0
UBS Global Financial Services
Conference
New York
May 14, 2008




Paul Calello, CEO, Investment Bank
Cautionary statement

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


Disciplined Approach to Risk Reduction


Strong Capital and Liquidity Position


Positioning for the Futu...
Credit Suisse has significant earnings power


  Benefit from a diversified and integrated global business


  Private Ban...
A diversified earnings mix

    Private Banking                           Investment Banking                              ...
Continued momentum in Wealth Management

Good net asset inflows                                 Gross margin on AuM at hig...
Greater focus on strengths in Asset Management;
continued inflows in alternative assets
                                  ...
Fixed income revenues outside most affected areas
at same level as very strong 1Q07
Fixed income trading and debt underwri...
Equity trading with solid performance in light of market
conditions
Equity trading net revenues
CHF m
                    ...
Underwriting and advisory business well positioned for a
rebound in corporate activity
Underwriting revenue               ...
Disciplined approach to cost management in Investment
Bank
General & administrative expenses
CHF m


                     ...
Growing collaboration revenues

2007 collaboration revenues              Key collaboration initiatives
in CHF bn and growt...
Earnings Power


Disciplined Approach to Risk Reduction


Strong Capital and Liquidity Position


Positioning for the Futu...
Significant progress in reducing risk positions
Exposures and writedowns in CHF bn
                            Leveraged f...
Earnings Power


Disciplined Approach to Risk Reduction


Strong Capital and Liquidity Position


Positioning for the Futu...
Maintained strong capital position following transition to
Basel II

                                                    !...
Earnings Power


Disciplined Approach to Risk Reduction


Strong Capital and Liquidity Position


Positioning for the Futu...
Assessing the progress of our franchise momentum and
growth initiatives

 Weaker               Progress                   ...
Continued revenue diversification
Prime Services Quarterly Revenue Growth
                                         ! Recor...
Continued geographic diversification

                                                                                    ...
Current market conditions validate Credit Suisse strategy


 Importance of geographic and product diversity

      Value o...
UBS Global Financial Services Conference
                                Slide 22
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UBS Global Financial Services Conference, New York

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Transcript of "UBS Global Financial Services Conference, New York"

  1. 1. UBS Global Financial Services Conference New York May 14, 2008 Paul Calello, CEO, Investment Bank
  2. 2. Cautionary statement Cautionary statement regarding forward-looking and non-GAAP information This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties, and we might not be able to achieve the predictions, forecasts, projections and other outcomes we describe or imply in forward-looking statements. A number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions we express in these forward-looking statements, including those we identify in quot;Risk Factorsquot; in our Annual Report on Form 20-F for the fiscal year ended December 31, 2007 filed with the US Securities and Exchange Commission, and in other public filings and press releases. We do not intend to update these forward-looking statements except as may be required by applicable laws. This presentation contains non-GAAP financial information. Information needed to reconcile such non-GAAP financial information to the most directly comparable measures under GAAP can be found in Credit Suisse Group's first quarter report 2008. UBS Global Financial Services Conference Slide 2
  3. 3. Earnings Power Disciplined Approach to Risk Reduction Strong Capital and Liquidity Position Positioning for the Future UBS Global Financial Services Conference Slide 3
  4. 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, masked by valuation reductions Well positioned to create long-term value and seize opportunities that arise from market dislocation UBS Global Financial Services Conference Slide 4
  5. 5. A diversified earnings mix Private Banking Investment Banking Asset Management CHF m 2,502 1,439 1,990 1,381 1,377 1,324 1,289 1) 527 1) 191 299 257 1) 6 45 98 (247) (468) (849) (3,460) 1Q07 2Q07 3Q07 4Q07 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 ! Stable results in challenging ! Most businesses performing well; ! Stable recurring management fees environment some at record levels ! Strong performance across most ! Good asset inflows and hiring ! Significant writedowns in leveraged businesses momentum for Relationship finance and structured products ! Valuation adjustments on our money Managers market assets ! Continued international expansion 1) Before losses from securities purchased from our money market funds UBS Global Financial Services Conference Slide 5
  6. 6. Continued momentum in Wealth Management Good net asset inflows Gross margin on AuM at high level CHF bn basis points Net asset inflows Net asset inflows of CHF 50.5 bn with of CHF 50.2 bn with 7.3% net growth rate 6.4% net growth rate 125 117 117 118 113 113 112 109 101 17 32 15 15 Transaction-based 14 13 12 85 11 10 9 Recurring 1Q08 1Q08 2006 2007 2006 2007 UBS Global Financial Services Conference Slide 6
  7. 7. Greater focus on strengths in Asset Management; continued inflows in alternative assets AuM NNA NNA % of 2007 Business 1Q08 1Q08 2007 revenues1) CHF ! Private equity Alternative ! Real estate 160 bn 2.2 bn 25.3 bn 40% investments ! Single and multi- manager hedge funds strategies (AI) ! Other strategies Multi-asset ! Active asset allocation strategies and solutions 165 bn 8.0 bn 24% (1.3)bn class solutions (MACS) across all asset classes ! Equities Global 275 bn (21.1)bn (29.7)bn 36% investment ! Fixed income strategies (GI) (incl. money markets) Total Asset Management division 600 bn (20.2)bn 3.6 bn 1) Asset Management division, before private equity and other investment-related gains and securities purchased from our money market funds UBS Global Financial Services Conference Slide 7
  8. 8. Fixed income revenues outside most affected areas at same level as very strong 1Q07 Fixed income trading and debt underwriting revenues CHF m ! Negative revenues in 1Q08 driven by valuation reductions in structured products and 1,226 leveraged finance 4,325 1,659 1,647 ! Very strong results in global rates and FX ! Strong results in emerging markets and proprietary trading ! 1Q08 adjusted revenues include (1,440) fair value reductions of CHF 0.5 Add back bn on corporate loan book 1Q08 Deduct 1Q08 1Q07 structured revenues 1Q08 fair adjusted adjusted 2) products and value revenues revenues leveraged finance gains on revenues 1) own debt 1) Total structured products and leveraged finance revenues excluding valuation adjustments of CHF 709 m reported in 'Other' revenues 2) Excluding revenues from structured products and leveraged finance businesses and converted into Swiss francs applying the 1Q08 average exchange rate to adjust for foreign exchange rate impact UBS Global Financial Services Conference Slide 8
  9. 9. Equity trading with solid performance in light of market conditions Equity trading net revenues CHF m ! Stable client-related businesses ! Good results in the global cash business driven by higher trading volumes, increased client flows and strong AES performance 2,475 2,171 2,068 ! Prime Services achieved record revenues 1,379 in 1Q08 with strong growth in client 1,037 balances and new client mandates ! Losses in equity proprietary trading in 1Q07 2Q07 3Q07 4Q07 1Q08 1Q08 compared to a strong 1Q07 AES = Advanced Execution Services, our electronic trading platform UBS Global Financial Services Conference Slide 9
  10. 10. Underwriting and advisory business well positioned for a rebound in corporate activity Underwriting revenue Advisory and other fees CHF m Debt underwriting Equity underwriting 713 726 340 670 632 510 86 440 396 136 413 393 327 311 172 1Q07 2Q07 3Q07 4Q07 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 ! Lower private fund group revenue from seasonally ! Lower levels of industry-wide equity issuance and strong 4Q sharp decline in number of IPOs ! Global M&A volume down from record 2007 ! ECM pipeline strong, up 30% over 1Q07 ! #6 in announced M&A for 1Q08; mandates up ! Credit environment has continued to impact high- 21% over 1Q07 yield and leveraged lending issuance UBS Global Financial Services Conference Slide 10
  11. 11. Disciplined approach to cost management in Investment Bank General & administrative expenses CHF m ! Flexibility of cost base positions us well in current markets and going forward 941 864 827 ! Continued focus on reducing G&A 803 748 expense (10)% ! Despite headcount growth, G&A expense trend shows improvement 1Q07 2Q07 3Q07 4Q07 1Q08 UBS Global Financial Services Conference Slide 11
  12. 12. Growing collaboration revenues 2007 collaboration revenues Key collaboration initiatives in CHF bn and growth % vs. 2006 ! Asset referrals CHF 3.1 bn 1 ! Structured Investment Products +5% 2 ! UHNW client solutions Private Asset ! Increase penetration of Managed Banking Management Investment Products 2 ! Product innovation CHF 2.3 bn CHF 0.5 bn ! Private Equity/Hedge Fund distribution +43% 1 +54% 3 ! Alternative investments distribution Investment ! Pension / Insurance solutions 3 Banking ! Fund linked products & Hedge Fund referrals Grow collaboration revenues from CHF 5.9 bn in 2007 to over CHF 10 bn in 2010 (+20% p.a.) UBS Global Financial Services Conference Slide 12
  13. 13. Earnings Power Disciplined Approach to Risk Reduction Strong Capital and Liquidity Position Positioning for the Future UBS Global Financial Services Conference Slide 13
  14. 14. Significant progress in reducing risk positions Exposures and writedowns in CHF bn Leveraged finance Commercial mortgages Net writedowns: Net writedowns: Origination- 59 2007 (0.8) 2007 (0.6) -64% -46% 1Q08 (1.7) 1Q08 (0.8) 36 based 35 26 19 21 (exposures Funded shown gross) Unfunded 3Q07 4Q07 1Q08 3Q07 4Q07 1Q08 Residential mortgages 1) CDO trading 2) Net writedowns: Net writedowns: Trading- 2007 (0.5) 2007 (1.3) -66% -70% 16 1Q08 (0.1) 1Q08 (2.7) 2.3 based 3.9 1.6 9 (exposures 1.6 6 0.7 shown net) Subprime 1.1 Other 3Q07 4Q07 1Q08 3Q07 4Q07 1Q08 1) All non-agency business, including higher quality segments; global total 2) Year-end positions related to US subprime; total IB subprime is CHF 3.2 bn (across RMBS & CDOs) UBS Global Financial Services Conference Slide 14
  15. 15. Earnings Power Disciplined Approach to Risk Reduction Strong Capital and Liquidity Position Positioning for the Future UBS Global Financial Services Conference Slide 15
  16. 16. Maintained strong capital position following transition to Basel II ! Weakening of US dollar reduces both risk- BIS Tier 1 ratio in % weighted assets and capital position Risk-weighted assets in CHF bn ! Managed to grow capital without having to 13.9 dilute existing shareholders 13.0 12.0 11.1 11.3 − Issued CHF 1.5 bn of hybrid tier 1 capital 10.0 9.8 ! Reduced share repurchase activity 324 312 301 299 296 ! Strong capital base as competitive 254 233 advantage (7)% ! Continue to prudently manage our balance sheet, exposures and capital 2005 2006 2Q07 3Q07 4Q07 4Q07 1Q08 Basel I Basel II UBS Global Financial Services Conference Slide 16
  17. 17. Earnings Power Disciplined Approach to Risk Reduction Strong Capital and Liquidity Position Positioning for the Future UBS Global Financial Services Conference Slide 17
  18. 18. Assessing the progress of our franchise momentum and growth initiatives Weaker Progress Stronger Prime Services Equity Derivatives Emerging Markets Commodities AES Platform Corporate Derivatives Life Finance Rates and FX CMBS and Lev Fin / Asia UBS Global Financial Services Conference Slide 18
  19. 19. Continued revenue diversification Prime Services Quarterly Revenue Growth ! Record quarter with increased client balances and new client mandates 125% − Our chargeable balances are up 59% from the beginning of 2007 ! Credit Suisse viewed as a strong counterparty and a “safe haven” in this market given strength and stability of funding and liquidity 1Q07 2Q07 3Q07 4Q07 1Q08 Life Finance Quarterly Revenue Growth ! Dominant market position in trading and distributing both longevity and mortality risk ! Trading in both physical (life settlements, premium 446% finance) and synthetic (swaps, structured notes) forms ! Expanding internationally (Europe in 2008, Asia in 1Q07 2Q07 3Q07 4Q07 1Q08 2009) UBS Global Financial Services Conference Slide 19
  20. 20. Continued geographic diversification Expansion of global footprint 2007 net revenues by region Kazakhstan Russian Federation Ukraine Czech Republic Americas Wroclaw Switzerland 27% Zurich 30% Toronto Montreal London Paris San Francisco Boston Milan Chicago Los Angeles Tokyo APAC Madrid New York Irvine EMEA Beijing Atlanta 11% Dallas Hong Kong Miami 32% Houston Nassau Bangkok Monterrey Cayman Islands Pune Philippines Mexico City U.A.E. Malaysia Bogotá Singapore Nigeria Qatar 2007 pre-tax income by region Kuala Lumpur Jakarta Rio de Janeiro Sydney São Paulo Perth Montevideo Americas Melbourne South Africa Buenos Aires APAC Santiago 3% 15% Switzerland In 2007, we strengthened our presence in the following countries: 49% EMEA Australia China Kazakhstan Ukraine 33% Austria India Panama United States Brazil Israel Turkey APAC = Asia / Pacific, EMEA = Europe, Middle East and Africa Based on Core Results before Corporate Center UBS Global Financial Services Conference Slide 20
  21. 21. Current market conditions validate Credit Suisse strategy Importance of geographic and product diversity Value of franchise leadership Utilization of economic risk capital model Integrated Bank as differentiator Importance of strong capital and liquidity position Well positioned to create long-term value and seize opportunities that arise from market dislocation UBS Global Financial Services Conference Slide 21
  22. 22. UBS Global Financial Services Conference Slide 22
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