.credit-suisse Annual Report Part 1 Share performance Market capitalisation as at 31 December

ANNUAL REPORT 1999/2000 www.credit-suisse.com

Share performance 400 350 300 250 200 150 100 Swiss Market Index Credit Suisse Group 1996 1997 1998 1999 2000 Market capitalisation as at 31 December CHF bn 80 70 60 50 40 30 20 10 0 90 91 92 93 94 95 96 97 98 99 Change Share data 1999 1998 +/-% Number of shares issued at 31 December 272,206,488 269,086,369 1 Shares ranking for dividend at 31 December 272,206,488 269,086,369 1 Average 271,310,760 267,542,466 1 Shares ranking for dividend at 31 March 2000/1999 273,842,638 272,101,488 1 Market capitalisation at year-end (CHF m) 86,153 57,854 49 Earnings per share (CHF) 19.24 11.47 68 Earnings per share fully diluted (CHF) 19.11 11.40 68 Book value per share (CHF) 119.84 96.02 25 Share price (CHF) at year-end 316.5 215 47 for inclusion in Swiss tax returns 302 214 41 year high 316.5 382 –17 year low 212 149.5 42 Dividend (CHF) 7* 5 40 * proposal of the Board of Directors to the AGM

FINANCIAL HIGHLIGHTS 1999 1999 1998 Change REVENUE COMPOSITION Consolidated income statement in CHF m in CHF m +/–% 1999 Revenue 227,870 21,700 28 Gross operating profit 18% 9,132 6,641 38 19% Net profit 5,221 3,068 70 Cashflow 7,983 6,066 32 Change ROE in % in % +/–% 24% 39% Credit Suisse Group 18.2 11.7 56 Balance sheet business Banking business 22.1 10.0 121 Commission and service fees Trading Insurance business 11.0 10.3 7 Insurance 31 Dec. 1999 31 Dec. 1998 Change Consolidated balance sheet in CHF m in CHF m +/–% Total assets 722,746 652,437 11 Total shareholders’ equity 34,368 28,162 22 – of which minority interests 1,747 2,325 –25 Total risk-weighted assets (BIS) 213,298 202,078 6 BIS tier 1 capital 28,261 24,198 17 – of which non-cumulative preferred stock 200 0 – BIS total capital 40,843 36,000 13 31 Dec. 1999 31 Dec. 1998 Change Assets under management in CHF bn in CHF bn +/–% 1,180 938 26 Total assets under management 604 523 15 – of which advisory 576 415 39 – of which discretionary Change BIS ratios in % in % +/–% BIS tier 1 ratio Credit Suisse 6.8 7.1 –4 Credit Suisse First Boston 9.9 8.4 18 Credit Suisse Group 13.2 12.0 10 BIS total capital ratio Credit Suisse Group 19.1 17.8 7 Change Staff numbers at year-end 1999 1998 +/–% Total staff 663,963 61,580 4 – of which in Switzerland banking business 20,885 20,625 1 insurance business 6,569 6,827 –4 – of which outside Switzerland banking business 17,249 15,753 10 insurance business 19,260 18,375 5 Financial calendar 2000 Annual General Meeting Friday, 26 May 2000 Dividend payment Friday, 2 June 2000 Publication of 2000 interim results Thursday, 31 August 2000 Publication of 2000 annual results Tuesday, 13 March 2001 2001 Annual General Meeting Friday, 1 June 2001 1

HEAD OFFICE OF CREDIT SUISSE GROUP IN ZURICH Renovation has restored the head office of Credit Suisse Group in Zurich to its former glory. This impressive building, which incorporates both Renaissance and Baroque elements, was designed by Jakob Friedrich Wanner and built between 1873 and 1876. 2

TO OUR SHAREHOLDERS RAINER E. GUT, CHAIRMAN OF THE BOARD OF DIRECTORS (RIGHT), AND LUKAS MÜHLEMANN, CHIEF EXECUTIVE OFFICER Dear Shareholders We can look back on 1999 as a very good year. Credit Suisse Group increased its net profit by 70% to CHF 5.2 bn and posted a 26% growth in assets under management to CHF 1,180 bn, CHF 62 bn of which were net inflows of new assets. All business units contributed to the Group’s overall performance with record results. Net operating income rose to CHF 27.9 bn, an increase of 28% on the previous year. Especially gratifying was the 31% increase in commission and service fee income to CHF 10.9 bn, which includes income from all areas of asset management. Operat- ing expenses increased by 24% to CHF 18.7 bn. This included a 28% rise in personnel expenses to CHF 13.5 bn, largely as a result of higher staff incentive payments. The increase in other operating expenses was attributable primarily to growth and e-commerce initiatives. The cost/income ratio was improved from just over 72% to 71% and consolidated return on equity (ROE) rose from 11.7% to 18.2%. The results of the individual business units were as follows: Credit Suisse more than doubled its net profit to CHF 451 m. Its return on equity improved from 4.8% to 10.3%. 3

Credit Suisse Private Banking posted a net profit of CHF 1.9 bn, an improvement of 14%, and assets under management increased by CHF 74 bn – or 18% – to CHF 477 bn. Credit Suisse First Boston regained its earnings strength and, by consistently building its lower-risk client business, achieved a net profit of CHF 1.9 bn and a return on equity of 19%. Credit Suisse Asset Management reported a 5% increase in net profit to CHF 235 m, while cash earnings, which have become an accepted profit measure for the asset management business, rose by 19% to CHF 279 m. Winterthur posted a 22% rise in net profit to CHF 1.1 bn, with both life and non-life insurance contributing to this good result. 1999 saw the launch of innovative products and services on the Internet by all business units. We are making intensive efforts in the area of e-commerce, which we regard as a driver of fundamental change both in the ‘business-to-business’ and ‘business-to-consumer’ areas of the financial services sector. Timely recognition by Credit Suisse Group of the importance of e-commerce will enable it to capitalise on the resultant opportunities in all of its activities. Since the restructuring which began in 1996, Credit Suisse Group has achieved a sound basis for sustained and profitable growth. Between 1996 – before the new organisation came into effect – and 1999, Group revenues increased by 19% p.a. Assets under management grew by 22% p.a. Excluding the mergers with Winterthur, Warburg Pincus Asset Management and other acquisitions, growth in assets under management was 17% p.a. Based on the 1996 Group operating results, net earnings per share (EPS) have grown by 32% p.a. to CHF 19 for 1999, and return on equity (ROE) has increased from 10% to 18%. Book value per share has increased by 14% p.a. since 1996. 4

In the same period, the Credit Suisse business unit achieved revenue growth of 10% p.a., during a highly successful restructuring phase. Credit Suisse Private Banking recorded revenue growth of 15% p.a. and growth in assets under management of 14% p.a., reflecting changes to the traditional business model as well as the launch of innovative products and services. Revenue growth of 29% p.a. at Credit Suisse First Boston reflects success in the execution of its strategy to focus on customer businesses and to close the gap with its three large global competitors. In the last three years, Credit Suisse Asset Management has posted revenue growth of 22% p.a., with 26% growth in assets under management, while building a consolidated global business. Winterthur has achieved net profit growth of 29% p.a. and growth in assets under management of 14% p.a., reflecting its concentration on its core businesses, restructuring efforts and market success. The creation of the new ‘Financial Services’ management division on 1 April 2000 is aimed at further accelerating the Group’s growth and advancing the ‘Personal Finan- cial Services Europe’ project – already successfully running in our pilot market, Italy – with a view to expanding our asset management business in Europe under even better conditions. The new structure will also pave the way for the closer integration of banking, insurance and e-commerce with a view to developing new customer service models as well as innovative products and services. We wish to thank our customers and you, our shareholders, for the trust you have placed in our company. We also extend our warmest thanks to our employees for their valuable contribution to the success of Credit Suisse Group. Rainer E. Gut Lukas Mühlemann Chairman of the Board of Directors Chief Executive Officer 5

THE STRUCTURE OF CREDIT SUISSE GROUP Credit Suisse Group is one of the world’s leading international financial services companies. The Group goes back to 1856. It employs around 64,000 staff and is listed on the SWX Swiss Exchange, Frankfurt and Tokyo stock exchanges. The Group comprises the Financial Services management division, incorporating Credit Suisse (corporate and individual customers in Switzerland), Winterthur (worldwide insurance business) and Personal Financial Services Europe (affluent private clients in Europe); the Group also includes Credit Suisse Private Banking (private investors) and Credit Suisse Asset Management (institutional investors), which are responsible for asset management, and Credit Suisse First Boston, the global investment bank. In parallel to its conventional distribution channels, Credit Suisse Group also offers a wide range of e-commerce services across all its business areas. Investment Banking Private Banking Asset Management Financial Services Personal Financial Services Europe Global investment Services for institu- Financial services for Worldwide insurance Services for private Corporate and indi- banking tional and mutual fund affluent customers in business investors in Switzer- vidual customers in investors worldwide Europe land and abroad Switzerland 4 locations in 7 locations in 5 locations in Italy, About 630 locations in 51 locations in 239 locations in Switzerland Switzerland with another 15 to Switzerland, present in Switzerland Switzerland 51 locations 16 locations follow in the course of over 30 countries 36 locations internationally internationally the year 2000 internationally Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Bank Leu* Neue Aargauer Winterthur Life Credit Suisse Credit Suisse Asset First Boston Bank* (98.6%) Management, LLC Clariden Bank* Winterthur International International Credit Suisse Trust Bank Hofmann* DBV-Winterthur Group Credit Suisse & Banking First Boston Corp. Credit Suisse Trust* Winterthur Holding Italia Credit Suisse Asset Credit Suisse Management Credit Suisse Fides* Hispanowin S.A. First Boston (Australia) Banca di Gestione Winterthur (UK) (Europe) Ltd. Credit Suisse Asset Patrimoniale* Holdings Management Ltd. Winterthur U.S. Holdings Winterthur legal entity Credit Suisse legal entity Credit Suisse First Boston legal entity * direct holding of Credit Suisse Group 6

THE SIX BUSINESS UNITS OF CREDIT SUISSE GROUP CREDIT SUISSE Credit Suisse serves corporate and Thanks to an innovative range of products individual customers in Switzerland through and services, especially in direct and a multichannel strategy and an efficient Internet banking, it ranks among the branch network covering all major locations. market leaders in its segment. CREDIT SUISSE PRIVATE BANKING Credit Suisse Private Banking is one of providing personal investment counselling the world’s largest private banks and has and professional asset management for a a strong presence in both the Swiss and sophisticated international clientele. international markets. It specialises in CREDIT SUISSE FIRST BOSTON Credit Suisse First Boston is a leading services, sales and trading, and financial global investment banking firm, providing products for users and suppliers of capital financial advisory and capital raising around the world. CREDIT SUISSE ASSET MANAGEMENT Credit Suisse Asset Management is a providing first-class international leading global asset manager focusing on management through domestic operations. institutional and mutual fund investors, WINTERTHUR Winterthur Group is one of the leading and corporate customers tailor-made insurance companies in Europe and one of insurance and pension solutions at a local the largest internationally active insurance and international level. companies in the world. It offers private PERSONAL FINANCIAL SERVICES EUROPE The Personal Financial Services Europe third-party products, personalised advice initiative targets affluent private clients in and Internet content, and seamless ser- selected European markets, offering a vice through a combination of traditional wide range of Credit Suisse Group and and electronic channels. 7

CREDIT SUISSE GROUP BUSINESS REVIEW AND CONSOLIDATED RESULTS Credit Suisse Group posted a net profit of CHF 5.2 bn, 70% higher than in the previous year, and an increase in revenue of 28%. All business units achieved record results and strong growth. The Group’s ROE increased to 18.2%. Assets under management grew by CHF 242 bn or 26% to CHF 1,180 bn. As of 1 April 2000, the Group established the new ‘Financial Services’ management division, with the aim of advancing the integration of banking, insurance and e-commerce and supporting dynamic business development. REVENUE CONTRIBUTION Credit Suisse Group’s net operating income rose to CHF 27.9 bn, an increase of 28% BY BUSINESS UNIT on the previous year. Commission and service fee income, which includes income from 12% asset management products and services, rose by 31% to CHF 10.9 bn. After last 16% year’s setback, income from trading rose by 177% to CHF 6.6 bn. Interest income 4% 17% rose by 2% to CHF 5.3 bn. Insurance business contributed CHF 5.1 bn (1998: CHF 5.4 bn) to the Group’s net operating income. Operating expenses rose by 24% to CHF 18.7 bn. Personnel expenses climbed 51% 28% to CHF 13.5 bn, mainly as a result of the 68% increase in performance-related CS CSPB staff incentive payments to CHF 5.2 bn. Other operating expenses rose by 17% to CSFB CSAM CHF 5.2 bn, primarily as a result of investment in growth and e-commerce initiatives. Winterthur The cost/income ratio improved from just over 72% to 71%. Gross operating profit went up by 38% to CHF 9.1 bn. Depreciation, valuation adjustments and losses decreased by 33% to CHF 2.6 bn. The overall tax bill doubled to CHF 1.1 bn, reflecting higher income. After deducting minority interests of CHF 118 m, Credit Suisse Group posted a net profit of CHF 5.2 bn, 70% higher than in 1998, with no extraordinary events having a material impact on the result. Total assets under management grew by CHF 242 bn, or 26%, to CHF 1,180 bn, of which CHF 62 bn, or 7%, were net new assets. At year-end, total equity amounted to CHF 34.4 bn, up 22%. Consolidated return on equity (ROE) improved from 11.7% to 18.2%. Book value per share rose by 25% to CHF 119.84, while net profit per STAFF NUMBERS BY BUSINESS UNIT share (EPS) came to CHF 19.24 (up 68%). At the Annual General Meeting on 26 May 2000 the Board of Directors will propose an increase in dividend from CHF 5 25,829 11,404 to CHF 7 per registered share. As at 31 December 1999, Credit Suisse Group had 63,963 employees 8,371 (1998: 61,580), of which 27,454 were in Switzerland (1998: 27,452). 2,000 Strong growth in all business units Credit Suisse more than doubled its net profit 15,185 CS to CHF 451 m. Its return on equity rose from 4.8% to 10.3%. Total revenue increased CSPB CSFB by 8%, while operating expenses rose by 1%. The cost/income ratio improved further CSAM Winterthur from 71% to 67%. Assets under management rose by CHF 21 bn, or 18%, to 8

CHF 141 bn, of which CHF 14 bn, or 12%, was accounted for by net new assets. In PROFIT CONTRIBUTION BY BUSINESS UNIT e-commerce, Credit Suisse continues to take a leading position in Switzerland: the 8% number of online banking customers more than doubled to over 212,000 by the end of 19% the first quarter of 2000. Youtrade, which became the first direct brokerage service in 4% Switzerland when it was launched in April 1999, had around 16,000 customers by end- 35% March 2000. Around 47% of all securities transactions at Credit Suisse are executed online. 34% CS CSPB Credit Suisse Private Banking posted a net profit of CHF 1.9 bn in 1999, a 14% CSFB increase on the previous year. Total revenue rose by 10%, while operating expenses CSAM Winterthur increased by 11%, mainly owing to higher personnel expenses (up 13%) and investment in new technologies. The cost/income ratio remained at 47%. Assets under management expanded by CHF 74 bn or 18% to CHF 477 bn, of which CHF 20 bn (1998: CHF 17 bn) were net new assets. Lugano-based Banca di Gestione Patri- moniale, founded in the second half of 1999, opened its doors for business in mid- February 2000. Zurich-based Bank für Handel und Effekten will, during the second quarter of 2000, be integrated into Bank Hofmann, a Zurich-based independent private bank under the umbrella of Credit Suisse Private Banking. With this step, Bank Hof- mann will expand its asset base, while adding credit expertise to its range of services. With new products in e-commerce (e.g. Fund Lab; Derivatives, IPOs and Bond Issues; Insurance Lab), the business unit continued to be an innovator in the electronic delivery of private banking products and services. Credit Suisse First Boston regained its earnings strength, posting a net profit of USD 1.3 bn (CHF 1.9 bn). The firm has consistently applied its strategy of growing client business involving less capital and risk, and simultaneously achieved good increases in market share in equities and improved its ranking in fixed income, as well as in mergers and acquisitions. Total revenue rose by 45% on a USD basis, or by 51% on a CHF basis, with strong contributions from equities business (up 94%/102%), fixed income and derivatives business (up 63%/70%) and investment banking (up 22%/27%). Operating expenses went up by 35% (USD) or by 40% (CHF), reflecting higher bonus accruals in line with revenue growth, investment in growth and e-commerce initiatives, as well as the significant shift in the business mix. 9

Credit Suisse Asset Management posted a net profit of CHF 235 m (up 5%). Cash earnings, which have become an accepted profit measure for the asset management business, increased by 19% to CHF 279 m. Revenue increased by 35%, while operating expenses rose by 44%, mainly reflecting investments in information technology and European retail infrastructure, as well as the acquisition of Warburg Pincus Asset Management. Discretionary assets under management grew by CHF 112 bn, or 53%, to CHF 324 bn, of which CHF 18.5 bn (9%) was attributable to net new assets, CHF 57.5 bn (27%) to market gains and CHF 36 bn (17%) to the acquisition of Warburg Pincus. Total assets under management amounted to CHF 425 bn (up 43%). Winterthur achieved a net profit of CHF 1.1 bn, up 22%, with both non-life and life business contributing to the overall result. Gross premiums in non-life grew by 3%. Following 1998’s tax-driven surge in Switzerland, life insurance premiums fell by 1%; the compounded annual growth between 1997 and 1999 was 10%. Total premiums grew by 1%, and assets under management grew by 16% to CHF 132 bn. The strength of Winterthur’s insurance operations permitted a significant reduction in realised capital gains (investment return was 6.3%). As a result of this investment strategy, which is in line with the current market environment, total reported equity went up by 20%. Through a series of acquisitions, Winterthur increased its customer base to more than 13 m clients in 14 European countries. With regard to e-commerce, it is offering transaction capabilities for household contents, motor, travel and life insurance in six European countries under the brand name ‘webinsurance’, with more to follow. In Italy – the pilot market for ‘Personal Personal Financial Services Europe Financial Services Europe’ – Credit Suisse (Italy) is already successfully operating with 250 Personal Bankers and its own Call Center. Assets under management have more than doubled since 1998 to CHF 4 bn (EUR 2.5 bn). The fifth Investment Center was opened in Milan at the end of March and another fifteen are to follow over the course of the year. Since April 2000, clients have also had direct access to comprehensive financial and product information and various advisory tools over the Internet. In parallel with these developments, preparations are currently underway for a pan-European e-commerce platform. During the second half of the year, Credit Suisse Group will start to offer online financial services, including brokerage, on the major European and overseas stock exchanges via a Group company domiciled in Luxembourg. Credit Suisse Group is fully focused on e-commerce, which it regards E-commerce as a driver of fundamental change in both the ‘business-to-business’ and ‘business-to- consumer’ areas. The Group is offering a variety of e-commerce services as an alternative to existing channels, as seen with Direct Net at Credit Suisse, webinsurance at Winterthur and PrimeTrade at Credit Suisse First Boston. It has also used e-commerce as a means 10

to offer new products and attract new customer groups, such as with youtrade, yourhome, Fund Lab and many others. Lastly, the Group is undertaking efforts which fundamentally transform existing business concepts through start-ups such as the ‘Personal Financial Services Europe’ project and other initiatives. Credit Suisse Group’s strategy is to capitalise on its strong brand, on its product and service capabilities and on the interplay between traditional and new distribution paradigms. Its goal is to have full e-commerce capabilities in all its primary businesses by the end of this year and to be in a position to move forward as one of the most successful established e-commerce market participants in financial services. In the first months of the current year, all business units have posted excel- Outlook lent results and are maintaining their strong growth momentum. Credit Suisse Group expects the operating environment to remain volatile and challenging, but it is confident of achieving further improvements in performance. New ‘Financial Services’ management division As of 1 April 2000 Credit Suisse Group adapted the organisational structure which was introduced at the beginning of 1997 in line with the altered market environment, in order to accelerate the Group’s growth further. Credit Suisse (corporate and individual customers in Switzerland), Winterthur (worldwide insurance business) and ‘Personal Financial Services Europe’ (affluent private clients in Europe) will be combined to form the new ‘Financial Services’ management division led by Thomas Wellauer, but will continue to appear in the market as independent business units. Thomas Wellauer will remain Chief Executive Officer of Winterthur. The creation of the ‘Financial Services’ management division will pave the way for the closer integration of banking, insurance and e-commerce with a view to developing new customer service models as well as innovative products and services. The focusing of strengths will facilitate the rapid and large-scale expansion of e-commerce activities, the development of new business models in Switzerland and the exploitation of additional business opportunities, especially in Europe. 11

OVERVIEW OF BUSINESS UNIT RESULTS Credit Credit Credit Adjustments Suisse Suisse Suisse including Credit 1999 Credit Private First Asset Winterthur Winterthur Corporate Suisse in CHF m Suisse Banking Boston Management Non-life Life Centre Group 3,478 4,715 14,532 1,149 3,016 2) 1,564 2) – 584 27,870 REVENUE Personnel expenses 1,239 2) 509 2) 1,401 1,418 7,999 467 476 13,509 Other operating expenses 783 2) 422 2) 866 768 2,714 377 –701 5,229 2,267 2,186 10,713 844 2,022 931 –225 18,738 TOTAL OPERATING EXPENSES 1,211 2,529 3,819 305 994 633 – 359 9,132 GROSS OPERATING PROFIT Depreciation and write-offs on non-current assets 51 46 439 44 41 75 349 1,045 Valuation adjustments, provisions and losses1) 610 55 786 0 0 0 89 1,540 550 2,428 2,594 261 953 558 –797 6,547 PROFIT BEFORE EXTRAORDINARY ITEMS/TAXES Extraordinary income 0 51 40 0 0 2 93 Extraordinary expenses 111 1) 0 17 22 0 2 152 Taxes 340 130 516 713 24 – 574 1,149 1,171 454 1,930 1,881 235 – 332 5,339 NET PROFIT BEFORE MINORITY INTERESTS – of which minority interests 90 3 19 1 0 5 118 1,081 451 1,911 1,880 235 – 337 5,221 NET PROFIT (after minority interests) Average allocated equity capital 11,618 4,411 2,771 9,925 540 Return on average equity capital 10.1% 10.3% n/a 19.0% n/a Equity capital allocation as of 1 January 2000 12,607 4,611 2,875 10,494 1,054 1) net of allocation (–)/release (+) of reserves for – 68 – 31 0 general banking risks 2) defined as premiums earned (net), less claims incurred and expenses for processing claims as well as actuarial provisions, less commissions (net), plus investment income from insurance business; expenses from the handling of both claims and investments are allocated to revenue; personnel expenses non-life: CHF 365 m, life: CHF 253 m, other operating expenses non-life: CHF 275 m, life: CHF 212 m. OVERVIEW OF ASSETS UNDER MANAGEMENT Credit Credit Suisse Suisse Credit Credit Private Asset Winterthur Suisse 31 Dec. 1999 Suisse Banking Management Group Group in CHF bn 65 38 6 4 112 CASH & TIME DEPOSITS SECURITIES ACCOUNTS Fixed income, equity and balanced safekeeping accounts 34 304 386 102 825 – of which fixed income 9 140 146 66 361 – of which equities 25 164 163 36 387 – of which balanced – – 77 – 77 Investment funds 32 68 – 5 105 – of which Credit Suisse Asset Management investment funds 28 50 – – 78 Other 7 4 31 22 64 73 376 417 128 994 TOTAL SECURITIES ACCOUNTS 3 63 1 – 68 FIDUCIARY TIME DEPOSITS 141 477 425 1 174 132 TOTAL – of which advisory – 604 139 365 100 – of which discretionary 324 132 570 2 112 Private Equity 6 1,180 TOTAL INCL. PRIVATE EQUITY 12

BUSINESS UNIT ACCOUNTING PRINCIPLES Unless stated below, Group accounting and valuation principles apply. BUSINESS UNIT FINANCIAL STATEMENTS The Credit Suisse Group financial statements reflect the organisational structure during 1999 and show the results of all business units as if they were legal entities operating independently. Financial information for the Corporate Centre includes income and expenses for the Corporate Centre as well as all consolidation adjustments. Corporate Centre costs attributable to operating business have been allocated to the respective business units. The business unit financial results include operating financial information only. For further details please refer to the relevant sections. MATERIAL CHANGES DURING 1999 The following changes are reported for the individual business units (for details see page 59): Credit Suisse Private Banking BGP Banca di Gestione Patrimoniale SA, Lugano Credit Suisse Asset Management Warburg Pincus Asset Management, New York Winterthur Group DBV Winterthur Holding National Insurance and Guarantee Corp. Plc (NIG), London Credit Suisse First Boston Credit Suisse First Boston International INCOME STATEMENT General To reconcile business unit accounts with legal entity accounts, certain adjustments have been made in the Corporate Centre (included in the ‘Adjustments including Corporate Centre’ column). Items such as restructuring costs are reflected in the Corporate Centre only. Expenses relating to projects sponsored by Credit Suisse Group that are not charged out to the business units are included in the ‘Adjustments including Corporate Centre’ column. Inter-business unit revenue splits Responsibility for each of our products is allocated to one of the business units. When one business unit contributes to the performance of another, revenue allocations have been established to compensate for such efforts. Revenue allocations are shown in the relevant income statement line. 13

Inter-business unit cost allocations Certain administrative and IT tasks (‘services’) may be concentrated in one business unit, which acts as a provider for the other business units. Such services are compensated for on the basis of service level agreements and transfer payments (which include personnel and other operating expenses). These are reflected in the ‘Other operating expenses’ line of the income statement. Real estate used by the bank All real estate in Switzerland, mainly bank premises, is managed centrally. The costs reflect market rent, plus an additional charge if actual costs exceed market rent. These costs are included in ‘Other operating expenses’. Provisions for credit risk Actual credit provisions exceeding the anticipated credit provision derived from statistically expected losses are booked against the ‘Reserves for general banking risks’ held at Group level and netted in the business unit ‘Valuation adjustments, provisions and losses’ income statement line. If the actual credit provisions are below the anticipated credit losses, the remaining amount is allocated to the ‘Reserves for general banking risks’. Taxes Taxes are calculated for individual business units based on average tax rates across their geographical range. The difference between these and actual tax expenses has been adjusted in the ‘Adjustments including Corporate Centre’ column. BALANCE SHEET General The balance sheets of the banking business units include the appropriate proportion of bank premises occupied in Switzerland and abroad. Equity allocation Available equity is allocated to the business units on the basis of average regulatory capital required during the period. KEY PERFORMANCE INDICATORS Ratios per head have not been calculated because some Group-wide services are pro- vided centrally by one or other of the business units, meaning that staffing required for services received is not reflected in the recipient business unit’s headcount. ASSETS UNDER MANAGEMENT Assets under management include client-related on and off-balance-sheet assets. Where two business units share responsibility for managing funds (such as investment funds), the assets under management are included in both business units. 14

REPORT OF THE GROUP’S AUDITORS ON THE BUSINESS UNIT FINANCIAL STATEMENTS OF CREDIT SUISSE GROUP, ZURICH We have performed certain procedures enumerated below in relation to the 1999 business unit financial statements of Credit Suisse Group and its subsidiary undertakings (‘the business unit financial statements’) for which the Directors of Credit Suisse Group are solely responsible. The business unit financial statements, which have been pre- pared for illustrative purposes only, are set out on pages 12 – 34 of the annual report. We have performed limited review procedures with regard to the business unit financial statements as follows: – reviewed the methodology for preparation of the business unit financial statements as described therein and their proper application; – given the methodology for preparation, reviewed the consistent application of the accounting policies; and – reviewed the reconciliation between the business unit financial statements and the consolidated Group results presented in the audited financial statements for the year. Nothing has come to our attention as a result of the foregoing limited review procedures that would lead us to believe that the business unit financial statements have not been properly compiled on the basis of the preparation set out therein or are materially misstated. KPMG Klynveld Peat Marwick Goerdeler SA Brendan R. Nelson Peter Hanimann Chartered Accountant Certified Accountant Auditors in Charge Zurich, 9 March 2000 15

CORPORATE AND INDIVIDUAL CUSTOMERS IN SWITZERLAND 1999 was a very successful year for Credit Suisse. Net profit more than doubled to CHF 451 m compared to the previous year. The bank’s return on equity rose from 4.8% to 10.3%. Total revenue increased by 8.4%, while operating expenses increased modestly – up 0.6%. The cost/income ratio improved from 71.2% to 66.6%. During 1999, Credit Suisse continued to improve its profitability through strong revenue growth. Lendings increased by 7.1% or CHF 6.0 bn, with mortgage growth accounting for 5.2%, or CHF 4.4 bn. This growth was achieved without compromising lending policy or the strict application of risk-adjusted pricing. Assets under management rose by more than 17.5% or CHF 21 bn to CHF 141 bn, of which 11.7% or CHF 14 bn was net new business. Credit Suisse also further grew its market share in the investment fund business. Assets under management held in investment funds grew by 34% to CHF 32.2 bn. In individual customer business, the trend towards greater savings through investment in securities continued. In pensions business, the volume of security investments rose by over 70% to CHF 1.6 bn. Further progress was made in expanding bancassurance activities. The travel insurance package launched with Winterthur at the beginning of June was well received, selling 14,000 units. In credit card business, a 35% increase in cards issued and the purchase of about 340,000 cards from Europay’s Eurocard portfolio enabled Credit Suisse to double its market share to 24%. RATIOS/KEY PERFORMANCE INDICATORS 1999 1998 Average allocated equity capital CHF m 4,411 4,230 Allocated equity capital CHF m (1 January 2000/1999) 4,611 4,450 Cost/income ratio 66.6% 71.2% – excl. amortisation of goodwill 66.3% 71.1% Return on average equity capital 10.3% 4.8% Number of employees at 31 Dec. 11,404 11,568 Pre-tax margin 16.8% 7.6% Personnel expenses/total expenses 61.8% 62.6% Personnel expenses/total income 40.3% 44.0% Number of branches at 31 Dec. 239 241 Net interest margin 2.35% 2.21% Loan growth at 31 Dec. 7.8% 10.4% Deposit/loan ratio at 31 Dec. 71.4% 71.8% Assets under management CHF bn at 31 Dec. 141 120 16

In corporate customer business, lendings in the low and medium risk classes grew 4.9%. Above-average growth was recorded in lendings to small and medium-sized enterprises (SME), with venture capital financing and consultancy services for structured financing contributing to this success. Trade financing volumes were up 30%, with Credit Suisse’s wider range of services and high level of commitment in this area both having a positive impact. Market share in foreign exchange trading was further expanded, reflecting the range of comprehensive, tailor-made hedging solutions on offer. Direct banking saw the number of online customers more than double to over 212,000 by the end of the first quarter of 2000. Youtrade, the first discount brokerage service via telephone and the Internet in Switzerland, launched in April 1999, proved a great success, with around 16,000 customers by the end of March 2000. 47% of all securities transactions at Credit Suisse are now executed online via Direct Net and youtrade. Yourhome is another innovative package of Internet-based services from Credit Suisse. It is aimed at people looking to buy a home and offers a full range of relevant products and services both from Credit Suisse and from external partners. E-commerce services will be expanded continuously. Lafferty Internet Ratings recently named Credit Suisse the best Internet bank in Europe for the second year running. INCOME STATEMENT 1999 1998 Change in CHF m in CHF m in % Net interest income 2,227 2,096 6 Net commission and service fee income 946 845 12 Net trading income 230 220 5 Other ordinary income 75 48 56 3,478 3,209 8 REVENUE Personnel expenses 1,401 1,412 –1 Other operating expenses 866 842 3 2,267 2,254 1 TOTAL OPERATING EXPENSES 1,211 955 27 GROSS OPERATING PROFIT Depreciation and write-offs on non-current assets 51 30 70 – of which amortisation of goodwill 13 4 225 Valuation adjustments, provisions and losses* 610 666 –8 PROFIT BEFORE EXTRAORDINARY ITEMS 550 259 112 AND TAXES Extraordinary income 51 36 42 Extraordinary expenses 17 51 – 67 Taxes 130 43 202 454 201 126 NET PROFIT – of which minority interests 3 –4 – 451 205 120 NET PROFIT (after minority interests) – 68 11 * net of allocation (–)/release (+) of reserves for general banking risks 17

Total revenue increased 8.4% to CHF 3,478 m. An increase in lending 1999 results volumes and an improved overall interest margin owing to lower interest arrears from non- performing loans resulted in a 6% increase in interest income. Commission and service fee income rose by 12%, with securities (including investment fund commissions) and service fee business contributing in equal parts to this growth. Trading income gener- ated from revenues from customers’ foreign exchange, foreign banknotes and precious metals business rose 5%, despite the introduction of the euro. Operating expenses increased modestly (0.6%), resulting in gross operating profit of CHF 1,211 m, up 27%. As a result, the cost/income ratio improved a further 4.6 percentage points to 66.6%. At CHF 99.9 bn, total assets were up 7% over 31 December 1998. Lending volumes increased by 7.1% to CHF 90.8 bn over the same period, while customer deposits grew by 6.4% to CHF 64.9 bn. Valuation adjustments, provisions and losses amounted to CHF 610 m. This fig- ure includes statistically determined credit risk costs of CHF 600 m and CHF 10 m in other provisions. Actual valuation adjustments on credit exposure decreased by 20% compared with 1998 and were CHF 68 m below the statistically anticipated value. Overall, the risk profile of the credit portfolio improved substantially. Net profit for the year was CHF 451 m, which represents an ROE of 10.3%, more than double the result for the previous year. 18

BALANCE SHEET 31 Dec. 1999 31 Dec.1998 * Change in CHF m in CHF m in % Cash and other liquid assets 1,374 869 58 Money market claims 489 563 –13 Due from banks 654 633 3 Due from other business units 1,080 1,187 –9 Due from customers 27,816 26,245 6 Mortgages 63,024 58,596 8 Securities and precious metals trading portfolio 21 54 – 61 Financial investments 1,711 1,873 –9 Participations 31 49 – 37 Tangible fixed assets 2,237 2,278 –2 Accrued income and prepaid expenses 292 194 51 Other assets 1,174 894 31 99,903 93,435 7 TOTAL ASSETS Due to banks 1,938 1,888 3 Due to other business units 16,689 13,101 27 Due to customers, in savings and investment accounts 36,330 37,429 –3 Due to customers, other 28,530 23,517 21 Medium-term notes 3,883 5,841 – 34 Bonds and mortgage-backed bonds 5,563 5,399 3 Accrued expenses and deferred income 504 548 –8 Other liabilities 1,501 903 66 Valuation adjustments and provisions 135 169 –20 Capital 4,830 4,640 4 – of which minority interests 13 10 30 99,903 93,435 7 TOTAL LIABILITIES * On the basis of the changes to the accounting principles, the accounting for securities lending and borrowing transactions was changed in 1999. Using the revised accounting rules, the 1998 balance sheet total would have been reduced by CHF 166 m. 19

SERVICES FOR PRIVATE INVESTORS IN SWITZERLAND AND ABROAD In 1999 Credit Suisse Private Banking improved on its excellent performance in 1998. Net profit before minority interests increased by 14% to CHF 1,911 m and assets under management grew by 18% to CHF 477 bn. The growth was the result of innovative product offerings, very strong investment performance and the acquisition of new portfolios. Credit Suisse Private Banking was thus able to further strengthen its position as one of the world’s leading private banks. At the same time, it consolidated its position as one of the most dynamic providers of Internet banking services. In 1999, Credit Suisse Private Banking produced strong growth and very good results in an increasingly competitive environment, and invested heavily in its business activities. In three areas, the bank faced particularly large challenges: new client groups with different requirements, increasing performance pressure, and price pressure caused by the deployment of new technologies. In all three areas, Credit Suisse Private Banking tackled the challenges head on and came up with innovative solutions. INCOME STATEMENT 1999 1998 Change in CHF m in CHF m in % Net interest income 898 852 5 Net commission and service fee income 3,115 2,713 15 Net trading income 592 551 7 Other ordinary income 110 159 – 31 4,715 4,275 10 REVENUE Personnel expenses 1,418 1,250 13 Other operating expenses 768 712 8 2,186 1,962 11 TOTAL OPERATING EXPENSES 2,529 2,313 9 GROSS OPERATING PROFIT Depreciation and write-offs on non-current assets 46 39 18 – of which amortisation of goodwill 7 5 40 Valuation adjustments, provisions and losses* 55 177 – 69 PROFIT BEFORE EXTRAORDINARY ITEMS 2,428 2,097 16 AND TAXES Extraordinary income 40 60 – 33 Extraordinary expenses 22 35 – 37 Taxes 516 435 19 1,930 1,687 14 NET PROFIT – of which minority interests 19 16 19 1,911 1,671 14 NET PROFIT (after minority interests) – 31 25 * net of allocation (–)/release (+) of reserves for general banking risks 20

In traditional private banking, where the relationship manager plays the central role, the trend away from product-focused portfolio management and towards comprehensive financial advice intensified. Credit Suisse Private Banking responded by expanding the breadth and depth of individual investment consulting services, offering its clients added value through comprehensive solutions to complex problems. One of Credit Suisse Private Banking’s main goals last year was to substantially increase the quality of its products and services. It managed to do this by implementing the following measures: specialisation in the products and services area, greater use of new technologies for the benefit of clients, and selling its own and other companies’ products with the aim of offering its clients the best products on the market. The clearest demonstration of these fundamental changes in strategy and positioning came with the wide range of online services that Credit Suisse Private Banking launched at www.cspb.com in 1999. These services have helped to make the market much more transparent for users: – Fund Lab, launched in March 1999, made it possible for the first time to compare and purchase mutual funds from a wide selection of European, American and Asian providers. By the end of the year, more than 700 investment funds from 28 providers were available through Fund Lab. All products – the bank’s own and those of other companies – are, with a few exceptions, offered at uniform issuing rates. – In April, youtrade was launched in conjunction with Credit Suisse. This service offers investors the opportunity to trade in securities directly, quickly, securely and on favourable terms via the Internet and by telephone. – Since June, Investors’ Circle has allowed clients to access relevant market and research information specifically designed for private clients. – During October, three additional Internet services were launched: Investment Pro- posal Online, an interactive advisory program, generates an investment proposal based on the investor’s personal risk profile; a second database gives an overview of the latest IPOs, derivatives and bond issues from leading issuing houses, whilst an information service from Reuters provides market quotes and news. – Launched in December, Insurance Lab enables clients to compare life insurance products from different companies and select interactively the insurance product best suited to their individual needs. 21

Fund Lab demonstrates the importance of the new Internet services to the bank’s overall success. In 1999 it contributed substantially to the massive and sustained increase in sales of proprietary and third-party funds. Every week Credit Suisse Private Banking receives requests from external fund companies wanting to have their funds included in Fund Lab. The database registers more than 50,000 hits per day. The innovative qualities of Fund Lab won Credit Suisse Private Banking the ‘Global Fund Leader of the Year 1999’ award from a leading UK investment fund publication. The creation of a new bank and two acquisitions added to Credit Suisse Private Banking’s progress in 1999. In the second half of the year, a new private bank, Banca di Gestione Patrimoniale, was founded in Lugano. As an independent private bank, it fills a strategic gap in the Italian-speaking market. The new bank opened for business in the middle of February 2000. Outside Switzerland, Credit Suisse Private Banking made two acquisitions in Spain during 1999. In March it bought Gestión Integral and in July it acquired the private banking business of ABN AMRO. These purchases strengthened Credit Suisse Private Banking’s position as one of the leading foreign financial institutions in the strategically important Spanish market. New representative offices in Beirut, Athens and Istanbul were opened during 1999 and Credit Suisse Trust Limited was established in the Bahamas. Bank für Han- del und Effekten will, during the second quarter of 2000, be integrated into Bank Hof- mann, an independent private bank under the umbrella of Credit Suisse Private Bank- ing. Bank Hofmann will thus expand its asset base while adding credit expertise to its range of services. At the end of 1999 Credit Suisse Private Banking had a total of 51 Swiss branches and a further 36 offices outside Switzerland. BALANCE SHEET INFORMATION 31 Dec. 1999 31 Dec.1998* in CHF m in CHF m Total assets 99,651 83,913 Due from customers 31,902 22,544 – of which secured by mortgages 7,667 6,505 – of which secured by other collateral 22,731 14,042 * On the basis of the changes to the accounting principles, the accounting for securities lending and borrowing transactions was changed in 1999. Using the revised accounting rules, the 1998 balance sheet total would have been reduced by CHF 6,515 m. 22

In a turbulent market characterised by inflationary fears, low bond yields 1999 results and resurgent equity markets, Credit Suisse Private Banking was able to repeat its strong first-half performance in the second half of the year. Assets under management grew by CHF 74 bn, or 18%, compared with 1998, of which CHF 20 bn, or 5%, was net new business. At year-end, assets under management totalled CHF 477 bn. Total revenue rose by 10.3%, with most of the growth attributable to a 14.8% improvement in commission and service fee income. Trading income and interest income were also up, by 7.4% and 5.4% respectively. Operating expenses increased by 11.4%, the two main drivers being greater investment in new technologies and performance-related remuneration (+13.4%). Staff numbers decreased slightly – from 8,399 to 8,371. The cost/income ratio was virtually unchanged on last year’s level at 47%. There was a significant reduction in valuation adjustments, provisions and losses (down 69% at CHF 55 m), reflecting improved risk management and much lower provisions. Net profit increased by 14.3% to CHF 1,911 m. The ratio of net profit to average assets under management rose from 42 bp to 44 bp. KEY PERFORMANCE INDICATORS 1999 1998 Average allocated equity capital CHF m 2,771 2,596 Allocated equity capital CHF m (1 January 2000/1999) 2,875 2,200 Cost/income ratio 47.3% 46.8% – excl. amortisation of goodwill 47.2% 46.7% Number of employees at 31 Dec. 8,371 8,399 Pre-tax margin 51.9% 49.6% Fee income/total income 66.1% 63.5% Fee income/operating expenses 142.5% 138.3% Assets under management CHF bn at 31 Dec. 477 403 Growth in assets under management at 31 Dec. 18.4% 5.9% – of which volume 5.0% 4.5% – of which performance 13.4% 1.4% After-tax profit/Ø assets under management 44 bp 42 bp 23

GLOBAL INVESTMENT BANKING 1999 was a year of strong achievement and robust financial results at Credit Suisse First Boston. Revenues rose to record levels, up 45% to USD 9.8 bn (CHF 14.5 bn), while net profit was USD 1.3 bn (CHF 1.9 bn), producing a 19% return on equity. Credit Suisse First Boston gained market share worldwide in almost all its client business areas for the third successive year. It aims to cement its position as one of the world’s leading global investment banks through additional investment in expanding client business, modernising infrastructure and strengthen- ing e-commerce activities. Credit Suisse First Boston is positioned at the forefront of its industry in harnessing change for clients and in its own activities – key attributes for success in the ‘new economy’. Credit Suisse First Boston’s strategy since 1997 has been to strengthen its global special bracket position through targeted growth of client business and consolidation of the more capital-intensive Fixed Income & Derivatives businesses in which the firm remains a market leader. This emphasis was accentuated following the losses in 1998. In 1999, further progress was made in moderating value at risk and balance sheet utilisation. The new ‘Strategic Risk Management’ function made a strong contribution, especially to improving the quality of risk assessment and focusing on risk concentrations. Credit Suisse First Boston has come through a demanding period with excellent earnings recovery, underpinned by market share advances and further investment in the future. Stable staff numbers, strategic direction and investment have supported this achievement. CSFB has been distributing fixed income securities electronically since 1993. During 1999 significant effort was expended on ‘e-nabling’ numerous aspects of our interaction with securities clients. Through our affiliation with TradeWeb (which was founded by CSFB), and our proprietary PrimeTrade offering, clients can purchase US government bonds, commercial paper, repurchase agreements, deposits, new issue debt offerings, FX and futures electronically. Indications of interest for equity IPOs can be submitted via the web at ‘IPOs@CSFB’ while clients may execute orders through CSFB’s alliances with e*offering and TD Waterhouse. RATIOS/KEY PERFORMANCE INDICATORS 1999 1998 Average allocated equity capital CHF m 9,925 10,176 Allocated equity capital CHF m (1 January 2000/1999) 10,494 9,340 BIS tier 1 ratio* 9.9% 8.4% Cost/income ratio 76.7% 82.5% – excl. amortisation of goodwill 76.3% 82.4% Return on average equity capital 19.0% –2% Number of employees at 31 Dec. 15,185 14,126 Pre-tax margin 17.9% 0.5% Personnel expenses/total expenses 74.7% 69.8% Personnel expenses/total income 55.0% 55.5% * applies to the Credit Suisse First Boston bank 24

Significant enhancements will be implemented this coming year in the web-based distribution of equity and fixed income research (‘Research_View’). CSFB has created a dedicated investment pool to invest in new business models that might impact our institutional businesses, with six investments having been made to date, including Redibook (US), Tradepoint (UK) and Brokertec (US & UK). 1999 results Overall, conditions on the financial markets were good, although they deteriorated in the second half for most fixed income segments. Strong revenue growth (45% on a USD basis) reflects market share gains in most areas, as well as a recovery in Fixed Income & Derivatives versus 1998. The firm’s quality of earnings improved, with revenue diversification in favour of Equities and Investment Banking and the client segments of Fixed Income & Derivatives businesses. Precautionary credit and related reserves increased in view of a cautious medium-term outlook. The firm’s business mix moved to greater client orientation, reflecting a less capital-intensive, more people- intensive strategy. Consequently, average allocated equity for 1999 declined 6% compared to 1998 in USD terms, whilst a strong 9.9%* BIS tier 1 ratio (legal entity) was maintained. The pre-tax margin reflects this mix change, with employee numbers up * applies to the Credit Suisse First Boston bank INCOME STATEMENT 1999 1998 Change 1999 1998 Change in CHF m in CHF m in % in USD m in USD m in % Fixed Income & Derivatives 6,290 3,699 70 4,221 2,586 63 Equity 4,786 2,366 102 3,212 1,655 94 Investment Banking 3,262 2,561 27 2,189 1,791 22 Private Equity 191 745 –74 129 521 –75 Other 3 229 – 99 2 160 – 99 14,532 9,600 51 9,753 6,713 45 REVENUE Personnel expenses 7,999 5,332 50 5,368 3,728 44 Other operating expenses 2,714 2,307 18 1,822 1,613 13 10,713 7,639 40 7,190 5,341 35 TOTAL OPERATING EXPENSES 3,819 1,961 95 2,563 1,372 87 GROSS OPERATING PROFIT Depreciation and write-offs on non-current assets 439 279 57 295 195 51 – of which amortisation of goodwill 62 11 464 42 8 425 Valuation adjustments, provisions and losses** 786 1,566 – 50 527 1,095 – 52 2,594 116 – 1,741 82 – PROFIT BEFORE EXTRAORDINARY ITEMS AND TAXES Extraordinary income 0 15 –100 0 11 –100 Extraordinary expenses 0 81 –100 0 57 –100 Taxes 713 221 223 479 155 209 1,881 –171 n/a 1,262 –119 n/a NET PROFIT/LOSS – of which minority interests 1 50 n/a 0 35 n/a 1,880 –221 n/a 1,262 –154 n/a NET PROFIT/LOSS (after minority interests) 0 306 0 214 ** net of allocation(-)/release(+) of reserves for general banking risks The business unit income statement differs from the Group’s legal accounts in presenting brokerage, execution and clearing expenses as part of operating expenses in common with US competitors, rather than netted against revenues. 25

7.5% over the last twelve months. Operating expenses (excluding compensation) rose 13%, owing to the headcount increase, Y2K costs and other infrastructure expenditure. Total compensation expenses rose as a result of revenue increases, business mix and competitor remuneration. In geographic terms, Credit Suisse First Boston’s unique balance was again reflected by revenues split 42% North America, 35% Europe and 23% the rest of the world. The individual divisions performed as follows (percentages reflect dollar figures): Revenues increased 94%, with ROE significantly exceeding 30% despite Equity continued investment in people for further growth. For the first time Equities’ net profit exceeded that of FID. The ‘cash’ businesses boosted revenues by over 100% from the previous year’s level, while derivatives and other equity businesses also saw strong gains. Growth came from all geographic regions. Excellent gains in primary and sec- ondary market shares and in research rankings around the world underpin this success. The positive impact of Credit Suisse First Boston’s leading position in technology industry activities particularly benefited Equities (and Investment Banking). Fixed Income & Derivatives (FID) Despite market conditions that deteriorated during the year, FID recovered well from 1998’s difficulties with revenues up 63%. Management successfully tackled the challenges of integrating Credit Suisse Financial Products (following the repurchase of the 20% minority stake from Swiss Re in April 1999) and restructuring the division to accommodate tighter risk disciplines and capital profitability. Despite more challenging market conditions in the second half, reduced profit potential following risk reduction and real estate losses, a 16% ROE was achieved. The merged activities in Credit Products enjoyed excellent growth and Emerging Markets’ results were strong. An outstanding performance in Latin America offset the Russian gap and complemented good results from other regions. A recovery in Distressed Securities’ performance compensated for declines in For- eign Exchange and Money Markets. Real Estate products registered losses, reflecting a reduction in risk concentration and increased precautionary provisioning levels. Credit Suisse First Boston’s debt capital markets underwriting position strengthened further to number four in the global rankings. Revenues increased 22% despite further reductions in Investment Banking (IBD) net interest income owing to a smaller loan book. Capital employed in lending has been reduced by 66% since 1997 and has now reached the target range of below USD 1 bn. Underlying growth is excellent, with M&A and capital markets’ gross revenues up 42% on 1998. Credit Suisse First Boston has expanded its client coverage capacity in IBD substantially during the last 24 months. While this heavy investment implies an initial drag on profits, the resultant market share gains, complementing those of Equities, enhance Credit Suisse First Boston’s prospects for growth and diversified earnings. 26

Private Equity The investment of Credit Suisse First Boston’s globally managed private equity funds, totalling USD 3.6 bn, is now accelerating. The current level of revenues reflects limited harvesting of previous investments. The organisation was strengthened further, mainly in Europe. BALANCE SHEET 31 Dec. 1999 31 Dec. 1998 * Change in CHF m in CHF m in % Cash 1,161 1,175 –1 Money market paper 22,893 18,860 21 Due from banks 169,030 138,726 22 – of which securities lending and reverse repurchase agreements 134,406 78,303 72 Due from other business units 2,478 1,894 31 Due from customers 54,132 61,522 –12 – of which securities lending and reverse repurchase agreements 23,783 28,634 –17 Mortgages 7,352 7,178 2 Securities and precious metals trading portfolio 122,837 100,963 22 Financial investments 6,354 10,072 – 37 Participations 1,023 436 135 Tangible fixed assets 2,515 1,947 29 Goodwill 1,128 535 111 Accrued income and prepaid expenses 5,823 6,845 –15 Other assets 43,055 49,555 –13 – of which replacement value of derivatives 39,413 46,347 –15 439,781 399,708 10 TOTAL ASSETS in USD m 275,224 290,696 –5 TOTAL ASSETS Money market liabilities 30,118 19,923 51 Due to banks 222,802 185,335 20 – of which securities borrowing and repurchase agreements 67,150 74,915 –10 Due to other business units 9,536 16,350 – 42 Due to customers, in savings and investment deposits 110 180 – 39 Due to customers, other 69,550 71,157 –2 – of which securities borrowing and repurchase agreements 31,357 22,714 38 Bonds and mortgage-backed bonds 34,478 33,464 3 Accrued expenses and deferred income 10,410 8,844 18 Other liabilities 47,956 53,007 –10 – of which replacement value of derivatives 40,644 49,481 –18 Valuation adjustments and provisions 2,366 1,638 44 Capital 12,455 9,810 27 439,781 399,708 10 TOTAL LIABILITIES in USD m 275,224 290,696 –5 TOTAL LIABILITIES * On the basis of the changes to the accounting principles, the accounting for securities lending and borrowing transactions was changed in 1999. Using the revised accounting rules, the 1998 balance sheet total would have been reduced by CHF 9.8 bn. 27

SERVICES FOR INSTITUTIONAL AND MUTUAL FUND INVESTORS WORLDWIDE Performance in 1999 was strong with discretionary assets under management increasing 53% over 1999 and revenue increasing 35%. Total assets under management, including advisory, amounted to CHF 425 bn at 31 December 1999. Among the strategic achievements was the acquisition of Warburg Pincus Asset Management in July 1999, which significantly enhanced Credit Suisse Asset Management’s US franchise. 1999 growth in assets under management demonstrated Credit Suisse Asset Manage- ment’s continued success in achieving internal growth as well as growth through acquisitions. Discretionary assets under management totalled CHF 324 bn, up CHF 112 bn or 52.8% over 1998; CHF 18.5 bn (8.7%) was due to net new business, CHF 57.5 bn (27.1%) came from market appreciation and CHF 36 bn (17.0%) was due to the acquisition of WPAM. Mutual funds grew by 63.5% to CHF 121 bn globally. Particularly strong were the performances in the Luxembourg (+31%) and Swiss (+54%) mutual fund families and Swiss institutional business. In Australia, growth in assets under management was also strong (+66%), buoyed by strong investment performance and a very successful entry into the retail market. RATIOS/KEY PERFORMANCE INDICATORS 1999 1998 Average allocated equity capital CHF m 540 180 Allocated equity capital CHF m (1 January 2000/1999) 1,054 170 Cost/income ratio 77.3% 70.2% – excl. amortisation of goodwill 75.4% 70.1% After-tax profit/average assets under management 6.6 bp 7.9 bp Number of employees at 31 Dec. 2,000 1,577 Pre-tax margin 22.5% 29.7% Personnel expenses/total expenses 55.3% 56.1% Personnel expenses/total income 40.6% 38.6% Total assets under management CHF bn at 31 Dec. 425 297 Total discretionary funds CHF bn at 31 Dec. 324 212 Total mutual funds distributed CHF bn at 31 Dec. 121 74 Total advisory assets CHF bn at 31 Dec. 100 85 Growth in discretionary assets under management 52.8% 20.0% – of which volume 8.7% 14.0% – of which performance 27.1% 6.0% – of which acquisition 17.0% n /a 28

Acquisition of Warburg Pincus Asset Management On 6 July, CSAM closed the acquisition of Warburg Pincus Asset Management for an initial purchase price of USD 450 m. This acquisition significantly enhances CSAM’s US franchise, increasing total assets under management in the United States by USD 23 bn at the date of acquisition. The addition of Warburg Pincus significantly bolsters CSAM’s presence in the US retail market through Warburg Pincus Mutual Funds and also gives CSAM access to the US high net worth market. Warburg Pincus adds to CSAM’s growing strength in equity products and as of 31 December 1999, equity and balanced products represented 57% of CSAM’s total discretionary assets under management globally. 1999 results Revenue increased by 35% to CHF 1,149 m. The growth in revenue was exceeded by growth in assets under management, as the 1999 financial results reflect only six months of results of the WPAM business. Operating expenses were CHF 844 m versus CHF 586 m, up 44%, reflecting significant investments in information technology and European retail infrastructure, as well as the half-year effect of the WPAM business, including CHF 21 m of one-off acquisition-related expenses. Gross operating profit was CHF 305 m, an increase of 15% over 1998. The increase in the depreciation of non-current assets primarily reflects the amortisation of goodwill associated with the acquisition. Cash earnings, which include the add-back of non-cash charges, increased by 19% to CHF 279 m. INCOME STATEMENT 1999 1998 Change in CHF m in CHF m in % Management and advisory fees 757 595 27 Net mutual fund fees 330 206 60 Other revenues 62 51 22 1,149 852 35 REVENUE Personnel expenses 467 329 42 Other operating expenses 377 257 47 844 586 44 TOTAL OPERATING EXPENSES 305 266 15 GROSS OPERATING PROFIT Depreciation and write-offs on non-current assets 44 12 267 – of which amortisation of goodwill 22 1 – Valuation adjustments, provisions and losses 0 0 0 PROFIT BEFORE EXTRAORDINARY ITEMS 261 254 3 AND TAXES Extraordinary income 0 0 0 Extraordinary expenses 2 1 100 Taxes 24 30 –20 235 223 5 NET PROFIT – of which minority interests 0 0 0 235 223 5 NET PROFIT (after minority interests) 279 235 Cash earnings 19 29

INSURANCE FOR PRIVATE AND CORPORATE CUSTOMERS WORLDWIDE Winterthur Group achieved a strong result in 1999 as net operating income increased 22% to CHF 1.1 bn. Within this result the increasing strength of Winterthur’s insurance operations permitted a 137 basis point reduction in realised capital gains, resulting in a remarkable 6.3% reported return on invested assets. Winterthur registered premium growth in nearly all markets, and total premiums grew by 1% to CHF 28.3 bn. The continued expansion of bancassurance activities within Credit Suisse Group supported both the efficiency and top-line growth improvements. Total assets under management grew 16% to CHF 132 bn, while Winterthur’s total reported equity rose 20% to CHF 11.2 bn. Winterthur’s non-life and life business both contributed strongly to the overall result. Severe weather-related losses in Switzerland and neighbouring European countries par- tially masked the scope of the performance improvement in non-life business. The actual impact of these catastrophe losses was nevertheless contained through Win- terthur’s global risk management programmes. Through restructuring of local operations and improvements in process management, Winterthur continued to improve its efficiency as total costs, including new investments, were held constant. Having reformulated its business strategy in 1998 with a clear focus on the European markets, Winterthur announced a series of targeted acquisitions in 1999 in the UK and Eastern Europe, building its retail customer base to more than 13 million clients in 14 European countries. In addition, Winterthur’s controlling investment in DBV-Winterthur was consolidated through the acquisition of Commerzbank’s 23% stake in DBV Winterthur Holding AG, to reach 69%. DBV- Winterthur’s partnership with Commerzbank ended in the middle of February 2000, with no great impact anticipated on future performance. In 1999 Winterthur expanded its e-business initiatives, registering the ‘webinsurance.com’ domain in all key European countries. Winterthur currently has business-to-consumer transaction capabilities in six countries for household contents, motor, travel and life insurance. In addition, Winterthur has secured preferred provider status on a number of relevant portals and sites, including one of Europe’s emerging e-commerce auto businesses. Business-to-business transactions, typically supporting intermediaries but also allowing corporate customers to tailor cover via the Internet, are active in four countries. Winterthur will continue to invest in and promote the wide array of agent, broker, bank and direct channels it has built up in the European markets, while reinforcing its leadership position in the pan-European Internet distribution of insurance products. In Italy, Spain, France and Portugal Winterthur achieved double-digit Life business growth rates in life premiums, with DBV-Winterthur also showing strong growth in Ger- many. In Switzerland, life premiums fell from their tax-driven surge in 1998 and, with historically low interest rates in the first half of 1999 and the prevalent price level in the market, Winterthur chose not to underwrite policies which impair shareholder value. The Swiss life business nonetheless registered an average 10% annual growth between 1997 and 1999. Winterthur was able to further strengthen its market position in 30

pension business in Central and Eastern Europe. With major pension market shares in Hungary (15%) and the Czech Republic (9%), it now ranks among the top five pension funds in these two countries. Winterthur also had a good start in the Polish pension market, achieving a top-ten position in its first year. In Asia Winterthur focused its retail activities on the asset accumulation and life insurance business. In Hong Kong, Winterthur’s largest Asian market, life premiums more than doubled. Winterthur also entered the Japanese life insurance market by acquiring Nicos Life, an insurance company offering sophisticated asset accumulation products to private clients through professional sales consultants. Though not included in 1999 results, Nicos Life is expected to produce gross premiums of over CHF 400 m in 2000. In its non-life business, Winterthur successfully managed an Non-life business extraordinary set of natural catastrophes in Switzerland and neighbouring countries, as well as continued slow growth and intense price competition in many European markets. Major restructuring programmes in local units around the world reduced absolute expenses by CHF 180 m (5% of total non-life expenses), positioning Winterthur’s non- life business to continue adding value in difficult market conditions. In the UK, Churchill expanded its market position and multi-distribution capacity by acquiring the personal insurance broker Devitt and the National Insurance and Guar- antee Corp. Plc, adding a million clients and CHF 1 bn in premiums. Churchill reported a very strong 1999 performance and continues to set the standard for customer service and profitability. Strong growth was also recorded in non-life business in Italy, France, Portugal and the Netherlands. Non-life growth in Spain was contained as aggressive FINANCIAL HIGHLIGHTS 1999 1998 * Change in CHF m in CHF m in % Gross premiums 28,257 27,930 1 Net investment income 7,807 8,019 –3 Operating profit before taxes/minority interests 1,511 1,302 16 Taxes 340 307 11 Net operating profit 1,171 995 18 – of which minority interests 90 111 –19 1,081 884 22 NET OPERATING PROFIT (after minority interests) 31 Dec. 1999 31 Dec. 1998 Change in CHF m in CHF m in % Total assets under management 132,000 114,200 16 Technical provisions 107,560 96,652 11 Debentures outstanding 164 465 – 65 Shareholders’ equity (excl. minority interests) 11,194 9,358 20 Change 31 Dec. 1999 31 Dec. 1998 in % 25,829 25,202 2 Staff numbers * adjusted for the sale of reinsurance business 31

pricing and underwriting measures were implemented to counter a continuing market deterioration. The German operations continued to shape their market with launches of tailored customer-segment products. Soft pricing conditions in Swiss non-life lines left premium volume roughly unchanged, and the division began a major reorganisation to further lower its expense base. The North American operations reported a 5% increase in premiums. They achieved consistent improvements in their operating ratios and continued to profit from strict adherence to their regional company business strategy. The 1999 passage of the Financial Services Modernization Act increased flexibility for Winterthur and Credit Suisse Group in conducting their business in the US. BALANCE SHEET 31 Dec. 1999 31 Dec. 1998 Change in CHF m in CHF m in % Investments 126,446 111,505 13 – non-life 30,790 27,327 13 – life 88,954 79,587 12 – unit-linked 6,702 4,591 46 Policy loans 708 878 –19 Deposits with reinsured companies 101 697 – 86 Cash at bank and in hand 864 524 65 Receivables from insurance companies 965 1,181 –18 Receivables from agents and policyholders 3,121 2,811 11 Sundry debtors 1,560 1,915 – 19 Accrued income and prepaid expenses 2,203 2,287 –4 Office and IT equipment 375 243 54 Other assets 915 680 35 Total other assets 10,812 11,216 –4 137,258 122,721 12 TOTAL ASSETS Technical provisions 107,560 96,652 11 – non-life 23,041 21,463 7 – life 77,796 70,535 10 – unit-linked 6,723 4,654 44 Due to banks 2,019 266 659 Deposits received from reinsurance ceded 583 1,253 – 53 Convertible bonds and warrant issues 164 465 – 65 Payable to insurance companies 824 1,271 – 35 Payables to agents and policyholders 2,833 3,468 –18 Sundry creditors 2,027 2,420 –16 Accrued expenses and deferred income 2,025 1,497 35 Other liabilities 6,617 4,104 61 Minority interests 1,412 1,967 – 28 Shareholders’ equity after minority interests 11,194 9,358 20 137,258 122,721 12 TOTAL LIABILITIES 32

The market for large corporate risks continued to be difficult, although firmer prices were found in some markets. Serving large corporate clients, Winterthur International continued its investments in building global risk management and service capabilities. As anticipated, the changeover to the new millennium led to only a small number of minor claims across Winterthur Group. 1999 results Winterthur Group’s pre-tax /minorities operating profit increased by 16% to CHF 1,511 m despite a 3% decrease in investment income, as the Group reduced its dependency on realised capital gains. The actual tax rate fell slightly, from 23% to 22%. Net operating profits rose by 22% to CHF 1,081 m. Assets under management rose by 16% to CHF 132 bn. As Winterthur’s invested equity capital (paid-in capital plus retained earnings, adjusted for dividends and goodwill) increased a modest 6% to CHF 6.5 bn, the return on invested equity rose to 18.0%, from 16.6% in 1998. Winterthur’s total reported equity increased by CHF 1.8 bn, or 20%, owing to a significant increase in unrealised gains, and now stands at CHF 11.2 bn. Results from non-life business Gross premiums from non-life business grew by 3% in 1999. Despite the extraordinary weather-related losses in Switzerland and neighbouring countries (CHF –260 m gross, CHF –170 m net), the overall non-life loss ratio improved slightly, and the expense ratio improved more than 2 points. The combined ratio (sum of the claims and expense ratios) improved from 107.5% to 105.2% (including dividends paid to policyholders, from 110.4% to 107.8%). Net investment income was 14% lower at CHF 1.9 bn, but the overall result from non-life business (before taxes and minority interests) increased 7% to CHF 953 m. Results from life business Life insurance premiums, following 1998’s tax-driven surge in Switzerland, fell by 1% year-on-year: the compounded annual growth between 1997 and 1999 was 10%. Total life expenses, measured as a percentage of premiums, were 10.9%, up from 1998 but the same as 1997 in spite of significant investments in the emerging markets and a new European life platform. Actual expenses measured against technical provisions improved from 1.28% in 1998 to 1.20% in 1999. Benefits and claims incurred rose by 10%, while the change in actuarial provisions was reduced by 12%. Net investment income increased 2% to CHF 5.9 bn, while net profits (before taxes and minority interests) grew 34% to CHF 558 m. 33

NON-LIFE BUSINESS 1999 1998 * Change in CHF m in CHF m in % Gross premiums 13,993 13,520 3 Net premiums 12,678 11,994 6 Premiums earned, net 12,102 11,538 5 Claims incurred, net – 9,144 – 8,712 5 Dividends to policyholders incurred, net – 312 – 335 –7 Operating expenses, net (including commissions paid) – 3,591 – 3,686 –3 – 945 –1,195 –21 UNDERWRITING RESULT, NET Net investment income 1,942 2,261 –14 Interest on deposits and bank accounts 70 140 – 50 Other interest paid –75 –108 – 31 Other income and expenses (including exchange rate differences) – 39 –211 – 82 PROFIT 953 887 7 (before extraordinary items, taxes, minority interests) Investments as at 31 Dec. 30,790 27,327 13 Technical provisions as at 31 Dec. 21,463 7 23,041 Combined ratio (excl. dividends to policyholders) 107.5% 105.2% Claims ratio 75.5% 75.6% Expense ratio 29.7% 32.0% 190.4% Insurance reserve ratio 181.9% LIFE BUSINESS 1999 1998 * Change in CHF m in CHF m in % Gross premiums 14,264 14,410 –1 Net premiums 14,170 14,484 –2 Premiums earned, net 14,101 14,485 –3 Claims incurred, net –7,726 – 6,691 15 Change in actuarial provision, net – 8,092 – 9,204 –12 Allocation to participation, net –1,846 –1,918 –4 Operating expenses, net (including commissions paid) –1,535 –1,438 7 Net investment income 5,865 5,758 2 Interest on deposits and bank accounts 124 207 – 40 Interest on bonuses credited to policyholders –130 –117 11 Other interest paid –217 – 312 – 30 Other income and expenses (including exchange rate differences) 14 – 355 –104 PROFIT 558 415 34 (before extraordinary items, taxes, minority interests) Investments as at 31 Dec. 95,656 84,178 14 Technical provisions as at 31 Dec. 84,519 75,189 12 Expense ratio 10.9% 9.9% Claims incurred and change in technical provision 112.2% 109.7% * adjusted for the sale of reinsurance business 34

PERSONAL FINANCIAL SERVICES EUROPE ‘Personal Financial Services Europe’, the strategy announced in March 1999, was launched successfully. In Italy – the pilot market for PFS – assets under management have more than doubled since 1998. Additionally the pan-Euro- pean e-commerce platform is progressing towards a launch in late 2000. Changing client needs, increased use of electronic communications channels and the emergence of a pan-European market have given rise to new opportunities for financial institutions. ‘Personal Financial Services Europe’, the strategy announced in March 1999, represents a new business model to address these opportunities. With ‘Personal Financial Services Europe’, Credit Suisse Group aims to strengthen its local presence in selected European markets and to extend its leading position in e-commerce in Switzerland to the rest of Europe. The initiative targets affluent private clients with bankable assets of CHF 80,000 (EUR 50,000) upwards, who are offered a wide range of both Credit Suisse Group and third-party products, a tailored combination of personalised advice and Internet content, and seamless service. In Italy – the pilot market – Credit Suisse (Italy) is already operating successfully with 250 Personal Bankers and its own Call Center. Assets under management have more than doubled since 1998 to CHF 4 bn (EUR 2.5 bn). The fifth Investment Center was opened in Milan at the end of March and another fifteen are due to follow over the course of the year. Since April 2000, clients have also had direct access via the Internet to comprehensive financial and product information and a range of advisory tools. Additionally, preparations are currently underway for a pan-European e-commerce platform to be launched in late 2000. During the second half of the year, Credit Suisse Group will start to offer processing of online financial transactions, including brokerage, on the major European and overseas stock exchanges via a Group company domiciled in Luxembourg. This service will be adapted to suit the specific requirements of each of the national markets in which the Group intends to establish similar operations as in Italy by means of a greenfield approach and/or alliances and acquisitions. With its multinational presence in Europe, its well-known brand and its comprehensive range of products for wealth creation and protection, Credit Suisse Group is in an excellent position from which to implement its ‘Personal Financial Services Europe’ strategy successfully. Channels Italy Country 2 Country 3 Personal Bankers Investment Centers Call Centers E-commerce Pan-European Alliances Product providers • Value proposition and branding Content & Stock advice exchanges • Product offer • E-commerce channel Customer CSG products access • Customer database and reporting Third-party • IT platform Technology products • Back-office operations 35

CREDIT SUISSE GROUP IN SOCIETY Credit Suisse Group is well aware of its obligations to society as a whole. All of its activities are based on a responsible, respectful and professional approach. This applies both to its actual business operations and to its dealings with other stakeholders. The world of financial services is currently characterised by Attractive employer innovation and far-reaching change. As an internationally active company, Credit Suisse Group offers a wide range of interesting professional opportunities. Targeted training and development programmes are used to ensure that our staff remain in a position to meet the challenges of the future. In Switzerland alone, 200 university and college graduates, 1,200 trainees and 120 high school graduates are being trained within Credit Suisse Group. In order to meet the increasing need for computer specialists, the Group offers a number of IT training programmes for professionals from other specialist disciplines. The creation of the new ‘Personal Financial Services Europe’ entails an intensive recruitment campaign throughout Europe. New jobs in e-commerce are being created all over the Group all the time. Credit Suisse Group is particularly concerned about ensuring equal opportunities, a commitment that is borne out by the continually increasing proportion of women in management positions. What began in 1989 Acknowledged achievements on the environmental front with the creation of the post of environmental officer has now grown into a comprehensive environmental management system certified under ISO-14001. Re-certification and the incorporation into the system of locations outside Switzerland are scheduled for the year 2000. The results of the Group’s efforts in the area of operational ecology are described in the latest Environmental Report. Credit Suisse Group’s 1999 report was commended as the second best of any large Swiss company. Respected rating agencies consider Credit Suisse Group to be among the best in the world in terms of its attitude and activities on the environmental and social front. Credit Suisse Group is included in the Dow Jones Sustainability Index as a ‘leading sustainability company’ in the banking sector; the Canadian/US Innovest organisation has awarded the Group an AAA rating; and the German rating agency œkom found Credit Suisse to have the second best environmental performance of the 26 banks under scrutiny. These citations by independent bodies make Credit Suisse Group an attractive proposition for investors focusing on sustainability. Credit Suisse Group is represented in ten portfolios run by investment funds and foundations that focus on ecological/ethical issues and sustainability. Social and charitable commitments Every year Credit Suisse Group devotes around CHF 15 m to helping various organisations and institutions. The Jubilee Foun- dation focuses on supporting charitable projects in the social domain. By concentrating on choice projects, which are selected from almost a thousand applications received each year or which it initiates itself, the Foundation can provide substantial financial support, help to give new momentum or the initial push needed to get new ideas off the ground. In collaboration with the ‘Young Swiss Researchers’ project, for instance, the Foundation conducted study weeks for those researching topics in the financial field. Another example is the significant contribution made to the success of the 6th World Skiing Championships for the Disabled held at the end of January 2000 in Anzère and Crans-Montana. 36

In 1999, the CSFB Foundation Trust supported over 600 charitable organisations around the world, concentrating mainly on educational initiatives and social programmes for young people in major cities, especially New York. In addition, many Credit Suisse First Boston employees helped the disadvantaged by doing voluntary work with community organisations, community centres and neighbourhood associations. Sponsorship The main focus of Credit Suisse’s sports sponsorship is football – including its role as sponsor of the Swiss national team and the Swiss Football Asso- ciation’s youth development programme – and equestrian sports. 1999 saw the end of Credit Suisse’s many years of support for cycle racing. In the cultural arena, Credit Suisse concentrates on music and fashion. The bank appears as a headline sponsor at all of Switzerland’s major fashion events. Credit Suisse Private Banking supports various significant cultural and sporting institutions and events. Highlights of the 1999 cultural sponsorship calendar included the ‘Chagall, Kandinsky, Malevich and the Russian Avant Garde’ exhibition at Zurich’s Museum of Fine Art, and a series of gala concerts featuring soloist Anne-Sophie Mutter. Sporting highlights included the White Turf horse races in St. Moritz, and two golf tournaments: the PGA European Seniors Tour event in Bad Ragaz and the Canon European Masters in Crans-Montana. Winterthur is a sponsorship partner of the Pfadi Winterthur handball club, the Swiss Gymnastics Association and – together with Credit Suisse – of the Swiss Foot- ball Association. In the cultural sphere, Winterthur supports the Swiss Youth Symphony Orchestra. The Arosa Humour Festival, where Winterthur was headline sponsor, marked the launch of comedy as a new key area for sponsorship by the company. The ‘Wincare’ hearing protection service, which involves handing out about a million sets of earplugs at rock concerts and techno parties, proved extremely popular. As part of its sponsorship partnership with the concert promoter Good News, Winterthur also helped to arrange special seating for disabled people at numerous events. The company’s ‘Foundation for the Prevention of Accidents’ continued its successful campaigns to improve road safety for children and to promote safety in sports. Credit Suisse Group is contributing its own special project to the Swiss national exhibition, ‘Expo.02’. The Internet virtual identity game, ‘cyberhelvetia.ch’, is currently in development and will be launched in advance of the actual exhibition. Ever since the debate about the con- The Swiss banks and the Second World War duct of the Swiss banks during and after the Second World War, Credit Suisse Group has been committed to making amends both morally and financially. The review of the banking issues involved was brought to a close with the publication of the Volcker Com- mittee final report. The report came to the conclusion that the banks carried out their business activities with great professional diligence. There was no evidence of systematic discrimination against victims of Nazi persecution, nor of systematic concealment of assets or withholding of assets from their rightful owners. However, the report did document some extremely regrettable cases of human error and insensitivity. The dor- mant accounts discovered as part of the Volcker Committee’s research are an element in the comprehensive settlement reached by Credit Suisse Group, UBS, the plaintiffs and the Jewish organisations in the 1998 class action brought in the USA. The fact that this settlement represented a responsible, conclusive and comprehensive solution was confirmed – subject to final judicial approval – by the Fairness Hearing convened by US Federal Judge Edward Korman on 29 November 1999 in New York. 37

CREDIT SUISSE GROUP RISK MANAGEMENT Credit Suisse Group pursues a disciplined, comprehensive and integrated approach to risk management throughout its business units. Sig- nificant personnel and technological resources are focused on ensuring that Credit Suisse Group remains a leader in risk management. By means of a proactive risk management culture and the appropriate qualitative and quantitative tools, the Group aims to minimise the potential for undesired risk exposures and optimise the allocation of capital throughout the Group to the benefit of shareholders and other stakeholders. Financial services consist of four basic elements: Overview of risk management information, transactions, capital and risk. Information today is instant, ubiquitous and increasingly cheap. Simply owning information is not enough – only by packaging and interpreting information intelligently and providing value-enhancing advice and decision- making support can a company differentiate itself from the competition. The volume of transactions has grown dramatically in recent years on a global basis, and new technologies are expanding rapidly, making it even more important that in-house and out- sourced processes are cost effective. On today’s open, deregulated capital markets, basic access to capital is no longer an issue for well-run established companies. The challenge is to allocate the capital optimally to the different activities within the organisation. The ability to assess and manage risks effectively has always been important in the world of finance. The increasing pace and complexity of economic development in recent years has turned this ability into a decisive competitive edge. The primary objectives of Credit Suisse Group’s risk management strategy are to preserve the Group’s capital base by controlling its risk exposures, to optimise the allocation of capital and to foster a disciplined risk culture. This is where risk management adds value. Credit Suisse Group differentiates between seven major risk categories (see chart on page 39). Market, credit, insurance underwriting, commission and fee income and operational risks are already quantifiable or are increasingly becoming so, while strategy and reputation/brand risks must be made transparent by means of other methods. The Group’s structure as a series of distinct business units, introduced in 1996/97, is – among other things – designed to enhance transparency and a systematic approach; it allows us to regroup risk types, focus on major risk types and concen- trate expertise on specific risk classes with the help of tailor-made management tools. It is our ambition to establish the global benchmark with regard to structures, processes and methods. This is a continuous, never-ending task. Risk management is a multi-faceted process that extends well beyond Risk culture an organisation’s formal risk management structure, standards or processes. The math- ematical/statistical quantification of risks and consequent setting of appropriate, common-sense limits represents only part of the integrated approach to risk management. Integrated risk management must also include the development and maintenance of an appropriate risk and control culture as part of an overall corporate culture. This aspect is at least as important as the most sophisticated quantitative risk models. 38

The key factor in risk management is discipline. Credit Suisse Group encourages a disciplined culture by promoting integrity and high ethical standards, clear lines of responsibility and accountability, segregation of duties, appropriate supervision by senior management, and strong control systems. The Group’s monitoring systems are based on a comprehensive set of internal controls, with activities such as approvals, authorisa- tions, compliance checks, and follow-ups on non-compliance clearly defined at every level of the business. Internal and external auditors are recognised by the Board as critically important agents, providing an independent check on the information received from line management. The chief auditor reports directly to the Board of Directors’ Audit Committee. The issues unearthed by the internal and external auditors must be addressed comprehensively. If a financial services group is to achieve sustained success, confidence and trust built up over many years are vital. An excellent reputation is hard to gain, but easy to lose. Knowledge, expertise, experience, integrity, intellectual honesty, but also the daily conduct of each member of management and each employee, are the truly crucial elements that contribute to an institution’s reputation. One of the strengths of Credit Suisse Group is the competence Code of Conduct and diverse skills of the people that work for it around the world. In spite of this global diversity, however, our corporate culture has to be based on common denominators and shared values. This was the major reason for introducing an internal group-wide Code of Conduct at the beginning of 2000. Especially in such fast-changing times, common values help to give the individual a sense of focus; they create identity and a sense of belonging. Both the Board of Directors and the Group Executive Board have The added value of risk management Factors shaping Scope and challenge of an Effective risk manangement provides an organisation’s integrated firm-wide control over seven risk disposition risk management major business risks Values, society Strategy risk Building on the organisation’s & politics Inno 10 ‘S’s’: vati tion Facts • Strategy • Staff on & Ex peti p Market risk • Structure • Skills n tio ec tech Com • System • Style ep ta ti o Perc Credit risk • Speed • Shared values nolo ns Action and • Safety • Symbol gy reaction by Insurance underwriting risk ce management Ensuring a risk culture with: Poli rie n and staff Be Commission and fee income risk cies • modern methods pe ha Ex v io ur • proactive risk management nts & Operational risk Knowledge • control attitude reg Clie • continuous training/learning ulat • discipline as to corrective action ions Reputation/brand risk Markets & economy 39

approved the new Code of Conduct. Spelling out our twelve core values and guiding principles, the Code of Conduct extends and supplements existing, more specific compliance manuals, directives, guidelines and policies. Credit Suisse Group’s risk management governance Risk management governance structure begins with the Board of Directors, which is responsible for determining the general risk policy, the strategic risk management organisation and the Group’s overall appetite for risk. The Board of Directors meets at least five times a year. The Chair- man’s Committee of the Board of Directors is responsible for reviewing the Group’s major risk exposure on a quarterly basis. The Board of Directors delegates certain risk management and control responsibilities to the Group Executive Board, the Group Risk Coordination Committee and the Group Chief Risk Officer (GCRO). The Group Execu- tive Board’s Risk Management Committee includes all Board members and is chaired by the GCRO. It reviews the Group’s exposure to different categories of risk, assesses potential opportunities and risks and initiates corrective actions to mitigate undesired risk exposures. The Group Risk Coordination Committee, also chaired by the GCRO, meets four times a year, defines overall Group risk policies and approves general instructions, processes and standards concerning risk management at the business unit level. It also reviews Credit Suisse Group’s capital management process. The Group Chief Risk Officer is responsible for the development, implementation and monitoring of limits, risk reporting, risk management strategy, standards and procedures. Group Risk Management supports the GCRO in harmonising approaches to the management of different risk types across the business units and monitors the implementation of the Group’s risk management strategy in collaboration with the risk management units at the individual business units. As the main operating units, the business units Business unit risk management of Credit Suisse Group are responsible for implementing the Group’s overall risk management strategy. Each business unit has a specialised risk management structure in place – including risk committees, appropriate tools, systems, procedures and controls – that is specially tailored to cope with the risks taken in its particular line of business. While most business units are exposed to all risk types, their relative significance varies. Trading book market risks are concentrated at Credit Suisse First Boston, while credit risks are most important at Credit Suisse and Credit Suisse First Boston. Insur- ance underwriting risks are concentrated at Winterthur, while commission income risks dominate at Credit Suisse Private Banking and Credit Suisse Asset Management. All business units are exposed to operational, reputational and strategy risks. Market risk is the risk of loss arising from changes in the value of finan- Market risk cial instruments. Credit Suisse Group units active in trading use a comprehensive set of tools to identify, measure and control these risks. These tools include techniques such as Value at Risk modelling, scenario analysis, and backtesting, as well as risk limit setting and monitoring. The majority of Credit Suisse Group’s market risk is concentrated in the Credit Suisse First Boston business unit, the Group’s global provider of wholesale financial services (see chart on page 41). 40

Credit Suisse First Boston devotes considerable resources 1999 DISTRIBUTION OF Market risk within CSFB TRADING RISKS to ensuring that market risk is comprehensively captured and effectively managed. In 0.4% 6.4% 1999, CSFB established a Strategic Risk Management (SRM) function to provide comprehensive analysis of the firm’s overall risk profile and to recommend corrective action where appropriate. SRM and Credit Suisse Group Risk Management (GRM) were heavily involved in implementing the transition to a lower overall risk profile in 1999. Credit Suisse First Boston’s independent Risk Measurement and Management 93.2% (RMM) department is responsible for the measurement and reporting of all credit risk CSFB CSPB and market risk on a daily basis. The core tools used to measure and manage market CS risk exposures include the following: – the Value at Risk method (VaR method) estimates the potential loss arising from a given portfolio for a predetermined probability and holding period – scenario analysis estimates the potential loss after stressing market parameters – in addition, RMM has developed several models to measure gap risk, default risk and economic risk capital. It is expected that the use of these models will grow in the future. Gap and default risk Gap and default risk is designed to capture risks that occur on a Credit Suisse First Boston has used a VaR methodology to model mar- Value at Risk less frequent basis than those ket risk since 1995. Credit Suisse First Boston’s VaR is defined as the 99th percentile captured within the standard VaR model. There are several types of greatest loss that may be incurred on a given portfolio over a ten-day holding period. gap and default risk, including Credit Suisse First Boston currently uses a combination of variance-covariance and his- the risk of large moves in equity prices or foreign exchange rates, torical simulation methodologies. The methodology is subject to continuous review to the risk of bond issuers failing to ensure that it captures all significant risks and meets or exceeds regulatory and industry pay, as well as the risk of substantial changes in real estate standards. The parameters and procedures currently used meet the qualitative and prices. A different modelling quantitative requirements prescribed by the Basle Committee on Banking Supervision process is required to capture these risks and a longer time and the Swiss Federal Banking Commission, which has approved Credit Suisse First horizon is required (generally one Boston’s internal VaR models for use in the calculation of market risk capital as at year), compared with VaR analysis. 30 June 1998. Market risk limits are structured at multiple levels – from trading desks up to the business unit level. Limits at lower levels can be regarded as internal risk flags that are used to identify potential risk concentrations. The level of market risk versus the formal limits is a regular focus of senior management review. The ‘Average market risk at CSFB’ chart shows the distribution of average market risks since 1997 and indicates AVERAGE MARKET RISK AT CSFB that interest rate risks have lost importance relative to other risk categories. 100 % The chart on the following page illustrates the relationship between daily trading profit and loss and one-day VaR over the course of 1999. This type of backtesting is a 80 % method of assessing the performance of the internal VaR model and complies with the recommendations issued by the Basle Committee on Banking Supervision. Backtesting 60 % is performed at two levels: the overall level (Credit Suisse First Boston) and the individ- 40 % ual business line level. Results of the process at the aggregate level show no exceptions during 1999. This confirms that Credit Suisse First Boston’s VaR model is in the 20 % ‘Green Zone’, as defined by the Basle Committee on Banking Supervision (see sepa- rate box). In fact, CSFB has never had a bank-level exception in three years of using 0% 1997 1998 1999 the approved model, which indicates a significant degree of conservatism in its Total cross risk Total commodities approach to measuring market risk. Total equity Total foreign exchange Total interest rates 41

During 1999, CSFB undertook a firm-wide initiative to reduce its overall risk profile Backtesting zones whilst maintaining good returns. The 1999 VaR statistics for CSFB are given in the The Basle Committee on Bank- ing Supervision has defined three table below. As the table shows, CSFB’s 1999 average VaR was down 21.5% on the zones that assess the statistical 1998 average (in USD terms, 8.7% in CHF terms). Risk reductions in CHF terms were quality of a VaR model using backtesting results. The zones smaller because of the significant weakening of the CHF during 1999. are: Zone Number of exceptions 1999 1999 1998 1998 (per 250 in CHF m in USD m in USD m in CHF m observations) Green 0–4 Year-end (31 Dec.) 241.7 151.2 300.4 218.4 Yellow 5 –9 Average 280.7 175.7 307.6 223.7 Red 10 and more Maximum 423.6 265.1 382.2 277.9 Minimum 191.0 119.6 206.3 150.0 Models in the Green Zone are statistically acceptable, those in Note that when comparing the VaR figures calculated by different banks, the methodologies, assumptions and valuation the Yellow Zone require further methods used may differ, so a simple comparison may be misleading. Specifically, differences in VaR figures may not only investigation and analysis, whilst reflect different levels of market risk exposure, but also factors such as differences in the model assumptions and the those in the Red Zone almost underlying data. certainly require improvement. CSFB has never had an excep- By contrast, the average daily trading revenue improved to CHF 42.3 m in 1999, tion in three years of using the compared to CHF 14.3 m in 1998. Credit Suisse First Boston’s frequency distribution approved model. of daily trading revenue for 1999 and for 1998 is illustrated in the ‘Distribution of CSFB’s daily trading revenue’ chart. The combination of transition to a lower risk profile and more stable financial markets in 1999 resulted in a significantly narrower range of DISTRIBUTION OF CSFB’S trading profit and loss in 1999 than in 1998. DAILY TRADING REVENUE 1999 versus 1998 in CHF m No. of days Scenario analysis Scenario analysis is an essential component of Credit Suisse First 40 Boston’s market risk measurement framework. This technique assesses the bank’s 35 sensitivity to various financial market environments by revaluing all of its major portfolios 30 under various potential market crisis conditions. For example, the bank analyses the 25 potential impact of a number of extreme macroeconomic events which have occurred in 20 the past. Scenarios include large moves in yield curves, credit spreads, emerging mar- 15 ket bond prices, exchange rates, equity indices and stock prices, commodity prices and 10 changes in volatilities and correlations. Reports are produced for senior management 5 0 and traders for a range of scenarios at least on a monthly basis. 150 –150 –120 –80 0 80 120 RELATIONSHIP BETWEEN DAILY REVENUE AND VaR ESTIMATE FOR CSFB * 1998 1999 CHF m 150 100 50 0 –50 –100 –150 –200 –250 –300 –350 –400 –450 1st quarter 1999 2nd quarter 1999 3rd quarter 1999 4th quarter 1999 Daily revenue One-day VaR (99%) * Conversion of USD figures into CHF based on year-end exchange rate 42

1999 ACP AND The balance sheet interest rate risk is monitored Asset and liability management CREDIT PROVISIONS and managed by the individual business units within specifically designated centres of CHF m 800 competence; responsibility lies with the respective Asset and Liability Management 700 Committees. The management of interest rate risk is primarily based on mark-to-mar- 600 ket methods. Swaps, forward rate agreements and options are used as hedging instru- 500 ments. 400 300 Credit risk is the risk that a borrower (or counterparty) is unable to meet Credit risk 200 its financial obligations. In the event of a default, a bank generally incurs a loss equal to 100 the amount owed by the borrower, less a recovery amount resulting from foreclosure, 0 CSPB CSFB CSAM* CSG CS liquidation or restructuring of the company. The majority of Credit Suisse Group’s credit 1999 ACP 1999 credit provisions risk is concentrated in the Credit Suisse and Credit Suisse First Boston business units. * Included in ACP/ICP methodology in April 1999. Both ACP and credit provisions are well below CHF 1 m for 1999 Credit Suisse Group implemented a new Credit Risk Management Framework for the banking business units in December 1996. As this framework is used for management information purposes only, it is not reflected in the statutory financial statements. The new Credit Risk Management Framework is being refined continuously and simultaneously covers all business areas which are exposed to credit risk. Credit Suisse Group’s Credit Risk Management Framework comprises four core components: (i) an individual credit limit system, (ii) country and regional concentration limits, (iii) a credit risk provisioning methodology and (iv) a pricing methodology. A system of individual credit limits is the traditional means of managing credit risk and preventing risk concentrations. A comprehensive set of country and regional limits 99TH PERCENTILE WORST-CASE DEFAULT LOSS is in place to address concentration issues in the portfolio (see country risk). The third CHF m 2250 aspect of the Credit Risk Management Framework is an appropriate credit risk provi- 2000 sioning methodology. Annual credit provisions (ACP) equal expected credit losses 1750 derived from actual historical average losses. The chart top right shows the ACP of the 1500 four banking units in 1999 and the respective credit provisions. 1250 Actual losses which occur in any one year may be higher or lower than these pro- 1000 750 visions, depending on the economic environment and interest rates. In addition to the 500 expected loss, an indicative worst-case default loss, shown in the chart on the right, is 250 calculated using CREDITRISK +, the credit risk measurement and management tool 0 CSPB* CSFB CSAM** CSG*** CS developed by Credit Suisse Financial Products. The 99th percentile worst-case default 1996 1999 1998 1997 loss shown in the chart on the right is based on the 99th percentile of the full credit * Worst case loss in 1996 jointly calculated for CS and CSPB and default loss distribution. The difference between the 99th percentile worst-case default shown under CS. ** Included in April 1999 (worst case loss and the ACP reflects the unexpected loss level. The fourth aspect of the Credit loss for 1999 below CHF 3 m). *** Based on combined portfolio. Risk Management Framework is the pricing and optimisation of the portfolio and the consideration of risk and reward. Credit Suisse Group’s Credit Risk Management Framework is a vital tool for managing the Group’s credit risk on an ongoing basis. The framework allows us to price transactions involving credit risk more correctly by performing a risk/return calculation. The current implementation of the Credit Risk Management Framework covers virtually all of the credit exposures of Credit Suisse, Credit Suisse Private Banking and Credit Suisse Asset Management, as well as the majority of Credit Suisse First Boston’s credit-related exposures. The remaining portion of Credit Suisse First Boston’s credit-related exposures is covered by either the VaR methodology, or by applying credit risk adjustments. 43

CSFB EXPOSURE Country risk is the risk of a substantial, systemic loss of value in the Country risk TO SELECTED EMERGING MARKETS financial assets of a country or group of countries, which may be caused by the inability as at year-end 1999 or unwillingness of a sovereign to meet contractual obligations and/or the imposition of CHF m 8000 controls on capital flows. Given the international character of their activities, all business 7000 units of Credit Suisse Group are exposed to country risk, although the largest portion is 6000 held at Credit Suisse First Boston. 5000 Country ratings and country limits are the two primary instruments used by the 4000 bank to manage its country risk. Country ratings provide a quantitative, model-based 3000 assessment of the risk of sovereign default. They are periodically updated by the inde- 2000 pendent Credit Risk Management department (CRM) in cooperation with Economic 1000 Research. Country limits cap Credit Suisse Group’s exposure to individual countries. 0 Asia Latin Eastern They are supplemented by regional limits, which restrict the maximum exposure to a America Europe Net exposure Provisions specific region in order to limit the impact of contagion. Both country and regional limits are approved by the Chairman’s Committee. Within Credit Suisse First Boston these limits are periodically reviewed by the Credit Policy Committee and Capital Allocation and Risk Management Committee (CPC/CARMC). The measurement of exposures against country limits is undertaken by the inde- COUNTRY EXPOSURE BY CSFB pendent department, RMM. RMM and CRM provide independent supervision to ensure RATING (EXCLUSIVE OF PROVISIONS) that the divisions operate within their limits. CRM also assumes responsibility for actively as at year-end 1999 adjusting these limits to reflect changing credit fundamentals. CHF bn 160 140 Operational risk Operational risk is the risk of direct and indirect loss arising from 120 inadequate business processes, procedures or security, as well as the risk of losses 100 due to human error and external factors affecting business processes. At Credit Suisse 80 Group, operational risk is divided into five classes (see ‘Operational risk classes’ on 60 page 45). 40 20 All business units of Credit Suisse Group have their own dedicated Opera- Structure 0 N1 N2 N3 N4 N5 N6 N7 tional Risk Management teams that are sponsored by Senior Management and are in AAA AA A BBB BB B/ <CC CCC CSFB: funded loans and related close contact with Group Risk Management. Knowledge and experience is shared exposures (incl. exposures to trading counterparties) throughout the Group to ensure a coordinated approach. All business lines take Internal ratings N1–N7 are approximately equivalent to the respective external ratings. responsibility for their own operational risks. Operational risk management information Credit Suisse Group is currently implementing a management information system in all the business units to capture a consistent and comprehensive set of operational risk data. These data are used for reporting and help to quantify operational risks. 44

The reporting tool will enable line managers to act swiftly on issues before they esca- Operational risk classes late and provide senior management with a better overview of operational risks within Human: Risks arising from the business units. Another purpose of collecting operational risk data is the Group’s human-related issues such as aim to quantify operational risks – where feasible and relevant – for internal manage- recruitment, skills, training, conduct, fraud and illness. ment purposes such as economic capital allocation and risk-adjusted performance measurement. Organisational: Risks arising from organisational factors such as change management, data Operational risk is managed through effective and comprehensive staff flow, communication, coordina- Management tion and allocation of respon- training, specific policies and procedures, a system of internal controls and meticulous sibilities. due diligence. Such controls include the full segregation of duties, the use of risk Policy and processes: Risks management information and computer systems, communication networks and fraud arising from weaknesses or non- detection. Independent pricing controls are in place and technical and organisational compliance with policies and criti- cal processes such as policies on control mechanisms ensure that all transactions are processed promptly and correctly. documentation, due diligence, adherence to credit limits, settlement and payment processes. Winterthur is a business unit with many Winterthur’s risk management framework years of experience and success in the insurance business. It has developed outstand- Technology: Risks arising from technological dependencies such ing skills in managing all the risks associated with selling insurance policies. Protecting as information technology and Winterthur from undue risk accumulations (e.g. natural catastrophe exposure) is a core telecommunications infrastructure. E-commerce activities are risk management activity. The overall responsibility for risk identification, risk measure- also very significant here. ment and control is assumed by a central risk management unit. Specialist subunits Operating environment and focus on the various individual risk components using tools such as ‘economic risk external factors: Risks arising capital’. This is defined as the capital required to protect a business for one year with a from external factors and the Group’s operating environment predetermined safety margin; it is a key tool for risk management and performance such as fraud, litigation, physical measurement. threats to the institution or its representatives, business disrup- tion and regulatory changes. In order to under- Winterthur’s risk universe and risk management activities stand the risk universe of an insurance company, the flow of business and the accom- panying flow of risks are analysed. Premiums earned by selling insurance policies are invested to cover claims occurring at a future date – sometimes many years later. This means that the company has to manage and limit insurance risk – e.g. through reinsurance contracts – manage the financial market risks associated with its assets and liabilities (reserves), and manage and control the credit risks associated with its assets and reinsurance contracts. Within centrally established boundaries – relating to underwriting guidelines, reinsurance protection, reinsurance security guidelines (credit risk), asset allocation strategies and allocated risk capital – Winterthur’s individual business areas are responsible for day-to-day risk management. 45

Winterthur follows stringent guidelines, especially with 1999 Insurance underwriting risk ECONOMIC CAPITAL OF INSURANCE RISK regard to assuming insurance risk, the selection of risks and the sums insured. Winterthur operates two main insurance businesses, non-life and life, and faces several risk types stemming from its underwriting activity. 36% In non-life business, insurance risk relates to claims that might be more fre- Non-life quent or larger than forecast, and/or that might have to be paid earlier than expected 64% (expected payouts are priced into the premiums paid). Better-diversified insurance port- Non-life Life folios tend to imply smaller differences between expected and actual claims. Winterthur therefore holds a well-diversified insurance portfolio, in terms of both geographical and industry structure. A well-diversified insurance portfolio with many business lines spread over many policyholders might, nevertheless, be vulnerable to natural hazards. In such circum- stances the portfolios, although well diversified, can be exposed to a large accumulation of risk. If adequate reinsurance protection were not in place, substantial losses could be triggered by a single natural catastrophe. Winterthur thus uses reinsurance to limit the loss triggered by a single event, e.g. winter storm in Europe, to a worst-case amount of CHF 50 m. In life insurance the basic underwriting risk characteristics are similar to those in Life non-life business. The underwriting risk universe in this type of business is represented by deviations from expected death and disability rates, expected longevities and expected surrender rates. Savings elements are quite often embedded in life insurance products. The associated financial risks can be substantial and must be managed accordingly. The asset management units are responsible for taking care of these risk elements and producing the kind of cashflows that policyholders are likely to claim. The risk structure in the insurance business Underwriting Premium Insurance risk (gross) Assets Reinsurance Reserves Retention Market risk Credit risk Insurance risk 46

Winterthur runs a well-designed reinsurance structure to protect its 1999 Reinsurance RELATIVE IMPORTANCE OF ASSET CLASSES local businesses, its divisions and its capital at large. The architecture of this reinsurance protection is such that, on all levels of the organisation, i.e. local businesses, divi- 7% 1% sions and Group, a set of internal and external reinsurance contracts absorbs all risks 11% that exceed a prudent retention level. Reinsurance protection follows a three-layered organisational structure based on the uniform principle that each organisational entity runs insurance risk in accordance with its portfolio and its capital base. 26% 54% Bonds Investment portfolios are defined Financial market risks and investment strategy Equity Real estate according to the legal nature of the business concerned and the product structure. The Mortgages Money market main asset classes used by Winterthur are money market instruments, bonds, loans, mortgages, equities and real estate. The quality of assets is generally excellent: primarily bonds with AA and higher ratings, with A rating being the minimum require- ment for new investments. Derivatives are not considered as a suitable asset class for investment, but are used for risk management purposes. The asset allocation strategy for Winterthur is revised on a yearly basis, taking regulatory, local and product-related restrictions into consideration. The financial market risks of Winterthur’s asset and liability management Winterthur’s assets are not assessed in isolation. Insurance company assets are gener- ated by the fact that premiums are paid earlier than claims are settled. The resulting time difference of up to 50 years has to be bridged through asset and liability management. Winterthur’s exposure to credit risk stems from holding Credit risk at Winterthur debt instruments and from the use of reinsurance. Winterthur has defined high quality standards for investments. In addition, the Group monitors counterparty-specific accumulations across asset management and reinsurance credit risk exposures. Outlook It is part of Credit Suisse Group’s strategy to be a leader in risk management. Significant personnel and technological resources are focused on ensuring that Economic risk capital Credit Suisse Group continues to enhance its risk management capabilities, and there- Economic risk capital at Credit Suisse Group is defined as an by remains at the forefront of the industry. To achieve this goal, Credit Suisse Group equity reserve or cushion for has developed an integrated framework of best-practice risk management, risk policies, unexpected losses. It ensures that Credit Suisse Group – even methodologies and infrastructure. Credit Suisse Group is also in the process of linking under extreme conditions – risk management and performance measurement using an economic risk capital frame- remains solvent and stays in business. Unlike regulatory capi- work, with economic risk capital usage as a common denominator for all major risks. tal, which is confined to market Together with a proactive risk management culture and the appropriate qualitative and and credit risk, economic risk capital is designed to reflect all quantitative tools, this economic capital management framework will support decision- significant quantifiable risks asso- making by senior management at Credit Suisse Group, thus linking risk management to ciated with the business activities of Credit Suisse Group. the Group’s shareholder value strategy. 47

.credit-suisse Annual Report Part 1 Share performance Market capitalisation as at 31 December

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