credit-suisse Presentation slides

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credit-suisse Presentation slides

  1. 1. Fourth Quarter and Full Year Results 2006 Zurich February 15, 2007 Oswald J. Grübel, Chief Executive Officer
  2. 2. Cautionary statement Cautionary statement regarding forward-looking and non-GAAP information forward- non- This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties, and we might not be able to achieve the predictions, forecasts, projections and other outcomes we describe or imply in forward-looking statements. A number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions we express in these forward-looking statements, including those we identify in quot;Risk Factorsquot; in our Annual Report on Form 20-F for the fiscal year ended December 31, 2005 filed with the US Securities and Exchange Commission, and in other public filings and press releases. We do not intend to update these forward-looking statements except as may be required by applicable laws. This presentation contains non-GAAP financial information. Information needed to reconcile such non-GAAP financial information to the most directly comparable measures under GAAP can be found in Credit Suisse Group's fourth quarter report 2006. Fourth quarter and full year results 2006 Slide 2
  3. 3. Record results in 2006 Change 2006 2005 in % CHF bn Net revenues 1) 34.9 28.4 23 Total operating expenses 1) 24.3 23.2 5 Pre-tax income 1) 100 Pre- 10.7 5.4 83 Income from continuing operations 8.3 4.5 Income from discontinued operations 3.1 1.3 134 94 Net income 11.3 5.9 Basic earnings per share (in CHF) 10.30 5.17 99 89 7.53 from continuing operations (in CHF) 3.98 Return on equity (in %) 27.5 15.4 1) Excluding minority interest revenues of CHF 3,663 m, CHF 2,074 m and minority interest expenses of CHF 103 m, CHF 32 m in 2006 and 2005, respectively, from the consolidation of certain private equity funds and other entities in which the Group does not have a significant economic interest Fourth quarter and full year results 2006 Slide 3
  4. 4. Financial Review Renato Fassbind, Chief Financial Officer
  5. 5. Financial highlights fourth quarter 2006 4Q06 3Q06 4Q05 CHF m Investment Banking 2,342 758 286 Private Banking 1,143 1,022 1,026 Asset Management 89 158 241 (1,033) 2) Corporate Center 1) (187) (108) Pre-tax income 1) Pre- 3,387 1,830 520 Income from continuing operations 2,599 1,468 677 Income from discontinued operations 2,074 424 426 Net income 4,673 1,892 1,103 Basic earnings per share (in CHF) 4.35 1.74 0.98 from continuing operations (in CHF) 2.42 1.35 0.59 1) Excluding minority interest revenues of CHF 998 m, CHF 640 m, CHF 554 m and minority interest expenses of CHF 71 m, CHF 10 m, CHF 15 m in 4Q06, 3Q06, 4Q05, respectively, from the consolidation of certain private equity funds and other entities in which the Group does not have a significant economic interest 2) Includes a charge of CHF 630 m in relation to the change in accounting for share-based compensation awards Fourth quarter and full year results 2006 Slide 5
  6. 6. Annual pre-tax income by division Investment Banking Private Banking Asset Management CHF m 5,951 5,443 2) 4,596 +113% 3,966 3,717 2,5591) +16% (27)% 2,023 1,599 1,006 816 733 3) 508 2004 2005 2006 2004 2005 2006 2004 2005 2006 1) Excluding charge of CHF 960 m to increase the reserve for certain private litigation matters 2) Excluding credits of CHF 508 m from insurance settlements for litigation and related costs 3) Excluding realignment costs of CHF 225 m Fourth quarter and full year results 2006 Slide 6
  7. 7. Investment Banking with record fourth quarter and full year results Highlights fourth quarter 2006 S Record revenues and pre-tax income, reflecting strong performance across all key business areas and regions S Results demonstrate progress towards a more profitable integrated bank S Improving cost ratios in line with commitment to improve operating efficiency over time Fourth quarter and full year results 2006 Slide 7
  8. 8. Underwriting and advisory with record revenues in all key businesses Underwriting and advisory revenues Comments on 4Q06 S Record results driven by CHF m Equity underwriting 5,376 – high levels of deal activity Debt underwriting +38% – improved market shares in M&A and Advisory and other fees equities 3,890 – increased breadth and diversity of 1,955 businesses +65% S Best Bank of the Year for IPOs (The Banker) 1,185 1,052 S Best China Equity House (International Financing Review) S #1 in Latin America M&A and Equities for 2006 2005 2006 4Q05 3Q06 4Q06 Fourth quarter and full year results 2006 Slide 8
  9. 9. Strong fixed income trading results Fixed income trading revenues Comments on 4Q06 CHF m S 2nd highest level of quarterly revenues S Credit spreads remained narrow 9,598 resulting in continued liquidity and solid activity levels 7,004 S Strong revenue growth in – commercial mortgage-backed securities 2,755 +37% – emerging markets trading 2,137 – global foreign exchange and 1,566 +29% – leveraged finance businesses +76% S Solid growth in commodities trading 2005 2006 4Q05 3Q06 4Q06 Fourth quarter and full year results 2006 Slide 9
  10. 10. Significantly improved equity trading performance Equity trading revenues Comments on 4Q06 CHF m S 2nd highest level of quarterly revenues S Improved results in derivatives 5,881 benefiting from high levels of client- driven activity 4,340 S Strong results in cash businesses, with an increase in deal activity, stronger 1,596 secondary markets and good +36% performance in AES 1,062 1,021 S Equity proprietary trading reported +50% strong results across most regions and +56% strategies 2005 2006 4Q05 3Q06 4Q06 AES = Advanced Execution Services Fourth quarter and full year results 2006 Slide 10
  11. 11. Cost reduction program gaining traction and yielding positive initial results Compensation / Revenue ratio in % S Continuing to execute a program to 56.5 achieve sustainable, long-term cost / 55.5 50.1 income ratio reductions 42.2 S 2006 compensation / revenue ratio 2004 2005 2006 4Q06 down from previous years and quarters Other expenses CHF m 1,191 1) 1,326 S 4Q06 non-compensation expenses 1,233 1) 1,211 1,168 1,157 down from 3Q06 and 4Q05 759 4Q05 1Q06 2Q06 3Q06 4Q06 1) Excluding credits of CHF 474 m and CHF 34 m, from insurance settlements for litigation and related costs in 2Q06 and 4Q06, respectively Fourth quarter and full year results 2006 Slide 11
  12. 12. Progress in increasing the pre-tax margin Investment Banking pre-tax margin 1) 38% 27% 27% 18% 18% 17% 8% 2005 1) 2006 2) 2Q06 2) 4Q06 2) 4Q05 1Q06 3Q06 1) Excluding charge to increase the reserve for certain private litigation of CHF 960 m; reported margin was 10% 2) Excluding credits of CHF 474 m and CHF 34 m, from insurance settlements for litigation and related costs in 2Q06 and 4Q06, respectively; reported margins were 29%, 39% and 29% in 2006, 4Q06 and 2Q06, respectively Fourth quarter and full year results 2006 Slide 12
  13. 13. Private Banking achieves record profitability in 2006 Highlights S Strong fourth quarter performances in WM and CRB S Improving pre-tax income margins in 2006 while expanding investments in high growth markets S Wealth Management achieved overall profit in European onshore business one year ahead of plan WM = Wealth Management; CRB = Corporate & Retail Banking Fourth quarter and full year results 2006 Slide 13
  14. 14. Increased profitability due to international expansion and strong client activity Wealth Management: Pre-tax income CHF m 3,237 963 2,661 811 779 703 684 +22% +19% +15% 2005 2006 4Q05 1Q06 2Q06 3Q06 4Q06 Pre-tax income margin in % 37.3 39.6 37.6 43.2 38.3 37.1 39.0 Fourth quarter and full year results 2006 Slide 14
  15. 15. Wealth Management with solid revenue growth and stable gross margin for the year Gross margin on AuM Net revenues and gross margin on AuM Basis points CHF m and basis points (bp) 8,181 113 112 7,125 125 bp 113 bp 40 41 109 bp Transaction- 109 bp 101 bp based 2,227 73 2,077 71 2,034 Asset- 1,868 1,843 +15% based +13% +11% 2005 2006 4Q05 1Q06 2Q06 3Q06 4Q06 2005 2006 Fourth quarter and full year results 2006 Slide 15
  16. 16. Continued strength in asset gathering in Wealth Management Net new assets (NNA) Assets under management (AuM) CHF bn CHF bn 8.6 50.5 31.12.2005 693.3 42.8 10.9 Net new 16.5 50.5 assets +13.1% Market and 14.5 FX related 40.4 movements 2005 1Q06 2Q06 3Q06 4Q06 2006 31.12.2006 784.2 Rolling four quarters NNA growth on AuM in % 7.5 7.8 8.6 7.2 7.3 7.3 Fourth quarter and full year results 2006 Slide 16
  17. 17. Improving pre-tax income margin while continuing international expansion Wealth Management: Total operating expenses CHF m Compensation and benefits 4,963 Up 17% from FY05, due to strategic 4,439 2,780 investments in international front- 2,367 office recruitment (added net 115 relationship managers in 2006) and 1,283 1,161 1,163 performance-related compensation 714 596 629 2,183 2,072 Other expenses 567 569 Up 5% from FY05, mainly due to 532 higher commission expenses and 2005 2006 4Q05 3Q06 4Q06 ongoing international business growth Pre-tax income margin in% 37.3 39.6 37.6 37.1 39.0 Fourth quarter and full year results 2006 Slide 17
  18. 18. Corporate & Retail Banking with continued high profitability Pre-tax income S Increase in 2006 pre-tax margin CHF m reflecting revenue growth of 4% 1,359 1,305 and cost increase of 1% S Future releases of credit +4% provisions expected to slow 338 332 322 down due to a decline in the (2)% amount of impaired loans +3% 2005 2006 4Q05 3Q06 4Q06 Pre-tax income margin in% 38.7 38.9 38.0 40.3 37.1 Provisions for credit losses in CHF m 1) (96) (54) (23) (17) (24) 1) Negative numbers show net releases of provisions Fourth quarter and full year results 2006 Slide 1
  19. 19. Asset Management completes business realignment while launching growth initiatives in high margin areas Highlights 2006 S 2006 results impacted by realignment costs and lower investment related gains S Strong growth in net new assets with CHF 51 billion in 2006 S Launch of several growth initiatives in high margin areas including acquisition of Hedging-Griffo Fourth quarter and full year results 2006 Slide 19
  20. 20. Increased recurring revenue base growth, but lower investment-related gains in 2006 Net revenues CHF m 698 208 502 206 Private equity and (28)% other investment- 3,237 115 92 89 related gains 2,359 646 603 2,103 560 549 550 Asset management +7% +12% revenues and private equity +18% commissions 4Q05 1Q06 2Q06 3Q06 4Q06 2005 2006 Gross margin on AuM in basis points 1) 40.9 37.3 39.1 36.2 36.5 37.8 38.7 1) Based on revenues before private equity and other investment-related gains Fourth quarter and full year results 2006 Slide 20
  21. 21. Strong net new assets and good growth in assets under management during 2006 Net new assets (NNA) Assets under management (AuM) CHF bn CHF bn 21.2 (2.9) NNA growth on AuM 50.8 2006: 8.6% 31.12.2005 589.4 2005: 4.2% Net new 15.5 50.8 assets Market and +13.7% 5.1 (0.8) 19.6 17.0 FX related 29.7 11.4 movements 3.9 31.12.2006 669.9 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY 2005 2006 Fourth quarter and full year results 2006 Slide 21
  22. 22. Well-diversified asset class mix Assets under management by asset class As of 31.12.2006 CHF bn Change Balanced 277 9% Balanced 255 41% 137 21% Alternative Equities 113 7% 107 Fixed (3%) Income 110 15% 21% 101 Money 58% 16% Markets 64 Money Alternative 31.12.2006 markets 47 31.12.2005 (2%) Equities Fixed income 48 Note: Includes reclassifications of approx. CHF 10 bn from fixed income to money market and balanced Fourth quarter and full year results 2006 Slide 22
  23. 23. Increased capital payout and strong capital position Capital payout (per share) BIS Tier 1 data S Increased 2006 payout to CHF 2.70 1) Tier 1 ratio (%) 13.9 – Regular cash dividend of CHF 2.24 11.3 10.8 10.8 10.6 – Capital return of CHF 0.46 in form of par value reduction 4Q05 1Q06 2Q06 3Q06 4Q06 Share repurchases Risk-weighted assets (CHF bn) S Launch new three-year program worth 254 252 248 245 233 up to CHF 8 bn 1) S Complete current CHF 6 bn program in April 2007 4Q05 1Q06 2Q06 3Q06 4Q06 1) Subject to approval at shareholder meeting in May 2007 Fourth quarter and full year results 2006 Slide 23
  24. 24. Credit Suisse performance indicators in % in % 28 238 Diluted EPS Return on 84 16 15 growth 1) equity 5 2004 2005 2006 2004 2005 2006 in % in % Total 7 44 NNA growth 5 shareholder 31 7 (on assets under 3 return management) 2004 2005 2006 2004 2005 2006 in % in % Cost / 82 14 BIS Tier 1 12 75 11 Income 70 capital ratio ratio 2) 2004 2005 2006 2004 2005 2006 1) from continuing operations as reported in respective period 2) Excluding minority interest revenues before tax of CHF 1,088 m, CHF 2,074 m, CHF 3,663 m and minority interest expenses before tax of CHF 16 m, CHF 32 m, CHF 103 m in 2004, 2005 and 2006, respectively, from the consolidation of certain private equity funds and other entities in which the Group does not have a significant economic interest Fourth quarter and full year results 2006 Slide 24
  25. 25. Closing Remarks Questions & Answers Fourth quarter and full year results 2006 Slide 25

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