Average allocated capital in CHF m 2)
Pre-tax margin (operating) 1)
Fee income/operating income
Net new assets in CHF bnof which European Financial Services Initiative
Growth in assets under managementof which net new assetsof which market movement and structural effectsof which acquisitions
Net operating profit before minority interests/average AuM 1)
Assets under management in CHF bnof which European Financial Services Initiative
Number of employees
Number of advisors European Financial Services Initiative
Number of clients European Financial Services Initiative
1) Excluding amortization of acquired intangible assets and goodwill. / 2) New definition based on revised capital allocation methodology, as described on page 6.
1Q2001
53.1%
3,167
44.3%
61.1%
9.20.8
1.5%1.7%
(0.9%0.7%
47.6 bp
31.12.01
546.820.9
14,952
677
41,419
)
4Q2001
62.8%
3,233
40.1%
61.1%
8.60.9
6.2%1.7%4.0%0.5%
43.6 bp
31.03.02
557.623.9
15,176
658
45,494
1Q2002
55.7%
3,484
43.4%
67.2%
9.23.2
2.0%1.7%0.3%
–
46.0 bp
to compete for these assets. A net loss of CHF 2 to 3billion in assets is expected in the process of the Italiantax amnesty. In total, the European Financial ServicesInitiative reported CHF 3.2 billion in net new assets, ofwhich 80% relate to the Italian market.
Credit Suisse further expanded its business in theattractive Asian and Middle Eastern markets. The GlobalPrivate Banking Centre launched in Singapore inDecember continued to attract new clients. The success-ful launch of the Global Investment Program (GIP) underpinned Credit Suisse’s image as an innovativeprovider of structured financial products.
Corporate & Retail BankingThe business unit’s Swiss Corporate & Retail Bankingsegment reported a net operating profit before minorityinterests of CHF 120 million, corresponding to anincrease of 167% versus the previous quarter and of15% versus the first quarter 2001. Operating incomerose 6% compared with the fourth quarter and was down3% on the first quarter 2001. The new structure of thebusiness unit and lower provisions for incentive compen-sation led to a significant decrease in costs versus thefourth and first quarters of the previous year. This resultedin a healthy improvement in the operating cost/incomeratio to 60.6% from 74.6% in the previous quarter and67.0% in the first quarter 2001. The return on averageallocated capital in the first quarter 2002 was 12.1%.Despite the challenging market environment, asset qualityimproved owing to the continued reduction of all the non-performing loan positions in the portfolio.
10
Corporate & Retail Banking income statement in CHF m
Net interest incomeNet commission and service fee incomeNet trading incomeOther ordinary income
Operating income
Personnel expensesOther operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Valuation adjustments, provisions and losses 1)
Net operating profit before extraordinary items and taxes
Extraordinary income/(expenses), net Taxes 2)
Net operating profit before minority interests
Increased/(decreased) credit-related valuation adjustments 1)
2001 figures have been restated to reflect the realignment effective as of January 1, 2002. The presentation of segment results differs from the presentation of businessunit results by excluding acquisition-related costs and minority interests, and reporting these items at business unit level only.1) Increased/decreased valuation adjustments taken at Group level resulting from the difference between the statistical and actual credit provisions. / 2) Excluding taximpact on amortization of acquired intangible assets and goodwill.
4Q2001
413108602
583
235161
396
187
3989
59
) 0) (14
45
) 16
Change in %from 1Q2001
1(6
) (22 (12
(3
) (12 ) (18
) (14
17
) 38) 10
19
–19
15
)))
)
))
)
Change in %from 4Q2001
313
(12 –
6
(5 (18
(10
40
(54 (4
168
–) 164
167
)
1Q2001
4211306817
636
252161
413
223
1377
133
2) (31
104
(28
1Q2002
4261225315
616
223132
355
261
1885
158
(1 (37
120
(6
Corporate & Retail Banking balance sheet information in CHF m
Total assets
Due from customersMortgages
Due to customers in savings and investment depositsDue to customers, other
Corporate & Retail Banking key information
Cost/income ratio (operating) 1)
Return on average allocated capital (operating) 1)
Average allocated capital in CHF m 2)
Pre-tax margin (operating) 1)
Personnel expenses/operating income
Net interest margin
Loan growth
Net new assets in CHF bn
Deposit/loan ratio
Assets under management in CHF bn
Number of employees
Number of branches
1) Excluding amortization of acquired intangible assets and goodwill. / 2) New definition based on revised capital allocation methodology, as described on page 6.
Change in % from 31.12.01
(2
33
(1(8
1Q2001
67.0%
10.8%3,846
21.2%
39.6%
229 bp
0.6%
1.7
31.12.01
74.2%
55.9
6,742
227
)
))
31.12.01
72,372
28,88934,279
17,63129,218
4Q2001
74.6%
4.6%3,901
10.1%
40.3%
228 bp
0.2%
) 0.9
31.03.02
67.8%
54.4
6,673
226
31.03.02
70,644
29,79135,458
17,50226,757
1Q2002
60.6%
12.1%3,972
25.5%
36.2%
238 bp
3.3%
(1.4
www.credit-suisse.com 11
REVIEW OF BUSINESS UNITS CREDIT SUISSE FINANCIAL SERVICES
Life & Pensions income statement in CHF m
Gross premiums writtenReinsurance ceded
Net premiums written
Change in provision for unearned premiums
Net premiums earned
Death and other benefits incurredChange in provision for future policyholder benefits (technical)Change in provision for future policyholder benefits (separate account) 1)
Dividends to policyholders incurredOperating expenses, net (incl. commissions paid)Investment income general accountInvestment income separate account 1)
Interest received on deposits and bank accountsInterest on bonuses credited to policyholdersOther interest paidOther income/(expenses) (including foreign exchange impact)
Net operating profit before taxes and minority interests
Taxes
Net operating profit before minority interests
The segment’s income statement differs from the presentation of business unit results as it reflects the way the insurance business is managed, which is in line with Life &Pensions’ peers in the insurance industry. Amortization of acquired intangible assets and goodwill are excluded from ‘Operating expenses’ and are reported, like minorityinterests, at business unit level only.1) This represents the market impact for separate account (or unit-linked) business, where the investment risk is borne by the policyholder.
4Q2001
4,899) (61
4,838
) (5
4,833
) (3,234) (2,059) (652
458) (452
66365224
) (36) (91
2
) 108
(28
80
1Q2002
6,762(96
6,666
(39
6,627
(3,813 (3,289
(141 135
(424 79214123
(29 (50
6
(22
37
15
Change in %from 1Q2001
988
9
179
8
319
) –) –) 14
(46) –) 77) (9 ) 35
–
–
–
) (93
)
)
)
Change in %from 4Q2001
38) 57
38
) –
37
) 18) 60
(78) (71 ) (6
19) (78
(4 ) (19 ) (45 ) 200
–
) –
(81
1Q2001
6,189) (51
6,138
) (14
6,124
) (3 686 ) (2,765 ) 671
(403 ) (372
1,464(671
13) (32 ) (37
(39
267
) (63
204
Life & PensionsIn the first quarter 2002, the business unit’s Life &Pensions segment reported an 11% increase in grosspremiums to CHF 6.8 billion versus the correspondingperiod of 2001, including adjustments for divestitures inAustria and France. This growth reflects the positivedevelopment of the single premiums business in Italy andhigher volumes in Switzerland, as well as strong growth inthe UK, Belgium and Hong Kong. Net new assets totaledCHF 3.0 billion in the first quarter, compared with CHF2.3 billion in the corresponding period of 2001.
Despite this good performance, net operating profitbefore minority interests declined to CHF 15 million. Thisdecrease of CHF 189 million compared to the first quarterof 2001 is primarily the result of an unusually low invest-ment income. First quarter results were impacted by theincome statement recognition of lower valuations of equitysecurities held in the insurance portfolios. Net investmentincome excluding separate account business consequentlydeclined CHF 672 million or 46% versus the first quarter2001, and the impact on net operating profit beforeminority interests amounted to CHF 150 million.
Following its withdrawal from the Austrian and Frenchmarkets, the Life & Pensions segment is continuingto focus on selected markets in Europe and Asia offeringhigh growth and earnings potential, while further diversify-ing its product portfolio. Throughout 2002, Life &Pensions will be placing a particular emphasis on devel-oping innovative solutions for clients from other divisionswithin Credit Suisse Financial Services.
12
InsuranceThe business unit’s Insurance segment increased its netpremiums earned by 4% compared with the first quarterof 2001. Adjusted for divestitures (Winterthur Interna-tional, and in France and Austria) and acquisitions (inthe UK and Belgium), the Insurance segment recorded10% premium growth, which is attributable to an increasein rates and the positive development of new business. Inthe UK market and in Belgium, Spain and Germany, theInsurance segment recorded double-digit growth rates inthe period under review.
In the first quarter 2002, the combined ratio improvedby 2.5 percentage points to 103.9% versus the correspon-ding period of 2001, as the claims ratio fell by more than2 percentage points, to 75.2%, within one year. Quarter-on-quarter, the claims ratio rose 0.4 percentage points, whilea seasonal rise in claims within Europe offset the clearprogress achieved in North America. Despite considerablecosts incurred in the acquisition of new business, theoverall expense ratio for the first quarter fell by 0.3 percent-age points versus the corresponding period of 2001.
In spite of a significant improvement in its underwritingresult, the Insurance segment reported a net operatingloss before minority interests of CHF 147 million in thefirst quarter owing to an unusually low investment return.The results were affected by the income statementrecognition of lower valuation of equity securities. Netinvestment income thus declined CHF 442 million or84% versus the first quarter 2001, and the impact on netoperating profit amounted to CHF 305 million.
Life & Pensions key information
Expense ratio 1)
Growth in gross premiums written
Return on invested assets (excluding separate account)Current incomeRealized gains/losses and other income/expensesTotal return on invested assets 2)
Net new assets in CHF bn 3)
Total sales in CHF m 4)
Assets und management in CHF bn 5)
Technical provisions in CHF m
Number of employees
1) Operating expenses/net premiums earned. / 2) Total investment return on invested assets includes depreciation on real estate and investment expenses as well asinvestment income and realized gains and losses. / 3) Based on change in technical provisions for traditional business, adjusted for technical interests; net inflow of unit-linked business; and change in off-balance sheet business such as funds. / 4) Includes gross premiums written and off-balance sheet sales. / 5) Based on savings-relatedprovisions for policyholders plus off-balance sheet assets.
1Q2001
6.1%
18.5%
4.4%) 1.8%
6.2%
2.3
7,462
31.12.01
115.2
108,326
7,697
4Q2001
9.4%
16.0%
4.1%) (1.6%
2.5%
1.8
6,172
31.03.02
115.0
109,890
7,417
1Q2002
6.4%
9.3%
4.0%(0.8%3.2%
3.0
7,783
www.credit-suisse.com 13
REVIEW OF BUSINESS UNITS CREDIT SUISSE FINANCIAL SERVICES
Insurance income statement in CHF m
Gross premiums writtenReinsurance ceded
Net premiums written
Change in provision for unearned premiums and in provision for future policy benefits (health)
Net premiums earned
Claims and annuities incurred, netDividends to policyholders incurred, netOperating expenses, net (incl. commissions paid)
Underwriting result, net
Net investment incomeInterest received on deposits and bank accountsInterest paidOther income/(expenses) (including foreign exchange impact)
Net operating profit before taxes and minority interests
Taxes
Net operating profit before minority interests
The segment’s income statement differs from the presentation of business unit results as it reflects the way the insurance business is managed, which is in line with peersin the insurance industry. Amortization of acquired intangible assets and goodwill are excluded from ‘Operating expenses’ and are reported, like minority interests, at busi-ness unit level only.
Insurance key information
Combined ratio (excluding dividends to policyholders)
Claims ratio
Expense ratio
Return on invested assetsCurrent incomeRealized gains/losses and other income/expensesTotal return on invested assets 1)
Assets under management in CHF bn
Technical provisions in CHF m
Number of employees
1) Total investment return on invested assets includes depreciation on real estate and investment expenses as well as investment income and realized gains and losses.
Change in %from Q12001
(2 (31
1
(2
) 4
) 1(40
3
(38
) (84 129
) (27 ) –
–
–
–
1Q2001
106.4%
77.4%
29.0%
4.6%1.7%6.3%
31.12.01
30.5
27,738
21,815
))
)
)
)
)
)
4Q2001
3,685) (209
3,476
) 319
3,795
) (2,837) (50) (1,081
) (173
503(4
) (35) (216
) 75
7
) 82
1Q2002
56,668(415
6,253
(2,502
3,751
(2,819 (67
(1,077
(212
8716
(19 (61
(189
42
(147
Change in %from Q42001
81) 99
80
) –
(1
) (1 ) 34) 0
) 23
(83 –
) (46 (72
–
) 500
–
4Q2001
103.3%
74.8%
28.5%
3.9%) 2.4%
6.3%
31.03.02
29.1
30,603
22,787
1Q2001
6,774) (601
6,173
(2,556
3,617
) (2,799) (112) (1,049
) (343
529) 7) (26) 43
210
(60
150
1Q2002
103.9%
75.2%
28.7%
3.9%(2.7%1.2%
14
REVIEW OF BUSINESS UNITS CREDIT SUISSE FIRST BOSTON
Credit Suisse First Boston’s first quarter 2002 results reflect the cost reduction measures implementedand an improved performance in the Investment Banking segment. Excluding the amortization ofacquired intangible assets and goodwill as well as exceptional items, net operating profit stood at USD155 million (CHF 259 million), compared with a net operating loss of USD 114 million (CHF 188 million) in the fourth quarter of 2001, corresponding to an increase of USD 269 million(CHF 447 million).
Credit Suisse First Boston reported a net loss of USD 19 million (CHF 32 million) in the first quarter of2002, compared with a net loss of USD 939 million(CHF 1.6 billion) in the final quarter of 2001. In the firstquarter of the previous year, Credit Suisse First Bostonreported a net operating profit, excluding the amortizationof acquired intangible assets and goodwill, of USD 444 million (CHF 727 million) and a net profit of USD272 million (CHF 445 million).
The new organizational structure as of 2002 is dividedinto two reporting segments: Investment Banking, which includes the Fixed Income, Equity and InvestmentBanking divisions; and CSFB Financial Services, which
includes Credit Suisse Asset Management, Pershing andPrivate Client Services. Prior-period results have beenrestated accordingly.
In line with its strategy to exit non-core businesses,Credit Suisse First Boston announced the sale of most of its CSFBdirect business and its brokerage service subsidiary, Autranet, Inc. at the end of 2001.These sales closed during the first quarter of 2002.
Operating income in the first quarter increased 19%compared with the previous quarter to USD 3.3 billion(CHF 5.5 billion), reflecting improvements in the Invest-ment Banking segment. Compared with the first quarterof 2001, operating income was down 27%, with lower
Credit Suisse First Boston business unit income statement in USD m
Operating income
Personnel expenses Other operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Valuation adjustments, provisions and losses 1)
Net operating profit before extraordinary items, acquisition-related costs, exceptional items and taxes
Extraordinary income/(expenses), net Taxes 2)
Net operating profit before acquisition-related costs, exceptional items and minority interests
Acquisition interest Amortization of retention paymentsAmortization of acquired intangible assets and goodwill Exceptional itemsTax impact
Net profit before minority interests
Minority interests
Net profit
Reconciliation to net operating profitAmortization of acquired intangible assets and goodwillExceptional itemsTax impact
Net operating profit
See page 16 for footnotes.
)
))
)
)
)
)
)
)
))
)
)
4Q2001
2,757
1,1241,016
2,140
617
157477
(17
0) 55
38
) (100) (128) (222
(845319
) (938
(1
) (939
222845
) (242
(114
Change in%from 1Q2001
(27
(30) (12
(26
(33
) (8) 261
(56
–(62
(54
) (39) (9) 1
–) (15
) –
–
) –
) 1–
) 3
(65
Change in % from 4Q2001
19
61(24
21
12
(22(58
–
) –) –
–
) (1) (16) (4
–(65
(98
–
(98
(4–
) (84
–
1Q2001
4,505
2,583885
3,468
1,037
13356
) 848
(2(214
632
) (163) (118) (210) 0
131
) 272
) 0
) 272
2100
) (38
) 444
1Q2002
3,277
1,808775
2,583
694
123202
369
0(81
288
(99(107(213
0112
(19
0
(19
2130
(39
155
www.credit-suisse.com 15
REVIEW OF BUSINESS UNITS CREDIT SUISSE FIRST BOSTON
Credit Suisse First Boston business unit income statement in CHF m
Operating income
Personnel expenses Other operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Valuation adjustments, provisions and losses 1)
Net operating profit before extraordinary items, acquisition-related costs, exceptional items and taxes
Extraordinary income/(expenses), net Taxes 2)
Net operating profit before acquisition-related costs, exceptional items and minority interests
Acquisition interest Amortization of retention paymentsAmortization of acquired intangible assets and goodwill Exceptional itemsTax impact
Net profit before minority interests
Minority interests
Net profit
Reconciliation to net operating profitAmortization of acquired intangible assets and goodwillExceptional itemsTax impact
Net operating profit
For further information on the presentation of business unit results, please refer to the “Overview of business unit results” on page 4. 2001 figures have been restated toreflect the realignment effective as of January 1, 2002. The business unit income statement differs from the presentation of the Group’s consolidated results in a) includ-ing brokerage, execution and clearing expenses as part of other operating expenses in common with certain US competitors, rather than netted against operating incomeand reporting expenses for contractors as part of operating expenses instead of personnel expenses, b) excluding acquisition-related costs of acquisition interest andamortization of retention payments from operating income and personnel expenses, respectively, and reporting these items separately in the income statement, c) deductingminority interests from operating income d) excluding exceptional items from operating income, personnel expenses, depreciation of non-current assets and valuationadjustments, provisions and losses and reporting these items separately in the income statement. 1) The amounts in 4Q2001 and 1Q2001 include valuation adjustments taken at Group level of CHF 112 m (USD 66 m) and CHF 24 m (USD 15 m), respectively, result-ing from the difference between the statistical and actual credit provisions. Starting January 1, 2002, no such adjustments will be recorded within Credit Suisse FirstBoston and the amount reported for 1Q2002 reflects actual credit provision. / 2) Excluding tax impact on acquisition-related costs and exceptional items.
)
))
)
)
)
)
)
)
))
)
)
)
4Q2001
4,781
1,9691,747
3,716
1,065
270810
(15
0) 90
75
) (175) (220) (379
(1,428543
) (1,584
(1
) (1,585
3791,428
) (410
(188
Change in%from 1Q2001
(25
(28) (10
(24
(32
) (6) 267
(55
–(61
(53
) (38) (8) 3
–) (13
) –
–
) –
) 3–
) (5
(64
Change in % from 4Q2001
15
54(25
17
9
(23(58
–
) –) –
–
) (5) (19) (6
–(66
(98
–
(98
(6–
) (84
–
1Q2001
7,389
4,2351,451
5,686
1,703
22092
) 1,391
(2(353
1,036
) (268) (194) (345) 0
216
) 445
) 0
) 445
3450
) (63
) 727
1Q2002
5,505
3,0371,302
4,339
1,166
207338
621
0(137
484
(167(179(357
0187
(32
0
(32
3570
(66
259
equity and investment banking revenues reflecting thedownturn in the markets during the second half of 2001and into 2002, and lower fixed income revenues in linewith a more stable, rather than a declining, interest rateenvironment.
In accordance with Credit Suisse First Boston’scommitment to cost reduction, first quarter operatingexpenses were 26% below those of the comparableperiod in 2001. Compensation costs declined 30%,chiefly due to headcount reductions and reduced incen-tive compensation costs. Other operating costs decreasedby 12%, reflecting declines in virtually all discretionaryexpenses, particularly in technology and communication,and occupancy costs. Compared with the fourth quarter2001, compensation costs excluding bonus accrualsdeclined by 10%; however, incentive compensation in-
16
creased as a result of over-accruals in the first ninemonths and the classification of incentive compensationexpenses paid in connection with staff reductions as anexceptional item.
Assets under management, including private equityassets held on behalf of clients, totaled USD 387.9 billion (CHF 650.9 billion) as of March 31, 2002. Netnew assets in the first quarter totaled USD 1.6 billion (CHF 2.7 billion). Discretionary assets under manage-ment as of March 31, 2002, were USD 253.9 billion(CHF 426.1 billion), virtually unchanged versus December 31, 2001. Advisory assets under manage-ment as of March 31, 2002, were USD 134.0 billion(CHF 224.8 billion), a decrease of 11.6% againstDecember 31, 2002, primarily related to the sale ofCSFBdirect.
Credit Suisse First Boston key information Based on CHF amounts
Cost/income ratio (operating) 1) 2) 3) 4)
Return on average allocated capitalReturn on average allocated capital (operating) 3) 4)
Return on average allocated capital (operating, excluding amortization of retention payments, net of tax) 2) 3) 4)
Average allocated capital in CHF m 5)
Pre-tax margin 3)
Pre-tax margin (operating) 3) 4)
Pre-tax margin (operating, excluding acquisition interest and amortization of retention payments) 1) 2) 3) 4)
Personnel expenses/operating income 1) 2) 3)
Number of employees
1) Excluding acquisition interest. / 2) Excluding amortization of retention payments. / 3) Excluding exceptional items. / 4) Excluding amortization of acquired intangible assets andgoodwill. / 5) New definition based on revised capital allocation methodology, as described on page 6.
1Q2001
79.9%
11.4%18.6%
21.8%
15,625
7.9%12.5%18.8%
57.3%
31.12.01
27,302
4Q2001
83.4%
(42.6%)(5.0%)
(1.2%)
14,877
(16.5%)(8.6%)(0.3%)
41.2%
31.03.02
25,970
1Q2002
82.6%
(0.9%)6.9%
10.1%
14,913
(1.5%)5.0%
11.3%
55.2%
Investment Banking segmentThe Investment Banking segment reported first quarteroperating income of USD 2.7 billion (CHF 4.6 billion), up 27% compared with the fourth quarter and down 29%compared with the first quarter of 2001. As a result ofthe cost reduction measures implemented, first quarteroperating expenses were down 26% to USD 2.2 bilion(CHF 3.6 billion), compared with the same period a year ago.
Fixed Income revenues increased 36% on the previ-ous quarter to USD 1.2 billion (CHF 1.9 billion), with themost significant increase reported in the developed creditmarkets business. This area continued to benefit asinvestors looked to shift single name credit exposure tomore diversified instruments. Credit Suisse First Bostoncurrently ranks number one globally in asset-backedsecuritizations (13% market share). The revenues of theemerging markets group also rebounded from the priorquarter, which had been adversely impacted by lossesrelated to Argentina. In emerging markets debt, the rank-ing improved from fifth to third place, with market shareincreasing to 14% (8% in 2001). The revenues of theleveraged and bank finance business also increased, withthe top ranking maintained in high yield new issues. The
global high yield new issuance industry volume rose 15%compared with the fourth quarter. The revenues of theinterest rate products business, which had benefited fromseveral rate cuts in 2001, declined in the first quarter.Compared with the first quarter 2001, one of FixedIncome’s strongest quarters on record, first quarterrevenues declined 28%. Credit Suisse First Boston alsosaw its North American fixed income research standingimprove from ninth place in the first quarter of 2001 tothird.
Equity business revenues increased 22% quarter-on-quarter to USD 855 million (CHF 1.4 billion), primarily asa result of the rebound in the equity derivatives businessand increased new issue activity late in the first quarter.Revenues were down 35% compared with the first quar-ter 2001 due to reduced volatility and narrowing spreadson derivative instruments, continuing sluggish markets,reduced commission margins and reduced new issueactivity.
The Investment Banking division’s first quarter revenues increased 18% compared with the previousquarter to USD 695 million (CHF 1.2 billion). Therevenue increase was largely related to a gain on the sale of a strategic investment within the private equity
www.credit-suisse.com 17
REVIEW OF BUSINESS UNITS CREDIT SUISSE FIRST BOSTON
Overview of Credit Suisse First Bostonbusiness unit 1Q2002
Operating income
Personnel expensesOther operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Valuation adjustments, provisions and losses
Net operating profit before extraordinary items, acquisition-related costs, exceptional items and taxes
Extraordinary income/(expenses), net Taxes 1)
Net operating profit before acquisition-related costs, exceptional items and minority interests
Acquisition interestAmortization of retention paymentsAmortization of acquired intangible assets and goodwillExceptional itemsTax impact
Net profit before minority interests
Minority interests
Net profit
Reconciliation to net operating profitAmortization of acquired intangible assets and goodwillExceptional itemsTax impact
Net operating profit
Average allocated capital 2)
For further information on the presentation of business unit results, please refer to the “Overview of business unit results” on page 4. The presentation of segment results differs from the presentation of business unit results by excluding acquisition-related costs, exceptional items and minority interests, and reporting these items at business unit level only.1) Excluding tax impact on acquisition-related costs and exceptional items. / 2) New definition based on revised capital allocation methodology, as described on page 6.
)
)))
)
)
)
Credit SuisseFirst Boston
3,277
1,808775
2,583
694
123202
369
0) (81
288
(99(107(213
0112
(19
0
(19
2130
(39
155
8,894
CSFB FinancialServices
536
258157
415
121
213
97
0) (27
70
655
InvestmentBanking
2,741
1,550618
2,168
573
102199
272
0(54
218
8,462
Credit SuisseFirst Boston
5,505
3,0371,302
4,339
1,166
207338
621
0) (137
484
(167(179(357
0187
(32
0
(32
3570
(66
259
14,913
CSFB FinancialServices
901
434263
697
204
365
163
0) (46
117
1,098
InvestmentBanking
4,604
2,6031,039
3,642
962
171333
458
0) (91
367
)))
)
)
)
14,188
in CHF min USD m
business, and was partially offset by decreased revenuesgenerated from mergers and acquisitions and equity new issues. These businesses were adversely impactedby industry-wide volume declines of 31% and 23%,respectively. Compared with the same period in 2001, the division’s first quarter 2002 revenues declined by16%, principally due to lower M&A advisory revenue. The value of the industry’s global announced M&A dealsin the first quarter of 2002 decreased significantly – bymore than 45% versus the same period in 2001.However, Credit Suisse First Boston has achieved aglobal number one ranking in terms of both US dollarvalue and number of transactions, and 25% market sharefor its announced 2002 M&A deals, versus a rank ofnumber six for the first quarter of 2001.
The private equity business recorded net realized and unrealized gains of USD 29 million (CHF 48 million)
18
in the first quarter, compared with net realized and unrealized losses of USD 97 million (CHF 167 million)in the fourth quarter 2001 and USD 13 million (CHF 22 million) in the first quarter 2001. The totalpre-tax gain for the private equity business amounted to USD 4 million (CHF 7 million) in the first quarter versus total pre-tax losses of USD 138 million (CHF 235 million) in the fourth quarter and USD 50 million(CHF 82 million) in the first quarter 2001. The book valueof all private equity investments stood at USD 2.0 billion(CHF 3.4 billion) and fair value at USD 2.2 billion (CHF3.6 billion) as of March 31, 2002.
CSFB Financial ServicesCSFB Financial Services’ first quarter operating incomeof USD 536 million (CHF 901 million) decreased 10%compared with the fourth quarter and were down 19%
Investment Banking income statement in USD m
Fixed IncomeEquityInvestment BankingOther
Operating income
Personnel expenses Other operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Valuation adjustments, provisions and losses
Net operating profit before extraordinary items, acquisition-related costs, exceptional items and taxes
Extraordinary income/(expenses), net Taxes 1)
Net operating profit before acquisition-related costs, exceptional items and minority interests
2001 figures have been restated to reflect the realignment effective as of January 1, 2002. The presentation of segment results differs from the presentation of business unit resultsby excluding acquisition-related costs, exceptional items and minority interests, and reporting these items at business unit level only.1) Excluding tax impact on acquisition-related costs and exceptional items.
4Q2001
85469958918
2,160
901827
1,728
432
131469
(168
0) 85
(83
Change in %from 1Q2001
(28(35(16(69
(29
(31) (10
(26
(38
) (6) 249
(64
–(73
(61
))))
)
))
)
)
)
)
)
)
Change in %from 4Q2001
36221878
27
72(25
25
33
(22(58
–
) –) –
–
1Q2001
1,6051,314
823104
3,846
2,244685
2,929
917
10857
) 752
(1(198
) 553
1Q2002
1,15985569532
2,741
1,550618
2,168
573
102199
272
0(54
218
compared with the first quarter 2001. Operating expenseswere down 23% compared with the first quarter 2001,due to the cost reduction measures implemented as wellas to the sale of CSFBdirect.
Pershing’s revenues decreased versus the sameperiod in the prior year as reduced activity impacted trading and commission revenues; average trades per day declined 20%. Additionally, lower customer balances and the effect of tightened spreads resultingfrom interest rate cuts led to lower interest income;however, revenues have improved in 2002 compared tothe preceding quarter.
Compared with both the first and fourth quarters of 2001,Private Client Services’ revenues were down in the firstquarter 2002, reflecting a difficult equity environment,which contributed to lower relative net new asset growth,and a 7% reduction in its sales force compared with thefourth quarter.
Due to reduced net new business, Credit SuisseAsset Management’s first quarter revenues also declined compared with both the first quarter of 2001 and the unusually strong fourth quarter.
www.credit-suisse.com 19
REVIEW OF BUSINESS UNITS CREDIT SUISSE FIRST BOSTON
Investment Banking income statement in CHF m
Fixed IncomeEquityInvestment BankingOther
Operating income
Personnel expenses Other operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Valuation adjustments, provisions and losses
Net operating profit before extraordinary items, acquisition-related costs, exceptional items and taxes
Extraordinary income/(expenses), net Taxes 1)
Net operating profit before acquisition-related costs, exceptional items and minority interests
2001 figures have been restated to reflect the realignment effective as of January 1, 2002. The presentation of segment results differs from the presentation of businessunit results by excluding acquisition-related costs, exceptional items and minority interests, and reporting these items at business unit level only.1) Excluding tax impact on acquisition-related costs and exceptional items.
4Q2001
1,4911,2131,017
32
3,753
1,5831,421
3,004
749
224797
(272
0) 142
(130
Change in %from 1Q2001
(26(33(14(69
(27
(29) (8
(24
(36
) (4) 254
(63
–(72
(59
))))
)
))
)
)
)
)
)
)
Change in %from 4Q2001
31181566
23
64(27
21
28
(24(58
–
) –) –
–
1Q2001
2,6332,1551,350
170
6,308
3,6801,124
4,804
1,504
17894
) 1,232
(1(325
) 906
1Q2002
1,9471,4371,167
53
4,604
2,6031,039
3,642
962
171333
458
0(91
367
20
–
5034
46
24
74(32
33
29
34
285
25
200
25
34 58
Investment Banking key information Based on CHF amounts
Cost/income ratio (operating) 1) 2) 3) 4)
Average allocated capital in CHF m 5)
Pre-tax margin (operating, excluding acquisition interest and amortization of retention payments) 1) 2) 3) 4)
Personnel expenses/operating income 1) 2) 3)
Number of employees
1) Excluding acquisition interest. / 2) Excluding amortization of retention payments. / 3) Excluding exceptional items. / 4) Excluding amortization of acquired intangible assetsand goodwill. / 5) New definition based on revised capital allocation methodology, as described on page 6.
Investment Banking balance sheet information in CHF m
Total assets
Total assets in USD m
Due from banksof which securities lending and reverse repurchase agreements
Due from customersof which securities lending and reverse repurchase agreements
MortgagesSecurities and precious metals trading portfolios
Due to banksof which securities borrowing and repurchase agreements
Due to customers, otherof which securities borrowing and repurchase agreements
1Q2001
79.0%
14,834
) 19.5%
58.3%
31.12.01
19,094
) 7531.12.01
648,455
387,045
198,806159,784118,00759,80616,348
204,907
344,091137,731108,47062,136
))
)
)
4Q2001
86.0%
13,936
(7.2%
42.2%
31.03.02
18,574
31.03.02
694,172
413,714
232,567185,813128,75047,73515,798
226,422
373,800136,794120,11468,498
1Q2002
82.8%
14,188
9.9%
56.5%
CSFB Financial Services income statement in USD m
Net interest incomeNet commission and service fee incomeNet trading incomeOther ordinary income
Operating income
Personnel expenses Other operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Valuation adjustments, provisions and losses
Net operating profit before extraordinary items, acquisition-related costs, exceptional items and taxes
Extraordinary income/(expenses), net Taxes 1)
Net operating profit before acquisition-related costs and minority interests
2001 figures have been restated to reflect the realignment effective as of January 1, 2002. The presentation of segment results differs from the presentation of businessunit results by excluding acquisition-related costs, exceptional items and minority interests, and reporting these items at business unit level only.1) Excluding tax impact on acquisition-related costs and exceptional items.
4Q2001
614763525
597
223189
412
185
268
151
0) (30
121
Change in %from 1Q2001
) (51) (15) (37) –
) (19
(24) (22
(23
) 1
) (16) –
) 1
–) 69
) (11
)))
)
))
)
)
)
Change in %from 4Q2001
(20(8
(11) (28
(10
16(17
1
(35
(19) (63
(36
) –) (10
(42
1Q2001
10051349(3
659
339200
539
120
25(1
96
(1) (16
79
1Q2002
494383118
536
258157
415
121
213
97
0(27
70
www.credit-suisse.com 21
REVIEW OF BUSINESS UNITS CREDIT SUISSE FIRST BOSTON
CSFB Financial Services income statement in CHF m
Net interest incomeNet commission and service fee incomeNet trading incomeOther ordinary income
Operating income
Personnel expenses Other operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets Valuation adjustments, provisions and losses
Net operating profit before extraordinary items, acquisition-related costs, exceptional items and taxes
Extraordinary income/(expenses), net Taxes 1)
Net operating profit before acquisition-related costs, exceptional items and minority interests
2001 figures have been restated to reflect the realignment effective as of January 1, 2002. The presentation of segment results differs from the presentation of businessunit results by excluding acquisition-related costs, exceptional items and minority interests, and reporting these items at business unit level only.1) Excluding tax impact on acquisition-related costs and exceptional items.
CSFB Financial Services key information Based on CHF amounts
Cost/income ratio (operating) 1) 2) 3) 4)
Average allocated capital in CHF m 5)
Pre-tax margin (operating, excluding acquisition interest and amortization of retention payments) 1) 2) 3) 4)
Personnel expenses/operating income 1) 2) 3)
Net new assets institutional asset management in CHF bnNet new assets Private Client Services in CHF bn
Growth in assets under management
Growth in discretionary institutional assets under managementof which net new assetsof which market movement and structural effectsof which acquisitions
Growth in net new assets Private Client Services
Assets under management in CHF bnof which institutional asset managementof which Private Client Services
Discretionary assets under management in CHF bnof which institutional asset managementof which mutual funds distributedof which Private Client Services
Advisory assets in CHF bn
Number of employees
1) Excluding acquisition interest. / 2) Excluding amortization of retention payments. / 3) Excluding exceptional items. / 4) Excluding amortization of acquired intangible assets and goodwill. / 5) New definition based on revised capital allocation methodology, as described on page 6.
14Q2001
1078186043
1,028
386326
712
316
4613
257
0) (52
205
Change in %from 1Q2001
) (50) (12) (35) –
) (17
(22) (20
) (21
) 3
) (14) –
) 3
–) 64
) (10
1Q2001
85.5%
906
14.6%
51.3%
6.84.9
(1.5%
(1.0%1.9%
(2.9%–
4.6%
31.12.01
640.5508.897.1
393.6364.2132.429.4
246.9
8,208
)))
)
))
)
)
)
)
)
)
Change in %from 4Q2001
(23(10(13
) (30
(12
12(19
(2
(35
(22) (62
(37
) –) (12
(43
4Q2001
73.7%
1,072
25.0%
37.5%
) 1.94.7
) 16.1%
) 14.6%) 0.6%) 5.8%
8.2%
5.3%
31.03.02
606.4507.796.2
388.2359.6133.728.6
218.2
7,396
1Q2001
16584180(5
1,081
555327
882
199
42(2
159
(1) (28
130
1Q2002
81.4%
1,098
18.1%
48.2%
(3.93.1
(5.3%
(1.3%(1.1%(0.2%
–
3.2%
01Q2002
827375230
901
434263
697
204
365
163
0(46
117
22
CONSOLIDATED RESULTS CREDIT SUISSE GROUP
Consolidated income statement in CHF m
Interest and discount incomeInterest and dividend income from trading portfoliosInterest and dividend income from financial investmentsInterest expenses
Net interest income
Commission income from lending activitiesCommission income from securities and investment transactionsCommission income from other servicesCommission expenses
Net commission and service fee income
Net trading income
Premiums earned, netClaims incurred and actuarial provisionsCommission expenses, netInvestment income from the insurance business
Net income from the insurance business
Income from the sale of financial investmentsIncome from investments in associatesIncome from other non-consolidated participationsReal estate incomeSundry ordinary incomeSundry ordinary expenses
Other ordinary income/(expenses), net
Operating income
Personnel expensesOther operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assets 1)
Amortization of acquired intangible assetsAmortization of goodwillValuation adjustments, provisions and losses from the banking business
Depreciation, valuation adjustments and losses
Profit before extraordinary items, taxes and minority interests
Extraordinary incomeExtraordinary expensesTaxes
Net profit before minority interests
Minority interests
Net profit
1) Includes amortization of Present Value of Future Profits (PVFP) from the insurance businesses.
Change in %from 1Q2001
) (47) (1) (1) (44
20
(10) (16
28) 2
) (13
(56
711
) 0) (17
) (36
13(20
–) (35) (21) 20
) –
(25
(20) (15
) (19
(41
) 0) 1) 13) 98
) 24
(76
(91) (64
(85
(73
(26
(74
))))
))
)
)
)
)
)
))
)
))
)
)
)
)))
)
)
)
Change in %from 4Q2001
(9(13(20
) (17
15
27(630
) (14
(1
45
21) 21) (3
(39
(38
3452–
(37(43
) (21
(67
2
5(27
(6
45
(31(5
(14(63
(45
–
–) (96) –
–
) –
–
1Q2001
8,7402,673
108) (9,978
1,543
2214,505
380) (220
4,886
3,049
9,741) (9,093) (442
1,310
1,516
220751
48330
) (577
) 97
11,091
6,0301,954
7,984
3,107
483191170238
1,082
) 2,025
) 47) (25
(572
) 1,475
(47
) 1,428
4Q2001
5,1273,050
133) (6,705
1,605
1584,040
374) (261
4,311
920
8,628) (8,375) (459
1,783
1,577
56590
49461
) (877
) (252
8,161
4,6252,272
6,897
1,264
699203224
1,289
2,415
(1,151
(7) (250) 538
(870
) 40
(830
1Q2002
4,6522,648
107(5,554
1,853
2003,794
485(225
4,254
1,335
10,463(10,131
(4441,082
970
249607
31262
(691
(82
8,330
4,8371,661
6,498
1,832
481193192471
1,337
495
4(9
(87
403
(35
368
www.credit-suisse.com 23
CONSOLIDATED RESULTS CREDIT SUISSE GROUP
Consolidated balance sheet in CHF m
AssetsCash and other liquid assetsMoney market papersDue from banksReceivables from the insurance businessDue from customersMortgagesSecurities and precious metals trading portfoliosFinancial investments from the banking businessInvestments from the insurance businessNon-consolidated participationsTangible fixed assetsIntangible assetsAccrued income and prepaid expensesOther assets
Total assets
Subordinated assetsReceivables due from non-consolidated participations
Liabilities and shareholders’ equityMoney market papers issuedDue to banksPayables from the insurance businessDue to customers in savings and investment depositsDue to customers, otherMedium-term notes (cash bonds)Bonds and mortgage-backed bondsAccrued expenses and deferred incomeOther liabilitiesValuation adjustments and provisionsTechnical provisions for the insurance business
Total liabilities
Reserve for general banking risksShare capitalCapital reserveRevaluation reserves for the insurance businessReserve for own sharesRetained earningsMinority interestsNet profit
Total shareholders’ equity
Total liabilities and shareholders’ equity
Subordinated liabilitiesLiabilites due to non-consolidated participations
Change in %from 31.12.01
(26(18142050
1140
(1(2(2(6
(11
5
137(68
298
17061
10(29(12(33
5
000
(330
28(1
(77
0
5
(1(36
))
)))))
)
)))
)
))
))
31.12.01
3,09232,027
203,78511,823
186,15192,655
208,37437,306
131,2911,8469,422
22,85018,09563,796
1,022,513
1,578276
19,252335,93211,86438,547
261,7523,019
81,50525,51256,49311,362
138,354
983,592
2,3193,590
19,446749
2,4695,6403,1211,587
38,921
1,022,513
20,8921,098
31.03.02
2,29326,116
231,99714,227
194,82893,037
230,40838,973
131,1431,8339,248
22,48517,08856,604
1,070,280
3,74289
24,890361,37913,88738,734
278,5433,045
89,37018,14049,67111,026
142,620
1,031,305
2,3193,591
19,454500
2,4697,1973,077
368
38,975
1,070,280
20,626702
24
Off-balance sheet and fiduciary business in CHF m
Credit guarantees in form of bills of exchange and other guarantees 1)
Bid bonds, delivery and performance bonds, letters of indemnity, other performance-related guarantees Irrevocable commitments in respect of documentary creditsOther contingent liabilities
Contingent liabilities
Irrevocable commitmentsLiabilities for calls on shares and other equity instrumentsConfirmed credits
Total off-balance sheet
Fiduciary transactions
1) Including credit guarantees of securities lent as arranger: 31.03.02: CHF 22,251 m; 31.12.01: CHF 21,148 m.
Derivative instruments in CHF bn
Interest rate productsForeign exchange productsPrecious metals productsEquity/index-related productsOther products
Total derivative instruments
1) Including replacement values for traded derivatives (futures and traded options) subject to daily margining requirements. Total positive and negative replacement values oftraded derivatives amount to CHF 2.4 bn (December 31, 2001: CHF 1.8 bn) and CHF 1.0 bn (December 31, 2001: CHF 0.6 bn).
1)
Currency translation rates in CHF
1 USD1 EUR1 GBP100 JPY
31.12.01
29,7895,0563,2575,484
43,586
129,86479476
174,320
41,448
Negative gross
replacement1) value
31.12.01
98.740.21.8
13.63.5
157.8
31.12.01
1.67541.48242.42821.2759
31.03.02
32,3955,0734,6484,778
46,894
119,11168319
166,707
39,493
Positive gross
replacementvalue
31.12.01
97.039.61.3
14.13.5
155.5
31.03.02
1.67791.46612.39231.2657
Nominal1) value
31.12.01
9,120.81,936.3
29.5393.9120.7
11,601.2
1Q2001
1.641.522.391.39
Negativegross
replacement1) value
31.03.02
88.635.61.6
14.83.9
144.5
4Q2001
1.691.512.431.39
Positive gross
replacement value
31.03.02
87.335.90.9
14.03.0
141.1
1Q2002
1.681.472.401.27
Nominal
value31.03.02
9,039.82,366.5
25.6380.2140.7
11,952.8
Average rate year-to-date used in the income statement
Closing rate used in the balance sheet
Calculation of earnings per share (EPS)
Net profit in CHF mNet operating profit in CHF m 1)
Diluted net profit in CHF mDiluted net operating profit in CHF m 1)
Weighted average shares outstanding 2)
Dilutive impact 3)
Weighted average shares, diluted
Basic earnings per share in CHFBasic earnings per share – operating, in CHF 1)
Diluted earnings per share in CHFDiluted earnings per share – operating, in CHF 1)
All share-related data have been adjusted for the 4-for-1 share split effective as of August 15, 2001. 1) Excluding amortization of acquired intangible assets and goodwill as well as exceptional items of CHF 1,092 m in 4Q2001, all net of tax. / 2) Adjusted for weightedaverage shares repurchased / 3) From convertible bonds and outstanding options.
Change in % from 1Q2001
(74(60(74(60
(1(36(1
(74(60(74(60
))))
)))
))))
Change in % from 4Q2001
–11
–11
040
–12
–10
1Q2001
) 1,4281,726
) 1,4281,726
1,201,898,37211,743,235
1,213,641,607
) 1.191.44
) 1.181.42
4Q2001
(830616
(830616
1,188,677,4457,213,154
1,195,890,599
(0.700.52
(0.690.52
1Q2002
368686368686
1,189,051,0807,477,415
1,196,528,495
0.310.580.310.57
www.credit-suisse.com 25
CONSOLIDATED RESULTS CREDIT SUISSE GROUP
Income statement of the banking and insurance business 3 months, in CHF m
Net interest incomeNet commission and service fee incomeNet trading incomeNet income from the insurance business 1)
Other ordinary income/(expenses), net
Operating income
Personnel expenses Other operating expenses
Operating expenses
Gross operating profit
Depreciation of non-current assetsAmortization of acquired intangible assetsAmortization of goodwillValuation adjustments, provisions and losses from the banking business
Depreciation, valuation adjustments and losses
Profit before extraordinary items, taxes and minority interests
Extraordinary incomeExtraordinary expensesTaxes
Net profit before minority interests
Minority interests
Net profit
Income statements for the banking and insurance business are presented on a stand-alone basis. 1) Insurance business: expenses due to the handling of both claims and investments are allocated to the income from the insurance business, of which: CHF 168 m (3 months 2001: CHF 131 m) are related to personnel expenses and CHF 83 m (3 months 2001: CHF 80 m) to other operating expenses.
))
)
2002
1,8354,2631,335
–46
7,479
4,2411,323
5,564
1,915
347193174471
1,185
730
4(9
(166
559
(38
521
2001
1,5144,8903,049
–217
9,670
5,4891,599
7,088
2,582
391191160237
979
1,603
4) (25) (449
1,133
) (24
1,109
2002
–––
976(122
854
596338
934
(80
1340
180
152
(232
0) 0) 79
(153
) 3
(150
2001
–––
1,540) (121
1,419
541354
895
) 524
930
100
103
) 421
430
(123
) 341
(22
) 319
2002
1,8534,2541,335
970) (82
8,330
4,8371,661
6,498
1,832
481193192471
1,337
495
4(9
) (87
403
) (35
368
2001
1,5434,8863,0491,516
) 97
11,091
6,0301,954
7,984
3,107
483191170238
1,082
2,025
47) (25) (572
1,475
) (47
1,428
Banking business Insurance business Credit Suisse Group
Statement of shareholders’ equity in CHF m
At beginning of financial yearDividends paidDividends paid to minority interestsCapital increases, par value and capital surplusChanges in scope of consolidation affecting minority interestsForeign exchange impactChange in revaluation reserves from the insurance business, netMinority interests in net profitNet profit
At end of period
3 months2001
43,522(14
) (2048
) 1) 928) (1,841
0471,428
44,099
))
)
3 months2002
38,9210
(1610
(27(42
(27435
368
38,975
26
Loan valuation allowance in CHF m
Due from banksDue from customersMortgages
Total loans valuation allowance
of which on principalof which on interest
31.12.01
366,1983,030
9,264
7,5531,711
31.03.02
1055,8122,840
8,757
7,1951,562
Roll forward of loan valuation allowance in CHF m
At beginning of financial yearNet additions charged to income statementNet write-offsBalances acquired/(sold)Provisions for interestForeign currency translation impact and other
At end of period
31.12.01
10,7861,613
) (3,805(3
400273
9,264
))
31.03.02
9,264242
(9470
73125
8,757
Impaired loans in CHF m
With a specific allowanceWithout a specific allowance
Total impaired loans, gross
Non-performing loansNon-interest earning loansRestructured loansPotential problem loans 1)
Total impaired loans, gross
1) Potential problem loans consist of loans where interest payments are being made. However, there exists some doubt in the credit officer's assessment as to the timingand/or certainty of the repayment of contractual principal.
31.12.01
12,957912
13,869
7,9922,808
1142,955
13,869
31.03.02
12,373769
13,142
6,6422,576
773,847
13,142
Securities and precious metals trading portfolios in CHF m
Listed on stock exchangeUnlisted
Debt instruments
of which own bonds and medium-term notesListed on stock exchangeUnlisted
Equity instruments
of which own sharesPrecious metals
Total securities and precious metals trading portfolios
of which securities rediscountable or pledgeable with central banks
31.12.01
66,30891,434
157,742
1,03744,2025,123
49,325
4,4101,307
208,374
77,306
31.03.02
88,33388,904
177,237
1,11942,4768,859
51,335
4,2381,836
230,408
89,962
www.credit-suisse.com 27
CONSOLIDATED RESULTS CREDIT SUISSE GROUP
Investments from the insurance business in CHF m
As of March 31, 2002
Debt securities issued by Swiss Federal Government, cantonal or local governmental entities
Debt securities issued by foreign governmentsCorporate debt securitiesOther
Debt securities
Equity securities
Total securities – available-for-sale
Debt securitiesEquity securities
Total securities – trading
Own sharesMortgage loansOther loansReal estateShort-term investments and other
Investments from the insurance business
Equity securitiesDebt securitiesShort-term investmentsReal estate
Investments where the investment risk is borne by the policyholder
Total investments from the insurance business
Fair value
9,78918,61521,64615,835
65,885
23,657
89,542
–––
10,067–
–
––––
–
–
Grossunrealized
losses
120397339178
1,034
1,183
2,217
–––––
–
––––
–
–
Grossunrealized
gains
139231467465
1,302
1,722
3,024
–––––
–
––––
–
–
Amortized cost
9,77018,78121,51815,548
65,617
23,118
88,735
–––––
–
––––
–
–
Book value
9,78918,61521,64615,835
65,885
23,657
89,542
95745
1,002
1669,8944,5427,3684,120
116,634
10,7712,638
784316
14,509
131,143
Investments from the insurance business in CHF m
As of December 31, 2001
Debt securities issued by Swiss Federal Government, cantonal or local governmental entities
Debt securities issued by foreign governmentsCorporate debt securitiesOther
Debt securities
Equity securities
Total securities – available-for-sale
Debt securities
Equity securities
Total securities - trading
Own sharesMortgage loansOther loansReal estateShort-term investments and other
Investments from the insurance business
Equity securitiesDebt securitiesShort-term investmentsReal estate
Investments where the investment risk is borne by the policyholder
Total investments from the insurance business
Fair value
8,28719,50322,94715,823
66,560
22,332
88,892
–––
10,376–
–
––––
–
–
Grossunrealized
losses
70223267129
689
2,219
2,908
–––––
–
––––
–
–
Grossunrealized
gains
152474672543
1,841
2,406
4,247
–––––
–
––––
–
–
Amortized cost
8,20519,25222,54215,409
65,408
22,145
87,553
–––––
–
––––
–
–
Book value
8,28719,50322,94715,823
66,560
22,332
88,892
1,858
37
1,895
1849,8114,6487,5493,793
116,772
10,9342,495
794296
14,519
131,291
28
RISK MANAGEMENT
Trading exposures The VaR at Credit Suisse First Boston at the end of thefirst quarter of 2002 was USD 52.5 million comparedwith USD 42.7 million at the end of the previous quarter.The increase was due to an increase in interest ratevolatility combined with a reduction in overall portfoliobenefit across risk categories. As illustrated in the back-testing chart, Credit Suisse First Boston had no regula-tory backtesting exceptions in the first quarter of 2002.The backtesting chart shows the component of tradingrevenue due purely to overnight price movements andexcluding fee and commission income. This calculation isbetter suited for the evaluation of a VaR model.
Asset qualityDespite continuing economic weakness in selected mar-kets and sectors, overall impaired assets have declinedas older positions are resolved. Non-performing assetsat Credit Suisse First Boston declined in the first quarter2002 as a result of fewer new problem situations andsales of problem loans. The Group’s provision coverageof problem loans continued to strengthen. While invest-ment grade exposure continues to make up over 80% ofcounterparty exposure, non investment grade exposureshave deteriorated more quickly than in past years. Thisdevelopment has led to increased monitoring and moreactive credit hedging activities, particularly of exposuresin vulnerable areas.
2Q2001 3Q2001 4Q2001 1Q2002
Daily adjusted trading revenue One-day VaR (99%)
in USDm
100
50
0
–50
–100
–150
Adjusted trading revenue and VaR estimate for Credit Suisse First Boston.
CSFB trading exposures (99% one-day VaR)in USD m
Total VaRPeriod endAverageMaximumMinimum
in USD m
VaR by risk typeInterest rateForeign exchangeEquityCommodity
Subtotal
Diversification benefit
Total
Credit Suisse First Boston computes these VaR estimates separately for each risktype and for the whole portfolio using historical simulation methodology.Diversification benefit reflects the net difference between the sum of the 99%percentile loss for each risk type and for the total portfolio.
2Q2001
72.373.085.366.6
30.06.01
79.817.121.21.1
119.2
) (46.9
72.3
)
3Q2001
85.078.095.263.1
30.09.01
107.215.223.32.5
148.2
) (63.2
85.0
4Q2001
42.749.055.542.7
31.12.01
56.711.121.72.4
92.0
) (49.3
42.7
1Q2002
52.549.261.240.2
31.03.02
59.77.5
17.20.6
85.0
(32.5
52.5
Asset quality & provisions in CHF m
As of March 31, 2002
Non-performing counterparty exposure (NPCE) 1)
Capital provisions against NPCE 2)
Total counterparty exposure 1)
of which lendingof which committed, but unusedof which contingent exposureof which counterparty trading
Coverage ratio of NPCE31.03.0231.12.0131.03.01NPCE as percentage of counterparty exposure31.03.0231.12.0131.03.01
1) Includes loans and loan equivalents. / 2) Excludes total interest of CHF 1,275 m (fully provided).
Credit SuisseGroup
8,7585,261
380,342182,591105,20025,74266,809
60%59%62%
2.3%2.4%2.3%
Credit SuisseFirst Boston
3,4512,040
219,87938,847
103,93011,38365,719
59%59%60%
1.6%1.6%0.7%
Credit SuisseFinancial Services
5,3073,221
160,463143,744
1,27014,3591,090
61%60%62%
3.3%3.5%4.6%
www.credit-suisse.com 29
INFORMATION FOR INVESTORS
Credit Suisse Group shares Ticker symbolsStock exchange listings Bloomberg Reuters Telekurs
SWX Swiss Exchange/virt-x CSGN VX CSGZn.VX CSGN,380Frankfurt CSX GR CSGZn.DE CSX,013New York (ADS) 1) CSR US CSR.N CSR,065Tokyo 8653 JP CSGZ.T N1492,106
1) 1 ADS represents 1 registered share.
Swiss security number 1213853 ISIN number CH0012138530 German security number DE 876 800CUSIP number 225 401 108
RatingsAgencies Credit Suisse Group Credit Suisse Credi Credit Suisse First Boston Winterthur
Long term Short term Long term Short term Long term Short term
Moody’s, New York Aa3 - Aa3 P1 Aa3 P1 Aa3Standard & Poor’s, New York A+ A1 AA- A1+ AA- A1+ AA-Fitch IBCA, New York AA- F1+ AA- F1+ AA F1+ AA-
5520124English
Enquiries
CREDIT SUISSE GROUPInvestor Relations Gerhard Beindorff, Andreas PeterlikTel. +41 1 333 4570 / +41 1 333 3169Fax +41 1 333 2587
CREDIT SUISSE GROUPMedia Relations Karin Rhomberg Hug, Claudia KraazTel. +41 1 333 8844 Fax +41 1 333 8877
Copies of all Credit Suisse Group
financial publications may be ordered from:
CREDIT SUISSEKIDM 23Uetlibergstrasse 2318070 ZurichSwitzerlandFax +41 1 332 7294www.credit-suisse.com/q1results2002/order.html
Credit Suisse GroupParadeplatz 8 P.O. Box 1 8070 Zurich Switzerland
Tel. +41 1 212 1616 Fax +41 1 333 2587
www.credit-suisse.com