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David Mathers to present at the 2008 Lehman Brothers Global Financial Services Conference on September 9
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David Mathers to present at the 2008 Lehman Brothers Global Financial Services Conference on September 9

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  • 1. Lehman Brothers Financial Services Conference New York September 9, 2008 David Mathers, Head of Finance, Investment Banking
  • 2. Cautionary statement Cautionary statement regarding forward-looking and non-GAAP information This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties, and we might not be able to achieve the predictions, forecasts, projections and other outcomes we describe or imply in forward-looking statements. A number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions we express in these forward-looking statements, including those we identify in quot;Risk Factorsquot; in our Annual Report on Form 20-F for the fiscal year ended December 31, 2007 filed with the US Securities and Exchange Commission, and in other public filings and press releases. We do not intend to update these forward-looking statements except as may be required by applicable laws. This presentation contains non-GAAP financial information. Information needed to reconcile such non-GAAP financial information to the most directly comparable measures under GAAP can be found in Credit Suisse Group's second quarter report 2008. Lehman Brothers Conference Slide 2
  • 3. Financial Performance Risk Reduction Financial Markets Key Competitive Advantages Lehman Brothers Conference Slide 3
  • 4. Credit Suisse has significant earnings power Benefit from a diversified and integrated global business Private Banking continues to deliver good results Solid results across most Investment Banking and Asset Management businesses Well-positioned to create long-term value and seize opportunities that arise from market dislocation Lehman Brothers Conference Slide 4
  • 5. All divisions profitable Private Banking Investment Banking Asset Management Pre-tax income in CHF m 2Q07 1Q08 2Q08 2,502 1,381 1,324 1,220 299 281 167 (468) (3,460) ! Good results evidencing the ! 2Q08 operating earnings ! Stable fee-based gross 1) strength of business of CHF 650m margin ! Strong asset gathering and ! Most areas with good results ! Strong inflows in alternative hiring trends across all investments ! Immaterial net valuation regions ! Reduced 'liftout' assets reductions of CHF 22m ! Continue to implement ! Significant progress in international growth strategy reducing risk exposure 1) Excluding a fair value adjustment on own debt of CHF (503)m and a net litigation credit of CHF 134m Lehman Brothers Conference Slide 5
  • 6. Continued momentum in Wealth Management Good net asset inflows Gross margin on AuM at high level CHF bn basis points Net asset inflows of CHF 50.2bn with 6.4% net growth rate 118 117 117 116 113 112 15 30 15 Transaction-based 14 13 12 10 86 Recurring 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Lehman Brothers Conference Slide 6
  • 7. Fixed income trading with continued difficult market conditions; Strong equity trading result Fixed income trading net revenues Equity trading net revenues CHF m 4,646 6,054 3,634 3,282 2,475 2,255 (22)% 1,379 320 +64% (9)% (1,256) (1,576) 6M07 6M08 2Q07 1Q08 2Q08 6M07 6M08 2Q07 1Q08 2Q08 ! Increased revenues in RMBS, Europe high ! Prime services generated near-record grade and life finance revenues with growing client balances and new mandates ! 2Q08 revenues benefit from substantial ! Near-record revenues in equity derivatives, reductions in writedowns driven by strength in all regions and products ! Reported revenues of CHF 320 m include ! Strong result in the global cash business, writedowns of CHF 391m 1) and a fair value reduction on own debt of CHF 453m driven by increased client flows and growth in AES 1) Does not include offsetting gains of CHF 369m reported in debt underwriting and other revenues Lehman Brothers Conference Slide 7
  • 8. Underwriting fees still adversely affected by market conditions Advisory and other fees Underwriting fees CHF m CHF m Debt underwriting Equity underwriting 1,143 1,438 760 632 713 396 364 216 352 136 724 413 417 245 172 6M07 6M08 2Q07 1Q08 2Q08 6M07 6M08 2Q07 1Q08 2Q08 ! Solid advisory results as increase in strategic ! Equity underwriting impacted by lower levels M&A partly compensated for decline in of industry-wide equity issuance, particularly sponsor activity in areas of historical strength for CS, and ! lower market share Global M&A volume down from strong 2Q07 ! ! Credit environment has continued to impact #5 in announced M&A for 1H08 and #4 in high-yield and leveraged lending issuance the Americas ! High Grade performed well Lehman Brothers Conference Slide 8
  • 9. Financial Performance Risk Reduction Financial Markets Key Competitive Advantages Lehman Brothers Conference Slide 9
  • 10. Significant progress in reducing risk positions Exposures and writedowns in CHF bn Leveraged finance Commercial mortgages Net writedowns: Net writedowns: Origination- 59.2 2007 (0.8) 2007 (0.6) -58% 1Q08 (1.7) 1Q08 (0.8) 35.9 -76% based 2Q08 (0.1) 2Q08 (0.5) 35.1 25.9 19.3 15.0 20.8 (exposures 14.4 Funded shown gross) Unfunded 3Q07 4Q07 1Q08 2Q08 3Q07 4Q07 1Q08 2Q08 Residential mortgages 1) CDO trading 2) Net writedowns: Net writedowns: Trading- 4.6 2007 (0.5) 2007 (1.3) -67% -76% 1Q08 (0.1) 1Q08 (2.7) 16.2 based 2Q08 0.0 2Q08 0.5 1.9 8.7 (exposures 1.1 5.5 5.4 shown net) Subprime Other 4Q07 1Q08 2Q08 3Q07 4Q07 1Q08 2Q08 1) All non-agency business, including higher quality segments; global total; and year-end positions related to US subprime; total IB subprime is CHF 1.9bn (across RMBS & CDOs) Lehman Brothers Conference 2) Exposures computed per 0% IDR methodology Slide 10
  • 11. Financial Performance Risk Reduction Financial Markets Key Competitive Advantages Lehman Brothers Conference Slide 11
  • 12. Market conditions continue to be difficult Leveraged Finance spread trends Equity market performance Indexed price change Trading volume 900 110 30,000 714 800 CDX.NA.HY 105 700 25,000 iTraxx Europe Crossover 100 600 95 20,000 90 500 85 15,000 549 400 80 10,000 300 75 70 200 5,000 65 100 60 0 - Jan-07 May-07 Aug-07 Dec-07 Apr-08 Aug-08 Jan-07 May-07 Aug-07 Dec-07 Apr-08 Aug-08 S&P 500 FTSE 100 MSCI World Equity trading volume (NYSE and NASDAQ) ABX price CMBS spread trends 110 2,200 100 2,000 AAA AA BBB 90 1,800 80 66 1,600 1,952 70 1,400 60 1,200 814 50 1,000 40 800 600 30 ABX HE AAA 06-02 400 176 20 5 ABX HE BBB 06-02 200 10 - 0 Jan-07 May-07 Sep-07 Dec-07 Apr-08 Aug-08 Jan-07 May-07 Aug-07 Dec-07 Apr-08 Aug-08 Notes: Lehman Brothers Conference 1) All data through August 29, 2008 Slide 12
  • 13. M&A less severely affected than underwriting Leveraged finance origination volumes Global ECM origination volumes High-yield new issuance 2) Dealogic / Equidesk (USD bn) (USD bn) 294 292 Leveraged loan volume 3) 187 265 191 120 168 149 124 78 75 85 81 49 46 38 25 10 4 33 6 47 75 30 2005 2006 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 2005 2006 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 to to Quarterly avg Quarterly avg 1) dat e dat e 4) Global CMBS origination volumes Global announced M&A volumes Commercial Mortgage Alert / Thomson (USD bn) (USD bn) Thomson / SDC 110 1,781 1,523 1,472 75 74 1,190 59 858 49 836 730 606 11 10 0.5 2005 2006 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 2005 2006 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 to to Quarterly avg Quarterly avg 1) 1) d a te d a te 1) 3Q08 to date includes all of July and August 2) Source: Thomson / SDC Lehman Brothers Conference 3) Source: Standard & Poor's Slide 13 4) Leveraged loan volume as of August 21, 2008, High-yield volume includes all of July and August
  • 14. Financial Performance Risk Reduction Financial Markets Key Competitive Advantages Lehman Brothers Conference Slide 14
  • 15. Credit Suisse’s competitive advantages 1/2 Examples / Actions / Track Record Key competitive strengths of Credit Suisse Client account management Emphasis on client-led businesses “Integrated Bank” collaboration Strong track record: AES, Life Finance History of innovation Continue to reinvent our business Strong presence across developed and Geographically diverse emerging markets Continue build-out in key business areas, Diversified product offering such as Derivatives and Prime Services Lehman Brothers Conference Slide 15
  • 16. Credit Suisse competitive advantages 2/2 Examples / Actions / Track Record Key competitive strengths of Credit Suisse Continued focus on efficiency, Ability to adapt to weaker macro expense management environment Rebalance headcount between businesses Investment in people Momentum toward market-leading status Diversified funding base, price credit Stable funding base; conservative liquidity correctly management Lehman Brothers Conference Slide 16
  • 17. Clients and collaboration Client-led business ! Bank-wide Key Client Coverage program continues to mature on a global basis and actively involves the most senior leaders of the Bank Client ! Roughly 400 individual key client plans in place to increase wallet share, Account coordinate opportunities across the bank and increase senior Management management focus ! Joint venture with Private Bank organized to maximize cross divisional leverage and delivery of the Integrated Bank ! Investment Bank is significant contributor to Integrated Bank revenues Collaboration –Approx. 48% of total 2007 Integrated Bank revenues of CHF 5.9 billion came from Investment Bank collaboration with other divisions –Majority of collaboration revenue from equity cash, equity derivatives and global rates/FX Lehman Brothers Conference Slide 17
  • 18. Product innovation Innovation Life Finance Quarterly Revenue Growth AES Quarterly Revenue Growth 47% 201% 2Q07 3Q07 4Q07 1Q08 2Q08 2Q07 3Q07 4Q07 1Q08 2Q08 ! Revenues up over 50% vs. H107 ! Dominant market position in trading and distributing both longevity and mortality ! Recently registered first 1 billion share risk day in US AES (July 17) ! Trading in both physical (life settlements, ! CrossFinder: #2 dark pool in US premium finance) and synthetic (swaps, (more than160 million average daily structured notes) forms shares crossed) ! Expanding internationally (Europe in 2008, Asia in 2009) Lehman Brothers Conference Slide 18
  • 19. Geographically Continued geographic diversification diverse Expansion of global footprint Credit Suisse 2007 net revenues by region in CHF bn and up/down in % vs. 2006 Kazakhstan Russian Federation +15% Ukraine -19% Czech Republic Wroclaw Zurich 10.4 10.4 Toronto London Montreal Paris San Francisco Boston Milan Chicago Los Angeles Tokyo Madrid New York Irvine Beijing Atlanta Dallas Miami Hong Kong 4.0 Houston Nassau Bangkok Monterrey Cayman Islands 11.5 Pune Philippines Mexico City U.A.E. +23% Malaysia Bogotá Singapore Nigeria Qatar Kuala Lumpur Jakarta +16% Rio de Janeiro Sydney São Paulo Perth Montevideo Melbourne South Africa Buenos Aires Switzerland APAC Santiago EMEA Americas * Key IB offices in bold In 2007 and 1H08, we strengthened our presence in the following countries: Australia China Kazakhstan Ukraine Austria India Panama United States Brazil Israel Turkey Pakistan APAC = Asia / Pacific, EMEA = Europe, Middle East and Africa Lehman Brothers Conference Slide 19
  • 20. Diversified Diversification into less correlated businesses product offering Prime Services Quarterly Revenue Growth Equity Derivatives Quarterly Revenue Growth 7% 68% 2Q07 3Q07 4Q07 1Q08 2Q08 2Q07 3Q07 4Q07 1Q08 2Q08 ! Near-record quarter with increased client ! Near-record revenue quarter for equity balances and new client mandates derivatives ! CS viewed as a strong counterparty and a ! Record corporate and emerging markets “safe haven” given strength and stability of activity funding and liquidity ! Strong activity in US and EMEA flow ! Well-positioned for “flight to quality,” with derivatives steady transfers of business from competitors ! Ongoing focus on infrastructure and efficiency boosting balances by over 15% in 1H08 Lehman Brothers Conference Slide 20
  • 21. Disciplined cost management in Investment Macro environment Banking Other operating expenses (in CHF m) G&A per head1) (in CHF 000’s) 184 175 172 168 1) 2,286 2,178 2,044 153 149 1,300 1,145 1,232 1,097 1,0811) 145 (11)% (13)% 947 6M07 6M08 2Q07 3Q07 4Q07 1Q08 2Q08 6M07 6M08 2Q07 3Q07 4Q07 1Q08 2Q08 ! Other operating expenses1) decreased CHF 108m, or 5%, from 6M07, CHF 16m from 1Q08 and CHF 64m from 2Q07 ! This reflects higher average headcount compared to 6M07, offset by cost reduction efforts, a stronger Swiss franc and, in 2Q08, lower commission spend 1) Excluding net litigation credit of CHF 134m in 2Q08 Lehman Brothers Conference Slide 21
  • 22. Proactive reorientation of resources to capture Investment in people growth Headcount Change – 2Q 2007 to 2Q 2008 +100% +50% 0% -50% Life Finance Commodities EQ Derivs. Prime Svcs. Lev Fin CMBS CDOs RMBS Lehman Brothers Conference Slide 22
  • 23. Diversified Conservative funding structure funding base Asset and liabilities by category, end of 2Q08 CHF bn 1,230 1,230 ! Strong deposit base ! Long-term debt available to fund short-term trading book ! Benefited from 'flight to quality' during crisis, adding medium-term funding ! Integrated bank enables efficient access to retail funding and liquid markets globally ! All internal funding priced at market levels to ensure correct disciplines Capital and Assets liabilities Lehman Brothers Conference Slide 23
  • 24. Diversified funding base Well diversified unsecured funding mix Unsecured funding by type / product Total: CHF 541bn ! Well diversified funding distribution by client type and product ! Client deposits increased 15%, or CHF 37 bn, Institutional during 2007 deposits 3) Retail & 21% private banking ! Centralized funding function covering both deposits 1) CDs and long-term borrowing ensures 50% optimum efficiency in global market access Long-term debt 2) 29% 1) Time, demand and saving deposits Lehman Brothers Conference 2) Structured notes, long-term bonds and subordinated debt Slide 24 3) Bank deposits, CDs, corporates
  • 25. Recent market conditions validate Credit Suisse strategy Benefits of integrated bank with a client focus Innovative and diversified product offering Geographic diversification Expense discipline Efficient headcount management Importance of strong capital and liquidity position Well-positioned to create long-term value and seize opportunities that arise from market dislocation Lehman Brothers Conference Slide 25
  • 26. Lehman Brothers Conference Slide 26

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