credit-suisse Business Review 2006

Credit Suisse
Banking
in Progress
Business Review 2006
CREDIT SUISSE GROUP
Paradeplatz 8
8070 Zurich
Switzerland
Tel. +41 44 212 16 16
Fax +41 44 333 25 87
www.credit-suisse.com
5520214English
CreditSuisseBusinessReview2006E
Highlights 2006
CHF 38,603 million
Credit Suisse Group’s net revenues amounted to CHF 38,603 million in 2006,
an increase of 27% compared to 2005.
CHF 11,327 million
Net income for 2006 totaled CHF 11,327 million, up 94%
compared to 2005.
CHF 8,281 million
Income from continuing operations was CHF 8,281 million,
up 83% compared to 2005.
CHF 95.4 billion
In 2006, Credit Suisse Group recorded net new assets of CHF 95.4 billion,
compared to CHF 57.4 billion in 2005.
CHF 1,485.1 billion
Assets under management stood at CHF 1,485.1 billion
as of December 31, 2006, up 12.6% from December 31, 2005.
44,871
At year end 2006, Credit Suisse Group employed 44,871 people, of which
20,353 were in Switzerland and 24,518 were in more than
50 countries around the globe.
From left to right:
Cover
Stephen Pak
Customized Solution Management
Asset Management Division, Hong Kong
Christina Kim
Equity Capital Markets
Investment Banking Division, Hong Kong
Jennifer Theunissen
Project Services Asia-Pacific
Asset Management Division, Hong Kong
Gerard Bichon
Philippines
Private Banking Division, Hong Kong
Back Cover
Gary Kwok
Non-Japan Asia Corporate Finance
Investment Banking Division, Hong Kong
Karen Leung
Greater China
Private Banking Division, Hong Kong
A Longstanding Commitment to Asia
Hong Kong – More than seven million people live and work
in Hong Kong. Now the second largest financial center in
Asia, Hong Kong is strategically positioned as the gateway
to China and is, therefore, of key importance to globally ac-
tive companies such as Credit Suisse that are eager to par-
ticipate in this dynamic growth market. Credit Suisse began
operating in Hong Kong in 1955 but its presence in the
Chinese market dates back to 1784, when the forerunner of
Credit Suisse First Boston – the Massachusetts Bank –
financed the very first trading mission from America to China.
Some 220 years later, Credit Suisse was part of a consor-
tium that successfully executed the USD 21.9 billion IPO of
the Industrial and Commercial Bank of China (ICBC) in the
largest transaction of this type to date.
More than 1,000 people work for Credit Suisse in
Hong Kong in the two tallest skyscrapers pictured on the
left and right in the photo. The Asia-Pacific region has played
a pivotal role in the establishment of the integrated bank.
With its Investment Banking, Private Banking and Asset
Management businesses, Credit Suisse is ideally placed to
meet the growing needs of clients in Asia and in particular
to capitalize on the attractive business opportunities created
by China’s economic success.

Credit Suisse Group Financial Highlights
Credit Suisse Group financial highlights
Year ended December 31, in CHF m, except where indicated 2006 2005 2004
Consolidated statements of income
Net revenues 38,603 30,489 27,033
Income from continuing operations 8,281 4,526 4,996
Income from discontinued operations, net of tax1)
3,070 1,310 639
Net income 11,327 5,850 5,628
Return on equity 27.5% 15.4% 15.9%
Earnings per share, in CHF
Basic earnings per share from continuing operations1)
7.53 3.98 4.25
Basic earnings per share 10.30 5.17 4.80
Diluted earnings per share from continuing operations1)
7.19 3.90 4.23
Diluted earnings per share 9.83 5.02 4.75
Cost/income ratio – reported 63.2% 76.2% 72.4%
Cost/income ratio2)
69.6% 81.6% 75.4%
Net new assets, in CHF bn 95.4 57.4 28.2
December 31, in CHF m, except where indicated 2006 2005
Assets under management, in CHF bn 1,485.1 1,319.4
Consolidated balance sheet
Total assets 1,255,956 3)
1,339,052
Shareholders’ equity 43,586 42,118
Consolidated BIS capital data
Risk-weighted assets 253,676 232,891
Tier 1 ratio 13.9% 11.3%
Total capital ratio 18.4% 13.7%
Number of employees
Switzerland – Banking 20,353 20,194
Outside Switzerland – Banking 24,518 24,370
Winterthur 0 3)
18,959
Number of employees (full-time equivalents) 44,871 63,523
Stock market data
Share price per registered share, in CHF 85.25 67.00
Share price per American Depositary Share, in USD 69.85 50.95
Market capitalization 90,575 75,399
Market capitalization, in USD m 74,213 57,337
Book value per share, in CHF 41.02 37.43
Par value reduction, in CHF 0.46 4)
–
Dividend per registered share, in CHF 2.24 4)
2.00
1)
Before extraordinary items and cumulative effect of accounting changes. 2)
Excludes minority interest revenues of CHF 3,663 million, CHF 2,074 million and CHF 1,088 million and
minority interest expenses of CHF 103 million, CHF 32 million and CHF 16 million in 2006, 2005 and 2004, respectively, from the consolidation of certain private equity funds and other
entities in which the Group does not have a significant economic interest in such revenues and expenses. 3)
Impacted by the sale of Winterthur on December 22, 2006. 4)
Proposal
of the Board of Directors to the Annual General Meeting on May 4, 2007.
Financial calendar
First quarter results 2007 Wednesday, May 2, 2007
Annual General Meeting Friday, May 4, 2007
Dividend payment Thursday, May 10, 2007
Par value reduction payment Wednesday, July 18, 2007
Second quarter results 2007 Thursday, August 2, 2007
Third quarter results 2007 Thursday, November 1, 2007
doc_090154fa8008800c_10008 26.03.2007 11:33 Page 2
Cautionary statement regarding
forward-looking information
This Business Review contains statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act. In addition, in the future we, and others on our behalf, may make state-
ments that constitute forward-looking statements. Such forward-looking state-
ments may include, without limitation, statements relating to the following:
– Our plans, objectives or goals;
– Our future economic performance or prospects;
– The potential effect on our future performance of certain contingencies;
and
– Assumptions underlying any such statements.
Words such as “believes,” “anticipates,” “expects,” “intends” and “plans” and
similar expressions are intended to identify forward-looking statements but
are not the exclusive means of identifying such statements. We do not intend
to update these forward-looking statements except as may be required by
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By their very nature, forward-looking statements involve inherent risks and
uncertainties, both general and specific, and risks exist that predictions, fore-
casts, projections and other outcomes described or implied in forward-looking
statements will not be achieved. We caution you that a number of important
factors could cause results to differ materially from the plans, objectives, ex-
pectations, estimates and intentions expressed in such forward-looking
statements. These factors include:
– Market and interest rate fluctuations;
– The strength of the global economy in general and the strength of
the economies of the countries in which we conduct our operations
in particular;
– The ability of counterparties to meet their obligations to us;
– The effects of, and changes in, fiscal, monetary, trade and tax policies,
and currency fluctuations;
– Political and social developments, including war, civil unrest or terrorist
activity;
– The possibility of foreign exchange controls, expropriation, nationalization
or confiscation of assets in countries in which we conduct our operations;
– The ability to maintain sufficient liquidity and access capital markets;
– Operational factors such as systems failure, human error, or the failure
to implement procedures properly;
– Actions taken by regulators with respect to our business and practices
in one or more of the countries in which we conduct our operations;
– The effects of changes in laws, regulations or accounting policies or
practices;
– Competition in geographic and business areas in which we conduct our
operations;
– The ability to retain and recruit qualified personnel;
– The ability to maintain our reputation and promote our brand;
– The ability to increase market share and control expenses;
– Technological changes;
– The timely development and acceptance of our new products and
services and the perceived overall value of these products and services
by users;
– Acquisitions, including the ability to integrate acquired businesses
successfully, and divestitures, including the ability to sell non-core assets;
– The adverse resolution of litigation and other contingencies; and
– Our success at managing the risks involved in the foregoing.
We caution you that the foregoing list of important factors is not exclusive.
When evaluating forward-looking statements, you should carefully consider
the foregoing factors and other uncertainties and events, as well as the in-
formation set forth in our Form 20-F Item 3 – Key Information – Risk factors.
For purposes of the Business Review, unless the context otherwise requires,
the terms “Credit Suisse”, “the Group”, “we”, “us” and “our” mean Credit Suisse
Group and its consolidated subsidiaries and the term “the Bank” means
Credit Suisse, the Swiss bank subsidiary of the Group, and its consolidated
subsidiaries.
Enquiries
Credit Suisse Group
Investor Relations
Ian Roundell, +41 44 333 17 48
Marc Buchheister, +41 44 333 31 69
Fax +41 44 333 25 87
Credit Suisse Group
Media Relations
Charles Naylor, Andrés Luther
Tel. + 41 44 333 88 44
Fax +41 44 333 88 77
Editorial: Credit Suisse Group, Corporate Communications
Photography: Thomas Eugster, Berlin and
Marc Wetli, Zurich (pages 7 and 10)
Design: www.arnolddesign.ch
Production: Management Digital Data AG, Zurich
Printer: NZZ Fretz AG, Zurich
98 99 00 01 02 03 04 05 06
100
80
60
40
20
0
As end of reporting period (in CHF bn)
Share Performance
Market Capitalization
Credit Suisse GroupSwiss Market Index
2004 2005 2006 2007
CHF
90
80
70
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30

Credit Suisse
Business Review 2006

 For a detailed presentation of Credit Suisse Group’s
2006 financial statement, 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 2006
and the Supplemental Information 2006.
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Business Review 2006 was printed on paper that is made from at least 50 percent recycled fibers. And at least 17.5 percent
of the fibre used to manufacture this paper comes from forests certified by the Forest Stewardship Council (FSC).
Credit Suisse Group
Annual Report 2006
Investment Banking • Private Banking • Asset Management
Proof 3 as of
12.03.2007
Credit Suisse Group
Supplemental Information 2006
Investment Banking • Private Banking • Asset Management
Proof 3.
as of 13.03.2007
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Credit Suisse Business Review 2006
8 Message from Walter B. Kielholz, Chairman of the Board of Directors
10 Message from Oswald J. Grübel, Chief Executive Officer
14 The Economic Impact of the Emerging Markets Is Growing
The source of economic growth for the global economy in the years to come
18 International Diversification of Capital Flows Is on the Rise
Emerging countries are increasingly taking part in global financial flows
22 Banking in the 21st Century
New challenges for the financial services industry
28 The World Economy in 2007
Five members of the Global Economic and Strategy Group discuss trends
34 Global Infrastructure Gains Investor Interest
Urbanization and globalization boost the demand for infrastructure
40 IT Transforms the Finance Industry
Information Technology (IT) has completely transformed the banking business
44 Credit Suisse Group in Society
48 Executive Boards of Credit Suisse Group and Credit Suisse
52 Corporate Governance
56 The Strategy of Credit Suisse
58 Key Initiatives for Profitable Growth
60 Summary Operating Review: Credit Suisse Group and Credit Suisse
64 Statements of Income
65 Balance Sheets
Our Expertise
Company Information
Operating Review

Investment Banking
Credit Suisse at a Glance
In its Investment Banking business, Credit Suisse offers
securities products and financial advisory services to users
and suppliers of capital around the world. Operating in 57
locations across 26 countries, Credit Suisse is active across
the full spectrum of financial services products including debt
and equity underwriting, sales and trading, mergers and
acquisitions, investment research, and correspondent and
prime brokerage services.
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 approximately 45,000 people. Credit Suisse’s
parent company, Credit Suisse Group, is a leading global
financial services company headquartered in Zurich.
Credit Suisse Group’s registered shares (CSGN) are listed
in Switzerland and, in the form of American Depositary
Shares (CS), in New York.
Further information about Credit Suisse can be found at
www.credit-suisse.com.

Asset ManagementPrivate Banking
In Private Banking, Credit Suisse provides comprehensive
advice and a broad range of investment products and services
tailored to the complex needs of high-net-worth individuals
globally. Wealth management solutions include tax planning;
pension planning; life insurance solutions; wealth and
inheritance advice, trusts and foundations. In Switzerland,
Credit Suisse supplies banking products and services to
private banking clients as well as to business and retail
clients.
In its Asset Management business, Credit Suisse offers
products across the full spectrum of investment classes,
ranging from equities, fixed income and multiple-asset
class products, to alternative investments such as real estate,
hedge funds, private equity and volatility management.
Credit Suisse’s asset management business manages
portfolios, mutual funds, and other investment vehicles for
a broad spectrum of clients ranging from governments,
institutions and corporations to private individuals. With
offices focused on asset management in 18 countries,
Credit Suisse’s asset management business is operated as
a globally integrated network to deliver the bank’s best
investment ideas and capabilities to clients around the
world.

A Record Performance
Credit Suisse delivered a record performance in 2006. The
new integrated banking model proved successful and en-
abled it to capture the growth opportunities resulting from
high levels of client activity, while significantly improving its
profitability. Net income for the year increased by 94 percent
to CHF 11.3 billion, including a net capital gain of CHF 1.8
billion from the sale of Winterthur. Basic earnings per share
were CHF 10.30. Income from continuing operations was
CHF 8.3 billion or CHF 7.53 per share. The return on equity
improved significantly to 27.5 percent from 15.4 percent in
2005, and Credit Suisse generated net new assets of CHF
95.4 billion during the year.
Launch of the Integrated Global Organization
The new, integrated global organization was officially
launched on January 1, 2006. The integrated structure
provides a strong platform from which Credit Suisse can
offer comprehensive financial solutions to its clients, cre-
ate synergies for revenue growth, increase efficiency and
enhance shareholder value. The structure includes the
three divisions, Investment Banking, Private Banking and
Asset Management, as well as a regional structure, which
allows it to leverage resources and to develop cross-
divisional strategies that span the Americas, Asia-Pacific,
Europe, Middle East and Africa (EMEA) and Switzer-
land. The divisions and regions are supported by the
Shared Services functions, which provide a range of cor-
porate services and business support. Credit Suisse ex-
pects to generate significant revenue and cost synergies
in the coming years as a result of its new business model
and structure.
Credit Suisse underpinned the launch of its integrated global
structure with the introduction of a single brand and new
logo. The Credit Suisse brand is based on its 150-year tra-
dition of banking excellence, which has provided the foun-
dation to enable it to develop innovative solutions for its cli-
ents – a tradition to innovate.
Expansion of Credit Suisse’s Global Footprint
In addition to maintaining a close proximity to its cli-
ents in mature markets, Credit Suisse is also committed to
growing its footprint in emerging markets in order to meet
the increasing demand for innovative and integrated finan-
cial services and advice. In 2006, Credit Suisse expanded
its operations in a number of key growth markets by open-
ing offices, expanding its onshore activities, recruiting staff
and extending its range of product offerings.
Credit Suisse strengthened its footprint in a range of
emerging markets such as Brazil, Russia, South Africa, Qatar,
Lebanon, China, Vietnam, Indonesia, Australia, and India.
Latin America is an important growth market for
Credit Suisse. In December 2006, Credit Suisse announced
that it had signed an agreement to acquire a majority inter-
est in Hedging-Griffo, a leading independent asset manage-
ment and private banking company in Brazil. This acquisition
will significantly strengthen Credit Suisse’s onshore asset
management businesses, expand its private banking opera-
tions and complement its leading position in investment bank-
ing in the Brazilian market.
In Russia, Credit Suisse opened an onshore wealth
management business in Moscow in addition to its long-
established investment banking operation in this market.
The bank expanded its presence in the Middle East last
A Landmark Year for Credit Suisse
2006 was a landmark year for Credit Suisse, which began with the launch of its new integrated
global structure and the introduction of a single brand and logo. The sale of its insurance business,
Winterthur, was another key strategic step during the year, which will enable Credit Suisse to
focus fully on its core banking business in the future. The implementation of the bank’s new strategic
positioning coincided with a series of events to mark its 150 th anniversary.

year by obtaining a license to operate in the Qatar Financial
Centre. This license allowed Credit Suisse to open a subsid-
iary in Doha, from which it now offers investment advisory
services and products to wealthy individuals and institutional
clients. A new subsidiary also opened in Lebanon, from
which Credit Suisse supplies a comprehensive range of
local and global products to clients in this market. In Africa,
Credit Suisse founded a partnership with South Africa’s
Standard Bank in order to further grow its equities business.
Finally, in Asia-Pacific, Credit Suisse obtained an investment
manager license in Indonesia and launched private banking
operations in Australia. Credit Suisse continued to develop
its business in India. India is one of the most promising mar-
kets, with significant business opportunities in wealth man-
agement and investment banking.
New Business Initiatives
Credit Suisse believes that the establishment of joint ventures
creates valuable opportunities for business development and
consequently launched a number of new business initiatives
around the globe in conjunction with first-rate partners dur-
ing 2006. One example is its joint venture with South Korea’s
Woori Asset Management, which combines Woori’s distribu-
tion network with Credit Suisse’s expertise and knowledge
of the global markets.
In the area of infrastructure, Credit Suisse and Gen-
eral Electric established a joint venture − Global Infrastruc-
ture Partners − with USD 1 billion in funds earmarked for
global infrastructure investments in the areas of energy,
transportation and water. Global Infrastructure Partners’ first
transaction was the acquisition of London City Airport in con-
junction with the US insurer AIG. In the area of commodities,
Credit Suisse entered into a strategic alliance with Glencore
to create a derivatives and structured products trading busi-
ness in oil and metals. In the field of alternative energy, the
bank formed an investment partnership with the Abu Dhabi
Future Energy Company.
Sale of the Insurance Business
Credit Suisse’s insurance business, Winterthur, was sold to
the French insurer AXA in 2006 for cash consideration of
CHF 12.3 billion. Winterthur had been managed as a financial
investment since 2004, after Credit Suisse decided to focus
on the banking business.
Integration of the Independent Private Banks
In April 2006, Credit Suisse announced plans to merge its
four independent private banks, Clariden, Bank Leu, Bank
Hofmann and BGP Banca di Gestione Patrimoniale, as well
as the securities dealer Credit Suisse Fides, to form a sin-
gle private bank, Clariden Leu, effective January 1, 2007.
The new bank focuses on serving wealthy clients in Switzer-
land and selected international markets.
150th Anniversary Celebrations
2006 marked the 150th anniversary of the founding of
Credit Suisse by the Swiss pioneer and innovator Alfred
Escher. In addition to establishing the original “Schweize
rische Kreditanstalt” bank, Escher was the inspiration behind
other Swiss landmark institutions such as the Gotthard Rail-
way, which celebrates its 125th anniversary in 2007, the
insurer Swiss Life, and the Federal Institute of Technology
(ETH) in Zurich. Gala events in Zurich, New York, Hong Kong,
and London were the highlights in a series of anniversary
activities with the theme‚ “150 Years of Tradition and Innova-
tion” held by Credit Suisse throughout the year.
Continuity ensured: Chairman of Credit Suisse’s Board of Direc-
tors Walter B. Kielholz (center), with Brady W. Dougan (left), who
will succeed Oswald J. Grübel (right) as CEO on May 5, 2007.

Dear shareholders, clients and colleagues
In 2006, Credit Suisse celebrated its long history of banking expertise and inno-
vation in the context of its150th anniversary, while building a solid platform for its
future growth. It is particularly satisfying to note that 2006 was also the year in
which we reported our best ever financial result, confirming the success of our
efforts to realign the business over the last three years.
Our 150 years of banking experience have provided us with a strong foun-
dation that allows us to constantly look ahead and anticipate the needs of our
clients in a rapidly changing environment. It was this experience that enabled us
to quickly adapt to the impact of globalization on our industry and to devise an
appropriate response in the form of our integrated global banking model that mir-
rors the increasingly integrated global marketplace in which we operate. As a re-
sult, we began repositioning our business and − as one of the most highly inte-
grated banks worldwide − now have the necessary structure, flexibility and re-
sources to satisfy our clients’ demands for holistic solutions and global execution
capabilities.
Our efforts to create an integrated global bank in 2006 included the sale
of our insurance business, Winterthur, to AXA for cash consideration of CHF 12.3
billion. This key strategic step provided us with the best opportunity to deliver the
full value of Winterthur to our shareholders in a single transaction, while provid-
ing an opportunity to the future growth of the business within a leading global
insurance company. The creation of an integrated bank and the sale of Winter-
thur mean that we now have a very clear strategic focus and can concentrate
our capital and resources on our banking business and the global expansion of
Credit Suisse.
We already have a leading presence in Europe and North America, as
well as in rapidly developing emerging markets such as Brazil, Mexico, China,
Russia, and the Middle East. Going forward, we will continue to leverage our
position in our existing markets and will target new high-growth regions through-
out the world.
Our integrated model not only provides us with a platform for growth, it
also enables us to generate significant operating efficiencies, to increase the
scale of our business and to generate the necessary cash flow and capital to fund
our ambitious growth plans.
The Strongest Capital Base in Our History
Credit Suisse today has the strongest capital base in its history. At the Annual
General Meeting on May 4, 2007, the Board of Directors will propose a further
share buyback program of up to CHF 8 billion over three years. It will also pro-
pose a distribution of CHF 2.70 per share for the financial year 2006, comprising
a dividend of CHF 2.24 per share, the latter of which returns capital from the sale
of Winterthur to our shareholders. This compares to a dividend of CHF 2.00 per
share for the financial year 2005.
In addition, the sale of Winterthur has provided us with additional capital
to invest in the growth of our business. Of the total capital from the Winterthur
sale, the majority − CHF 7.5 billion − will be invested in the organic growth of the
business as well as in smaller and medium-sized acquisitions, joint ventures and
partnerships. Our plans for organic growth include investments in our highly prom-
ising alternative investments, commercial mortgage-backed securities and lever-
age finance businesses, as well as in the expansion of our lending activities and
our mortgage business for private banking clients.
We have set aside CHF 3.5 billion for targeted acquisitions of smaller and
medium-sized institutions such as the Brazilian asset manager and private bank
Message from the Chairman
Walter B. Kielholz
Chairman of the Board of Directors
Credit Suisse Group

Hedging-Griffo, which we signed an agreement to purchase in the fourth quarter
of 2006. Hedging-Griffo will complement our already strong Investment Banking
operations in Brazil and enable us to offer asset and wealth management ser-
vices and products to onshore clients, thus leveraging our integrated banking
model in this market.
Strong Leadership for Sustained Success
The future of every company is charted by its leaders. Having successfully posi-
tioned Credit Suisse for future growth, the Board of Directors had to reach an
important decision regarding the bank’s future leadership in 2006. After more
than 38 years with the company, Oswald J. Grübel informed the Board last
year of his intention to retire from his position as Chief Executive Officer of
Credit Suisse Group. He and his management team have worked relentlessly over
the last three years to create a new organization and the integrated business
model which leverages the expertise of the entire bank, combining its clear cli-
ent focus with its truly global reach. Oswald J. Grübel has made an enormous
contribution to the success of Credit Suisse, for which the Board of Directors
owes him considerable thanks.
We are very fortunate that we were able to appoint a highly qualified and
experienced successor to Oswald J. Grübel from within our management team.
Brady W. Dougan, who has been with Credit Suisse for 17 years, will assume the
position of CEO of Credit Suisse Group on May 5, 2007. He is currently the head
of our Investment Banking business, which delivered a particularly pleasing per-
formance in 2006 following its realignment under his expert guidance. As a mem-
ber of the Executive Board, Brady W. Dougan was also instrumental in designing
our integrated banking model. Together with his colleagues in Credit Suisse’s se-
nior management team, he will continue to build on the strengths of our organi-
zation and business model in the future. I personally look forward to working to-
gether with Brady W. Dougan and his management team.
Today, the global economy offers outstanding growth opportunities for in-
ternationally active financial institutions such as Credit Suisse. We believe that
we have the right organizational structure and business model to capture this po-
tential. At the same time, we are convinced that the systematic execution of our
strategy will pave the way for sustained earnings growth in 2007 and beyond.
2006 was a vitally important year for Credit Suisse. We are confident that as we
enter our next growth phase, we have the necessary financial strength, human
capital and expert leadership to deliver on our ambitious targets.
Yours sincerely,
Walter B. Kielholz
March 2007

Dear shareholders, clients and colleagues
2006 was a record year for Credit Suisse. We reported a 94% increase in net in-
come to CHF 11.3 billion compared to 2005. This included a net capital gain of
CHF 1.8 billion from the sale of Winterthur, which was recorded in the fourth quar-
ter. Income from continuing operations was CHF 8.3 billion or CHF 7.53 per share
in 2006, compared to CHF 3.98 per share in 2005. Basic earnings per share were
CHF 10.3. The return on equity improved significantly to 27.5%, from15.4% in 2005.
Credit Suisse gathered CHF 95.4 billion of net new assets in 2006, compared to
CHF 57.4 billion in 2005.
In 2006, Credit Suisse demonstrated its ability to embrace change and to
achieve success in a rapidly developing global marketplace. In addition to deliver-
ing a record result and building a strong integrated platform for future growth, we
tapped into many of the attractive new opportunities resulting from globalization
and technological advances.
I want to focus on just four examples: the rise of the emerging markets,
the growing demand for infrastructure investments, the need for customized cli-
ent solutions and the importance of accessing global talent. These areas offer sig-
nificant opportunities for integrated and globally active financial institutions such
as Credit Suisse.
Globalization is fuelling the rise of the emerging markets, and our clients
in these markets are becoming more global in the way they think and grow. As a
result, they need a dedicated partner who is close to and understands their re-
quirements, and who can provide them with access to the global markets and
capital. Credit Suisse is ideally positioned to fulfill this role. Over the years, we
have established a leading presence in dynamic markets such as Brazil, Mexico,
China, Russia and the Middle East. We are committed to achieving rapid growth
in these regions by capitalizing on our Investment Banking, Private Banking and
Asset Management offering.
Our emerging market capabilities are illustrated by a number of landmark
deals on which we advised in 2006, including the USD 12.1 billion acquisition of
Corus Steel in the UK by Tata Steel of India. We used our expertise in the com-
modities industry and our skill in developing innovative financing solutions to help
Tata Steel to realize its vision of global growth. We were also a joint bookrunner
in the USD 21.9 billion IPO of China’s leading commercial bank, the Industrial and
Commercial Bank of China Limited, in the largest transaction of this type to date.
Our particular strength in this deal was our ability to reach out to investors in the
US, Europe and Asia, including institutions and high-net-worth individuals.
As our clients develop an increasingly global outlook, their needs are be-
coming more complex. One of the many ways in which we are meeting the in-
creasingly sophisticated needs of high-net-worth individuals is through our Solu-
tion Partners team. Operating in financial centers around the globe from Zurich
to Singapore, this team draws on the expertise of the entire bank to provide cus-
tomized solutions that go well beyond our traditional competencies in Private
Banking. Sharing expert knowledge, developing innovative solutions for complex
client needs and executing them on a global scale – that is what the integrated
Credit Suisse is all about.
Globalization, urbanization and changing demographics will increase the
need for infrastructure investments in the coming years. As a result, infrastruc-
ture will become an increasingly important theme in banking – as an alternative
asset class, for example. In anticipation of this future trend, in May 2006
Credit Suisse established Global Infrastructure Partners, a joint venture with
General Electric. This venture has funds earmarked for global infrastructure
investments in the areas of energy, transportation and water. This was just one
Message from the CEO
Oswald J. Grübel
Chief Executive Officer
Credit Suisse Group
10 Credit Suisse Business Review 2006

step we took last year to further strengthen Credit Suisse’s world-leading alter-
native investment capabilities.
To be truly global in today’s environment, we need to be able to access the
best talent on an international scale that mirrors the global spirit of our bank. We
have therefore established “Centers of Excellence” in the US, Singapore, India
and Poland. These centers enrich our talent, and give us the flexibility to meet a
wide variety of needs across product areas and time zones and enhance the way
we perform in terms of both innovation and efficiency. Sophisticated technology
is key to the success of these centers. In addition, our leading Business School
in Singapore demonstrates our commitment to developing a global workforce that
can meet the diverse needs of our international clientele.
These four areas of opportunity have one thing in common; they are
all emerging against a backdrop of globalization and new technology and
Credit Suisse is benefiting from these developments. I believe that these two
trends, which have changed the banking industry beyond recognition in the last
ten years, will create dynamic markets for the foreseeable future. And the adjust-
ments we made to our business in 2006 – which have made Credit Suisse one
of only a few truly integrated banks with a global presence – have now provided
us with a distinct competitive advantage.
By combining our leading Investment Banking, Private Banking and Asset
Management businesses in 2006 and sharpening our focus on cooperation and
knowledge-sharing, we are able to provide complete solutions to institutional in-
vestors, high-net-worth individuals, governments and corporations globally. Our
integrated model is clearly working: demand for our integrated offering of bank-
ing solutions is increasing rapidly in today’s competitive marketplace.
This Business Review aims to provide a snapshot of the year 2006 at
Credit Suisse. We want to show you how we have achieved the best result in our
history and how we have created an integrated global bank. In particular, it is the
expertise, innovation, global perspective and experience of our people that is
driving the success of our bank and enabling us to create value for our share
holders and clients. That’s why, in the following pages, we will introduce you
to some of the 45,000 talented individuals in our organization and share their
insights, experiences and expertise with you.
Yours sincerely,
Oswald J. Grübel
March 2007
Credit Suisse Business Review 2006 11

Participating in the Growth
of the Emerging Markets
New York – The emerging markets are home to over half of the world’s
population and are an important source of economic growth in the 21st
century. The international banking industry plays a central role in the
transfer of capital from industrialized economies to the emerging mar-
kets, thus opening up new business and investment opportunities.
Credit Suisse has a leadership position in some of the world’s
most dynamic emerging markets that dates back more than 20 years.
Today, its integrated banking model serves as an effective platform
from which to capture the attractive growth opportunities in the “E7”
economies, comprising China, India, Brazil, Russia, Indonesia, Mexico,
and Turkey. The bank’s Emerging Markets teams around the globe ad-
vise sovereign and private sector clients in these regions on the under-
writing and arrangement of securities offerings as well as a wide range
of strategic transactions, including mergers and acquisitions (MA) and
major government privatizations.
The New York-based Emerging Markets team led the highest
volume of new Latin American equity deals and MA transactions on
Wall Street in 2006, while the Hong Kong team was the number one
underwriter of equities in China. With these teams, Credit Suisse com-
pleted a wide range of major transactions in the emerging markets last
year, including the USD 19.2 billion acquisition of Inco Limited by Bra-
zil’s Companhia Vale do Rio Doce’s (CVRD). In another landmark deal,
Credit Suisse advised on the USD 12.1 billion acquisition of Corus Steel
in the UK by Tata Steel of India. The New York-based team is pictured
here at a port in Brooklyn. International cargo volumes for ports in the
area hit record levels in 2005, fuelled primarily by increased trade in
the emerging markets.
From left to right:
Alejandro Jankelevich
Emerging Markets, Local Currency Trading,
Investment Banking, New York
Alfredo Alarcon
Emerging Markets, Local Currency Trading,
Maria Rengifo
Latin America Debt Capital Markets,
Global Markets Solutions Group,
Baltasar Krause
Global Structuring,
Siobhan Roche
Emerging Markets, Fixed Income Sales,
Fernanda Fenton
Latin America Debt Capital Markets,
Global Markets Solutions Group,

Far-reaching political, economical and technological changes
have led to ongoing global economic and financial integra-
tion, strongly influencing the development of emerging mar-
kets. The dynamics include changing demographics, the fall
of the Iron Curtain, dramatic changes in communications, in-
formation technology and mass transportation as well as the
General Agreement on Tariffs and Trade (GATT) and the Gen-
eral Agreement on Trade in Services (GATS).
A first growth phase was triggered by the global oil
crisis of the mid-70s when oil-exporting countries invested
their proceeds in the international bank market. A second
growth phase began in the ’90s after the market liberalisa-
tion of the GATT, when companies increasingly expanded
and invested abroad, and after the formalization of the GATS
in 1995, which turned out to be a main catalyst in the inter-
national expansion of the services industry. All in all, since
1970, the annual volume of foreign investments in emerging
countries has grown more than 11-fold.
As with every historical process, the development of
the emerging markets did not proceed in a linear way. In 1997
and 1998, a major financial crisis in Asia and Russia high-
lighted the shortcoming of those markets. Basic governance
and regulations lacked at the time, making emerging mar-
kets totally unprepared when the financial markets turned
against them. However, recovery came swiftly. The emerg-
ing markets managed to re-attract foreign portfolio invest-
ments, including bonds and equities, and the 2004 and 2005
capital flow levels have already surpassed 1997’s.
Demographical Changes and Investment Opportunities
A recent study by Price Waterhouse Coopers highlights the
growing economic impact of the emerging markets. The
gross domestic product (GDP) of the so-called E7 – China,
India, Brazil, Russia, Indonesia, Mexico, and Turkey – is fore-
cast to exceed the GDP of the G7 – Canada, France, Ger-
many, Italy, Japan, the UK, and the US – by 25% as of 2050.
To put that in perspective: the GDP of the E7 is today just
20% of the G7’s.
The driving force behind this shift will be the growing
prosperity of individuals and, even more important, the de-
mographic development in the E7. For example, out of a pop-
ulation of 1.1 billion in India, 700 million are in the working
age group. Each year this group grows by more than 10 mil-
lion young professionals. The economic sectors in which the
growing population will find jobs will change, too. According
to data provided by the International Labour Organization,
between 1980 and 2000 in China employment in the primary
sector decreased from 69% to 47%, in Korea from 34% to
The Economic Impact of the Emerging
Markets Is Growing
One of the economically most important developments of the last three decades is the rise of
the emerging or developing markets. The term was coined in the ’80s, and at the time, an emerging
market was defined as an economy with low per capita income and high risk characteristics. Since
then, much has changed.
Dong Tao, Investment Banking Research

Figure 1 Source: Credit Suisse
Largest Economies in 2050
In about 40 years the global economic landscape could have changed
fundamentally. The underlying assumption is that emerging markets
maintain their current growth policies.
10%, in Malaysia from 37% to 18%. Based on past experi-
ence the results of this development will be two fold. First, it
will lead to higher savings, higher investment, higher growth
and higher consumption. Second, it will also lead to migra-
tion on an astonishing scale, both within countries from the
rural areas to the cities and between countries, as well.
As a consequence of the migrational movements
many of the investment opportunities of the future will stem
from a great demand for infrastructure, particularly in the
booming mega-cities. We can expect to see a rise in demand
for basic goods that consumers in the developed world take
for granted as, for instance, housing, transportation, water,
security, food, achievable, and accessible health care. In the
wake of this process we will also see a booming demand for
information services, for health and wellness or for premium
consumer goods. China, for example, has not only 200,000
millionaires but also a rapidly growing middle class that has
an unsatisfied desire for premium goods and luxury goods.
A further investment opportunity to keep an eye on is
the development of financial centers in the emerging mar-
kets, many of which will remain regional in nature, but some
of which will rise up to challenge the established financial
centers of the developed nations.
Changing Pattern in Capital Flows
The emerging new global society has created a fast growing,
integrated global market that is changing the framework for
supply and demand. As a result, we are not only going to
see significant changes in labour and consumer markets but
in the capital markets, as well.
Foreign direct investments by American, Japanese
and European companies – triggered by their international
expansion – are still the primary factor behind the capital
flows moving into emerging markets. Emerging and devel-
oped countries attracted investments totalling a record USD
472 billion in 2005, up 45% compared with 1997. But now
a second pattern is emerging: the internationalization and
the diversification of the developed world’s financial savings.
Attracted by the higher returns currently offered by the
emerging markets, an increasing number of financial insti-
tutions, and private and institutional investors have invested
into emerging markets assets to better diversify their
portfolios.
At the same time, there are growing flows from the
emerging markets into industrialized economies. This trend
is dominated by the central banks of the emerging markets,
which are increasing their foreign exchange reserves to pro-
tect their currency regimes. The chief destination for these
capital flows is the US treasury market. As a consequence,
at the end of 2005, the currency reserves of emerging and
developing countries stood at USD 2.9 billion – more than
twice the amount of the industrialized nations, which means
that the world’s poorer countries are actually paying for the
twin deficits of the US. Many emerging markets are there-
fore not only receivers of capital but active players in the
global financial markets and some of them have become a
force with major influence.
Ch In Jpn RussUS Br Fr ItUK Ger
60,000
54,000
48,000
42,000
36,000
30,000
24,000
18,000
12,000
6,000
0
GDP (2003 CHF bn)

Financial Disintermediation in Emerging Markets
A interesting trend and one that is directly linked to the on-
going development of the financial markets is the move from
financing through loans to financing through capital markets,
called financial disintermediation.
In the ’70s corporations in emerging markets financed
their growth primarily through loans. For example, in Asia,
corporate financing was historically covered by bank loans.
Today, the corporate sector is moving away from bank credit.
This process is driven by large profits, de-leveraging and the
growth of domestic bond and equity markets – which, in turn,
is driven by the increasing direct portfolio investments in the
emerging markets from investors in the industrialized econ-
omies who are looking for a means of diversification. The re-
sulting demand for equity gives corporations a new source
of financing.
Disintermediation also has another function. The
growth of the capital markets makes it possible to bring to-
gether international institutional investors. It also allows a
growing global base of high-net-worth individuals – people
with financial assets exceeding one million dollars – to meet
the financing needs of emerging market companies.
Today, Brazil, Russia, India, and China are the coun-
tries benefiting most from the attractiveness for international
direct investments and portfolio investments but in the next
10 to 20 years we will see growing portfolio investments mov-
ing into other emerging markets, as well.
Worldwide Reorganization of Work
In many industrial economies, almost all of the manufactur-
ing resources that can be relocated to low-cost countries
have by now been moved. This is not the case for the ser-
vice industry, which was slow to adapt to globalization, even
though professional services and banking are ideally suited
to it. But that is changing. The prime driver for the emerg-
ing markets to enter into the global markets was GATS. The
second most important driver was information technology,
which makes it possible to distribute services functions glob-
ally. In fact, an unintended consequence of the technology
boom and the capital – that was invested in it – was that the
outsourcing of the service sector has become much easier.
The US is a prime example of these trends. At first it
largely outsourced its industrial base. Now its service func-
tions are migrating to lower cost producers, as well. Differ-
ent emerging markets have demonstrated different aptitudes
for attracting service outsourcing, with India being at the top
of most people’s lists.
The service sector has not only boomed in India. In-
ternational Labour Organization data shows that Mexican
employment in the services sector for example increased to
56% in 2000 from 24% in 1980. As a result of these struc-
tural changes, increasing numbers of people in emerging
markets can obtain a wide range of consumer products, ser-
vices and technology. The demographic impact of these
trends on the emerging markets manifests in many ways. It
has speeded up the movement of people from agriculture to
manufacturing and to services. And as more people enter
Figure 2 Source: IMF – Balance of Payments Statistics Yearbook
Capital Movements of Emerging Markets
Capital inflows into emerging markets declined in the wake of the
Asian and Russian crisis, and following the bursting of the dot-com
bubble. Capital inflows and outflows have, however, increased.
In CHF bn
Inflows Outflows Balance
1995 407 – 115 292
1996 464 –200 264
1997 526 – 286 240
1998 172 –13 159
1999 360 – 254 106
2000 466 – 454 12
2001 272 –209 63
2002 237 –166 71
2003 435 370 65
2004 754 – 617 137
Average 1995–2004 409 – 268 141

professions with higher value creation and higher wages,
consumption rises. In addition, the transformation of the
emerging markets into service-oriented economies creates
a demand for proper infrastructure and, more important, for
better education, which is the entry ticket into the global
market place. As the flows of global capital change, we see
the emergence of new financial centers.
Development of Financial Centers
Financial centers are becoming an important part of the busi-
ness infrastructure. Singapore has made great progress with
its financial center. Dubai launched one in 2004. Hong Kong
and Shanghai have benefited from a wave of public offerings
in China and are currently ahead of New York and London
in initial public offerings. Many other emerging economies
plan to build such centers.
As valuation discounts between emerging markets
and developed markets are narrowing, as barriers to invest-
ing in emerging market’s stock markets have come down
dramatically and as emerging markets’ issuers prefer to trade
close to their home markets, in their time zone and where
their language is spoken, it is now apparent that there is less
of an advantage in dealing with a global center. And so, along
with increasing global integration, we will see the develop-
ment of even more new financial centers.
It shows one of the great advantages of global inte-
gration. Capital is no longer focused on one or two markets.
It is made available on a global basis. This means more com-
petition for traditional financial centers like New York, Tokyo,
London, Switzerland, and Frankfurt. Not every emerging
market economy will have its own financial center. To be
competitive, these centers must reach the right scale and li-
quidity. They must follow a consistent regulatory framework,
and they must use compatible infrastructure. If they achieve
this, their appearance is a very positive development for com-
panies, such as Credit Suisse. As the new centers grow, mar-
kets will open up for us in our role as bank, securities inter-
mediary and asset manager. We can go where our clients
are. This is particularly true for Asia and the Middle East,
where we have been building up international on-shore busi-
ness over the last few years.
Globalization Cannot Be Turned Back
Globalization creates many challenging issues, but it cannot
be turned back. The emerging markets and the developed
nations must work in partnership in the creation of the new
global economy. They are partners who need each other to
benefit fully from the fruits of a global economy. Capital mar-
kets have become more diversified and complex as a result
of globalization. As emerging markets mature, they will be-
come more liquid and diversified and will have a lower risk
profile. This will in turn make them more attractive for port-
folio investments, making their capital markets and banks
gain in importance.
Credit Suisse, with its business model and strategy,
has already a strong presence in the emerging markets, and
will continue its expansion there.

The annual volume of external financing for emerging coun-
tries has grown 11-fold since 1970 (calculated in terms of
constant, i.e. inflation-adjusted US dollars). As Figure 1 on
the right shows, the first marked phase of expansion lasted
until the early ’80s. It should be viewed in conjunction with
the crude oil crisis at the time, which led to a massive recy-
cling of petrodollars. The oil-producing countries, taken by
surprise by their sudden wealth, plowed much of their oil rev-
enue in the international banking market. The emerging
countries, which were importing the crude oil, borrowed from
banks to help them pay their mounting bills. When Mexico
failed to keep up its repayments in 1982, this sparked off an
international debt crisis. Consequently, capital flows slowed
down significantly throughout the ’80s.
External finance experienced a second upturn in for-
tunes in the ’90s in the course of increasing globalization. It
was supported primarily by foreign direct investments (found-
ing of or participation in companies). In view of the fact that
they were eligible to return to the capital markets, emerging
countries were also able to step up their portfolio investments
(equities, bonds, etc.). The capital flows were only steered
onto calmer paths again by the crises in Asia and Russia, al-
though the annual influx remained higher than before. The
1997 record levels have been exceeded again since 2004.
The structural changes in external financing have
been striking. Public development financing is making a com-
paratively stable contribution even though it has – in relevant
terms – experienced a discernible drop in significance. Bank
loans were originally very much in the foreground in private
capital flows. Bank loans now play a less pronounced role
as banks have been losing their appetite for risk since the
outbreak of the various debt crises, the introduction of more
stringent equity regulations, and a wide-ranging shift in
weighting from balance sheet to neutral business.
Bank loans have been replaced by portfolio invest-
ments by banks, institutional investors, and private investors.
They reflect the desire for increased international diversifi-
cation of securities portfolios and greater confidence in the
emerging markets in particular. Direct investments have be-
come the mainstay of capital flows in the past 15 years. They
are less volatile than bank loans and portfolio investments.
In contrast to the capital flows outlined. There has
been a sharp rise in the volume of investments by foreign
creditors from emerging countries. There are a variety of eco-
nomic backgrounds to these capital movements. Large in-
dustrial investors and wealthy individuals have growing in-
vestment and financial requirements, which can only be met
to a limited extent in their own countries. Financial institu-
tions require credit abroad in order to process payment trans-
actions, for example. The same goes for businesses wish-
ing to refinance foreign subsidiaries.
There have been very large increases in the foreign
exchange reserves of central banks in recent years. The
emerging countries had already overtaken the group of in-
dustrial nations during the ’90s. They now hold more than
two thirds of the worldwide foreign exchange reserves with
some 2900 billion US dollars. In addition, China over took its
neighbor Japan last year as the single biggest holder of re-
serves. However, reserves are evidently very concentrated
within the emerging markets: the top five account for half of
International Diversification of
Capital Flows Is on the Rise
Capital flows are taking on an ever more global dimension. The international diversification of the
procurement of funds and of capital investment is playing a particularly important role in industrial
countries. However, emerging countries are becoming more and more embedded in international
capital flows.
Alois Bischofberger, Chief Economist of Credit Suisse Group

the total (China, Taiwan, South Korea, Russia, India) and the
top 10 make up two thirds (including Hong Kong, Singapore,
Malaysia, Mexico, and Brazil).
Given their experience of the Asian crisis in 1997/98,
many countries are tending to draw upon their own resources
to protect themselves against any currency crises that may
occur in the future. They no longer want to be (so heavily)
reliant on the International Monetary Fund, which provides
extensive funding in times of crisis but makes its aid contin-
gent upon clear reform conditions. Some countries have also
held foreign exchange reserves for alternative uses for some
time. They include crude oil funds in countries like Russia,
Norway, Venezuela or Kuwait, in particular; these funds are
intended to smooth the volatile oil revenue for the state cof-
fers or to provide for future generations. However, other ex-
amples are China, where state-owned banks have been re-
capitalized on the strength of foreign exchange reserves, and
Russia which has used its reserves to pay back foreign debt
(early).
Around two thirds of the world’s foreign exchange re-
serves are held in US dollars, and about a quarter in euros.
This reflects the fact that central banks still have a strong
preference for investments in US (Treasury) securities. This,
in turn, is due to the breadth, depth and liquidity of the US
financial markets, which is unrivalled internationally. Com-
pared to before, the currency reserves are increasingly be-
ing managed more actively. Some central banks differentiate
between a liquidity portfolio and an investment portfolio –
with different objectives, risk profiles, investment horizons
and instruments.
The growing integration of emerging countries in the
world’s financial flows is playing an important part in opti-
mizing capital allocation. However, at the same time it also
represents a challenge. Firstly, the money flowing into the
emerging markets must last as long as possible. This neces-
sitates further efforts to improve local framework conditions
(political stability, law and order, economic reforms, strength-
ening of the financial sector, etc.). Secondly, the sharp rises
in foreign exchange reserves held on key emerging markets
reflect imbalances in the world’s economy. In order to pre-
vent rejections whenever these foreign exchange reserves
are used, sooner or later, in the domestic economy, the pro-
cess of adaptation needs to be as gentle as possible. Par-
ticular examples of this, at present, are the twin deficits in
the US (state budget and balance of payments) and China’s
exchange rate policy.
Figure 1 Source: World Bank, Credit Suisse Economic Research
External Financing of Emerging Countries
The annual volume of external financing for emerging countries has
grown 11-fold since 1970 (calculated in terms of inflation-adjusted
US dollars).
450
400
350
300
250
200
150
100
50
0
In USD bn (real, actual 1995)
1970
1975
1980
1985
1990
1995
2000
2005
 Ofﬁcial development aid  Portfolio investments
 Direct investments  Bank credits

Delivering Customized Client Solutions
Zurich – The interdisciplinary Solution Partners team is part of
Credit Suisse’s response to the increasingly complex needs of its global
clientele. This internationally networked team − including seasoned
experts in the fields of capital markets, corporate finance, private equity,
law and taxation − draws on the bank’s combined capabilities and
resources to provide customized solutions to high-net-worth private
clients that go beyond Credit Suisse’s traditional competencies in the
area of private banking.
To develop these specially tailored solutions, the members of
the team not only collaborate closely with one another but also exploit
the know-how and resources of the entire bank, thus capitalizing on
Credit Suisse’s integrated business model. Solution Partners operates
in financial centers around the globe, including Zurich, Geneva, London,
Hong Kong, Singapore, and Dubai.
Five members of the Solution Partners team are pictured here
in the dining room of the Bocken estate, located above Lake Zurich.
The villa was built in 1670 and renovated in 1993 to serve as a venue
for meetings and events. The estate also includes the Credit Suisse
Forum Horgen, a conference and training center that has been in use
since 1994.
From left to right:
John Zafiriou
Head of Solution Partners, Private Banking
Investment Services Products, Zurich
Evelio Garay Salazar
Specialist Fixed Income, Solution Partners,
Private Banking ISP, Zurich
Mariana Mayer-Wolf
Coverage Americas and Iberia, Solution Partners,
Private Banking ISP, Zurich
Jacques-Alban Callies
Coverage France, Asia and Middle East,
Solution Partners, Private Banking ISP, Zurich
Philipp Baretta
Coverage Switzerland, Italy and Americas,
Solution Partners, Private Banking ISP, Zurich

Over the past 50 years the population of the world has in-
creased like never before. The number of people has in-
creased from about three billion people to a current figure
of just under seven billion over the past half-century, a unique
phenomenon in the history of mankind. Population increases
are most evident in the areas of the world where poverty is
rife. Evidence of rapid migration, in some cases geographi-
cal, in some cases social, is leading millions and millions of
people out of poverty and into what are at least the lower
echelons of the income scale in modern societies. In China
people are flocking from the countryside into the cities. Thou-
sands of new jobs are being created in the world’s mega-cit-
ies, from Mexico City to Bangalore. People are changing
sides en masse at the interfaces between the world’s lower-
income zones and rich countries, for instance along the bor-
der between Mexico and the US or from Africa to Spain, a
country which, according to official statistics, has recorded
five million immigrants in the last five year’s. Migrant popu-
lations take up employment, receive wages and buy houses;
in other words, they require high-quality, but keenly priced
and omnipresent financial service providers. This provides
an ideal opportunity for banks which have correctly identi-
fied the signs of the times.
More Affluent People in the Emerging Countries
At the other end of the spectrum, banks’ private client busi-
ness is flourishing because globalization is leading to a
growth in wealth of around 6% year-on-year. Affluent sec-
tions of the population in emerging countries grew at record
rates in 2005 and 2006: South Korea led the way with 21.3%,
followed by India (19.3%), Russia (17.4%), Indonesia (14.7%),
and Hong Kong (14.4%). In addition to that, there has been
dramatic increase in wealth being left by one generation to
the next in the industrial countries of the West. These two
developments call for a rethink, both in terms of the service
strategies of bank networks and amongst product and asset
managers. There is an increasing need to develop integrated
asset-management models.
Investment in Infrastructure Continues to Boom
The growth of the mega-cities is being driven by the search
for employment and wealth. The United Nations predicts that
the percentage of the world’s population living in urban ag-
glomerations is set to rise from the current 48.7% to 60% by
2030. In other words, a city the size of Barcelona will spring
up every ten days! According to these UN forecasts, the li-
on’s share of this growth will take place in the underdevel-
oped regions of Asia and Africa. The percentage of the pop-
ulation of Africa living in urban regions is expected to rise
from a figure of 14.7% in 1950 to an estimated 50% by 2030,
i.e. roughly three-and-a-half times today’s figure. The same
calculations for Asia over the same timeframe reveal that ur-
ban populations there are set to more than triple. It goes
without saying that investments will have to be made in the
infrastructure of the emerging countries. However, this is
also true of older cities in industrial countries, which were
Banking in the 21st Century
The world’s rapidly increasing population is moving geographically, financially, and socially more
quickly than ever before. This presents new challenges to the financial services industry. Therefore,
the private banking sector, in particular, is experiencing rapid growth in the course of globalization.
At the same time, a new technology and volume-driven retail banking sector is emerging at the other
end of the income pyramid.
Giles Keating, Head of Global Research Private Banking and Asset Management

not built to accommodate these transient populations or with
the vast metropolises of the 21st century in mind. In the long
run, this will lead to extensive, costly investments in infra-
structure, as well as decentralization in the world’s largest
cities. There could soon be further privatizations in order to
fund these 21st century investments; there are calls in Ger-
many, for instance, for partial privatization of the motorways.
Studies show that the private financing of infrastructure leads
from 10% to 25% growth in efficiency. The capital markets
look set to gain in importance in view of the financial con-
straints of state budgets; the stature of infrastructure finance
companies will rise with it.
Benefiting from Migration
The World Bank expects the increasing migration from de-
veloping countries to reap profits for the world economy,
which we can all tap into. Migration of up to 3% of the work-
force in high-wage countries could generate additional wealth
worldwide in the order of 356 billion USD by 2025. Accord-
ing to estimates, this is twice as much as the global profits
from the complete deregulation of the trade in goods.
Migrants’ levels of skills and wages have an impact
upon the amounts that they are sending back to their home
countries. Studies compiled for the US indicate that highly
skilled and well-paid migrants (80% of migrants from India
working in the USA have university degrees) are in the habit
of saving and investing in their host country. There is every
possibility that the majority of highly skilled migrants come
from well-off families that do not need financial support from
abroad. By contrast, less well-skilled workers, such as some
of the Hispanic Americans in California or Texas, tend to
transfer larger amounts to their families; estimates put this
at approximately 500 dollars a month, on average. The up-
heaval in the migration process discussed up to now will lead
to two new business opportunies in banking.
Business Opportunities in Banking
Banking for the mass market: Present-day migration pat-
terns are revolutionizing the entire spectrum of banking ser-
vices. Many of today’s migrants are displaced people or ref-
ugees; they are also the potential retail customers of tomor-
row. In addition, thanks to shorter travel times, the mobility
of people in the 21st century is higher than ever before, lead-
ing to rising numbers of highly skilled economic refugees
and people who regard themselves as citizens of the world.
Credit Suisse itself does not follow a global retail banking
strategy, however, it is an area which we closely follow as an
investment strategy for our clients.
High-Net-Worth Individuals (HNWI): As an integrated,
globally active bank, Credit Suisse focuses on investment
banking, private banking and asset management. We have
observed that the needs of our clients in these three areas
increasingly converge. This is particularly true in private
banking, where the clients’ needs have become more global
and complex. The strong growth in private banking business
is currently being driven by Asia and Latin America. The age
structures in industrial countries are leading to wealth being
Figure 1 Sources: BBVA and INE
The Changing World
The number of people worldwide living outside of their home country
is estimated at 175 million. Spain provides a good example:
20052000 2001 2002 2003 2004
4000
3500
3000
2500
2000
1500
1000
500
0
Number of migrants in Spain in thousands
923.8
1370.6
1977.9
2664.2
3050.8
3691.5
1794.4
 Migrants  Migrants from Latin America
Foreign population as a
percentage of a total population
2.3 %
3.3 %
4.7 %
6.2 %
7.1 %
8.5 %

transferred between generations in the private banking sec-
tor. The new needs of younger customers who, as research
shows, are better acquainted with the ins and outs of invest-
ment processes, are bringing about structural changes in the
services offered to private customers.
Workforce Migration Driving Retail Banking
The number of people worldwide living outside their home
country is put at 175 million and rising steadily. Even though
the transfer of money abroad has long since been an issue
in debates about migration, it has been playing an ever in-
creasing role for some time. The reason for this is obvious.
There has been a sharp rise in the volumes of money trans-
ferred to developing countries, which is making this high-vol-
ume business increasingly more attractive.
These people often wish to support their relatives who
have remained at home. To facilitate this they require the
services of money transfer operators or bank accounts. Mi-
gration is creating potentially new groups of customers, and
the banks should tailor their services to meet the needs of
these groups. Migration does not just start off in poor coun-
tries; it is also driven by the current labor market situation,
as well as by demographic factors. Germany could soon be-
come a country with a negative migration balance. It is los-
ing more and more of its young, highly skilled workers and
attracting fewer workers, who tend to be unskilled. This is
accentuating the imbalances in the social security system
yet further. The fact that 60% of students currently enrolled
at German universities have stated that they would be happy
to leave Germany is symptomatic of how things are set to
develop in the future.
Migration for Work and Better Wages
A recent example is the migration of Polish workers. Some
450,000 Poles have emigrated to Ireland and England. Once
again, the reasons for this seem clear: unemployment in Po-
land stands at over 16%; besides that, there are also signif-
icant differences in earning capacity. A Polish nurse can earn
seven to eleven times more in Ireland than she can in Po-
land. As a result, the Polish health system has a shortage
of around 60,000 employees. The snowball effects of a phe-
nomenon like this are easy to imagine, such as the increas-
ing volume of foreign transfers made by these new bank cus-
tomers. To remain competitive and successful, Irish banks
are appointing employees who can speak Polish in order to
forge ties with the new customer group.
New Rivals in the Banking Sector
Banks are running the risk of losing out on many of tomor-
row’s customers, namely people who do not have a bank ac-
count yet because they have until now not been profitable
enough or because of their legal status as immigrants.
New media for transferring money such as mobile phones,
smart credit cards, and the Internet are putting pressure on
traditional money transfer operators (MTOs) such as West-
ern Union, as well as on banks which specialize in this area
of business. Furthermore, supermarket chains are also of-
Figure 2 Source: Capgemini Lorenz curve analysis, 2006
High-Net-Worth Individuals (HNWI)
Financial Wealth Forecast by Region
Strong global net new money growth of 6 percent till 2010 is supporting
wealth management significantly.
45
40
35
30
25
20
15
10
5
0
2003 2004 2005 2010E
 Annual Growth Rate,
 2005 – 2010E
 Global 6.0%
 Africa 5.2%
 Middle East 8.0%
 Latin America 5.9%
 Asia-Paciﬁc 6.7%
 North America 7.4%
 Europe 3.7%
28.5
30.7
33.3
44.6
In USD Trillions

fering credit cards, thereby forging links with the “bankless”.
The competition along the US-Mexico corridor, for example,
has led to large reductions in charges in Mexico. On aver-
age, it is now 56% cheaper to transfer 300 USD abroad than
it was seven years ago.
The Rich Are Getting Richer and Younger
We are at the dawn of a decade when wealth is transferred
between generations, driven by the demographic develop-
ments in the wealthy industrial countries of the West. Stud-
ies show that 15% of the world’s population was aged 56 or
more in 2005. The comparable percentage of high-net-worth
individuals (HNWIs with capital assets in excess of 1 million
USD) is closer to 60%. US studies predict that 41 trillion dol-
lars worth of assets will be transferred by 2053. About 19%
of the children of HNWIs live abroad. What’s more, growth
in asset management divisions in emerging countries is keep-
ing pace with the corresponding growth in industrial coun-
tries. Both trends clearly suggest a globalization of portfo-
lios which previously would have been invested on a more
local or regional basis. There is also an assumption that the
new customers are more willing to take financial decisions,
which is definitely a challenge for today’s financial advisors.
A close relationship with customers and advice which is tai-
lored specifically to meet their particular needs make the dif-
ference in being successful during this period of transition
and growth in asset management – this is much more impor-
tant than segmentation solely on the basis of the extent of
their capital assets.
A study of the US market by Phoenix Marketing Inter-
national shows that wealthy private customers increase their
number of bank accounts up to the age of 50 because they
require a wide range of banking services in their day-to-day
life and for secondary matters, such as student loans or prop-
erty issues. After age 50, their number of bank accounts nor-
mally reduce and capital investments then generally become
their primary financial service. Banks could learn a lesson
from this for the future in order to become one of the main
service providers. In other words, “big is beautiful” because
the organic growth of the largest players on the market will
probably outstrip the average growth rate of the asset-man-
agement sector. As the market is splintered, we anticipate
that the big banks with worldwide brands and solid balance
sheets will show above-average rates of growth and that the
smaller operators in the sector will increasingly be merged
or taken over.
Growing Importance of Women
Women currently make the financial decisions in 15% of US
households with capital assets in excess of 1 million USD.
Female customers are becoming increasingly important, be-
cause there are more and more well-off widows due to de-
mographic trends and also because an increasing number of
women are high earners. Women tend to prefer banks which
offer comprehensive advice, are less willing to take risks and
are, therefore, interested in diversified investment portfolios
focusing on preserving their wealth. Banks wishing to assert
themselves in this growth segment should take these fac-
tors into account and align themselves accordingly.
Lack of Skilled Workers
The search for skilled personnel will have to be stepped up –
increasing customer competence and high demand for per-
sonnel in the high-growth regions of the world such as Asia,
Latin America and the Middle East could result in a short-
age of experienced advisors, which is likely to drive income
levels up. Initial and further training initiatives have been in
place for young investment advisors for some time. What’s
more, an increasing number of banks are transferring expe-
rienced employees from their institutional investment side to
asset management in order to meet customers’ needs.
Success Through Integrated Asset Management
The response to the new challenges facing banking in the
21st century is an integrated asset-management model.
Banks wishing to ensure the loyalty of customers in the fu-
ture, have a global presence, a wide range of products, of-
fer sound advice, have a strong brand, and are renowned for
comprehensive risk management, as well as top-notch dis-
tribution and implementation capabilities. Focusing on the
core business – asset management, which in the broad sense
includes capital management – and in-depth knowledge of
the customer are essential for gaining the customer’s trust
and guaranteeing long-term success and growth in this area
of business.
.

Experts in Research and Analysis
Zurich – The Global Economic Strategy Group (GESG) is a panel of nine
senior economists, strategists and investment professionals from across
Credit Suisse. The GESG meets on a monthly basis to review key deve
lopments in the global economy, such as growth trends and the out
look for inflation, as well as discussing forecasts for the bond, equity
and currency markets. The findings of these meetings are integrated
into Credit Suisse’s internal investment process and play a determining
role in the bank’s decisions on asset allocation on behalf of its clients
in Private Banking and Asset Management. The purpose of the GESG
is to make Credit Suisse’s research and analytic expertise available to
both current and potential clients. The group is headed by Giles Keating,
Head of Research for Private Banking and Asset Management.
The GESG members are pictured in the Board room at
Credit Suisse’s headquarters at Paradeplatz in the center of Zurich,
Switzerland.
From left to right:
Giles Keating
Head of GESG, Head of Research for Private
Banking and Asset Management, Zurich
Andrew Garthwaite
Head of Equity Strategy, Investment Banking,
London
Arun Ratra
Chief Investment Officer Multi-Asset Class
Solutions, Asset Management, Zurich
Jonathan Wilmot
Chief Strategist, Investment Banking,
London
GESG members not pictured:
Alois Bischofberger
Chief Economist of Credit Suisse Group,
Zurich
Mark Burgess
Head of Equities, Asset Management,
London
Bunt Ghosh
Head of Fixed Income and Economics Research,
Investment Banking, London
Joe Prendergast
Head of Foreign Exchange Research,
Investment Banking, London
Neal Soss
Chief Economist, Investment Banking,
New York

The World Economy in 2007
What is in store for the world economy in 2007? Will economic growth accelerate in the coming
year? Five members of Credit Suisse’s Global Economic and Strategy Group take up the debate.
They discuss possible trends for 2007 and identify which sectors are likely to perform best.
Credit Suisse’s Global Economic and Strategy Group (GESG) meets to discuss
global economic trends on a monthly basis. The group is lead by the bank’s Head
of Global Research for Private Banking and Asset Management, Giles Keating.
Other GESG members present at the January meeting in Zurich were: Andrew
Garthwaite, Head of Equity Strategy, Investment Banking; Arun Ratra, Chief
Investment Officer, Multi-Asset Class Solutions; Neal Soss, Chief Economist,
Investment Banking; and Jonathan Wilmot, Chief Strategist, Investment Banking.
The following is a transcript from their roundtable discussion.
Is the global economy on track for another year of growth?
All: Yes.
Andrew Garthwaite: Another good year of growth lies ahead. Growth will
probably be a bit softer in the first half of 2007, before accelerating again in the
second half.
Giles Keating: The good news is that this is a very helpful slowdown, as it
has taken the inflationary edge off the world economy.
Neal Soss: The GESG is forecasting growth in the world economy for the
sixth consecutive year. The global growth rate should be in the region of 5 % this
year. It is by far the best period of growth in a century − if not centuries. It is also
worth pointing out that growth will be better balanced throughout the world than
it has previously been. Economic expansion will be less dependent on the US.
Europe, in particular, will make more of a contribution to global growth.
Jonathan Wilmot: The GESG also agrees that there is a high probability the
economy is roughly in the middle of a mid-cycle slowdown. Within this longer
period of exceptional growth, the GESG thinks a slowdown began quite signifi-
cantly in the middle of 2006 and will extend roughly into the middle of this year.
Depending on which country you look at, this has, in turn, reduced inflationary
pressures and allowed interest rates to come down slightly rather than rising − or
to rise more slowly than would otherwise have been the case. Longer-term growth
prospects have been boosted by this friendly interest-rate environment, as have
the equity markets. In addition, the pause in the interest-rate cycle has helped to
bring down some overheated prices such as oil, copper, etc., which were seen in
the global system. If there were to be a very strong reacceleration of growth in
the second half of this year and into 2008, the global economy would be back
into a scenario of inflation worries. If the world economy stays on the same sort
of track that began in 2006, and which we are seeing right now, then inflation
worries will continue to subside. That is good news. It makes growth more sus-
tainable and is good for the financial markets. Ultimately, the risk to growth is on
the upside. But an acceleration of growth to a level that would be regarded as a
Giles Keating:
“The current slowdown
is very helpful as
it has taken the infla-
tionary pressure off
the world economy.”

negative risk to the financial markets is unlikely to materialize before the second
half of this year at the earliest.
Will any regions outperform in 2007?
Giles Keating: It clearly looks as if Europe is more buoyant than the US,
which is unusual. Europe won’t be completely exempt from the slowdown in the
US but shouldn’t suffer very much. Asia has seen a bit of a slowdown but, in
aggregate, the growth rate there is still very healthy. Both China and India will
continue to grow at around double-digit rates.
Could the slump in the US housing market derail global economic growth?
Giles Keating: At the moment, it looks as if the US economy is on track for
a soft landing in the housing market. Obviously, the housing market is much weaker
than it was 12 months ago. However, the good news is that it looks as if we are
no longer seeing a build-up of unwanted housing in the pipeline. As a result, the
number of unsold houses seems to have stabilized. Things will stay weak in that
market for perhaps six months. At the moment, it doesn’t look as if it is going off
the edge of a cliff.
Neal Soss: That risk remains present and omnipresent in forecasts. How-
ever, professional opinions are increasingly converging − saying that the global
economy has weathered the slowdown in the US housing market. This slump has,
perhaps, been more abrupt than in past housing cycles and may not lead to a pro-
nounced recovery. But if housing demand stabilizes, the outlook losses can be
calculated. Once you can calculate your losses, they are not nearly as frightening
as they seemed at the outset. That is very good news. In the face of the risks
posed to the US and − by extension − the global economies from the housing
slowdown, central banks have been maintaining very high levels of liquidity, most
likely higher than they would otherwise have been. There are some grounds to be
concerned that as the housing market stabilizes, part of this liquidity that is still
built into financial asset prices may come to be viewed as not fully justified by
long-term fundamentals.
Is the global economy facing any other risks?
Giles Keating: There are always risks. Ironically, in economic terms, the big-
gest risk is that the world economy may grow a little too strongly. If that happens −
which would probably not be in the first half of 2007 but, perhaps, in the second
half of the year − then we’ll see expectations about interest rates going up and
inflation worries coming in. That could, of course, damage the equity markets.
There are other geopolitical risks, which could affect the oil markets. Those kinds
of risks can never be ruled out. At the moment, however, they perhaps look that
little bit less worrying than at certain times over the last year.
Jonathan Wilmot: The geopolitical risks are well known. Venezuela. Nigeria
is more unstable, as is Iraq. The situation is getting worse in Iran. What is inter-
esting is that the oil market is beginning to get bored of these risks. The economy
has been living with them for the past 18 months, if not the past two years. The
current assessment is that these risks, perhaps, shouldn’t be priced into the mar-
ket quite so actively. At present, OPEC is struggling to maintain its oil prices at
current levels. That could, however, change very quickly if global growth acceler-
ates and the demand for oil gathers speed. For the first half of the year − and
maybe for most of 2007 − the market seems to be less focused on the above-
mentioned geopolitical risks. They will come back into the general consciousness,
particularly the Iranian risk, later on in the year.
Andrew Garthwaite: Let’s start with what is probably not a risk: oil. Spare
oil capacity has tripled since last year. The global economy can today accommo-
Andrew Garthwaite:
“Another good year
of growth lies ahead.
It will be softer in
the first half and accel-
erate in the second.”

date a surge in oil prices far better than it could just one year ago. Another risk
is that Ben Bernanke, Chairman of the Federal Reserve, could lose his credibility.
He did a complete U-turn on inflation within the space of a month last year. It
would be a great problem if investors stopped believing Bernanke’s rhetoric.
Changes in the reserve recycling by China are an additional risk. Huge pressure
on the Chinese currency, the renminbi, to revalue by 30% or even 40% would be
bad for US inflation, bad for global growth and bad for real trade volumes. It would
be a triple negative. A sharp increase in protectionist measures in China would
also harm the global economy.
How about oil prices? Will they stabilize at around USD 50 per barrel?
Giles Keating: The oil price has come down from its peak of almost USD
80 per barrel last summer. It looks as though it could continue to stay pretty soft.
That trend could, of course, be interrupted by geopolitical factors. Sooner or later,
if the oil prices really start coming down from the level of USD 50 per barrel,
OPEC would step in with more decisive output cuts, resulting in a bounce back
in oil prices.
How about interest rates? Will they remain unchanged in 2007?
Giles Keating: The likelihood is that the US Federal Reserve will keep rates
steady over most of this year. We don’t think the Fed will cut rates. The European
Central Bank looks as if it will take its rates up two more times in the first half of
the year, with the Swiss National Bank following suit. The Bank of Japan looks
as if it might do just one rise during the course of the year. The Bank of England
is almost certainly set to raise its rates.
Jonathan Wilmot: Provided there is a slowdown in growth in the first half
of the year, there will be a turning point for short-term interest rates by the time
we reach the middle of the year. Europe will have completed the first phase of its
tightening phase, while the Federal Reserve won’t yet be in a situation where it
is hiking rates up again. Japan may have gone quite a long way in terms of raised
interest rates. Some of the bigger risk may arise towards the end of this year and
in 2008, because global growth may then reaccelerate.
Giles Keating: To summarize the situation: the big message on interest
rates is that the risks will really come later on this year – in the third quarter or at
the beginning of the fourth quarter, when investors and central bankers will start
to look towards 2008. If they think the world economy will accelerate too much,
the central banks will have to take more action than seems likely at the moment.
That could become quite unsettling for the markets.
How do you expect the US dollar to move during the year?
Giles Keating: The US dollar should remain relatively flat against the euro
during the first half of this year but that doesn’t mean there will be no movement
at all. The GESG expects the dollar to trade in a range of 1.27 to 1.33 against the
euro during 2007, with fairly powerful sources acting both in favor of and against
the US currency.
Jonathan Wilmot: The dollar is forecast at 1.28 against the euro at the end
of the year, not far from its current level. The GESG is more optimistic than most
financial experts.
Why?
Jonathan Wilmot: Because the dollar is already undervalued against the
euro. There is quite high nominal rates support in favor of the dollar. Asian curren
cies like the renminbi, which appreciated in 2006, are the ones under pressure to
Arun Ratra:
“Alternative assets
should always be
part of any investor’s
portfolio.”
Neal Soss:
“Growth will be better
balanced throughout
the world than it
has previously been.”

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