The vision of Credit Suisse is to become the world’s
premier bank, renowned for its expertise in investment
banking, private banking and asset management, and
most valued for its advice, innovation and execution.
Brand launch in Hong Kong
On January 16, 2006, we launched
our new Credit Suisse brand and
logo worldwide. The façades of
Credit Suisse buildings in Hong
Kong, London, New York, Singapore
and Zürich were illuminated to
celebrate the new brand.
Credit Suisse Group financial highlights
Year ended December 31, in CHF m, except where indicated 2005 2004 2003
Consolidated income statement
Net revenues 60,632 55,139 52,515
Income from continuing operations before
cumulative effect of accounting changes 5,863 5,684 1,585
Net income 5,850 5,628 770
Return on equity
Return on equity – Group 15.4% 15.9% 2.2%
Return on equity – Banking 16.2% 17.8% 12.6%
Return on equity – Winterthur 11.7% 9.2% (26.9%)
Earnings per share
Basic earnings per share in CHF 5.17 4.80 0.64
Diluted earnings per share in CHF 5.02 4.75 0.63
Net new assets in CHF bn 58.4 32.9 5.0
December 31, in CHF m, except where indicated 2005 2004
Assets under management in CHF bn 1,484.3 1,220.7
Consolidated balance sheet
Total assets 1,339,052 1,089,485
Shareholders’ equity 42,118 36,273
Consolidated BIS capital data
Risk-weighted assets 232,891 199,249
Tier 1 ratio 11.3% 12.3%
Total capital ratio 13.7% 16.6%
Number of employees
Switzerland – banking segments 20,194 19,558
Switzerland – insurance segments 5,928 6,147
Outside Switzerland – banking segments 24,370 21,606
Outside Switzerland – insurance segments 13,031 13,221
Number of employees (full-time equivalents) 63,523 60,532
Stock market data
Market price per registered share in CHF 67.00 47.80
Market price per American Depositary Share in USD 50.95 42.19
Market capitalization 75,399 53,097
Market capitalization in USD m 57,337 46,865
Book value per share in CHF 37.43 32.65
Share performance Market capitalization
Swiss Market Index (rebased) Credit Suisse Group As of end of reporting period (in CHF bn)
2003 2004 2005 97 98 99 00 01 02 03 04 05
Key Highlights 2005
Our 2005 results show
that we are making good CHF 5,850 million
progress in transforming Net income for 2005 totaled CHF 5,850 million,
up 4% compared to 2004.
the underlying profitability
of our business. Our new
integrated structure will
help us to further enhance
our growth and returns for
CHF 42.7 billion
our shareholders. Private Banking recorded net new assets of CHF 42.7 billion,
reflecting excellent inflows across all regions.
This corresponded to a strong annual growth rate of 7.9%.
CHF 1,484.3 billion
The Group’s total assets under management stood at
CHF 1,484.3 billion as of December 31, 2005, up 21.6% from
December 31, 2004.
As of year-end 2005, Credit Suisse Group employed 63,523
people, of which 44,564 in its banking business, Credit Suisse,
and 18,959 in its insurance business, Winterthur.
For a detailed presentation of Credit Suisse Group’s financial statement 2005,
its company structure, risk management, an in-depth review of the operating and
financial results and additional information on corporate governance, please refer
to the Annual Report 2005 and the Supplemental Information 2005.
Cover image: Daria Mihaesco,
Private Banking (Geneva)
4 Credit Suisse at a glance
6 Message from Walter B. Kielholz, Chairman of the Board of Directors
8 Message from Oswald J. Grübel, Chief Executive Officer
10 Our vision and our mission
11 Our three principles
12 A relentless focus on the needs of our clients
16 Teamwork must be at the heart of all we do
20 Our reputation is everything
24 Operating review
24 Credit Suisse Group and Credit Suisse
30 Aiming for Operational Excellence
32 Credit Suisse Group in society
36 Corporate governance and management
36 Corporate governance
38 Executive Boards of Credit Suisse Group and Credit Suisse
40 Summary of the responsibilities of the Board of Directors
and the Executive Boards of Credit Suisse Group and Credit Suisse
42 Financial tables
The content of this Business Review is for information purposes only and constitutes
neither an offer for sale of any product nor investment advice.
at a glance
As one of the world’s leading banks, Credit Suisse
provides its clients with investment banking,
private banking and asset management services
worldwide. Credit Suisse offers advisory services,
comprehensive solutions and innovative products to
companies, institutional clients and high-net-worth
private clients globally, as well as retail clients in
Switzerland. Credit Suisse is active in over 50
countries and employs more than 44,000 people
from 100 different nations.
Credit Suisse’s parent company, Credit Suisse
Group, is a leading global financial services
company headquartered in Zürich. Credit Suisse
Group also includes Winterthur, the leading
insurance company in Switzerland and one of the
top 10 composite insurers in Europe. Credit Suisse
Group’s registered shares (CSGN) are listed in
Switzerland and, in the form of American Deposi-
tary Shares (CSR), in New York.
In Investment Banking, Credit Suisse offers securities
products and financial advisory services to corporations,
governments and institutional investors. Operating in
69 locations in 33 countries, this business specializes
in creating innovative solutions to clients’ challenges,
drawing on expertise from across the full spectrum
of products: debt and equity underwriting, sales and
trading, mergers and acquisitions, investment research,
correspondent and prime brokerage services.
You can find further information about
Credit Suisse Group and Credit Suisse at
www.credit-suisse.com and further information
about Winterthur at www.winterthur.com.
4 Credit Suisse Group Business Review 2005
In Private Banking, Credit Suisse provides comprehen- In Asset Management, Credit Suisse manages
sive advice and a broad range of investment products portfolios, mutual funds and other investment vehicles
and services tailored to the complex needs of high-net- for a broad spectrum of clients globally, from
worth individuals all over the world. Credit Suisse’s governments, institutions and corporations to private
structured advisory process encompasses both asset individuals. It offers investment products across the full
and liability management. Furthermore, the bank is a range of asset classes, including equity and fixed
leading provider of innovative alternative investment income securities, commodities and multiple-asset class
products. Wealth management solutions include tax products. The bank is a world leader in providing
planning, pension planning, life insurance solutions, alternative asset solutions and offers alternative
wealth and inheritance advice, trusts and foundations. investments including real estate, hedge funds, private
Credit Suisse offers multiple booking platforms and equity and volatility management. This business is a
global execution capabilities. In Switzerland, Credit globally integrated network, sharing information across
Suisse supplies banking products and services to busi- borders to deliver our best investment ideas and
ness and retail clients as well as to private banking clients. capabilities to clients around the world.
Credit Suisse Group Business Review 2005 5
Message from the Chairman
Dear shareholders, clients and colleagues
The year 2006 marks the occasion of Credit Suisse’s 150th anniversary. This milestone
gives us an opportunity to thank those who have helped to build our company and
those who place their trust in us. At the same time, we want to continue to foster the
spirit of innovation that has been a hallmark of our bank.
Alfred Escher, who founded Credit Suisse in 1856, was one of the most important
politicians and commercial pioneers of his time. In addition to founding Credit Suisse,
he played a crucial role in the founding of two important railway lines, a technical
university, and two insurance companies. I am convinced that Escher’s strength
in innovation continues to influence us even now that we are a global institution.
Our ability to implement new ideas while maintaining the tried and tested is the golden
thread that runs through our 150-year history and one which will stand us in good stead
for the future.
Walter B. Kielholz
Chairman of the Board of Directors
Our long tradition of innovation is evident not only in the way we develop products and
Credit Suisse Group
services to meet our clients’ high expectations – but also in the way we developed a
response to our rapidly changing business environment in 2005.
Technology and the globalization of markets have increased the complexity of the
financial services industry and transformed the needs of our clients. In 2005 we
responded swiftly and effectively to this challenging environment by building an
organizational structure that enables us to combine our wealth of experience and
expertise of the financial markets from across our banking business to meet our clients’
demand for sophisticated and holistic solutions.
Credit Suisse began operating as an integrated global bank on January 1, 2006.
Focused on investment banking, private banking and asset management, we are now
well-placed to strengthen our competitive position globally and seize opportunities in our
Our 150 years of experience has been the solid foundation that has enabled us to
constantly look ahead, create novel solutions for our clients and define the marketplace
of the future. We are proud to have a strong Investment Banking business that is one
of the most innovative on Wall Street; a Private Banking business that is the benchmark
in terms of profitability and innovation, and an Asset Management business that is a
market leader in alternative investments. Our transition to an integrated structure means
we can use our resources more effectively and our people can work together on a
global basis – from all three areas of our bank – for the benefit of our clients.
Crucially, while implementing our strategic plan, we remained committed to enhancing
profitability and creating value for our shareholders. We reported net income of
CHF 5,850 million for the full year. The Board of Directors will propose a dividend of
CHF 2.00 per share to the Annual General Meeting on April 28, 2006.
6 Credit Suisse Group Business Review 2005
Two markets have, so far, accounted for a significant amount of our business volume:
Switzerland and the US. Both markets will remain very important to the bank. However,
we see a shift towards the emerging economies. We are operating in a global
environment; if we want to be close to our clients and the markets in which they
operate, we know we must increase our global footprint. This will complement the
strong bases we will continue to develop in our home markets.
Our global business strategy will be underpinned by our proximity to our clients, the
expertise and commitment of our people, and the effective use of technology. We are
therefore committed to investing in our global expansion, to recruiting and training the
very best people in our industry and to dedicating resources to technology. This will
enable us to create a competitive advantage through customized solutions and
economies of scale.
In 2005 we demonstrated our ability to deliver good results, while at the same time
refocusing our business. I am confident that with our integrated global structure, we will
be able to capitalize on our strong operating business and solid capital base to achieve
sustained and profitable growth.
Walter B. Kielholz
Credit Suisse Group Business Review 2005 7
Message from the Chief Executive Officer
Dear shareholders, clients and colleagues
Change is the driving dynamic of the banking business – change that is fueled by the
growth of an increasingly global economy and the new, wired world of global networks
and instant communications.
In our constantly changing business environment, it is all too easy for the individual
client to become marginalized, even neglected. That is why we are dedicated to putting
our clients first in every single phase of our business. Clients are at the heart of
everything we do. Meeting their needs, earning their trust and keeping that trust
through the successful delivery of products and services tailored to their requirements
are our highest priorities.
Our success depends upon our ability to unlock the considerable experience and
knowledge of the financial markets from across our organization. We have therefore
Oswald J. Grübel built an integrated global bank, focused on our core strengths in investment banking,
Chief Executive Officer private banking and asset management. Our new organizational structure, which we
Credit Suisse Group launched on January 1, 2006, enables our people to work together closely on a global
basis for the benefit of our clients.
Our ability to create innovative solutions has been evident throughout our 150-year
history. We think independently, finding new ways of solving problems and developing
new services in response to client-specific needs.
Preserving and enhancing our reputation is a major element of our service to clients.
We know that it can take decades to develop a reputation – and an instant to
lose it. Our reputation is determined by our capital and how we use it, by the ability
and integrity of our people, and by the results we achieve – the value we bring to
A relentless dedication to our clients, a ceaseless determination to earn and keep their
trust, and a deep commitment to teamwork and integrity – these are the foundation
stones of the integrated global Credit Suisse.
While we implemented our integration strategy in 2005 and prepared Credit Suisse for
future growth, we remained fully focused on our clients and succeeded in growing our
business. Net income for the full year reached CHF 5,850 million, strengthening the
underlying profitability of our business. We maintained strong capital ratios with a
consolidated BIS tier 1 ratio of 11.3% at year-end 2005. Net new assets of CHF 58.4
billion for the full year 2005 underscore the trust our clients place in us to increase and
protect their wealth. As of December 31, 2005, we had assets under management of
CHF 1,484.3 billion. These figures also include Winterthur, which further improved its
profitability in 2005.
8 Credit Suisse Group Business Review 2005
The year 2005 was decisive for Credit Suisse. I am convinced that we are now
in an excellent position to build on our success by meeting our clients’ demand
for sophisticated and holistic solutions across Investment Banking, Private Banking
and Asset Management.
In Investment Banking, we see attractive trends in areas in which we have historically
been strong, and we will stay focused on these strengths – such as in leveraged
finance, prime brokerage, advanced execution services and initial public offerings
(IPOs). The latter performed very well in 2005 and Credit Suisse was ranked first in the
global market share for IPOs for the full year, having participated in a number of high-
profile transactions, including the IPO for China Construction Bank, the world’s largest
IPO since 2001 and the largest IPO ever in China and in non-Japan Asia.
In Private Banking, we set the industry benchmark for profitability and we fully expect
to continue to do so. The demographics of this market are attractive, and we are
well-placed to benefit from projected growth. We are broadening our global footprint
in Private Banking: in 2005 we created a Private Banking hub in Dubai (United Arab
Emirates) – a further milestone in our global strategy to grow the wealth management
business. In addition, we opened local representative offices in Bangkok (Thailand),
Guangzhou (China), Mumbai (India) and St. Petersburg (Russia).
In Asset Management, the integration of our skills and know-how into one division
empowers us to take full advantage of our leading position in discretionary mandates
and alternative capital. It provides us with the opportunity to adjust swiftly and effectively
to each and every change in this dynamic industry. I am confident that as an integrated
bank, Credit Suisse will force the pace of innovation in asset management.
The future of our industry in today’s rapidly changing global marketplace will be shaped
by the banks that can stay close to their clients and their needs, by the banks that can
efficiently turn their expertise into effective products and solutions, and by the banks
that embrace change for the benefit of their shareholders, clients and employees. At
Credit Suisse, we understand this new marketplace. We have created the integrated
organization to thrive in it. And we have the talent and dedication to become the best
in our business.
Oswald J. Grübel
Credit Suisse Group Business Review 2005 9
Our vision and our mission
The vision of Credit Suisse is to become the world’s premier bank,
renowned for its expertise in investment banking, private banking
and asset management, and most valued for its advice, innovation
Our mission describes how we will achieve our vision. Credit Suisse
will set new standards: new standards in partnering with our clients
and new standards in providing them with innovative and integrated
solutions. Cultural diversity is essential to the success of Credit Suisse.
As an integrated global bank, Credit Suisse will empower people to
work openly and respectfully with each other and with clients to deliver
superior results that will lead to success and prosperity for all its
Charlene Yu, Roderick Ng,
Private Banking (Hong Kong)
10 Credit Suisse Group Business Review 2005
Our three principles
Three principles guide our actions, ambitions and decision-making:
we want to give our clients maximum value through our integrated
approach; we optimize the expertise from our Investment Banking,
Private Banking and Asset Management businesses through teamwork;
and we preserve and nurture our reputation at every opportunity.
A relentless focus The financial world is becoming ever more sophisticated and its clients consequently
more demanding: they expect superior results. Clients are at the center of what
on the needs of we do. We must understand their business, consider their goals from the outset,
our clients and anticipate their needs. Nothing short of excellence will suffice in helping them
to maximize their potential.
Teamwork must If we are to succeed in becoming an integrated global bank that delivers truly world-
class, innovative solutions to its clients, we must work together across our businesses
be at the heart in a spirit of respect and collaboration. We have an obligation to bring together the
of all we do combined intelligence of the entire organization to present a seamless service that
will set us apart in our industry.
Our reputation Reputations are built over decades but can be lost in an instant. Ours is built on trust,
and has enabled us to build a global business. We understand the past but are shaped
is everything by the future, so we must preserve and nurture our reputation at all times. Our
reputation is determined by our capital and how we use it; by our people, their integrity,
openness and respect; and, ultimately, by the results we achieve – the value we bring
to our clients.
Credit Suisse Group Business Review 2005 11
A relentless focus
on the needs of our clients
The measure of our success
To build strong relationships with our clients, it is crucial that we understand their needs
– what they need today and what they will need in the future. But as their requirements
are rapidly changing, how do we stay ahead?
We make sure we understand their business inside out; asking the right questions;
finding the best solution. Like a team of Formula One engineers fine-tuning a car to
suit the driver and the requirements of the track, we take pride in providing the perfect
product and service to fulfill the client’s need and circumstance.
Our talent for innovation is born of a desire to continually find better ways of serving
our clients, to produce ideas triggered by the issues they face. We have pioneered
techniques and business practices that are now standard in the industry, thanks to the
imagination and creativity of our people in response to our clients’ objectives.
Through our experience in investment banking, private banking and asset management,
we can respond to the needs of a broad range of private, corporate and institutional
clients. Through the global scope of our business, we can be close to our clients and
their markets and we are able to give the service they expect.
Of course, it is no good just talking about it; actually achieving what we say we will is
the key to earning the satisfaction of our clients, by far the most important measure of
Yvonne Siu, Kehinde Longe,
Product Control (Hong Kong)
Credit Suisse Group Business Review 2005 13
Principle in action: client focus
Our relentless focus on the needs of our clients – coupled with our product and market
knowledge – means we can provide advice that works. This sounds fine in theory, but
how does it work in practice? The following cases show the first of our three principles
Innovative debt restructuring for Brazil
Our Investment Banking business managed a major Brazilian bond exchange in July
2005. The transaction’s success was largely due to its design, which grew out of our
Liability Management expertise, solid experience in Latin America, and two years’
ongoing dialogue with our client, the government of Brazil. We focused the transaction
on what the client wanted to accomplish – in effect, to retire the inefficient and
underperforming C Bond (Capitalization Bond – a widely-held issue with interest
accruing on the principal and capitalized interest) – one of the last reminders of the
country’s previous instability.
Our solution removed unpopular elements such as a call option, in return for a longer
Debt Capital Markets – Latin America,
maturity, yet retained many of the attractive features of the old bond. However, in terms
Investment Banking (New York)
of success, the really novel move was to offer this to investors in an auction based on
the maturity they would accept, rather than price.
This innovation was vindicated when the transaction achieved the highest participation
rate ever recorded for a Brazilian exchange, including every major holder, with over
80% of the old bonds retired. It extends the bond’s maturity by 3.75 years – and,
as well as retiring USD 4.3 billion of bonds that came out of the Brady plan debt
restructuring, it relieves Brazil of over USD 500 million in annual amortization payments
through 2009. With this transaction, Brazil could confirm its strengthening economic
prosperity, just 11 years after its restructuring.
Largest IPO in China…
We also showed marketing leadership and innovation when in October 2005 we
successfully priced and executed the largest initial public offering (IPO) in the world that
year, which was also the largest ever IPO in China: the USD 9.2 billion offering for
China Construction Bank. This was the first of China’s large state-owned banks to list
shares overseas and was also the largest ever for a bank. Investment Banking obtained
a high-quality and diverse investor base, actively addressing any enquiries and
concerns, and converting these to orders through roadshows and one-to-one meetings.
The offering, and the strong institutional demand for it, are seen as fresh evidence of
investor confidence in China’s booming growth.
… and in Russia
In 2005, Credit Suisse also handled the largest ever IPO in Russia, helping Sistema
raise USD 1.56 billion in the form of global depositary receipts traded on the London
Stock Exchange. The offering was more than 2.6 times oversubscribed in the face of
uncertain investor sentiment towards Russia. Sistema is the largest private sector
consumer services company in Russia and the Commonwealth of Independent States,
owning a 51% stake in Russia’s largest mobile phone company, plus additional
interests in telecoms, financial services, real estate, technology and media. The
company plans to use the proceeds to participate in the upcoming privatization of
national telecom holding company Svyazinvest and to consolidate its leadership
positions in selected industries.
14 Credit Suisse Group Business Review 2005
Crafting solutions to meet individual requirements
Our focus on clients’ needs runs through every part of the bank. Our Private Banking
clients have known for years that their dedicated relationship manager affords access
to the entire spectrum of knowledge and services Credit Suisse has to offer.
For one such client, Credit Suisse provided asset allocation, security selection and
trading services. We hedged and monetized a single stock position worth CHF 500
million – and we also helped him close on a USD 2 billion private equity transaction by
arranging a tailor-made escrow service. In addition, we structured a private investment
fund for his family and friends to participate in his investment activities, and have
arranged financing for a new yacht and private aircraft.
Similarly, another private client was looking to buy a medium-sized enterprise when he
retired from the Executive Board of a listed company. We assessed and recommended
several candidate firms whose owners were considering succession planning and we
arranged financing of CHF 5 million for the selected acquisition.
For a key executive of a South Asian company, colleagues from Credit Suisse’s Private
Banking and Investment Banking divisions cooperated in 2005 to complete a pioneer-
ing corporate equity derivative deal. The transaction allowed the executive to generate
cash to pay off a loan secured by shares in his company, while still maintaining upward
exposure to the company’s performance through the purchase of a call option. The
transaction was well received by the market with the stock opening higher than its
previous day close after the executive had disclosed the deal publicly.
One point of contact at a single bank is the most efficient way for many of our private
clients to manage their wealth. A Hong Kong client, with a significant investment
portfolio, used to deal separately with different divisions of leading financial institutions.
As such, his advisors often focused on promoting products rather than offering
objective advice. Now, with a single contact point at Credit Suisse to coordinate his
different needs, he enjoys comprehensive banking and wealth management services
based on our global resources.
New products, new ideas, new perspectives – for our clients
In 2005, our Asset Management division developed a high dividend yield equity product
to offer Japanese clients exposure to global markets. Faced with the low yield of
government bonds at around 1.5%, this product offers Japanese retail investors above
4.0% and pays a monthly dividend payment. We developed the product and won
the mandate in response to a request from Nikko Cordial, one of the top three
Japanese brokerage firms, for a product to distribute through their network to retail
clients. This is a good example of how we can design a specific new product to meet
the needs of clients in certain market environments.
Private Banking (Geneva)
Credit Suisse Group Business Review 2005 15
Teamwork must be
at the heart of all we do
Combining our experience, knowledge and expertise
What use is an orchestra of talented musicians who play only solos? To perform well,
we must perform together. Teamwork creates enormous value. Our people collaborate
across the business with one common goal: bringing value to our clients.
Credit Suisse has a global reach – over 44,000 people in locations as diverse as
Mexico City, Tokyo and Geneva. Performing as one team is not always simple. It
requires dedication, determination and dialogue. It means we have to trust each other,
listen attentively and be generous with our talent and ideas. We have to understand and
believe in our goals, and recognize we are part of a global team.
We make our talent work for our clients by sharing our wealth of experience,
knowledge and expertise throughout the entire business in investment banking, private
banking and asset management.
Working as a team is not something we can choose to do some days but not others.
It is the means by which we can make the most of our inherent strengths – our global
reach, our first-class advice and our business experience – and reach our full potential
for the benefit of our clients and our shareholders.
Yong Cai, Charles Jin, Michael Daniel, Manish Kumar,
Collateralized Mortgage Obligations,
Investment Banking (New York)
Credit Suisse Group Business Review 2005 17
Principle in action: teamwork
Developing market-leading innovations – or acquiring them – represent two routes to
growth for large organizations such as Credit Suisse. Putting those innovations to work
successfully for different clients, internal and external, across a global, multi-business
company, can create huge competitive advantage. But it takes teamwork to develop
the structures, processes and relationships to pursue cross-business opportunities.
The following cases provide a practical demonstration of our teamwork and the tangible
benefits it can create for our clients.
Building on knowledge from experts and clients
HOLT, a platform to analyze the financial performance of companies, offers Credit
Suisse divisions and clients unique insights into corporate strategy, performance and
valuation, through one of the most advanced frameworks available, with a database
covering over 18,000 companies in more than 55 countries. It works on the premise
that stock markets set prices based on fundamentals such as cash flow, rather than
traditional accounting measures. Therefore, it removes accounting distortions and
HOLT, Investment Banking (Chicago)
inflation, and calculates performance on Cash Flow Return on Investment (CFROI).
Brought into the Cash Equities business of Credit Suisse in 2002, HOLT has lived a
broad vision from day one to become a shared resource, or strategic advisory boutique,
for many different areas within the bank. It is used for research, publications, structured
and tailored products, insights and sometimes purely to demonstrate the competitive
advantage of Credit Suisse to win pitches.
Better still, HOLT enjoys a natural upward spiral in quality every time it is used. Diverse
enough to cater for the needs of over 600 external clients, as well as our thousands
of internal users, the framework and database improve as more people look at it,
contributing their own unique insights, and customizing it to meet their own specific
needs. The moment each improvement is in the database, every HOLT user gets the
benefit of it. In effect, it is building a community that people want to be part of, bringing
the ability to create niche businesses within Credit Suisse, and becoming a case study
in how to engender innovation across a large organization.
Raising funds through teamwork
Coordinated team efforts feature across many parts of the bank. Since 2001, the
Leveraged Investment Group of our Alternative Capital business and colleagues from
Fixed Income have raised USD 4.8 billion of leveraged loan Collateralized Debt
Obligations (CDOs) across nine transactions. Private Banking played a critical role
in raising funds for several of these. The latest of these is Castle Garden Funding,
a USD 850 million CDO structured and underwritten by Fixed Income.
An integrated approach, a wealth of resources
Successful company executives and leaders of industry will, by the nature of their work,
have a strong relationship with an investment bank. Their very success means they will
also need private banking facilities. So it’s natural to choose a bank that can offer both
services – and where the two can work seamlessly together.
In 2005, our Paris office arranged a number of services for a client who owned a private
company. He wanted to monetize part of this wealth and also raise funds to grow
the company. Our investment bankers evaluated his options and found a buyer for two-
thirds of the company, then subsequently took the company public. In the end, the
client entrusted our Private Banking division with the task of structuring and managing
his private wealth.
HOLT, Investment Banking (New York)
18 Credit Suisse Group Business Review 2005
In addition, a number of other leading executives wanting to exercise stock options
could not find the specific and speedy cash management service they required from
their retail banks. Colleagues from the Investment Banking and Private Banking
divisions worked together before the transaction to arrive at the best approach for the
executives concerned, as well as the company and its employees. We then advised
each client from a tax and wealth organization perspective, including assets the clients
held with other banks.
Working in close partnership with our clients
Our work with Hiag Holding AG, a leading Swiss forestry products group and its
owners, provides a similar illustration of maintaining a client relationship across several
parts of the bank. We have worked with them for many years, including on the
establishment in 2000 of their joint venture Nybron Flooring International Corporation,
Europe’s leading wooden flooring company. In 2005, our clients, on the initiative of
their private equity partner in Nybron, decided to monetize their investment and awarded
Credit Suisse’s Investment Banking business the mandate. We ran a successful
divestiture process, which raised a sum considerably above the sellers’ target, while
also providing financing to the purchasers based on Nybron’s credit status, and pre-
hedging the expected euro proceeds into Swiss francs for Hiag and its owners. Here
again, thanks to our integrated approach, we were able to offer our clients not only
investment banking, but also private banking services.
Advice without boundaries
In asset management, there is no single product or selection that will suit every client.
So to reach our goal of bringing value to clients, we need close cooperation across the
business, generally coordinated by a relationship manager.
Our work for a German insurance company, who came to us with a quite specific
product request, crosses borders. With the relationship managed from Frankfurt, and
our teams there also taking care of reporting and compliance issues, we were able to
bring in our portfolio management team in London to work on a sophisticated solution.
This changed the structure of the product, keeping the out-performance ability the
client wanted, yet building in other features to provide a perfect fit for the client’s
Credit Suisse is a market leader in the field of alternative investments, managing over
USD 100 billion in a broad range of alternative asset classes, including real estate,
private equity and hedge funds, among others. The alternative investments area is
growing rapidly around the world, as both institutional and individual investors are
increasingly seeking new investment areas that provide diversification from traditional
Mergers and Acquisitions,
asset classes, and are shifting to a focus on absolute returns. Our experience in this
Investment Banking (London)
area allows us to advise clients on an ever broader selection of investment choices that
suit their circumstances and needs and put us at the forefront of an exciting new
opportunity for our clients.
Credit Suisse Group Business Review 2005 19
Our most valuable asset
In today’s competitive financial services industry, complacency is not an option. We
are continually judged on the strength of the results we achieve, the attitude of our
people, the respect we show for others and the value we bring to our shareholders
and our clients.
Like a chess grandmaster planning a move, we take great care over the immediate
requirement, but always with an eye on the greater long-term consequences of our
actions. To earn and preserve the long-term trust and support of our clients, we must
anticipate, meet and beat their expectations. Their faith is crucial to our ability to grow
our business and meet our goals.
Our clients want more than just a product; they want a solution to their specific financial
needs. They want more than just information; they want guidance from a specialist with
an in-depth knowledge of their business.
We take pride in rising to the challenges they set. We care about the difference we
make. We serve our clients well and act professionally, and our experience shows that
our own success follows.
When our clients turn to us over and over again, it is because they enjoy working with
our people. They value our straightforward approach, our integrity and our willingness
to listen. They admire our commitment, energy and creativity. They appreciate our
desire for finding the answers to their complex and rapidly changing requirements,
supported by our wealth of experience in investment banking, private banking and
We want them to know that we have the talent and resources to provide outstanding
advice and expertise. And we want them to know that when we say we will do
something, we will do it.
Piers Cox, Richard Hitchcox, Shane O’Cuinn,
Investment Banking (London)
Credit Suisse Group Business Review 2005 21
Principle in action: reputation
Edyta Lopizzo, Ernest Durussel,
Trade Finance Services,
Private Banking (Geneva)
The knowledge that our reputation is everything is crucial to our ability to serve our
clients. Reputation is the third principle that guides us in our daily activities. In the final
part of this chapter, we look to our people and the way they interact with our clients to
illustrate this principle in action.
Meeting and beating clients’ expectations
Credit Suisse is reinforcing its reputation as an innovative partner for small and medium-
sized enterprises (SMEs) in Switzerland. We are meeting their demand for growth
financing options with some alternative forms of financing, which do not affect
ownership structure – CSA Mezzanine and Preferred Pooled Shares (PREPS).
Generally, SMEs are largely financed by bank loans, and it is difficult for many companies
to support their expansion plans, as they cannot access the capital markets. Credit
Suisse is therefore offering CSA Mezzanine financing, issued in the form of subordi-
nated loans from Credit Suisse Investment Foundation, and managed by experts in
the Asset Management division, as a vehicle for pension funds to tap into this
alternative investment segment. PREPS, on the other hand, give both institutional and
private investors a Pan-European platform to invest in larger SME companies in a
broadly diversified, pooled manner. Prior to this, access to the capital markets to obtain
resources similar to equity funding was unavailable for smaller companies.
Reliable partner for US pension funds
Credit Suisse is helping a growing number of US states with investment management
programs that use state pension funds to invest in small and start-up enterprises within
the state – these are often under-served by the large private equity firms. Central to
the concept is the belief each state has in the quality of its entrepreneurs, and the
endorsement of this by a global brand with the reputation of Credit Suisse.
22 Credit Suisse Group Business Review 2005
The state of Indiana chose Credit Suisse to manage a fund of funds, created to provide
capital for innovation and investment in the state’s wealth of intellectual property in life
sciences. Having raised USD 73 million, not just from the state employees’ pension
fund but also from corporate investors and educational institutes, Credit Suisse now
invests the money through carefully chosen venture capital firms.
On the strength of this success, Credit Suisse operates similar schemes in Oregon and
Ohio, with other states soon to follow. To demonstrate confidence in the funds, Credit
Suisse also invests, usually at far higher than the standard 1%. Our involvement adds
a confidence factor, which in itself can bring in greater investment, including from
outside the state. It also has the benefit of shining the spotlight on different areas of
entrepreneurial expertise within different states.
While the outcome of these programs is a boost to economic development within the
state, the main focus is the investment return for the states’ pension funds – and the
funds are monitored strictly with this in mind. This is where the in-depth knowledge and
experience of Credit Suisse plays such an important role. Clients place their faith in us
and trust us to deliver.
Finding new ways to improve client service
At Credit Suisse, our reputation for smooth-running client service is due in no small
part to our people, and the skills of every employee are important to us. We run a
series of training programs and efficiency initiatives to support our aims. For example,
Private Banking Switzerland runs the Next Pace initiative to improve staff familiarity
with our five-step customer advisory process, while Retail Banking’s Come On Camp
initiative helps client advisors position Credit Suisse as a committed bank that offers
Trusted advice, trusted relationships
Clients know we will rise to the challenge of their changing requirements, and we are
proud of the faith they put in us. A multi-billion dollar pension plan in the entertainment
industry is a case in point. Clients of Asset Management in New York, they expressed
concern about the future expected return environment for US fixed income.
Because of our strong relationship with them, we were able to work in partnership with
their investment consultant to discuss the potential to expand their investment guide-
lines to take in fixed income globally. This would bring the benefits of diversification,
plus the opportunity to take advantage of other markets. We introduced them to our
London team and they made the decision to exit US fixed income and move to
a global mandate.
So we retained the business, and the fund enjoyed the comfort of a seamless move.
They didn’t have to hire a new manager, and could continue working with the same
trusted firm to arrive at a different solution – and of course they retained all their
existing client services relationships with our New York office.
Private Banking (Geneva)
Credit Suisse Group Business Review 2005 23
Operating review: Credit Suisse Group and Credit Suisse
Our 2005 results show that we are making good progress
in transforming the underlying profitability of our business.
Our new integrated structure will help us to further
enhance our growth and returns for our shareholders.
The following discussion is based on the operational
and management structure in place in 2005.
2005 was a year of decisive change and significant progress for Credit Suisse Group.
In May 2005, Credit Suisse Group merged its two banking entities, Credit Suisse and
Credit Suisse First Boston, to create an integrated global bank. The integrated global
structure, combining the core businesses of Investment Banking, Private Banking and
Asset Management, began operations on January 1, 2006. On January 16, 2006, the
new Credit Suisse brand was launched.
Credit Suisse Group
While Credit Suisse Group implemented the integration strategy of its banking business
in CHF m, except where indicated 2005 2004
Net revenues 60,632 55,139 in 2005, the results for the full year demonstrate that it was at the same time making
Total operating expenses 27,954 24,534
good progress in strengthening the underlying profitability of its business. The Group
Net income 5,850 5,628
proved its ability to benefit from an increase in client activity and the continued favorable
Return on equity – Group 15.4% 15.9%
credit environment. Net income totaled CHF 5,850 million, up 4% compared to 2004.
Return on equity – Banking 16.2% 17.8%
This result includes a non-cash charge in the fourth quarter of 2005 of CHF 421
Return on equity – Winterthur 11.7% 9.2%
million after tax relating to a change in the Group’s accounting for share-based awards,
Basic earnings per share in CHF 5.17 4.80
as well as a CHF 624 million after-tax charge in Institutional Securities in 2005 to
BIS Tier 1 ratio 11.3% 12.3%
Number of employees (full-time equivalents) 63,523 60,532 increase the reserve for certain private litigation matters.
Assets under management in CHF bn 1484.3 1220.7
Credit Suisse Group’s return on equity was 15.4% in 2005. The Group maintained its
strong capitalization, with a consolidated BIS tier 1 ratio of 11.3% at year-end 2005.
Furthermore, Credit Suisse Group recorded net new assets of CHF 58.4 billion for the
full year 2005.
Private Banking provides wealth management products and services to high-net-
in CHF m, except where indicated 2005 2004
Net revenues 7,729 7,170 worth individuals in Switzerland and many other markets around the world.
Total operating expenses 4,431 4,143
Net income 2,647 2,473 This segment reported net income of CHF 2,647 million for 2005, up 7% compared to
Cost/income ratio 57.3% 57.8%
2004. The increase in net income primarily reflected improved commissions and fees
Gross margin 129.2 bp 133.7 bp
and trading revenues, partly offset by higher compensation and benefits.
Net new assets in CHF bn 42.7 26.4
Assets under management in CHF bn 659.3 539.1
As part of its growth in strategic key markets, Private Banking expanded its business
Number of employees (full-time equivalents) 13,077 12,342
during 2005 in areas such as Asia, the Middle East and Russia. A Private Banking hub
was created in Dubai (United Arab Emirates) – a further milestone in the global strategy
to grow the wealth management business. In addition, local representative offices were
opened in Bangkok (Thailand), Guangzhou (China), Mumbai (India) and St. Petersburg
(Russia). In 2006, Private Banking intends to establish a presence in Saudi Arabia by
entering into a joint venture with experienced local partners in the Saudi Swiss
Securities consortium, with an office in Riyadh.
Private Banking increased its net revenues by 8%. This improvement was mainly driven
by higher commissions and fees, reflecting the increase in assets under management
and higher brokerage volumes. Furthermore, Private Banking recorded higher trading
revenues, reflecting higher client transaction volume.
The segment recorded higher costs, with a 7% increase in total operating expenses
compared to 2004. This increase was mainly due to higher compensation and benefits,
while other expenses increased only marginally. Compensation and benefits increases
were driven by higher performance-related compensation, in line with higher pre-tax
income and ongoing strategic investments in growth markets, including front-office
24 Credit Suisse Group Business Review 2005
The gross margin for 2005 was 129.2 basis points. Compared to 2004, the gross
margin decreased 4.5 basis points, mainly related to lower net interest income.
Assets under management were CHF 659.3 billion as of December 31, 2005, an
increase of 22% compared to December 2004. The main drivers of this growth were
strong net new asset inflows, the impact of favorable foreign exchange rate fluctuations
and higher equity valuations.
Private Banking continued to achieve healthy money inflows from strategic key markets
in Asia and from the onshore business in Europe, where double-digit growth rates were
achieved. The segment recorded CHF 42.7 billion of net new assets for 2005.
Corporate & Retail Banking
Corporate & Retail Banking, which offers banking products and services to
in CHF m, except where indicated 2005 2004
Net revenues 3,458 3,348 Corporate & Retail clients in Switzerland, reported a 19% increase in net income to
Total operating expenses 2,186 2,051
CHF 1,069 million, a record result.
Net income 1,069 901
Cost/income ratio 63.2% 61.3%
Net revenues for 2005 were up 3% versus 2004, reflecting strong increases in
Return on average allocated capital 20.7% 18.0%
commissions and fees from increased brokerage volumes and increased trading
Number of employees (full-time equivalents) 8,469 8,314
revenues. Net interest income remained stable as an increase in lending volume was
offset by margin pressure in the low interest rate environment.
Key drivers for the segment’s strong result were stable net reserves and releases of
provisions in 2005 compared to net provisions for credit losses in 2004. For 2005, net
releases of provisions for credit losses of CHF 96 million were recorded compared to
net provisions of CHF 122 million in 2004. The release of provisions reflected the
ongoing favorable credit environment for lenders.
For 2005, total operating expenses increased 7% compared to 2004, due to higher
performance-related compensation in line with higher pre-tax income, while other
expenses only marginally increased.
Corporate & Retail Banking achieved a strong return on average allocated capital of
20.7% in 2005, which was well above the mid-term target of 15%.
In 2005, Corporate & Retail Banking further expanded its Swiss residential mortgage
business, reporting growth of approximately 9%. The growth in this business reflected
increased marketing efforts and Credit Suisse’s wide range of mortgage products.
In line with the strategic aim of gaining market share in the high-end retail business,
particularly in investment products, Credit Suisse launched a new investment product
during 2005: Credit Suisse Triamant. This new product combines the advantages of
professional asset management with those of an investment fund by providing actively
managed asset allocation, broad diversification and transparent reporting, and,
furthermore, underscores Corporate & Retail Banking’s strategy to provide more
innovative investment products to retail clients.
Credit Suisse Group Business Review 2005 25
Operating review: Credit Suisse (continued)
Institutional Securities provides securities and investment banking services to
institutional, corporate and government clients worldwide.
Institutional Securities reported net income of CHF 1,080 million in 2005, a decrease
in CHF m, except where indicated 2005 2004
Net revenues 15,102 13,120 of 18% compared to 2004. Excluding the CHF 624 million after-tax charge in the
Total operating expenses 13,643 11,375
second quarter of 2005 to increase the reserve for certain private litigation matters,
Net income 1,080 1,313
net income for the full year was CHF 1,704 million, an increase of 30% compared to
Cost/income ratio 90.3% 86.7%
2004. This improvement, excluding the litigation charge, was driven by higher revenues,
Pre-tax margin 10.1% 13.6%
lower income tax expenses and lower credit provisions (including the release of
Return on average allocated capital 8.6% 12.8%
significant credit provisions), offset in part by higher operating expenses. Net income
Number of employees (full-time equivalents) 18,809 16,498
for 2005 was positively impacted by certain tax-related items.
Institutional Securities increased its revenues by 15% versus 2004, reflecting higher
investment banking and trading revenues and increased industry-wide activity. This
improvement demonstrates Credit Suisse’s strength and leadership position in key
business areas, including initial public offerings (IPOs), leveraged finance, advanced
execution services, emerging markets, prime brokerage and the increasingly important
financial sponsor client base.
Investment banking net revenues include debt underwriting, equity underwriting and
advisory and other fees. Total investment banking revenues improved 16% in 2005.
This strong investment banking performance reflected the impact of the newly
established financing platform, which integrated the capital markets, leveraged finance
origination and structuring teams. Institutional Securities also benefited from a leading
position in the financial sponsors business.
Debt underwriting revenues were up 8% versus 2004, primarily reflecting higher results
in investment grade capital markets, leveraged finance and residential mortgage-backed
securities. Equity underwriting revenues increased 25%. These improvements were due
to higher industry-wide equity issuance activity and increased IPO market share in the
Americas and Europe. Advisory and other fees increased 23%, due primarily to an
increase in industry-wide activity and increased market share.
Total trading revenues increased 14% compared to 2004. The increase in fixed income
trading revenues reflected improvements in commercial and residential mortgage-
backed securities as well as Latin America and other emerging markets trading, all of
which are key growth areas in the industry. The increase in equity trading revenues
reflected higher revenues in prime services, the global cash business and proprietary
Institutional Securities reported a 20% increase in total operating expenses versus
2004. This included the impact of the CHF 960 million charge in 2005 to increase the
reserve for certain private litigation matters. Excluding the impact of this litigation
charge, total operating expenses in 2005 increased 11%, primarily reflecting higher
compensation accruals in line with higher revenues and higher other expenses.
26 Credit Suisse Group Business Review 2005
Credit Suisse was ranked first in the global market share for IPOs for the full year
2005, having participated in a number of high-profile transactions, including the USD
9.2 billion IPO for China Construction Bank, the world’s largest IPO since 2001 and
the largest IPO ever in China and in non-Japan Asia. Other notable transactions include
the USD 1.8 billion IPO for chemical company Huntsman, the IPO of Neustar, the
landmark USD 21 billion sale of AT&T, the historic USD 4.4 billion “Brady Bond”
exchange for Brazil, and the leveraged buyout of SunGard Data Systems, which was
the largest ever technology buyout.
Wealth & Asset Management
Wealth & Asset Management offers international asset management services –
in CHF m, except where indicated 2005 2004
Net revenues 5,234 4,202 including a broad range of investment funds – to institutional and private investors.
Total operating expenses 2,687 2,539
It also provides financial advisory services to corporate clients.
Net income 663 530
Total assets under management in CHF bn 608.8 482.4
The Wealth & Asset Management segment reported net income of CHF 663 million in
Total net new assets in CHF bn 11.5 2.6
2005, an increase of 25% compared to 2004. The increase primarily reflected a higher
Number of employees (full-time equivalents) 3,035 2,981
level of investment-related gains in Alternative Capital.
Wealth & Asset Management measures business performance based on assets under
management, discretionary assets under management and net new assets. Assets
under management as of December 31, 2005 amounted to CHF 608.8 billion, up
26.2% versus December 31, 2004, while discretionary assets under management
increased 28.7%. Wealth & Asset Management had a net asset inflow of CHF 11.5
billion, a significant improvement from the 2004 net asset inflow of CHF 2.6 billion.
Wealth & Asset Management increased its net revenues in 2005 by 25% compared
to 2004. Revenues before investment-related gains increased 5% from 2004, due
to higher placement fees in Alternative Capital and higher management fees in Credit
Suisse Asset Management. Investment-related gains increased 28% in 2005, driven
by a higher level of private equity gains resulting from the sale of private equity
Operating expenses in 2005 increased 6% from 2004, primarily reflecting higher pro-
fessional fees in Alternative Capital. The increase in professional fees was due primarily
to consulting fees paid to managers who continue to assist in managing portfolios of
certain funds spun off from Alternative Capital. Compensation and benefits expenses
increased slightly in 2005, reflecting higher performance-related compensation, offset
in part by lower severance costs.
Detailed information on the financial results of Credit Suisse Group can be found in the
Annual Report 2005 and the Supplemental Information 2005.
Credit Suisse Group Business Review 2005 27
Operating review: Winterthur
Winterthur achieved good progress in 2005 as it improved
its overall financial results and strengthened its operating
performance. This underscores the effectiveness of the
measures implemented over the past three years.
Winterthur still has further potential to grow and to
enhance its profitability.
Winterthur is the leading insurance company in Switzerland and is one of the top 10
composite insurers in Europe. Building on its 130-year history, Winterthur operates its
Life & Pensions and Non-Life businesses primarily in Western Europe, as well as in
Central and Eastern Europe, the US and Asia. It distributes a well-balanced product
portfolio through multiple channels and focuses on private clients and small and
medium-sized enterprises (SMEs). The Winterthur brand reflects a straightforward and
entrepreneurial approach to business, a commitment to high-quality products and
superior customer services.
Winterthur is active in 17 countries and has approximately 19,000 employees serving
13 million clients worldwide.
Credit Suisse Group’s strategy regarding Winterthur is to secure its leading market
position in Switzerland and to strengthen its international operations. The Group
continues to manage Winterthur as a financial investment and is preparing it for
a potential capital markets transaction.
2005 was a successful year for Winterthur, which strongly contributed to Credit Suisse
Group’s results. Considerable efforts, initiated in 2002, to systematically improve
Winterthur’s risk profile and to implement strict and selective underwriting processes
have proved beneficial. Solid operational progress contributed in 2005 to a significant
increase in net income. The return on equity reached 11.7% in 2005 after 9.2% in the
Life & Pensions
Both reporting segments, Life & Pensions and Non-Life, succeeded in further
in CHF m, except where indicated 2005 2004
Net revenues 18,197 16,618 strengthening the underlying business performance in 2005. Life & Pensions continued
Total operating expenses 1,883 1,776
its focus on technical performance, reflected by an improved risk margin, while
Total business volume 17,685 16,777
maintaining good growth dynamics. For the full year 2005, Life & Pensions reported
Net income 490 522
net income of CHF 490 million. This 6% decrease compared to 2004 was primarily
Number of employees (full-time equivalents) 6,913 6,524
attributable to specific effects related to taxes and changes in actuarial models and
assumptions. In Non-Life, net income for 2005 increased from CHF 206 million
Non-Life to CHF 578 million. This improvement was partly driven by the after-tax charge of
CHF 242 million booked in the fourth quarter of 2004 to increase provisions for
in CHF m, except where indicated 2005 2004
Net revenues 11,688 11,533 contingencies related to the sale of Winterthur International in 2001. The main factors
Total operating expenses 2,850 3,134
contributing to the improvement of Non-Life’s operating performance were a favorable
Net income 578 206
claims experience and continued strict cost and claims management.
Combined ratio 96.6% 100.1%
Number of employees (full-time equivalents) 12,046 12,844
Winterthur has not only achieved a solid level of profitable growth but has also
succeeded in further strengthening its business portfolio. It withdrew from the Canadian
market in 2005, while further improving its position in promising pension markets in
Central and Eastern Europe via the acquisition of the Polish pension fund Dom, for
which regulatory approval is expected in 2006. A significant milestone was the
completion in December 2005 of the seasoning process relating to the sale of
Winterthur International to XL Insurance (Bermuda) Limited in 2001. Substantial
progress has also been made in other areas, including the establishment by Credit
Suisse Group of a new Board of Directors for Winterthur and the preparations for
a potential listing of Winterthur on the stock market. In view of the accomplishments in
2005, Winterthur is well-positioned to successfully seize new business opportunities.
28 Credit Suisse Group Business Review 2005
The market environment in which Winterthur operates is characterized by sustained low
interest rates and competitive pressure. Strict cost management, flexibility and, crucially,
the spirit to shape market trends are key to coping with these challenges. Winterthur’s
expertise with regard to risk and asset-liability management will provide a true
competitive advantage as it captures new Life & Pensions opportunities resulting from
growing pension markets and demographic trends. In Non-Life, the continued focus on
customer needs and service quality, the streamlining of administration processes and
the sophisticated underwriting approach set the foundations for Winterthur to achieve its
target of generating profitable growth across the insurance cycle.
In both Life & Pensions and Non-Life, Winterthur’s initiatives continue to be based on
common business sense, hands-on entrepreneurial leadership and proximity to clients –
as well as creativity and skillful execution. Winterthur will continue to focus on retail
customers and SMEs, which will allow the insurer to further standardize processes and
products. Winterthur will pursue its targeted underwriting policy and further develop
pricing and claims-handling processes.
Detailed information on Winterthur and its financial results can be found in the Credit
Suisse Group and Winterthur Group Annual Reports 2005.
Credit Suisse Group Business Review 2005 29
Aiming for Operational Excellence
Operational Excellence is a key business initiative that aims
to support the growth strategy of Credit Suisse and to
promote innovation through the implementation of more than
300 targeted projects in all areas of the bank. The individual
projects focus on the improvement of customer service,
profitability and processes and aim to generate results within
several months of their launch.
Operational Excellence was launched at Credit Suisse in fall 2004 and initially
introduced to Private Banking. After conducting benchmarking analysis, particularly in
the US, Credit Suisse selected Lean Sigma as the basis for its Operational Excellence
initiative. This is a well-established, systematic methodology for the improvement of
business processes and service quality. Credit Suisse was one of the first companies in
the European financial services industry to implement a full-scale Lean Sigma program.
Lean Sigma provides Credit Suisse with a common language for the execution of
its Operational Excellence activities and thus supports its efforts to better align key
processes to client needs and expectations. These measures are focused on the
client’s perspective and begin with a systematic, fact-based analysis of client
requirements. Before initiating any improvements, Credit Suisse first asks its clients
and then takes actions to best improve service, increase quality or minimize errors.
Credit Suisse is now rolling out Operational Excellence within the entire bank and will
coordinate the initiative across its Investment Banking, Private Banking and Asset
Management divisions as well as across the bank’s support functions (Shared
Services). The positive momentum of Operational Excellence in Private Banking and
the experience gained so far will benefit the entire organization. In addition, it will be
possible to incorporate the evaluation of client satisfaction into the assessment of a
manager’s performance, whereas performance-related compensation was previously
determined exclusively on the basis of financial results.
Operational Excellence is, of course, an ongoing and long-term initiative. Its aim is to
create and foster a culture of continuous improvement focused on delivering excellent
client service, leading to profitable and sustainable growth. While the first series of
projects focused on urgent issues or on improvements that could be realized rapidly,
Credit Suisse is now addressing areas that may be less prominent internally but have a
significant impact on client service. To date, around 200 employees have been trained
as Lean Sigma project leaders or “Black Belts” and Credit Suisse has provided more
than 6,000 days of project training for senior management and team members.
In terms of benefits arising from our Operational Excellence projects, we have so far
identified a net income contribution of around CHF 150 million per annum. 70% of the
total benefits are expected to come from revenue increases, while the other 30% will
stem from efficiency improvements. This underscores the key role of Operational
Excellence as a driver of Credit Suisse’s growth strategy.
Ali Baradar, Richard Shilling,
Product Control (London)
30 Credit Suisse Group Business Review 2005
Equities, Investment Banking (Hong Kong)
Credit Suisse is renowned for its innovative strength. Operational Excellence also serves
to promote innovation by providing a platform for the realization of new ideas. Its
standard Lean Sigma methodology supports the implementation of new solutions and
thus leads to continuous advances in product and service quality. This is of particular
importance within growth areas, where Operational Excellence ensures the smooth
functioning of new processes.
Operational Excellence reflects Credit Suisse’s commitment to placing its clients at the
center of all that it does. It also serves to strengthen its reputation by ensuring flawless
execution and promotes the principle of teamwork by fostering cooperation across the
bank. Credit Suisse will continue to roll out further strategically-aligned Operational
Excellence projects and to train more employees in Lean Sigma. Going forward
Operational Excellence will be central to the way Credit Suisse works.
Credit Suisse Group Business Review 2005 31