Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

credit-suisse Quarterly Review Q3/2001

554 views

Published on

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

credit-suisse Quarterly Review Q3/2001

  1. 1. Q3 CREDIT SUISSE GROUP QUARTERLY REVIEW 2001
  2. 2. 1 Editorial 2 Financial highlights Q3/2001 4 An overview of Credit Suisse Group 8 Review of business units 8 Credit Suisse Financial Services 16 Credit Suisse Private Banking 18 Credit Suisse Asset Management 20 Credit Suisse First Boston 23 Consolidated results 23 Income statement 24 Balance sheet 25 Off-balance sheet business 25 Selected notes Information for investors Cautionary Statement Regarding Forward-Looking Information This communication may contain projections or other forward-looking statements related to Credit Suisse Group that involve risks and uncertainties. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. Readers are referred to the documents filed by Credit Suisse Group with the SEC, specifically the most recent filing on Form 20-F, which identify important risk factors that could cause actual results to differ from those con- tained in the forward-looking statements, including, among other things, risks relating to market fluctuations and volatility, sig- nificant interest rate changes, credit exposures, cross border transactions and foreign exchange fluctuations, impaired liquidity, competition and legal liability. All forward-looking statements are based on information available to Credit Suisse Group on the date of its posting and Credit Suisse Group assumes no obligation to update such statements unless otherwise required by applicable law. This symbol is used to indicate topics on which further information is available on our website. Go to www.credit-suisse.com/q3review2001/bookmarks.html to find links to the relevant information. The additional information indicated is openly accessible and does not form part of the Quarterly Review. Some areas of Credit Suisse Group’s websites are only available in English.
  3. 3. EDITORIAL Major challenges for the financial services industry Dear shareholders, clients and for the first nine months amounted to colleagues CHF 3.4 billion, down 37% over the first nine months of 2000. Although The third quarter of 2001 was over- net new assets were down shadowed by the tragic events of in the third quarter as a result of September 11 in the US. Our thoughts seasonality, they were up 42% versus are with all those who lost family, friends the same period last year. Total assets or colleagues in the attacks. Despite under management stood at CHF these events, we decided to go ahead 1,290.4 billion as of September 30, with our plans to list the Credit Suisse 2001, a reduction of 7.3% from Group share on the New York Stock December 31, 2000, due to market Exchange (NYSE) as a sign of support movements. for the Wall Street community and In the Group’s insurance business- Lukas Mühlemann its determined efforts to carry on. Our es, continued declines in equity markets Chairman and Chief Executive Officer share began trading in the form of worldwide reduced the unrealized American Depositary Shares (ADS) gains in the investment portfolios in on September 25. This move will the third quarter. Credit Suisse Private strengthen Credit Suisse Group’s Banking continued to perform well position in the US capital market and given market conditions, with net oper- enhance its visibility in the US market- ating profit of CHF 513 million in the place. third quarter. At Credit Suisse First Credit Suisse Group faced major Boston, we initiated an extensive cost- challenges in the third quarter of 2001, reduction program to tailor the firm’s as did the entire industry. Demanding size and cost structure to market con- market conditions impacted our invest- ditions. This effort is expected to save ment banking business, as well as USD 1 billion by the end of 2002, by investment income from the insurance reducing staffing levels by approximately units. However, all other areas achieved 2,000 jobs and cutting other operating good results given the current environ- costs. ment. For the fourth quarter, Credit Our company’s fundamentals Suisse Group remains cautious. We remain strong. Credit Suisse Group expect that transaction volumes continues building leadership positions will remain low and that weak market in key markets around the world, conditions will continue. Fundamentally, with a powerful global franchise. At we remain optimistic about the medi- the same time, we have implemented um- and long-term prospects for our comprehensive programs to adapt our industry and our position to capture business to the current environment, the resulting opportunities. including significant cost reductions across all units. In the third quarter of 2001, Credit Suisse Group posted a net operating profit of CHF 21 million. After taking into account the amortization of acquired intangible assets and good- Lukas Mühlemann will, the Group reported a net loss of Chairman and Chief Executive Officer CHF 299 million. Net operating profit November 2001 www.credit-suisse.com 1
  4. 4. CREDIT SUISSE GROUP FINANCIAL HIGHLIGHTS Q3/2001 Change vs. 31 Dec. 2000 Share data 30 Sept. 2001 30 Sept. 2001 30 June 2001 31 Dec. 2000 in % Shares issued 1,196,253,596 1,196,253,596 1,203,599,288 1,201,751,960 0 1) Shares repurchased 7,730,000 7,730,000 8,400,000 0 – Shares outstanding 1,188,523,596 1,188,523,596 1,195,199,288 1,201,751,960 (1) Share price in CHF (as of November 13, 2001: CHF 66.10 ) 56.50 56.50 73.88 77.00 (27) Market capitalization in CHF m 67,152 67,152 88,295 92,535 (27) Book value per share in CHF 29.90 29.90 35.76 34.08 (12) Change vs. Q3/2001 Q3/2001 Q2/2001 2000 2000 Share price in CHF in CHF in CHF in CHF in % High 75.88 75.88 83.13 97.13 (22) Low 44.80 44.80 72.25 73.25 (39) Calculation of 9 months 9 months Change in % 9 months earnings per share (EPS) Q3/2001 Q2/2001 Q3/2000 2001 2000 2001/2000 Net profit in CHF m (299) 1,288 1,605 2,417 5,195 (53) Net operating profit in CHF m 4) 21 1,611 1,654 3,358 5,338 (37) Diluted net profit in CHF m (299) 1,289 1,605 2,418 5,197 (53) Diluted net operating profit in CHF m 4) 22 1,611 1,655 3,359 5,340 (37) Weighted average shares outstanding 1,189,924,996 2) 1,196,053,400 2) 1,095,648,252 1,195,915,064 2) 1,093,963,768 9 Dilutive impact 3) 7,860,925 10,834,360 3,248,177 10,102,975 4,781,646 111 Weighted average shares, diluted 1,197,785,921 1,206,887,760 1,098,896,429 1,206,018,039 1,098,745,414 10 Basic earnings per share in CHF (0.25) 1.08 1.47 2.02 4.75 (57) Basic earnings per share – operating, in CHF 4) 0.02 1.35 1.51 2.81 4.88 (42) Diluted earnings per share in CHF (0.25) 1.07 1.46 2.00 4.73 (58) Diluted earnings per share – operating, in CHF 4) 0.02 1.33 1.51 2.79 4.86 (43) 1) Out of the total shares repurchased, 7,600,000 were cancelled on August 10, 2001, as previously approved by the Annual General Meeting. 2) Adjusted for weighted average shares repurchased. 3) From convertible bonds and outstanding options. 4) Excl. amortization of acquired intangible assets and goodwill, net of tax. Share performance Market capitalization Swiss Market Index Credit Suisse Group as of end of reporting period (in CHF bn) 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 10 20 0 1996 1997 1998 1999 2000 2001 91 92 93 94 95 96 97 98 99 00 Q3/01 Financial calendar Investors’ Day Friday, December 7, 2001 Fourth quarter/full-year results 2001 Tuesday, March 12, 2002 First quarter results 2002 Wednesday, May 15, 2002 2
  5. 5. 9 months 9 months Change in % Q3/2001 Q2/2001 Q3/2000 2001 2000 9 months Consolidated income statement in CHF m in CHF m in CHF m in CHF m in CHF m 2001/2000 Operating income 8,720 11,182 8,675 30,993 26,599 17 Gross operating profit 1,490 3,009 2,696 7,606 8,913 (15) Net operating profit 1) 21 1,611 1,654 3,358 5,338 (37) Net profit (299) 1,288 1,605 2,417 5,195 (53) Cash flow 1,373 2,674 2,306 6,582 7,425 (11) 9 months 9 months Change in % Q3/2001 Q2/2001 Q3/2000 2001 2000 9 months Return on equity (ROE) in % in % in % in % in% 2001/2000 Credit Suisse Group: – Reported ROE (3.0) 12.4 19.6 8.0 21.8 (63) – Operating ROE 1) 0.2 15.2 20.1 10.9 22.3 (51) Banking business: – Reported ROE (5.3) 10.0 21.2 6.0 24.4 (75) – Operating ROE 1) (1.6) 13.1 21.8 9.4 25.0 (62) Insurance business: – Reported ROE 11.0 26.0 14.8 18.2 14.3 27 – Operating ROE 1) 12.0 26.8 15.2 18.9 14.7 29 – Return on invested capital (ROIC) 9.0 29.3 25.1 19.8 25.3 (22) 30 Sept. 2001 31 Dec. 2000 Consolidated balance sheet in CHF m in CHF m Change in % Total assets 1,006,062 987,433 2 Shareholders’ equity 37,937 43,522 (13) Minority interests in shareholders’ equity 2,167 2,571 (16) 30 Sept. 2001 31 Dec. 2000 BIS data in CHF m in CHF m Change in % BIS risk-weighted assets 237,347 239,465 (1) BIS tier 1 capital 21,325 27,111 (21) – of which non-cumulative perpetual preferred securities 1,078 1,102 (2) BIS total capital 35,216 43,565 (19) 30 Sept. 2001 31 Dec. 2000 BIS capital ratios in % in % BIS tier 1 ratio – Credit Suisse 7.1 7.1 – Credit Suisse First Boston 2) 12.5 13.6 – Credit Suisse Group 3) 9.0 11.3 BIS total capital ratio – Credit Suisse Group 14.8 18.2 30 Sept. 2001 30 June 2001 31 Dec. 2000 Change vs. . Assets under management/client assets in CHF bn in CHF bn in CHF bn 31 Dec. 2000 in % Advisory assets under management 660.1 751.4 724.7 (9) Discretionary assets under management 630.3 700.7 667.3 (6) Total assets under management 1,290.4 1,452.1 1,392.0 (7) Client assets 1,928.3 2,178.9 2,065.0 (7) 9 months 9 months Change in % Q3/2001 Q2/2001 Q3/2000 2001 2000 9 months in CHF bn in CHF bn in CHF bn in CHF bn in CHF bn 2001/2000 Net new assets 7.1 16.7 5.0 48.5 36.2 34 Change vs. Number of employees 30 Sept. 2001 30 June 2001 31 Dec. 2000 31 Dec. 2000 in % Switzerland – banking 22,694 22,357 21,454 6 – insurance 6,289 6,439 6,781 (7) Outside Switzerland – banking 30,660 30,636 30,666 0 – insurance 22,315 23,353 21,637 3 Total employees Credit Suisse Group 81,958 82,785 80,538 2 1) Excl. amortization of acquired intangible assets and goodwill, net of tax. For details refer to the consolidated income statement. 2) Ratio is based on a tier 1 capital of CHF 16.8 bn (Dec. 31, 2000: CHF 17.6 bn), of which non-cumulative perpetual preferred securities is CHF 1.1 bn (for both periods). 3) Ratio is based on a tier 1 capital of CHF 21.3 bn (Dec. 31, 2000: CHF 27.1 bn), of which non-cumulative perpetual preferred securities is CHF 1.1 bn (for both periods). www.credit-suisse.com 3
  6. 6. AN OVERVIEW OF CREDIT SUISSE GROUP Credit Suisse Group posted a net operating profit of CHF 21 million and a net loss of CHF 299 million in the third quarter of 2001, as operations were impacted by negative market developments. Cost-reduction initiatives are underway in all businesses within the Group to address operating capacity given the current economic outlook. The Group’s asset gathering activities generated net new assets of CHF 7.1 billion. Credit Suisse First Boston maintained its strong market positions across its core businesses. Overview of business unit results Credit Credit Credit Credit Adjustments Suisse Suisse Suisse Suisse including Credit 9 months 2001 Financial Private Asset First Corporate Suisse in CHF m Services Banking Management Boston Center Group Operating income 7,389 4,411 1,145 18,683 (635) 30,993 11 091 Operating expenses 4,976 2,040 886 16,233 (748) 23,387) 7 984 Gross operating profit 2,413 2,371 259 2,450 113 7,606 3 107 Depreciation and write-offs on non-current assets 1) 480 42 23 658 284 1,487 483 Valuation adjustments, provisions and losses 2) 244 91 0 731 237 1,303 238 Profit before extraordinary items, taxes 1) 1,689 2,238 236 1,061 (408) 4,816) 2 386 Extraordinary income/(expenses), net 12 5 (14) (1) 26 28 (22 Taxes (468) (494) (39) (162) (56) (1,219) Net operating profit before minority interests 1) 1,233 1,749 183 898 (438) 3,625) 1 773 Amortization of acquired intangible assets ) 298 and goodwill, net of tax 51 12 67 817 (6) 941 Net profit before minority interests 1,182 1,737 116 81 (432) 2,684) 1 475 Minority interests (76) (15) 0 0 (176) (267) Net profit 1,106 1,722 116 81 (608) 2,417) 1 428 Net operating profit 1) 1,157 1,734 183 898 (614) 3,358) 1 726 Value added 3) 555 1,548 111 (407) (788) 1,019 Average allocated capital 10,893 4) 3,406 1,251 16,952 Return on average allocated capital 14.5% 4) n/a n/a 0.6% Return on average allocated capital (operating) 1) 15.1% 4) n/a n/a 7.1% Increased/(decreased) credit-related valuation adjustments 2) 16 (4) – 82 1) Excl. amortization of acquired intangible assets and goodwill. 2) Increased/decreased valuation adjustments taken at Group level resulting from the difference between the statistical and actual credit provisions. 3) Value Added is a measure of value creation in the period under review. It is derived from Credit Suisse Group’s Value Based Analysis (VBA) and complements the per- formance metrics which are currently used, but does not replace them. The measure is aimed at enhancing the management’s awareness of value creation. For this purpose, accounting figures are adjusted by adding back accounting distortions such as selected non-cash charges (e.g. amortization of goodwill), and cost of equity is charged to the business unit as well as the consolidated accounts. 4) For the Winterthur business units within Credit Suisse Financial Services, average invested capital is used for the calculation of return on invested capital (ROIC). 4
  7. 7. Assets under management/client assets 30 Sept. 2001 30 June 2001 31 Dec. 2000 Change vs. in CHF bn in CHF bn in CHF bn 1) 31 Dec. 2000 in % Credit Suisse Financial Services Assets under management 263.9 278.4 273.8 (3.6) – of which discretionary 140.4 147.5 142.6 (1.5) Client assets 278.5 293.8 289.6 (3.8) Credit Suisse Private Banking Assets under management 438.6 489.1 456.4 (3.9) – of which discretionary 113.5 122.5 108.7 4.4 Client assets 470.9 526.7 495.6 (5.0) Credit Suisse Asset Management Assets under management 434.4 503.4 487.2 (10.8) – of which discretionary 317.8 372.4 360.1 (11.7) Client assets 434.4 503.4 487.2 (10.8) Credit Suisse First Boston Assets under management 153.5 181.2 174.6 (12.1) – of which discretionary 58.6 58.3 55.9 4.8 – of which Private Equity on behalf of clients 27.1 32.4 31.9 (15.0) Client assets 744.5 855.0 792.6 (6.1) Credit Suisse Group Assets under management 1,290.4 1,452.1 1,392.0 (7.3) – of which discretionary 630.3 700.7 667.3 (5.5) Client assets 1,928.3 2,178.9 2,065.0 (6.6) 9 months 9 months Change in % Q3/2001 Q2/2001 Q3/2000 2001 2000 9 months Net new assets in CHF bn in CHF bn in CHF bn in CHF bn in CHF bn 2001/2000 Credit Suisse Financial Services 1.1 (1.1) 1.3 4.6 7.0 (34) Credit Suisse Private Banking 5.0 12.1 3.2 25.5 14.1 81 Credit Suisse Asset Management 2) (0.7) 1.2 0.5 7.3 15.1 (52) Credit Suisse First Boston 3) 1.7 4.5 0.0 11.1 0.0 – Credit Suisse Group 7.1 16.7 5.0 48.5 36.2 34 1) Certain restatements have been made to conform to the current presentation. 2) Net new discretionary assets. 3) Measured as the balance from accounts opened minus accounts closed. Credit Suisse Group reported a net provisions for unsecured credit expo- slightly less than half the figure for the operating profit of CHF 21 million for sure to SAirGroup. previous quarter, but up 42% versus the third quarter, compared to CHF Net operating profit for the first the same period of last year. For the 1.6 billion in the previous quarter and nine months amounted to CHF 3.4 bil- first nine months, net new assets CHF 1.7 billion in the third quarter of lion, down 37% over the first nine contributed CHF 48.5 billion (CHF 2000. After taking into account the months of 2000, while net profit was 36.2 billion in the corresponding period amortization of acquired intangible as- down 53% to CHF 2.4 billion. of 2000), or 3.5%, to the Group’s sets and goodwill, the Group reported Operating earnings per share for the assets under management, which a net loss of CHF 299 million, versus first nine months decreased by 42% stood at CHF 1,290.4 billion as of a net profit of CHF 1.3 billion in the to CHF 2.81 from CHF 4.88 for the September 30, 2001, 11.1% lower second quarter of 2001 and CHF corresponding period of 2000. than at June 30, 2001 (7.3% lower 1.6 billion in the third quarter of last Annualized operating return on equity than at December 31, 2000) due to year. Factors affecting the Group’s for the first nine months was 10.9% market movements. For the first nine results were an operating loss at versus 22.3% in the same period of months of 2001, Credit Suisse Private Credit Suisse First Boston, lower last year. Banking contributed CHF 25.5 billion profits from the insurance business- As expected due to seasonality, (CHF 5.0 billion in the third quarter), es, a significant writedown on the net new assets in the third quarter Credit Suisse Asset Management CHF Group’s holding in Swiss Life, and came in lower at CHF 7.1 billion, 7.3 billion (CHF –0.7 billion), Credit www.credit-suisse.com 5
  8. 8. AN OVERVIEW OF CREDIT SUISSE GROUP Suisse Financial Services CHF 4.6 profit for the third quarter was CHF billion (CHF 1.1 billion), and Credit 513 million, down 11% quarter- Operating income composition, first nine months 2001 Suisse First Boston CHF 11.1 billion on-quarter. Net operating profit in (CHF 1.7 billion) to the Group’s net relation to average assets under 15% 16% new assets. management amounted to 44.2 Credit Suisse Group’s third quarter basis points, versus 48.3 basis results include an unrealized loss of points in the previous quarter. 26% CHF 400 million on its financial invest- ment in Swiss Life, which exceeds 5% • Credit Suisse Asset Management 43% of outstanding shares, under lower-of- reported a net operating profit for cost-or-market accounting. Future in- the third quarter of CHF 34 million, creases or decreases in the Swiss Life down 58% on the previous quarter. Balance sheet business share price will impact the Group’s This was due to a reduction in Commission and service fees profit and loss account. The Group has assets, as well as to the reversal of Trading substantial unrealized gains on other a tax benefit recognized in the first Insurance financial investments. Credit Suisse half of the year. Over the first nine Group also recognized provisions of months of the year, assets under approximately CHF 200 million on its management fell 10.8% to CHF unsecured exposure to SAirGroup. 434.4 billion. Net new business gains for the same period added Operating income contribution by • At Credit Suisse Financial Services, CHF 7.3 billion to discretionary as- business unit, first nine months 2001 net operating profit for the third sets of CHF 317.8 billion, which quarter declined 49% versus the were down 14.7% quarter-on- 23% strong third quarter 2000, to stand quarter. at CHF 225 million. This decrease was largely attributable to a lower • Credit Suisse First Boston reported 59% level of investment income from the an operating loss for the third quar- 14% insurance businesses as continued ter of USD 123 million (CHF 204 4% declines in equity markets worldwide million), reflecting demanding significantly reduced the unrealized market conditions, lower transac- gains in their investment portfolios. tion volumes and the impact of CSFS Winterthur Life & Pensions in- the terrorist attacks on September CSPB creased its net operating profit by 11. Revenues for the third quarter CSAM 19% in the first nine months, while were down 17% on the second CSFB net operating profit at Winterthur quarter, while expenses dropped Insurance dropped by 16% despite 6%. This decrease was largely at- good premium growth and sound tributable to lower compensation underwriting results. In the first nine costs, which fell by 8%. As an- months, Credit Suisse Banking nounced earlier, the business unit reported a 2% fall in net operating has implemented an extensive pro- Net operating profit contribution by profit versus the corresponding peri- gram to tailor its business and cost business unit, first nine months 2001 od of 2000, reflecting lower com- structure to market conditions. The 22% 29% mission income from asset gathering initiative is aimed at reducing oper- activities. The operating cost/income ating costs by USD 1 billion by the ratio increased to 68.2%. Within end of 2002. 5% Credit Suisse Personal Finance, operations were launched on Credit Suisse Group remains cautious schedule in Germany and Spain. in its outlook for the fourth quarter. 44% As expected, continued investments Transaction volumes are expected to resulted in a net operating loss of stay at relatively low levels, and mar- CHF 90 million for the third quarter. kets will continue to be challenging. CSFS At the same time, the Group remains CSPB • Credit Suisse Private Banking optimistic about its market position in CSAM continued to perform well given the all its businesses and expects to in- CSFB market conditions and lower trans- creasingly realize the benefits of its action volumes. Net operating cost-reduction programs. 6
  9. 9. Commitment to maintaining a Swiss public sector. This solution is a sign airline of national solidarity and of collective The events related to SAirGroup, and determination under extraordinary the commitment of the public and circumstances. All of the investors private sectors to maintaining a have stated that they are willing to Swiss airline, have met with consid- hold their stake in the new airline for erable interest and prompted often at least twelve months. In view of the heated discussions both in Switzer- current uncertainty in the global air- land and abroad. Credit Suisse line industry, the investors are aware Group would like to explain its efforts that there are risks associated with and course of action concerning this their commitment. issue. Following the planned capital On October 1, 2001, UBS and increase for the new airline, Credit Credit Suisse Group announced a Suisse Group will hold a stake of package of CHF 1.35 billion to sup- approximately ten percent. Credit port efforts to build up a new Swiss Suisse Group regards its commit- airline and maintain airline-related ment as a financial investment and businesses. While the package re- will not be involved in the operational mains subject to certain conditions, management of the company. the banks were able to prevent the bankruptcy or the filing of a debt moratorium by the entire SAirGroup, to the benefit of all creditors and stakeholders. This in turn prevented the collapse of the entire company, including Crossair and the airline- related businesses, which would have had dramatic implications for the economy and for Zurich Airport, and would have resulted in tens of thousands of job losses. In addition, UBS and Credit Suisse Group agreed to voluntarily pay out the deposits of CHF 110 million held by SAirGroup employees in employee accounts with the company. With this commitment, Credit Suisse Group has made a contribu- tion towards maintaining the global position of Switzerland – its domestic market – and thus acted in keeping with the interests of its staff, clients, shareholders and other stakeholders in Switzerland and abroad. This financial package is commercially prudent. In addition, the major banks hoped that their efforts would help build confidence among further po- tential investors. On Monday, October 22, 2001, it was announced that a broad-based financing of the new airline was essentially secured, subject to certain conditions, thanks to the combined efforts of a large number of private sector companies, individuals and the www.credit-suisse.com 7
  10. 10. REVIEW OF BUSINESS UNITS Credit Suisse Financial Services Credit Suisse Financial Services re- Winterthur International and market ported a net operating profit of CHF conditions. Net new assets in the third 1.2 billion for the first nine months of quarter totaled CHF 1.1 billion. 2001, down 17% on the corresponding period of the previous year. Net operat- The continuing negative market environ- ing profit for the third quarter declined ment impacted significantly on Credit Thomas Wellauer 49% versus the strong third quarter Suisse Financial Services’ third quarter Chief Executive Officer 2000, to stand at CHF 225 million. This results. Excluding Credit Suisse decrease was largely attributable to a Personal Finance, which is investing lower level of investment income from heavily in pan-European expansion, the insurance units. Assets under net operating profit for the first nine management decreased by CHF 14.5 months stood at CHF 1.4 billion, billion to CHF 263.9 billion in the third corresponding to an operating return on quarter as a result of the divestiture of average allocated capital of 18.6%. Overview of business area Credit Suisse Financial Services Credit Credit Winterthur Credit Suisse Suisse 9 months 2001 Winterthur Life & Suisse Personal Financial in CHF m Insurance Pensions Banking Finance Services Operating income 2,537 1) 1,938 1) 2,882 32 7,389 2 462 Operating expenses 1,703 1) 1,0551) 1,874 344 4,976 1 628 Gross operating profit 834 1) 8831) 1,008 (312) 2,413) 834 Depreciation and write-offs on non-current assets 2) 103 258 91 28 480 131 Valuation adjustments, provisions and losses 3) 0 0 243 1 244 86 Profit before extraordinary items, taxes 2) 731 625 674 (341) 1,689) 617 Extraordinary income/(expenses), net 0 0 12 0 12 (1 Taxes (231) (125) (167) 55 (468) 168 Net operating profit before minority interests 2) 500 500 519 (286) 1,233) 450 Amortization of goodwill, net of tax 14 24 6 7 51 Net profit before minority interests 486 476 513 (293) 1,18214 436 Minority interests (48) (27) (1) 0 (76) Net profit 438 449 512 (293) 1,106 Net operating profit 2) 452 473 518 (286) 1,157 Average allocated capital 6,477 4) 4,390 26 10,893 4) Return on average allocated capital 19.8% 4) 15.6% n/a 14.5% 4) Return on average allocated capital (operating) 2) 20.6% 4) 15.8% n/a 15.1% 4) Increased/(decreased) credit-related valuation adjustments 3) n/a n/a 16 n/a 16 Assets under management in CHF bn 29.3 106.0 122.6 6.0 263.9 – of which discretionary 29.3 106.0 2.5 2.6 140.4 4.6 Net new assets in CHF bn n/a 2.6 1.3 0.7 4.6 145.3 Client assets in CHF bn 29.3 106.0 136.9 6.3 278.5 1) Defined as premiums earned (net), less claims and annuities incurred and expenses for processing claims as well as provisions for future policy benefits, less commissions (net), plus investment income from insurance business; expenses from the handling of both claims and investments are allocated to revenue; personnel expenses Winterthur Insurance: CHF 313 m, Winterthur Life & Pensions: CHF 94 m; operating expenses Winterthur Insurance: CHF 141 m, Winterthur Life & Pensions: CHF 85 m. 2) Excl. amortization of goodwill. 3) Increased/decreased valuation adjustments taken at Group level resulting from the difference between the statistical and actual credit provisions. 4) For Winterthur business units, average invested capital is used for calculation of return on invested capital (ROIC). 8
  11. 11. Winterthur Insurance income statement Veränderung (non-life business) 9 months 9 months Change in % seit Q3/2001 Q2/2001 Q3/2000 2001 2000 9 months Q1/2000 in CHF m in CHF m in CHF m in CHF m in CHF m 2001/2000 in % Gross premiums written 3,614 4,339 4,057 14,727 12,793 15 Reinsurance ceded (317) (445) (461) (1,363) (1,454) (6) Net premiums written 3,297 3,894 3,596 13,364 11,339 18 Change in provision for unearned premiums and in provision for future policy benefits (health) 411 (7) (174) (2,152) (1,364) 58 103 Net premiums earned 3,708 3,887 3,422 11,212 9,975 12 17 Claims and annuities incurred, net (2,817) (3,056) (2,622) (8,672) (7,691) 13 Dividends to policyholders incurred, net (78) (71) (94) (261) (282) (7) Operating expenses, net (incl. commissions paid) (1,033) (1,172) (976) (3,254) (2,936) 11 Underwriting result, net (220) (412) (270) (975) (934) 4 Net investment income 360 825 601 1,714 1,727 (1) Interest received on deposits and bank accounts 9 17 23 33 69 (52) Interest paid (25) (41) (34) (92) (102) (10) Other income/(expenses) (incl. exchange rate differences) 1) 22 (14) 7 51 75 (32) Profit before extraordinary items, taxes 1) 146 375 327 731 835 (12) Extraordinary income/(expenses), net 0 0 0 0 0 – – Taxes (51) (120) (88) (231) (232) 0 Net operating profit before minority interests 1) 95 255 239 500 603 (17) Amortization of goodwill 3 6 4 14 12 17 Net profit before minority interests 92 249 235 486 591 (18) Minority interests 7 (38) (26) (48) (62) (23) Net profit 99 211 209 438 529 (17) Net operating profit 1) 102 217 213 452 541 (16) 1) Excl. amortization of goodwill. Winterthur Insurance key information (non-life business) 9 months 9 months Q3/2001 Q2/2001 Q3/2000 2001 2000 Combined ratio (excl. dividends to policyholders) 103.8% 108.8% 105.1% 106.4% 106.5% Claims ratio 76.0% 78.6% 76.6% 77.4% 77.1% Expense ratio 27.8% 30.2% 28.5% 29.0% 29.4% 30 Sept. 2001 30 June 2001 31 Dec. 2000 Assets under management in CHF bn 29.3 32.6 32.5 Technical provisions in CHF m 26,710 30,339 26,653 Number of employees 21,135 22,516 21,796 www.credit-suisse.com 9
  12. 12. REVIEW OF BUSINESS UNITS Winterthur Life & Pensions income statement 1999 (life business) 9 months 9 months Change in % 1999 in Mio USD Q3/2001 Q2/2001 Q3/2000 2001 2000 9 months 1999 in CHF m in CHF m in CHF m in CHF m in CHF m 2001/2000 in Mio USD Gross premiums written 3,138 3,187 2,667 12,514 11,228 11 Reinsurance ceded (91) (7) (47) (149) (203) (27) Net premiums written 3,047 3,180 2,620 12,365 11,025 12 Change in provision for unearned premiums 1 3 0 (10) 0 – Net premiums earned 3,048 3,183 2,620 12,355 11,025 12 Death and other benefits incurred (2,560) (2,687) (2,151) (8,933) (7,059) 27 Change in provision for future policyholder benefits 553 (1,205) (716) (2,746) (4,780) (43) Dividends to policyholders incurred (114) (228) (592) (745) (1,753) (58) Operating expenses, net (incl. commissions paid) (463) (581) (454) (1,416) (1,210) 17 Net investment income (376) 1,919 1,572 2,336 4,722 (51) Interest received on deposits and bank accounts 25 24 22 62 66 (6) Interest on bonuses credited to policyholders (27) (40) (29) (99) (87) 14 Other interest paid (35) (62) (60) (134) (178) (25) Other income/(expenses) (incl. exchange rate differences) 1) 11 (27) (72) (55) (236) (77) Profit before extraordinary items, taxes 1) 62 296 140 625 510 23 Extraordinary income/(expenses), net 0 0 0 0 0 – Taxes 4 (66) (17) (125) (70) 79 Net operating profit before minority interests 1) 66 230 123 500 440 14 Amortization of goodwill 10 9 4 24 11 118 Net profit before minority interests 56 221 119 476 429 11 Minority interests (6) (16) (14) (27) (42) (36) Net profit 50 205 105 449 387 16 Net operating profit 1) 60 214 109 473 398 19 464 1) 3 Excl. amortization of goodwill. Winterthur Life & Pensions key information (life business) 9 months 9 months Q3/2001 Q2/2001 Q3/2000 2001 2000 Expense ratio 1) 15.2% 18.3% 17.3% 11.5% 11.0% 2) Net return on average technical provisions 6 bp 21 bp 15 bp 45 bp 46 bp Net new assets in CHF bn 3) (0.1) 0.6 0.3 2.6 1.9 30 Sept. 2001 30 June 2001 31 Dec. 2000 Assets under management in CHF bn 4) 106.0 109.4 104.7 Technical provisions in CHF m 105,402 108,926 105,522 Number of employees 7,469 7,276 6,562 1) Operating expenses/earned premiums. 2) Net profit before minority interests/average technical provisions. 3) Based on change in technical provisions for traditional business, adjusted for technical interests; net cash flow unit-linked business; and change in off-balance sheet business such as funds. 4) Based on savings-related provisions for policyholders plus off-balance sheet assets. 10
  13. 13. Winterthur Insurance markedly lower investment income as a Net operating profit of CHF 60 Winterthur Insurance’s gross premium result of demanding market conditions, million was reported for the third quar- volume increased 15%, to CHF 14.7 as well as to lower total investments ter, down 45% on the third quarter of billion, compared with the first nine following the divestiture of Winterthur 2000. Investment income declined months of 2000. This increase is International. significantly in the third quarter 2001. attributable to strong growth in the UK, The majority of the decrease related to as well as in other key markets. Gross Winterthur Life & Pensions the depreciation of unit-linked invest- premiums were down by 17% quarter- Winterthur Life & Pensions reported a ments, which did not impact on net on-quarter to CHF 3.6 billion, due to 11% rise in premiums, to CHF 12.5 operating profit owing to a correspon- the divestiture of Winterthur International billion, for the first nine months of the ding reduction in unit-linked provisions. on July 1, 2001. year; premium growth for the third Winterthur Life & Pensions The combined ratio improved mar- quarter stood at 18% compared to the launched new unit-linked products in ginally to 106.4%, versus the first nine corresponding period of 2000. The Japan and Hungary in the third quarter months of 2000. The claims ratio rose major market units contributing to this and made further progress in the by 0.3 percentage points year-on-year, growth included Switzerland, the UK implementation of a cross-border IT to 77.4%. This reflects considerably and Spain. At CHF 3.1 billion, premi- platform. higher claims for damages in North um volumes for the third quarter of America in the first half of the year. In 2001 were down slightly on the previ- Winterthur’s solvency Europe, however, an improved claims ous quarter. Winterthur exceeded the local solvency ratio was recorded over the first nine In the first nine months, net operat- requirements in all of the principle sub- months, with progress achieved in Italy, ing profit rose 19% to CHF 473 million sidiaries which are reviewed on a quar- the UK and also in Spain. Despite versus the previous year, reflecting terly basis. In addition, the reclassifica- changes in the product and channel good operating results in Switzerland, tion of reported balance sheet positions mix, which resulted in higher acquisition Germany, the UK and the Netherlands. to EU-consistent standards indicates a expenses, the expense ratio improved At 11.5%, the expense ratio for the 140% coverage of consolidated EU modestly. first nine months was marginally above solvency requirements at the end of In the third quarter of 2001 the that of the corresponding period of the September. The recovery of equity valu- combined ratio improved by five per- previous year. Net new assets amount- ations since September 30, 2001, has centage points over the previous quar- ed to CHF 2.6 billion for the first nine further improved its solvency coverage. ter, to stand at 103.8%. In terms of months of the year, compared with costs, the first-time consolidation of the CHF 1.9 billion for the first nine months Pearl business in the UK added a one- of 2000. time positive effect, in addition to the aforementioned steady improvement achieved as a result of ongoing restructuring measures. In terms of claims, a large decrease in the level of claims incurred in Spain and North America in the third quarter had a posi- tive impact. This was accompanied by a fall in costs per claim in the UK, as well as in Italy and Spain. Withdrawal from the large corporate business as the result of the divestiture of Winterthur International also had a positive impact on both the claims and the combined ratios in the third quarter. Despite the progress made with regard to the combined ratio, third quarter net operating profit was CHF 102 million, down 53% quarter- on-quarter. This decrease is due to www.credit-suisse.com 11
  14. 14. REVIEW OF BUSINESS UNITS Credit Suisse Banking income statement 9 months 9 months Change in % Q3/2001 Q2/2001 Q3/2000 2001 2000 9 months in CHF m in CHF m in CHF m in CHF m in CHF m 2001/2000 Net interest income 609 618 602 1,841 1,768 4 Net commission and service fee income 240 263 275 784 874 (10) Net trading income 74 79 80 237 257 (8) Other ordinary income (6) 22 27 20 37 (46) Operating income 917 982 984 2,882 2,936 (2) Personnel expenses 421 417 389 1,241 1,123 11 Other operating expenses 192 229 228 633 660 (4) Operating expenses 613 646 617 1,874 1,783 5 Gross operating profit 304 336 367 1,008 1,153 (13) Depreciation and write-offs on non-current assets 1) 36 22 13 91 39 133 Valuation adjustments, provisions and losses 2) 78 79 165 243 448 (46) Profit before extraordinary items, taxes 1) 190 235 189 674 666 1 Extraordinary income/(expenses), net 3 7 0 12 22 (45) Taxes 3) (40) (63) (42) (167) (161) 4 Net operating profit before minority interests 1) 153 179 147 519 527 (2) Amortization of goodwill, net of tax 1 2 3 6 9 (33) Net profit before minority interests 152 177 144 513 518 (1) Minority interests 0 (1) 0 (1) (1) 0 Net profit 152 176 144 512 517 (1) Net operating profit 1) 153 178 147 518 526 (2) Increased/(decreased) credit-related valuation adjustments 21 28 (26) 16 (92) – Tax impact on amortization of goodwill 1 1 0 2 0 – 1) Excl. amortization of goodwill. 2) Increased/decreased valuation adjustments taken at Group level resulting from the difference between the statistical and actual credit provisions. 3) Excl. tax impact on amortization of goodwill. Credit Suisse Banking by cost-reduction measures. For the risk structure of its credit portfolio. In Credit Suisse Banking posted a net first nine months, the operating its leasing business, it reported a 10% operating profit of CHF 518 million for cost/income ratio was 68.2%. increase in volumes since the start the first nine months, down 2% on the Net new assets for the third quar- of the year. corresponding period of 2000. Net ter amounted to CHF 1.2 billion. In the The online portal www.credit- operating profit for the third quarter strategically important funds business, suisse.ch/investment was stood at CHF 153 million, down 14% net new asset growth as of September launched in July 2001. As part of on the previous quarter but up 4% on 30, 2001, was over 10% on an annu- Credit Suisse’s multi-channel strategy, last year’s third quarter. Operating re- alized basis. For the first nine months, this service provides customers with turn on average allocated capital was the net interest margin remained stable valuable support in the analysis and 14.1% for the third quarter. The oper- at 237 basis points and net interest in- selection of products and services ating cost/income ratio rose to 70.8% come was up 4% over the first nine relating to investments and retirement in the third quarter as a result of con- months of 2000. In addition, Credit planning. tinuing weak fee income partially offset Suisse Banking further improved the 12
  15. 15. Credit Suisse Banking balance sheet information 30 Sept. 2001 31 Dec. 2000 in CHF m in CHF m Total assets 105,725 100,653 Due from customers 31,152 28,940 Mortgages 65,903 64,616 Due to customers in savings and investment deposits 32,038 33,322 Due to customers, other 32,413 31,287 Credit Suisse Banking key information 9 months 9 months Q3/2001 Q2/2001 Q3/2000 2001 2000 Cost/income ratio 71.0% 68.3% 64.3% 68.5% 62.4% Cost/income ratio (operating) 1) 70.8% 68.0% 64.0% 68.2% 62.1% Return on average allocated capital 14.0% 16.5% 13.4% 15.6% 15.6% Return on average allocated capital (operating) 1) 14.1% 16.7% 13.7% 15.8% 15.9% Average allocated capital in CHF m 4,353 4,289 4,292 4,390 4,416 Pre-tax margin 20.8% 24.3% 18.9% 23.5% 23.1% Pre-tax margin (operating) 1) 21.0% 24.6% 19.2% 23.8% 23.4% Personnel expenses/operating income 45.9% 42.5% 39.5% 43.1% 38.2% Net interest margin 231 bp 238 bp 241 bp 237 bp 238 bp Loan growth (0.6%) 2.3% 1.2% 3.8% 2.7% Net new assets in CHF bn 1.2 (2.0) 0.6 1.3 3.4 30 Sept. 2001 30 June 2001 31 Dec. 2000 Deposit/loan ratio 66.4% 68.7% 69.1% Assets under management in CHF bn 122.6 130.3 130.8 Number of branches 228 232 235 Number of employees 12,061 11,842 11,438 1) Excl. amortization of goodwill. www.credit-suisse.com 13
  16. 16. REVIEW OF BUSINESS UNITS Credit Suisse Personal Finance income statement 9 months 9 months Change in % Q3/2001 Q2/2001 Q3/2000 2001 2000 9 months in CHF m in CHF m in CHF m in CHF m in CHF m 2001/2000 Net interest income 0 4 2 7 7 0 (27 Net commission and service fee income 7 9 13 27 39 (31) Net trading income 1 1 3 4 6 (33) Other ordinary income (5) (1) 1 (6) 1 – – Operating income 3 13 19 32 53 (40) Personnel expenses 60 43 26 152 66 130 50 Other operating expenses 44 78 26 192 80 140 34 Operating expenses 104 121 52 344 146 136 46 Gross operating profit (101) (108) (33) (312) (93) 235 24 1) Depreciation and write-offs on non-current assets 17 5 4 28 6 367 74 Valuation adjustments, provisions and losses 0 1 0 1 0 – (32 Profit before extraordinary items, taxes 1) (118) (114) (37) (341) (99) 244 33 Extraordinary income/(expenses), net 1 0 0 0 0 – 29 Taxes 27 9 7 55 22 150 34 Net operating profit before minority interests 1) (90) (105) (30) (286) (77) 271 Amortization of goodwill 4 2 1 7 4 75 285 Net profit before minority interests (94) (107) (31) (293) (81) 262 25 Minority interests 0 0 0 0 0 –) 200 Net profit (94) (107) (31) (293) (81) 262 25 Net operating profit 1) (90) (105) (30) (286) (77) 271 34 58 1) Excl. amortization of goodwill. 59 Credit Suisse Personal Finance anticipated, in a net operating loss of factors. Operating income for the first The third quarter saw the launch of CHF 90 million in the third quarter. nine months of 2001 stood at CHF Credit Suisse Personal Finance’s offer- The performance of Credit Suisse 20 million, the same level as for the ings in Germany and Spain. The Personal Finance in Italy reflected corresponding period of the previous acquisition of the Spanish broker and the continuing weak market environ- year. asset manager General de Valores y ment. Assets under management Credit Suisse is fully committed Cambios was completed in mid- stood at CHF 4.5 billion at the end of to the Personal Finance concept for August and its integration is underway. September, compared with CHF 5.1 affluent wealth management and At end-September, Credit Suisse billion at end-June. Net new assets believes it offers a long-term opportu- Personal Finance had a total of 568 amounted to CHF 0.1 billion for the nity to leverage its brand, products financial advisors and its number of third quarter, compared with CHF and capabilities. Credit Suisse Personal investment centers has risen to 19, 0.2 billion in the previous quarter. Finance has decided not to pursue its including those in Berlin, Munich and Revenues were 48% lower than in launch in the UK for the time being in Madrid. Credit Suisse Personal the previous quarter, at CHF 4 million, view of the more challenging economic Finance’s network comprises 76 sales owing to a marked decrease in com- environment. offices. Investments in further expan- mission and service fee income due sion and lower revenues resulted, as to market conditions and seasonal 14
  17. 17. Credit Suisse Personal Finance key information 9 months 9 months Q3/2001 Q2/2001 Q3/2000 2001 2000 Personal Finance Growth in assets under management 3.9% 4.3% 5.7% 9.8% 38.0% – of which net new assets 1.7% 3.5% 7.9% 12.6% 41.6% – of which market movement and structural effects (15.4%) 0.8% (2.2%) (21.4%) (3.6%) – of which acquisition 17.6% – – 18.6% – youtrade Number of transactions (in ’000s) 61 81 106 250 340 Credit Suisse Personal Finance Average allocated capital in CHF m 20 29 n/a 26 n/a 30 Sept. 2001 30 June 2001 31 Dec. 2000 Personal Finance Assets under management in CHF bn 5.3 5.1 4.8 Number of clients 29,240 20,097 17,898 Number of advisors 568 407 331 youtrade Assets under management in CHF bn 0.7 1.0 0.9 Number of clients 27,520 28,656 25,228 Credit Suisse Personal Finance Number of employees 1,013 1,011 764 www.credit-suisse.com 15
  18. 18. REVIEW OF BUSINESS UNITS Credit Suisse Private Banking Credit Suisse Private Banking posted previous quarter and down 3.9% a net operating profit of CHF 513 mil- versus end-2000. This decline was lion in the third quarter of 2001, in a primarily attributable to the marked weak market context. This was a de- deterioration in equity markets and the crease of 11% on the previous quarter weakness of the US dollar. Net new and represented a decrease of 15% assets amounted to CHF 5.0 billion for Oswald J. Grübel on a year-to-date basis versus the first the third quarter, representing 1.0% of Chief Executive Officer nine months of 2000. Assets under total assets under management. Credit management declined 10.3% in the Suisse Private Banking reported CHF third quarter, while net new assets of 25.5 billion in net new assets for the CHF 5.0 billion were recorded for the first nine months of the year, repre- same period. senting 5.6% of total assets under management. In the third quarter, At the end of the third quarter, Credit operating income fell 14% compared Suisse Private Banking reported with the third quarter of 2000 and assets under management of CHF 11% versus the previous quarter on 438.6 billion, down 10.3% on the the back of significantly lower transac- Credit Suisse Private Banking income statement 9 months 9 months Change in % Q3/2001 Q2/2001 Q3/2000 2001 2000 9 months in CHF m in CHF m in CHF m in CHF m in CHF m 2001/2000 Net interest income 261 298 306 873 918 (5) Net commission and service fee income 919 1,058 1,050 3,001 3,178 (6) Net trading income 123 152 175 436 596 (27) Other ordinary income 27 (6) 22 101 67 51 Operating income 1,330 1,502 1,553 4,411 4,759 (7) Personnel expenses 430 438 437 1,304 1,311 (1) Other operating expenses 231 268 215 736 602 22 Operating expenses 661 706 652 2,040 1,913 7 Gross operating profit 669 796 901 2,371 2,846 (17) Depreciation and write-offs on non-current assets 1) 16 15 17 42 37 14 Valuation adjustments, provisions and losses 2) 6 43 40 91 144 (37) Profit before extraordinary items, taxes 1) 647 738 844 2,238 2,665 (16) Extraordinary income/(expenses), net 2 2 2 5 (7) – Taxes (132) (160) (194) (494) (605) (18) Net operating profit before minority interests 1) 517 580 652 1,749 2,053 (15) Amortization of goodwill 4 5 2 12 6 100 Net profit before minority interests 513 575 650 1,737 2,047 (15) Minority interests (4) (4) (6) (15) (21) (29) Net profit 509 571 644 1,722 2,026 (15) Net operating profit 1) 513 576 646 1,734 2,032 (15) Increased/(decreased) credit-related valuation adjustments 2) (5) 0 (10) (4) (32) (88) 12 1) Excl. amortization of goodwill. 2) Increased/decreased valuation adjustments taken at Group level resulting from the difference between the statistical and actual credit provisions. 16

×