Private Banking Update

Citigroup Swiss Private Banking
Roundtable
Zurich, September 9, 2008

Martin Mende, Private Bankin...
Cautionary statement

Cautionary statement regarding forward-looking and non-GAAP information
This presentation contains f...
Agenda



Status & overall Strategy

International Growth

Client Value Proposition

The Integrated Bank

Financial Target...
Key trends in Wealth Management
From ...                                   To ...


                                      ...
Current markets: Where do we stand?

! Long-term growth prospects for wealth managers remain
   intact
   – Rise of emergi...
Good net new asset growth in Wealth Management

                              NNA growth on AuM in %
           5.8       ...
Continued strong gross margin

WM gross margin on AuM (bps)


    113      112      115      117
                         ...
Credit Suisse as the premier global private bank –
What will it mean?

! We lead the industry in client solutions

! We wo...
Private Banking: Strategy overview




                                                                                   ...
Agenda



Status & overall Strategy

International Growth

Client Value Proposition

The Integrated Bank

Financial Target...
Strong growth in mature markets and increased presence
in key emerging markets
                                           ...
Our hiring philosophy


      Prudent economics                         Cultural fit

  ! Clear business case for each    ...
Region EMEA: Key figures and achievements
Key figures                         1H08    Key achievements
                   ...
Region Asia-Pacific: Key figures and achievements
Key figures                         1H08    Key achievements
           ...
Region Americas: Key figures and achievements
Key figures                       1H08   Key achievements
                  ...
Agenda



Status & overall Strategy

International Growth

Client Value Proposition

The Integrated Bank

Financial Target...
Client Centricity as strategic way to innovate around
 client needs
                                                      ...
Managed Investment Products as key thrust
Benefits

                  ! Broad risk diversification
      Client      ! Lar...
Agenda



Status & overall Strategy

International Growth

Client Value Proposition

The Integrated Bank

Financial Target...
Unique value proposition to Private Banking clients
through integrated coverage and solution delivery

                   ...
Leveraging the Integrated Bank: Key examples

                                                     Solution Partners team
...
Integrated Bank model maintains momentum

Gross margin with Wealth Management clients (in bps)

                          ...
Agenda



Status & overall Strategy

International Growth

Client Value Proposition

The Integrated Bank

Financial Target...
Our target: Delivering strong results, while investing
continuously and significantly in growth

Growth investments of CHF...
Citi Swiss Private Banking Roundtable
         September 9, 2008, Page 25
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2008-09-10 Citi Swiss Private Banking Roundtable

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2008-09-10 Citi Swiss Private Banking Roundtable

  1. 1. Private Banking Update Citigroup Swiss Private Banking Roundtable Zurich, September 9, 2008 Martin Mende, Private Banking Head of Business Development
  2. 2. Cautionary statement Cautionary statement regarding forward-looking and non-GAAP information This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties, and we might not be able to achieve the predictions, forecasts, projections and other outcomes we describe or imply in forward-looking statements. A number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions we express in these forward-looking statements, including those we identify in quot;Risk Factorsquot; in our Annual Report on Form 20-F for the fiscal year ended December 31, 2007 filed with the US Securities and Exchange Commission, and in other public filings and press releases. We do not intend to update these forward-looking statements except as may be required by applicable laws. This presentation contains non-GAAP financial information. Information needed to reconcile such non-GAAP financial information to the most directly comparable measures under GAAP can be found in Credit Suisse Group's second quarter report 2008. Citi Swiss Private Banking Roundtable September 9, 2008, Page 2
  3. 3. Agenda Status & overall Strategy International Growth Client Value Proposition The Integrated Bank Financial Targets Citi Swiss Private Banking Roundtable September 9, 2008, Page 3
  4. 4. Key trends in Wealth Management From ... To ... Focus on total client wealth, including Services around free investible assets all asset classes as well as liabilities Narrow focus on classical private Comprehensive solutions, combining banking offerings private and investment banking skills Segmentation mostly along asset size Needs-based segmentation will finally and product usage take off Focus on home markets and offshore Global business models, on- and centers offshore capabilities in all major regions Citi Swiss Private Banking Roundtable September 9, 2008, Page 4
  5. 5. Current markets: Where do we stand? ! Long-term growth prospects for wealth managers remain intact – Rise of emerging markets – Generational transfers of wealth – Private investment banking ! Credit Suisse is well positioned to face challenges and to outperform its competitors – Global presence – Strong balance sheet – Unique Integrated Bank approach Citi Swiss Private Banking Roundtable September 9, 2008, Page 5
  6. 6. Good net new asset growth in Wealth Management NNA growth on AuM in % 5.8 7.5 7.3 6.4 6.91) CHF bn 31 43 51 50 29 WM NNA AuM grew by 36% (2004-1H08), representing a WM AuM 784 839 774 568 693 CAGR of 9% 2004 2005 2006 2007 1H08 1) Annualized Citi Swiss Private Banking Roundtable September 9, 2008, Page 6
  7. 7. Continued strong gross margin WM gross margin on AuM (bps) 113 112 115 117 Transaction-based 40 38 35 31 Recurring 73 74 80 86 2005 2006 2007 1H08 Citi Swiss Private Banking Roundtable September 9, 2008, Page 7
  8. 8. Credit Suisse as the premier global private bank – What will it mean? ! We lead the industry in client solutions ! We work as part of a truly integrated bank ! We are the preferred employer for top performers and talent ! We outgrow the competition, globally and in core markets ! Our productivity is benchmark ! We deliver superior returns to our shareholders Our clients are our ambassadors Citi Swiss Private Banking Roundtable September 9, 2008, Page 8
  9. 9. Private Banking: Strategy overview Premier global private bank Market share Integrating Productivity International Client value gains in the banking and financial Best people growth proposition Switzerland businesses performance Premier bank in Switzerland Citi Swiss Private Banking Roundtable September 9, 2008, Page 9
  10. 10. Agenda Status & overall Strategy International Growth Client Value Proposition The Integrated Bank Financial Targets Citi Swiss Private Banking Roundtable September 9, 2008, Page 10
  11. 11. Strong growth in mature markets and increased presence in key emerging markets Continued +14 offices in 10 investment in countries/+550 RMs Accelerated Russia and since 2007 Continued turn- growth in Eastern Europe around and growth Western Europe in the US China onshore India onshore established launched Gulf: Leverage integrated bank Japan onshore Mexico onshore in preparation in preparation Relationship Managers at year-end 4'100 Expanded 3'140 presence in Brazil 2'540 (Hedging-Griffo) +330 p.a. Australia onshore +200 p.a. launched Goal 2004 2007 2010 Citi Swiss Private Banking Roundtable September 9, 2008, Page 11
  12. 12. Our hiring philosophy Prudent economics Cultural fit ! Clear business case for each ! Entrepreneurial spirit hired RM (NNA, revenues) ! Share our view on how ! Average break-even for we serve clients + RMs 18-24 months ! Broad solution and product ! Focus on pay for expertise performance; limited upfront bonus Citi Swiss Private Banking Roundtable September 9, 2008, Page 12
  13. 13. Region EMEA: Key figures and achievements Key figures 1H08 Key achievements ! Segment initiatives for UHNWI and AuM (CHF bn) 285 entrepreneurs successfully rolled-out growth1) NNA 5.1% ! Improved UHNWI coverage ! Continuously expanded product offering Relationship managers 1'300 ! Expanded footprint in UK and Italy ! Launched India onshore ! Launched Austria onshore ! Opened offices in Israel, Kazakhstan, Ukraine Way forward ! Accelerate growth in France, Germany, Italy, Spain and UK ! Continue investment into Moscow onshore platform; launch Poland onshore ! Further develop the Gulf region in an Integrated Bank approach ! Expand UHNWI franchise, e.g., by hiring additional dedicated RMs and improved solution offering ! Further roll-out client need segmentation, client profitability and sales cycle 1) Annualized Citi Swiss Private Banking Roundtable September 9, 2008, Page 13
  14. 14. Region Asia-Pacific: Key figures and achievements Key figures 1H08 Key achievements ! Launched Australia onshore AuM (CHF bn) 64 ! Acquired Hindal NNA growth1) 19.4% ! Opened branch in Shanghai Relationship managers 440 ! Strengthened sales management functions ! Continued product innovation ! Established UHNWI competence center ! Well ahead of hiring targets ytd. Way forward ! Further invest in regional platform, e.g., product and solution capabilities, operations, shared services ! Realize value from new onshore presences (Australia, China, Indonesia) ! Launch Japan onshore ! Expand UHNWI franchise and leverage Integrated Bank 1) Annualized Citi Swiss Private Banking Roundtable September 9, 2008, Page 14
  15. 15. Region Americas: Key figures and achievements Key figures 1H08 Key achievements ! Expanded presence in Latin America AuM (CHF bn) 112 – Successful integration of Hedging Griffo growth1) NNA 9.3% – Opened Panama office ! Continued turnaround of US business, e.g., Relationship managers 510 – Strengthened management, added various top RMs – Expanded service/product suite – Opened 4 new offices Way forward ! Latin America: Further growth – Broaden collaboration between CS and Hedging Griffo in Brazil (e.g., referrals, product distribution) – Launch Mexico onshore leveraging IB and AM platforms – Further enhance product offering ! US: Further growth and increase of profitability – Continue recruiting best in class RM teams – Strengthen products and services by leveraging PB global expertise and Integrated Bank 1) Annualized Citi Swiss Private Banking Roundtable September 9, 2008, Page 15
  16. 16. Agenda Status & overall Strategy International Growth Client Value Proposition The Integrated Bank Financial Targets Citi Swiss Private Banking Roundtable September 9, 2008, Page 16
  17. 17. Client Centricity as strategic way to innovate around client needs Segment specific Client understanding Advisory process Client profitability value propositions Illustrative Profitable Not Life- cycle phase profitable + + + e yp rt Client 1 Client 2 Client 3 vio ha Be Source of wealth Revenue Economic profit ! Needs-based customer ! Targeted offering, e.g., ! Comprehensive advice ! Client Profit and Loss segmentation around succession in five structured steps including Economic planning Profit ! Example: Entrepreneurs ! Boost in client ! Dedicated ! Identification and as key segment satisfaction Entrepreneur Desks development of focus ! Increased profitability clients (sales cycle) ! Basis and new insights for growth drivers ! Clients' needs met holistically through high-quality advice and service Citi Swiss Private Banking Roundtable September 9, 2008, Page 17
  18. 18. Managed Investment Products as key thrust Benefits ! Broad risk diversification Client ! Large variety of innovative solutions ! Professional investment management ! Broad range of components for tailor made solutions Relationship ! More time for advice and relationship building Manager ! Improved efficiency ! Reduced revenue volatility Bank ! Higher margins through higher value added ! Increased revenues for Investment Banking and Asset Mgmt Citi Swiss Private Banking Roundtable September 9, 2008, Page 18
  19. 19. Agenda Status & overall Strategy International Growth Client Value Proposition The Integrated Bank Financial Targets Citi Swiss Private Banking Roundtable September 9, 2008, Page 19
  20. 20. Unique value proposition to Private Banking clients through integrated coverage and solution delivery Client Relationship Manager Solution Specialists Investment Banking Private Banking Asset Management ! Traditional services: ! Financial planning and ! Traditional Investment Equities, FI, FX, Prime investment consulting: funds: Equities, FI... Services, Research... Pension Planning, Trust ! Discretionary Mandates Services, Inheritance & ! Alternative Investments: ! Alternative Investments: Tax Consulting... Structured Products, Private Equity, Hedge ! Banking products: Pay- Commodities... Funds, Real Estate... ments, Deposits, Lending, ! Corporate Finance ! Labeled fund solutions Leasing, Cards... Services: M&A, Equity/ ! ... Debt Capital Markets... Shared Services Citi Swiss Private Banking Roundtable September 9, 2008, Page 20
  21. 21. Leveraging the Integrated Bank: Key examples Solution Partners team International growth ! Enable RMs to find out quickly what ! Leverage local IB and AM the entire bank can offer presences for PB market entries ! Leverage IB and AM capabilities for ! Examples include Brazil, UHNWI clients Mexico, Russia, China, ! Provide customized solutions across Japan and Australia all asset classes with institutional discipline Swiss Entrepreneur/UHNWI desks Key Client Coverage ! Set up of eight dedicated ! Cross-divsional client coverage Desks on regional level management for largest clients in all regions ! Servicing UHNWI and ! Particularly broad effort in Switzerland, Entrepreneur & Executive clients with 1'250 clients covered and over 1'300 employees involved in cross- ! Joint cross-divisional divisional teams offering (PB, IB, AM) Citi Swiss Private Banking Roundtable September 9, 2008, Page 21
  22. 22. Integrated Bank model maintains momentum Gross margin with Wealth Management clients (in bps) 135 130 18 14 Referred to IB/AM 116 117 Booked in Wealth Management 1H07 1H08 Citi Swiss Private Banking Roundtable September 9, 2008, Page 22
  23. 23. Agenda Status & overall Strategy International Growth Client Value Proposition The Integrated Bank Financial Targets Citi Swiss Private Banking Roundtable September 9, 2008, Page 23
  24. 24. Our target: Delivering strong results, while investing continuously and significantly in growth Growth investments of CHF 300m+ p.a. Medium term-targets ! International platforms ! Top Relationship Managers Pre-tax income margin > 40% Supported by revenue growth initiatives ! Innovative client value proposition ! Managed Investment Products ! Leverage the integrated bank Net new assets growth And stringent cost management > 6% (WM only) ! Centers of Excellence ! Operational Excellence Citi Swiss Private Banking Roundtable September 9, 2008, Page 24
  25. 25. Citi Swiss Private Banking Roundtable September 9, 2008, Page 25
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