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INTERIM REPORT FIRST HALF 2000
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Page 1: credit-suisse Credit Suisse Group Interim Report 2000

INTERIM REPORTFIRST HALF 2000

Page 2: credit-suisse Credit Suisse Group Interim Report 2000

Share performance

1996 1997 1998 1999 2000

Credit Suisse Group

Swiss Market Index

100

300

250

200

150

400350

ChangeShare data 30 June 2000 31 Dec. 1999 in %

Number of shares issued 273,911,468 272,206,488 1

Shares ranking for dividend 273,911,468 272,206,488 1

Average 273,278,067 271,310,760 1

Market capitalisation (CHF m) 88,884 86,153 3

Bookvalue per share (CHF) 123.27 119.84 3

1st half 2000 1st half 1999

Earnings per share (CHF) 13.21 9.85 34

Earnings per share fully diluted (CHF) 13.16 9.79 34

Share price (CHF) (at 25 August 2000: 381.0)

at 30 June/31 Dec. 324.5 316.5 3

half-year/year high 339.5 316.5 7

half-year/year low 265.5 212.0 25

Financial calendar

Publication of 2000 annual results Tuesday, 13 March 2001

Annual General Meeting 2001 Friday, 1 June 2001

4

Page 3: credit-suisse Credit Suisse Group Interim Report 2000

FINANCIAL HIGHLIGHTS 1ST HALF 2000

Consolidated income statement

Revenue

Gross operating profit

Net profit

Cash flow

Return on equity (ROE)

Credit Suisse Group

Banking business

Insurance business

Insurance business return on invested capital (ROIC)

Consolidated balance sheet

Total assets

Total shareholders’ equity

– of which minority interests

Total risk-weighted assets (BIS)

BIS tier 1 capital

– of which non-cumulative preferred stock

BIS total capital

Assets under management

Total assets under management

– of which advisory

– of which discretionary

BIS ratios

BIS tier 1 ratio

Credit Suisse

Credit Suisse First Boston

Credit Suisse Group

BIS total capital ratio Credit Suisse Group

Staff numbers

Total staff

– of which in Switzerland banking business

insurance business

– of which outside Switzerland banking business

insurance business

Changein %

29

31

35

25

Changein %

9

7

7

9

Changein %

13

6

50

1

0

458

1

Changein %

4

3

5

Changein %

4

13

–1

1

Changein %

4

0

2

5

7

1st half 1999 in CHF m

13,804

4,671

2,665

4,024

1st half 1999 in %

19.4

24.2

10.6

17.2

31 Dec. 1999in CHF m

722,746

34,368

1,747

213,298

28,261

200

40,843

31 Dec. 1999in CHF bn

1,182

629

553

31 Dec. 1999in %

6.8

9.9

13.2

19.1

31 Dec. 1999

63,963

20,885

6,569

17,249

19,260

1st half 2000in CHF m

217,848

6,133

3,610

5,049

1st half 2000in %

21.2

25.9

11.3

18.7

30 June 2000in CHF m

817,193

36,388

2,622

215,078

28,275

1,116

41,412

30 June 2000in CHF bn

1,227

649

578

30 June 2000in %

7.1

11.2

13.1

19.3

30 June 2000

66,379

20,953

6,717

18,080

20,629

5

Page 4: credit-suisse Credit Suisse Group Interim Report 2000

Credit Suisse Group announced a net profit of CHF 3.6 bn after taxes andminority interests for the first half of 2000, thereby exceeding the very goodresult of the first six months of 1999 by 35%. The new Credit Suisse FinancialServices business area posted a net profit of CHF 948 m (up 36%); net profit at Credit Suisse Private Banking rose 61% to CHF 1.4 bn; Credit Suisse FirstBoston posted a net profit of CHF 1.2 bn (up 22%); Credit Suisse Asset Management reported cash earnings of CHF 161 m (up 39%). The Group’sreturn on equity advanced from 19% to 21%.

CONSOLIDATED HALF-YEAR RESULTS

6

The first-half 2000 results were characterised by strong performance and progressagainst strategic goals by all business units. Credit Suisse First Boston further expand-ed market share in its global business. Credit Suisse Private Banking showed goodgrowth and continued its leadership in e-commerce applications for private banking.Another milestone was the formal establishment of the Credit Suisse Financial Servicesbusiness area in April 2000. Credit Suisse Group also continued its strong investmentand focus in e-commerce and e-enabled business models.

A supportive equity capital market, particularly in the first quarter, resulted instrong growth in commissions and trading throughout the Group, particularly at Credit Suisse First Boston and Credit Suisse Private Banking, while capital marketslowed to a more normal level in the second quarter.

The Group’s assets under management have risen to CHF 1,227 bn since theend of 1999 – up CHF 45 bn or 3.8%. Net inflow of new funds was CHF 28 bn or2.4%, to which Credit Suisse Private Banking contributed CHF 12 bn (first-half 1999:CHF 8.9 bn), Credit Suisse Financial Services CHF 1.8 bn (first-half 1999: CHF 4.8 bn) and Credit Suisse Asset Management CHF 14.6 bn (first-half 1999: CHF 19.0 bn).

The Group’s revenue advanced 29% to CHF 17.8 bn against the first half of 1999. Commission and service fee income rose by 51% to CHF 7.5 bn and tradingincome by 49% to CHF 5.4 bn. Interest income fell by CHF 486 m or 17% to CHF2.3 bn, primarily owing to narrower interest margins at Credit Suisse First Boston.Income from insurance business grew by 22% to CHF 2.7 bn.

Operating expenses climbed 28% to CHF11.7 bn, with personnel expenses advancing33% to CHF 8.9 bn and other operatingexpenses rising 16% to CHF 2.8 bn. Theincrease in operating expenses can be attrib-uted primarily to performance-related staffbonuses, which rose to CHF 4.3 bn (up 51%),reflecting higher levels of revenue.

Gross operating profit rose by 31% toCHF 6.1 bn. Valuation adjustments, provisionsand losses declined by 31% to CHF 606 m.Extraordinary expenses increased from CHF 14 m to CHF 134 m. Of the increase, CHF103 m was due to the allocation of provisionsto the “Reserves for general banking risks”,based on the Group’s statistically driven creditloss model. After deducting taxes of CHF 1.1 bn(up 68%) and minority interests of CHF 101 m,the Group produced a net profit of CHF 3.6 bn,up 35% on the first six months of 1999.

year)

year)

year)

Equity)

year)

year)

Changein %

3.1

3.8

4.4

7.0

3.8

31 Dec. 1999in CHF bn

276.8

4.8

135.4

476.7

8.9

95.2

424.6

19.0

324.2

5.7

0.7

1,181.8

33.4

553.4

30 June 2000in CHF bn

285.5

1.8

141.4

494.9

12.0

104.7

443.2

14.6

334.2

6.1

0.2

1,226.7

28.0

577.7

OVERVIEW OF ASSETS UNDER MANAGEMENT

Credit Suisse Financial Services

– of which net new assets (1st half

– of which discretionary

Credit Suisse Private Banking

– of which net new assets (1st half

– of which discretionary

Credit Suisse Asset Management

– of which net new assets (1st half

– of which discretionary

Credit Suisse First Boston (Private

– of which net new assets (1st half

Credit Suisse Group (consolidated)

– of which net new assets (1st half

– of which discretionary

Page 5: credit-suisse Credit Suisse Group Interim Report 2000

Net profit per share came to CHF 13.21 (up 34%), and book value per share has increased by 3% since the start of 1999 to CHF 123.27. As at 30 June 2000,Credit Suisse Group employed 66,379 staff (up 4%).

In March 2000, Credit Suisse Group announced the establishment of CreditSuisse Financial Services, and on 1 July 2000 the business area was formally estab-lished. It comprises the Credit Suisse Banking (private and corporate customers inSwitzerland), Credit Suisse Personal Finance (European on-shore business with affluent private clients), Credit Suisse e-Business (Internet-based services), WinterthurInsurance (non-life insurance), and Winterthur Life & Pensions (life insurance andpension fund solutions) business units and a shared Technology and Services unit. The Credit Suisse Private Banking, Credit Suisse First Boston and Credit Suisse AssetManagement business units remained unchanged.

Business unit resultsFor the first six months of 2000, the business units forming Credit Suisse FinancialServices as of 1 April 2000 posted a total net profit of CHF 948 m, a 36% increasecompared to the same period in 1999. In order to provide comparability, the followingreports on the results of the businesses forming the Credit Suisse Financial Servicesbusiness area are presented as in the management structure which was in place until30 June 2000.

Winterthur produced a 24% growth in net profit to CHF 625 m. This result wasachieved despite a challenging operating environment and continued moderate realisa-

15,863

39,115

8,544

STAFF NUMBERS BY BUSINESS UNIT

CSFSCSPBCSFB

CSAM

2,067

CreditSuisseGroup

17,848

8,917

2,798

11,715

6,133

642

606

4,885

44

134

1,084

3,711

101

3,610

Adjustmentsincluding

CorporateCenter

–248

254

– 419

–165

– 83

151

– 82

–152

9

111

–198

–56

33

– 89

CreditSuisseAsset

Management

733

308

225

533

200

32

0

168

0

0

39

129

0

129

1,066

n/a

1,092

CreditSuisse

FinancialServices

4,533

1,727

1,152

2,879

1,654

104

283

1,267

30

9

287

1,001

53

948

16,723

12.0%

16,198

– 66

CreditSuisse

FirstBoston

9,624

5,754

1,453

7,207

2,417

331

301

1,785

0

0

545

1,240

0

1,240

10,748

23.1%

10,786

–15

CreditSuissePrivate

Banking

3,206

874

387

1,261

1,945

24

104

1,817

5

14

411

1,397

15

1,382

3,069

n/a

3,152

–22

OVERVIEW OF BUSINESSUNIT RESULTS

1st half 2000in CHF m

REVENUE

Personnel expenses

Other operating expenses

TOTAL OPERATING EXPENSES

GROSS OPERATING PROFIT

Depreciation and write-offs on non-current assets

Valuation adjustments, provisions and losses1)

PROFIT BEFORE EXTRAORDINARY ITEMS/TAXES

Extraordinary income

Extraordinary expenses

Taxes

NET PROFIT BEFORE MINORITY INTERESTS

– of which minority interests

NET PROFIT (after minority interests)

Average allocated equity capital

Return on average equity capital

Equity capital allocation as of 1 July 20001) net of allocation (-)/release (+) of reserves for general banking risks

1)

7

Page 6: credit-suisse Credit Suisse Group Interim Report 2000

30%

13%

42%

15%

REVENUE COMPOSITION

Balance sheet businessCommission and service feesTrading

Insurance

53%

25%

18%

REVENUE CONTRIBUTION BY BUSINESS UNIT

CSFSCSPBCSFB

CSAM

4%

33%26%

37%

PROFIT CONTRIBUTION BY BUSINESS UNIT

CSFSCSPBCSFB

CSAM

4%

8

tion of capital gains (total investment return was a sustainable 6.2%). Non-life businessachieved rate increases in many markets and good growth partially offset by higherclaims. In life business, an aggressive pricing environment in Switzerland – particularlyin single-premium sales – was partially offset by good growth in annual life premiumsand in other European markets. The annualised return on invested capital increased to18.7%.

Credit Suisse generated a net profit of CHF 366 m, thereby exceeding theresult for the first half of 1999 by CHF 165 m or 82%. While revenue climbed 16% toCHF 2.0 bn, driven particularly by high commissions from securities transaction vol-umes, operating expenses advanced by only 6%. The cost/income ratio (excl. goodwillamortisations) further improved, falling 4.9 percentage points to 61.5%.

The Personal Financial Services Europe project has been operating success-fully in Italy since May 1999 and will be launched in other European markets over thenext twelve months. Overall, the project reported a start-up pre-tax loss of CHF 56 min the first half of 2000, resulting from capital expenditure establishing the business,including corresponding marketing activities. Credit Suisse (Italy) significantly expandedits client base from 12,400 to 16,100 and assets under management reached CHF 5 bn as at the end of June 2000, an increase of 25% since year-end 1999. TheCredit Suisse (Italy) finance portal was launched in April of this year. Within the nextfew weeks, Credit Suisse Group will launch a pan-European e-commerce platform,offering clients across Europe comprehensive financial information, investment fundsfrom leading fund management companies and online brokerage on the world’s mainstock exchanges. Youtrade, Switzerland’s leading online broker with more than 20,000clients and a market share of around 35% as at 30 June, once again exceeded expec-tations and broke even 14 months after its inception.

Credit Suisse Private Banking increased net profit by 61% compared with thesame period in 1999 to CHF 1.4 bn. Revenue climbed by 42% to CHF 3.2 bn, attrib-utable primarily to a CHF 618 m increase in commission income to CHF 2.1 bn. Oper-ating expenses advanced 17% to CHF 1.3 bn, of which personnel expenses rose 23%to CHF 874 m, the result primarily of a 53% increase in performance-related pay.Assets under management climbed by 3.8% to CHF 495 bn in the first six months of2000, of which CHF 12 bn (first-half 1999: CHF 8.9 bn) or 2.5% can be attributed tonet inflow of new funds and 1.3% to market-related and structural growth.

Credit Suisse First Boston further increased its key market shares and pro-duced a net profit of CHF 1.2 bn (up 22%) or USD 761 bn (up 9%). Revenue rose by30% to CHF 9.6 bn (or by 15% to USD 5.9 bn). The 38% increase in operatingexpenses to CHF 7.2 bn (or a 23% rise to USD 4.4 bn) reflects investment in organicgrowth in Equity business and Investment Banking as well as higher bonus provisionsresulting from increased earnings. The 34% (in USD: 42%) drop in earnings fromFixed Income business to CHF 2.3 bn (USD 1.4 bn) was more than compensated forby the 96% (in USD: 74%) increase in earnings from Equity business to CHF 4.8 bn(USD 2.9 bn). Earnings from Investment Banking expanded 59% (in USD: 41%) toCHF 2.4 bn (USD 1.5 bn). Geographically, 48% of earnings were generated in NorthAmerica, 35% in Europe and 17% in other regions, reflecting Credit Suisse FirstBoston’s strong global presence. Return on equity further improved from 21% to 23%.

Credit Suisse Asset Management posted a net profit of CHF 129 m, a 16%increase against the first half of 1999. On a cash earnings basis (excluding goodwillamortisation and other non-cash items), income rose by 38% to CHF 161 m. Compari-son with the first six months of 1999 is impacted by the acquisition of Warburg PincusAsset Management in July 1999. Revenue expanded by 59% to CHF 733 m. Higherpersonnel costs and investment in IT produced operating expenses of CHF 533 m – arise of 67%. Discretionary assets under management were up 3.1% to CHF 334 bn;

Page 7: credit-suisse Credit Suisse Group Interim Report 2000

this is the combined effect of an increase of CHF 14.6 bn (first half of 1999: CHF19.0 bn), or 4.5%, resulting from net new business, and a reduction of CHF 4.5 bn, or1.4%, resulting from market movements including foreign exchange. Total assets undermanagement rose 4.4% to CHF 443 bn.

OutlookCredit Suisse Group anticipates a good overall result for the year as a whole. It cannotbe assumed, however, that the favourable market conditions of the first six months willcontinue in the second half of the year; investment in new business activities and tech-nologies could also influence the annual result.

CREDIT SUISSE GROUP ORGANISATION AND EXECUTIVE BOARD AS OF 1 JULY 2000

Chairman and Chief Executive Officer:Lukas Mühlemann

Chief Risk Officer andVice-Chairman of the Executive Board:Hans-Ulrich Doerig

Chief Financial Officer:Philip Ryan

Chief Executive Officer: Allen D. Wheat

Vice-Chairman of the Executive Board: Richard E. Thornburgh

Chief Executive Officer: Oswald J. Grübel

Chief Executive Officer: Phillip M. Colebatch

Chief Executive Officer: Thomas Wellauer

Chief Financial Officer: Erwin W. HeriTechnology and Services: Ulrich Körner

Chief Executive Officer: Manfred Broska

Chief Executive Officer: Rolf Dörig

Chief Executive Officer: Olivier Steimer

Chief Executive Officer: Thomas Wellauer

Chief Executive Officer: Markus Dennler

9

Page 8: credit-suisse Credit Suisse Group Interim Report 2000

COMPREHENSIVE FINANCIAL SERVICES

For the first half year 2000, Credit Suisse Financial Services posted a total netprofit of CHF 948 m, a 36% increase compared to the same period in 1999.Total assets under management grew by CHF 8.7 bn or 3%, to CHF 285.5 bnand the annualised return on invested capital increased to 16.9%.

In April Credit Suisse Group announced the formation of the business area Credit Suisse FinancialServices by combining Credit Suisse, Winterthur and its Personal Financial Services Europeinitiative in order to more closely integrate banking, insurance and e-commerce. The new businessarea consequently adapted its structure to reflect these objectives and on 1 July formed fivebusiness units (Winterthur Insurance, Winterthur Life & Pensions, Credit Suisse Banking, Credit Suisse Personal Finance and Credit Suisse e-Business) plus a Technology & Services unit.Credit Suisse Financial Services serves close to 17 million clients with around 40,000 employeesand approximately 17,000 tied agents.

Credit Suisse Financial Services turned in a strong performance for the first half year. All business units contributed to this result: Winterthur, comprising Winterthur Insurance andWinterthur Life & Pensions in the new structure, produced a strong 24% growth in net profits toCHF 625 m in a challenging market environment and Credit Suisse (Credit Suisse Banking in thenew structure) increased net profit by 82% to CHF 366 m benefiting from a combination ofstrong revenue growth and continued expense control. The Personal Financial Services Europeinitiative, comprising Credit Suisse Personal Finance and part of Credit Suisse e-Business in thenew structure, is continuing its expansion; ongoing investments in technology and marketing ledto a reported loss of CHF 43 m.

CreditSuisse

FinancialServices

4,533

1,727

1,152

2,879

1,654

104

283

1,267

30

9

287

1,001

53

948

16,723

12.0%

16,198

285.5

1.8

141.4

– 66

PersonalFinancialServices Europe

35

22

64

86

–51

5

0

–56

0

0

–13

– 43

0

– 43

60

n/a

81

6.0

0.8

2.6

Credit Suisse

1,952

745

429

1,174

778

32

283

463

30

9

117

367

1

366

4,476

16.4%

4,349

142.8

– 0.2

2.1

– 66

WinterthurLife

961

289

225

514

447

28

0

419

WinterthurNon-life

1,585

671

434

1,105

480

39

0

441

2)

2)

2)

2)

2)

2)

OVERVIEW OF BUSINESS AREACREDIT SUISSE FINANCIAL SERVICES

1st half 2000in CHF m

REVENUE

Personnel expenses

Other operating expenses

TOTAL OPERATING EXPENSES

GROSS OPERATING PROFIT

Depreciation and write-offs on non-current assets

Valuation adjustments, provisions and losses1)

PROFIT BEFORE EXTRAORDINARY ITEMS/TAXES

Extraordinary income

Extraordinary expenses

Taxes

NET PROFIT BEFORE MINORITY INTERESTS

– of which minority interests

NET PROFIT (after minority interests)

Average allocated equity capital

Return on average equity capital

Equity capital allocation as of 1 July 2000

TOTAL ASSETS UNDER MANAGEMENT IN CHF BN

– of which net new assets

– of which discretionary1) net of allocation to (–)/release (+) of reserves for general banking risks2) defined as premiums earned (net), less claims incurred and expenses for processing claims as well as actuarial provisions, less commissions (net), plus investmentincome from insurance business; expenses from the handling of both claims and investments are allocated to revenue; personnel expenses non-life: CHF 168 m, life:CHF 66 m, other operating expenses non-life: CHF 118 m, life: CHF 53 m.

0

0

183

677

52

625

12,187

11.1%

11,768

136.7

1.2

136.7

10

Page 9: credit-suisse Credit Suisse Group Interim Report 2000

Winterthur successfully managed the difficult conditions in most markets and evencontinued major investments in operational improvements and new technologies. Whileevidence of more rational pricing emerged in the UK and Spanish motor markets, poorconditions elsewhere were met with an ongoing determination to achieve adequate pricing and further a long-term reduction in costs.

Winterthur’s non-life businesses reported higher loss frequencies in Switzerlandand Germany, and material increases in the average costs of claims in Italy, France and the US. Winterthur’s Spanish operations registered a major turnaround compared tolast year with a 6-point improvement in the half-year combined ratio. Conversely, theresults from the motor business in Italy worsened as unprecedented governmentintervention has frozen the rates for third-party liability, removing insurers’ ability to adjustrates in response to steep increases in claims costs. Webinsurance, Winterthur’sproprietary European e-commerce channel, was expanded to Italy and Belgium in 2000,enabling Winterthur to sell motor, home and accident insurance directly via the Internet in eight European countries and in the United States.

In the UK, a number of important part-nerships delivered a strong new customer flowto Churchill, resulting in extraordinary 55%growth compared to the first half of 1999. Theacquisition of NIG Skandia was completed on 1 April and added CHF 350 m of premiums tothe mid-year accounts.

Winterthur’s life business continued toimplement value-creating pricing as competi-tors aggressively pursued growth strategies. As a result, single premium sales in Switzer-land, in particular, and mortgage endowmentsin the UK were reduced. By contrast,Winterthur’s annual life premiums grew 8.6%over the first half of 1999. New productlaunches in Switzerland and Italy are expectedto boost overall growth in the second half ofthe year.

Winterthur continued to reinforce itsstrong position in the life and pension marketsof Eastern Europe and Asia. The acquisition of Nicos Life (Japan) was finalised on 1 April 2000, marking Winterthur’s expansioninto the world’s largest life insurance market.With its announcement of the acquisition of

1st hin

1

2

NON-LIFE BUSINESS

Gross premiums

Net premiums

Premiums earned, net

Claims incurred, net

Dividends to policyholders incurred, net

Operating expenses, net(including commissions paid)

UNDERWRITING RESULT, NET

Net investment income

Interest on deposits and bank accounts

Other interest paid

Other income and expenses(including exchange rate differences)

PROFIT (before extraordinary items,tax, minority interests)

Assets under management as at 30.6./31.12.

Technical provisions as at 30.6./31.12.

Combined ratio (excl. dividend to policyholders)

Claims ratio

Expense ratio

Insurance reserve ratio

In the first half of 2000, Winterthur, comprising Winterthur Insurance andWinterthur Life & Pensions in the new structure, produced a robust 24%growth in net profit to CHF 625 m. This result was achieved with strongearnings development in both life and non-life businesses, continued moder-ate realisations of capital gains resulting in a total investment return of a sus-tainable 6.2%. Net premiums grew 4% overall, comprising a 13% increase innon-life business, aided by rate increases in a number of challenging non-lifemarkets and a 2% decrease in life business due to aggressive pricing compe-tition in Switzerland. Annualised return on invested capital increased to 18.7%.

INSURANCE FOR PRIVATE AND CORPORATE CUSTOMERS WORLDWIDE

1st half 1999in CHF m

7,677

7,020

5,841

– 4,458

–136

–1,805

–558

910

47

–34

– 9

356

31,131

23,041

107.2%

76.3%

30.9%

214.8%

Changein %

15

13

11

14

36

8

35

25

9

118

24

4

14

alf 2000 CHF m

8,816

7,900

6,459

–5,082

–185

–1,947

–755

1,142

51

–74

77

441

32,360

26,183

08.8%

78.7%

30.1%

05.8%

11

Page 10: credit-suisse Credit Suisse Group Interim Report 2000

Colonial Life UK, the British subsidiary of the Australian Colonial, Winterthur also reinforced itsposition in the UK life market.

Major investment continued in Winterthur’s Euro Life e-commerce platform. The first unit-linked product family was successfully launched in Germany in July.

Results from non-life business: Gross premiums in non-life business grew at a strong 15%,benefiting from significant price increases in Spain, the UK, US and smaller European markets. The combined ratio (sum of the claims and expense ratio) increased slightly from 107.2% to108.8%, as a further improvement in the expense ratio, from 30.9% to 30.1% did not offset a 2.4 percentage point deterioration in the loss ratio to 78.7%. Net investment income increased by25% to CHF 1.1 bn. Overall, the result (before tax and minority interests) totalled CHF 441 m, a 24% increase over the comparable period last year.

Results from life business: Life premiums registered a 2% decline for the half-year. Theexpense ratio increased slightly to 10.3% owing to continued investments in the European Life e-platform and investments in new business. Claims incurred were up 31%, largely the result ofpayouts from big single premium contracts. These also reduced the corresponding actuarial provi-sions so that total outflow was 6% below last year’s sum. Net investment income was up 11% to CHF 3.1 bn. Overall, Winterthur’s life operations posted a strong 27% gain in net profits toCHF 419 m (before extraordinary items, tax and minority interests) in the first half of 2000.

Winterthur Group results first half 2000: Total gross premiums rose by 6% to CHF 17.2 bn as at 30 June 2000. Net investment income increased to CHF 4.3 bn for the half year ended 30 June2000; the average annualised return on assets was a sustainable 6.2%. Pre-tax operating profitincreased 25% to CHF 860 m. Modest increases in taxes and minority interests resulted in a slightlylower 24% rise in net profits to CHF 625 m.

1st half 1999in CHF m

8,534

8,490

7,683

–3,665

– 4,948

– 857

– 697

2,821

72

– 63

– 93

78

331

100,879

84,519

9.1%

112.1%

Changein %

–2

–2

–2

31

–33

36

11

11

13

5

27

–226

27

3

6

1st half 2000in CHF m

8,379

8,293

7,533

– 4,788

–3,309

–1,162

–776

3,122

81

– 66

–118

– 98

419

104,298

89,446

10.3%

107.5%

LIFE BUSINESS

Gross premiums

Net premiums

Premiums earned, net

Claims incurred, net

Change in actuarial provision, net

Allocation to participation, net

Operating expenses, net(including commissions paid)

Net investment income

Interest on deposits and bank accounts

Interest on bonuses credited to policyholders

Other interest paid

Other income and expenses (including exchange rate differences)

PROFIT (before extraordinary items,tax, minority interests)

Assets under management as at 30.6./31.12.

Technical provisions as at 30.6./31.12.

Expense ratio

Claims incurred and change in actuarial provision in relation to premiums earned

12

Page 11: credit-suisse Credit Suisse Group Interim Report 2000

CORPORATE AND PRIVATE CUSTOMERS IN SWITZERLAND

The first six months of 2000 were very successful for Credit Suisse (CreditSuisse Banking in the new structure). Net profit rose by 82% year-on-year toCHF 366 m. Return on equity climbed from 9.2% to 16.4%. Revenue advanced16%, while operating expenses rose only 6%. The cost/income ratio improvedfurther from 66.4% to 61.5%.

Gross operating profit grew 34%, with all important income streams, particularly com-missions from securities transactions, posting significant increases. Mortgage claimsrose by 2% or CHF 1.2 bn in the first half of the year, while in the investment sectorthe bank improved its market share in fund sales. Assets under management climbedto CHF 143 bn, up 1.4% or CHF 2 bn. Fund holdings advanced by over 9% to CHF 35.2 bn.

Investment savings continued to prove popular among private customers, with afurther increase in average invested assets. Securities investments in the pension provi-sion segment advanced sharply in the first six months to CHF 2.3 bn. Credit Suisselaunched the Flex Investment Account, an attractive account for specific savings tar-gets. It has an interest rate which is geared to the money market and reset every threemonths. Credit card business also continued to perform well. 340,000 cards from theEurocard portfolio were integrated successfully and the bank also succeeded in acquir-ing about 60,000 new card customers.

In corporate banking, trade financing continued its good performance aided bythe improved economic environment in Switzerland. Foreign exchange trading alsoposted a further rise. At the end of May 2000the bank set up Credit Suisse Fleet Manage-ment AG in partnership with Deutsche LeasingAG. The new company offers medium-to-largenational and international firms comprehensivevehicle fleet management services with a 24-hour-a-day mobility guarantee. The first con-tracts have already been signed.

In Direct Banking, the number ofInternet Banking customers rose by 30% inthe first half-year to around 220,000.Yourhome, Credit Suisse’s homes and homeownership Internet portal, recorded 300,000visitor sessions. Over 100 firms are interestedin working with yourhome. E-business isexpanding continuously and new businessmodels are being developed, as evidenced bythe launch of the independent joint financeportal with bluewin and TA-Media.

1st INCOME STATEMENT

Net interest income

Net commission and service fee income

Net trading income

Other ordinary income

REVENUE

Personnel expenses

Other operating expenses

TOTAL OPERATING EXPENSES

GROSS OPERATING PROFIT

Deprecation and write-offs on non-current asse

– of which amortisation of goodwill

Valuation adjustments, provisions and losses*

PROFIT BEFORE EXTRAORDINARY

1st half 1999in CHF m

1,105

458

107

15

1,685

680

424

1,104

581

21

6

303

257

19

5

69

202

1

201

–12

Changein %

6

31

65

–33

16

10

1

6

34

52

0

–7

80

58

80

70

82

0

82

half 2000in CHF m

1,166

599

177

10

1,952

745

429

1,174

778

32

6

283

463

30

9

117

367

1

366

– 66

ts

ITEMS AND TAXES

Extraordinary income

Extraordinary expenses

Taxes

NET PROFIT

– of which minority interests

NET PROFIT (after minority interests)

* net of allocation to (-) / release of (+) reserves for general banking risks

13

Page 12: credit-suisse Credit Suisse Group Interim Report 2000

Results first half 2000: At CHF 100.8 bn, Credit Suisse’s total assets haveincreased by 1% since 31 December 1999. Customer lending expanded by 1% to CHF 91.9 bn. In the same period, customer assets contracted by 5% to CHF 61.6 bn. Investment funds became increasingly popular among private customers.In the corporate customer segment, fiduciary deposits posted a pleasing rise.

The 16% increase in revenue to CHF 1,952 m was generated mainly by non-interest business. Commission and service fee income, primarily from securities trading,rose by 31%. Trading income – income from trading in foreign exchange, foreign bank-notes and precious metals on behalf of customers – jumped 65%. Interest businessposted a 6% improvement. Operating expenses grew at a modest 6%, resulting in a34% increase in gross operating profit to CHF 778 m. This marked increase inefficiency lead to a further improvement in the cost/income ratio (excl. amortisation ofgoodwill) of 4.9 percentage points to 61.5%.

Valuation adjustments, provisions and losses came to CHF 283 m. This includescredit risk costs of CHF 261 m for statistically expected losses and CHF 22 m forother provisions. Actual valuation adjustments in credit business fell by 25% against thefirst six months of 1999 and were CHF 66 m below the statistically expected figure.The risk structure of the credit portfolio improved still further.

Net profit increased by 82% to CHF 366 m and the ROE improved to 16.4%.

RATIOS/KEY PERFORMANCE INDICATORS

1st half 2000 1999

Average allocated equity capital CHF m 4,476 4,409

Allocated equity capitalCHF m (1 July/1 January) 4,349 4,611

BIS tier 1 ratio*30.6./31.12. 7.1% 6.8%

Cost/income ratio 61.8% 66.8%– excl. amortisation of goodwill 61.5% 66.4%

Return on average equity capital 16.4% 9.2%

Number of employees at 30.6./31.12. 11,472 11,404

Pre-tax margin 24.8% 16.1%

Staff expenses/operating expenses 63.5% 61.6%

Staff expenses/total income 38.2% 40.4%

Number of branches at 30.6./31.12. 239 239

Net interest margin 2.36% 2.37%

Loan growth 1.5% 3.8%

Deposit/loan ratio 30.6./31.12. 67.0% 71.4%

Assets under managementCHF bn at 30.6./31.12. 143 141

* legal entity Credit Suisse

14

30 June 2000in CHF m

1,103

551

893

1,314

27,687

64,242

24

1,316

32

2,165

355

1,152

100,834

3,076

20,047

34,072

27,521

3,587

5,494

719

1,207

340

4,771

100,834

31 Dec. 1999in CHF m

1,374

489

654

1,080

27,816

63,024

21

1,711

31

2,237

292

1,174

99,903

1,938

16,689

36,330

28,530

3,883

5,563

504

1,501

135

4,830

99,903

Changein %

–20

13

37

22

0

2

14

–23

3

–3

22

–2

1

59

20

– 6

– 4

– 8

–1

43

–20

152

–1

1

BALANCE SHEET

Cash and other liquid assets

Money market claims

Due from banks

Due from other business units

Due from customers

Mortgages

Securities and precious metals trading portfolio

Financial investments

Participations

Tangible fixed assets

Accrued income and prepaid expenses

Other assets

TOTAL ASSETS

Due to banks

Due to other business units

Due to customers in savings andinvestment accounts

Due to customers, other

Medium-term notes

Bonds and mortgage-backed bonds

Accrued expenses and deferred income

Other liabilities

Valuation adjustments and provisions

Capital

TOTAL LIABILITIES

Page 13: credit-suisse Credit Suisse Group Interim Report 2000

Personal Financial Services Europe project (PFS): With the “Personal Financial Ser-vices Europe” initiative which will be carried forward in the new structure of Credit SuissePersonal Finance and Credit Suisse e-business, Credit Suisse Group aims to strengthenits presence in selected European markets and to extend its leading position in e-commerce in Switzerland to the rest of Europe. It offers a complete range of productsfor wealth creation and protection, a targeted combination of personal advice and Internet-based facilities and a comprehensive service to private clients who have upwards of CHF 80,000 (EUR 50,000) to invest. In the first half of 2000, the initiative comprised thepilot market, Italy (Credit Suisse (Italy)), the pan-European e-commerce platform projectand the online broker, youtrade.

Credit Suisse (Italy) continued to chart a successful course. Assets under manage-ment increased by more than 25% to CHF 5 bn in the first half of 2000, while the num-ber of clients rose from 12,400 to 16,100. This sound foundation will be strengthenedwith the opening of new Investment Centres in major Italian cities and the vigorous exten-sion of the range of products on offer. Expansion will be driven forward in other selectedmarkets – Germany, Spain and the UK – by means of organic growth and small-scaleacquisitions.

Progress on establishing the pan-European e-commerce platform also continues.The Credit Suisse Italy finance portal – offering a broad range of financial and productinformation – was launched in April of this year. In the next few weeks, Credit Suisse willlaunch a Luxembourg-based online service which will offer investment funds from leadingfund management companies in addition to comprehensive financial information and online brokerage on the world’s main stock exchanges. The service will be expandedcontinuously – the next phase being localised services in specific markets.

With more than 20,000 clients as at 30 June, youtrade once again exceededexpectations and broke even after just 14 months. Youtrade is Switzerland’s leading onlinebroker, with a market share of around 35%.

Overall, the Personal Financial Services Europe project (Credit Suisse (Italy),youtrade and the pan-European e-commerce platform), reported a start-up loss (pre tax)of CHF 56 m in the first half of 2000 as a result of capital expenditure on establishing thebusiness.

PERSONAL FINANCIAL SERVICES EUROPE

30 June 2000

0.9

20,049

31 Dec. 1999

0.5

9,603

31 Dec. 1999

4.0

12,395

230

30 June 2000

5.1

16,117

297

30 June 2000

6.0

36,366

297

31 Dec. 1999

4.5

21,998

230

KEY PERFORMANCE INDICATORS

CS Italy (total) youtrade PFS

Assets under management (in CHF bn)

Number of clients

Personal bankers

15

Page 14: credit-suisse Credit Suisse Group Interim Report 2000

During the first six months of 2000, Credit Suisse Private Banking producedcontinued strong results which exceeded the very good performance of thesecond half of 1999. Net profit increased by 61% to CHF 1,382 m compared tothe prior year period. Assets under management grew by 3.8% to CHF 495 bnover the end of 1999, with net new business accounting for CHF 12 bn. Credit Suisse Private Banking continued its leadership as a technological andfinancial innovator by providing new services through its Internet portal

SERVICES FOR PRIVATE INVESTORS IN SWITZERLAND AND ABROAD

16

www.cspb.com.

Credit Suisse Private Banking remained an Internet first mover by adding further innov-ative services to its financial portal at www.cspb.com. Launched in March 2000,Estate Lab offers users an overview of exclusive properties in several European coun-tries and comprehensive advice on virtually all aspects of buying and selling real estate.A number of new fund providers are now offering their products via Fund Lab, theinteractive fund data base, bringing its total number of funds to over 800. InsuranceLab, which now largely covers the Swiss life insurance market, positions Credit SuissePrivate Banking as a premier provider of Swiss life insurance products. The new toolFinancial Check-Up Online permits users to assess online their personal financialsituation quickly and simply and gives specific advice on how to optimise their finances.The range of interactive services available under Investors’ Circle was broadened toinclude Portfolio Tracker, which enables clients to continuously follow the performance

of their chosen securities and portfolios.During the first half of 2000, Credit

Suisse Private Banking also introduced aseries of innovative products and servicesfor its clients. In response to increaseddemand for alternative investment vehicles,Absolute Europe AG and Absolute Technolo-gy AG were launched to complement thealready very successful Absolute InvestmentAG. All three companies invest in broadlydiversified, return-oriented strategies with lowcorrelation to the stock and bond marketsand the ability to generate high returns irre-spective of prevailing market trends. DreamTeam, a new product package aimed specifi-cally at leading sportsmen and women whichwas introduced in March, provides a broadrange of asset management and insuranceservices specially tailored to meet the particularneeds of this profession. In a new develop-ment, Credit Suisse Private Banking now alsooffers comprehensive support to entrepreneurswho are considering selling their business orraising growth capital for their company.

Credit Suisse Private Banking continuedto expand internationally, opening a branch in Valencia, Spain and a representative office in Jakarta, Indonesia. At the end ofJune 2000, Credit Suisse Private Bankinghad 51 branches in Switzerland and 38 officesabroad.

income

n-current assets

ill

and losses*

ARY

ts)

reserves

ther ordinary fee income

Changein %

46

41

46

45

42

23

5

17

66

14

0

167

64

– 44

100

69

61

67

61

1st half 1999**in CHF m

420

1,510

289

31

2,250

713

368

1,081

1,169

21

4

39

1,109

9

7

243

868

9

859

– 9

1st half 2000in CHF m

612

2,128

421

45

3,206

874

387

1,261

1,945

24

4

104

1,817

5

14

411

1,397

15

1,382

–22

INCOME STATEMENT

Net interest income

Net commission and service fee

Net trading income

Other ordinary income

REVENUE

Personnel expenses

Other operating expenses

TOTAL OPERATING EXPENSES

GROSS OPERATING PROFIT

Deprecation and write-offs on no

– of which amortisation of goodw

Valuation adjustments, provisions

PROFIT BEFORE EXTRAORDINITEMS AND TAXES

Extraordinary income

Extraordinary expenses

Taxes

NET PROFIT

– of which minority interests

NET PROFIT (after minority interes

* net of allocation to (-) / release of (+)for general banking risks

** reclassification of trust income from oincome to net commission and servicebeginning from January 1, 2000

Page 15: credit-suisse Credit Suisse Group Interim Report 2000

During the first half, the volume of securities transactions surged to extraordinary levelswhich was effectively handled by the systems and operations teams. Credit SuissePrivate Banking and Credit Suisse Group will be embarking on a project to reengineerthe securities operating platform to position the securities business for the volumes andbusiness developments of the future.

Results first half 2000: In a challenging market environment, particularly in thesecond quarter, assets under management increased by CHF 18 bn or 3.8% comparedto year end 1999. Net new business accounted for CHF 12 bn, or 2.5%. Total assets under management amounted to CHF 495 bn at the end of June 2000.Total revenue rose by 42% to CHF 3,206 m, reflecting strong growth in income fromcommission and service fees (up 41%), trading (up 46%) and net interest income (up46%).

The 17% increase in operating expenses to CHF 1,261 m is due mainly to higherpersonnel expenses, especially higher performance-related remuneration. The number of staff increased by 173 to 8,544. Investment in new technologies con-tinue to grow, and accounts for the majority of the 5% rise in other operating expensesto CHF 387 m. Tax expenditure increased by 69% to CHF 411 m. There was amarked improvement in the cost/income ratio from 49% for the half-year 1999 to 40%for the six months ended on 30 June 2000, which was the result of the very rapidrevenue growth in the first quarter of 2000. Net profit grew by 61% to CHF 1,382 m.Net profit in relation to average assets under management rose from 41 to 57 basispoints.

BALANCE SHEET INFORMATION

30 June 2000 31 Dec.1999in CHF m in CHF m

Total assets 102,531 99,651

Due from customers 35,982 31,902– of which secured by mortgages 8,109 7,667– of which secured

by other collateral 23,928 22,731

RATIOS/KEY PERFORMANCE INDICATORS

1st half 2000 1999

Average allocated equity capital CHF m 3,069 2,689

Allocated equity capitalCHF m (1 July/1 January) 3,152 2,875

Cost/income ratio 40.1% 49.0%– excl. amortisation of goodwill 40.0% 48.8%

Number of employees 30.6./31.12. 8,544 8,371

Pre-tax margin 56.4% 49.4%

Fee income/total income 66.4% 67.1%

Fee income/operating expenses 168.8% 139.7%

Assets under management CHF bn 30.6./31.12. 495 477

Growth in assets under management 3.8% 9.2%– of which net new business* 2.5% 2.2%– of which performance and

structural effects 1.3% 7.0%

After-tax profit/average AuM 57 bp 41 bp

* excluding dividends and interests

17

Page 16: credit-suisse Credit Suisse Group Interim Report 2000

The first half of 2000, despite mixed markets, produced record six-monthresults for Credit Suisse First Boston. Revenues, compared to the first halfof 1999, rose 15% to USD 5.9 bn (CHF 9.6 bn); net profit was a record USD761 m (CHF 1,240 m) while the ROE was 23% versus the previous year’s 21%.The consistent investment in building the equity business and investmentbanking is continuing to show returns as evidenced by improved marketshare, significant growth in revenue and improved margins in equity prod-ucts.

GLOBAL INVESTMENT BANKING

18

Credit Suisse First Boston’s performance is measured not only against financial targetsbut also in terms of market share across products and regions. Credit Suisse FirstBoston continues to rank amongst the top 4 or 5 investment banks in the world asdetermined by market share achievements. Significant progress has been made in thepast three years in strengthening its competitive position in: equity new issuance,merger & acquisition advisory, debt new issuance, equity research rankings in thirdparty polls and secondary equity sales penetration.

At June 30, 2000, Credit Suisse First Boston had market share rankings in equitynew issuance of #5, #5 in M&A advisory, and #4 ranking in debt new issuance. CreditSuisse First Boston’s rankings in IPO’s was #4 and particularly in tech IPO’s was #1.The percentage market share in M&A was 23% and 8% in equity new issuance. The equity research rankings as measured by Institutional Investor in the U.S. was #5

Changein %

– 42

74

41

–76

15

28

8

23

–3

34

23

– 46

6

0

0

1

9

9

1st half 2000in CHF m

2,336

4,804

2,389

19

76

9,624

5,754

1,453

7,207

2,417

331

44

301

1,785

0

0

545

1,240

0

1,240

–15

1st half 1999in CHF m

3,564

2,450

1,506

74

–174

7,420

4,010

1,200

5,210

2,210

219

32

497

1,494

0

0

478

1,016

2

1,014

58

Changein %

–34

96

59

–74

30

43

21

38

9

51

38

–39

19

0

0

14

22

22

1st half 2000in USD m

1,433

2,947

1,466

12

46

5,904

3,530

891

4,421

1,483

203

27

185

1,095

0

0

334

761

0

761

– 9

1st half 1999in USD m

2,458

1,690

1,038

51

–120

5,117

2,766

827

3,593

1,524

151

22

343

1,030

0

0

330

700

1

699

40

INCOME STATEMENT

Fixed Income

Equity

Investment Banking

Private Equity

Other

REVENUE

Personnel expenses

Other operating expenses

TOTAL OPERATING EXPENSES

GROSS OPERATING PROFIT

Depreciation and write-offs on non-current assets

– of which amortisation of goodwill

Valuation adjustments, provisions and losses*

PROFIT BEFORE EXTRAORDINARY ITEMS AND TAXES

Extraordinary income

Extraordinary expenses

Taxes

NET PROFIT

– of which minority interests

NET PROFIT (after minority interests)

* net of allocation to (-)/release of (+) reserves for general banking risks

The business unit income statement differs from the Group's legal accounts in presenting brokerage, execution and clearing expenses as part of operating expenses incommon with US competitors, rather than netted against revenues.

Page 17: credit-suisse Credit Suisse Group Interim Report 2000

compared to the previous ranking of #6; #4 in Europe versus the previous year of #6;and in non-Japan Asia #6 versus a #15 ranking one year ago.

During the past six months, Credit Suisse First Boston lead managed the demu-tualization and IPO of MetLife with USD 5.2 bn of proceeds; advised on five of the tenlargest M&A deals globally including France Telecom on its USD 46 bn merger withOrange; lead managed the largest industrial investment grade debt offering in the USfor International Paper with USD 3 bn of proceeds. Credit Suisse First Boston alsoacquired Schroder’s Japanese equity business, which included approximately 100people facilitating Credit Suisse First Boston’s re-entry into the Japanese cash equitiesbusiness. Credit Suisse First Boston had exited the Japanese cash market in 1994.

Results first half 2000: Revenues reflect a good balance across all areas of CreditSuisse First Boston’s global business with revenue split 48% to North America, 35% toEurope and 17% to the rest of the world. The outstanding performance of the equitydivision, with revenues over 70% greater than the first half of 1999, has more thancompensated for a decline in fixed income revenues of 42% versus the prior year peri-od. Fixed income experienced difficult market conditions and substantially lower propri-etary trading results. The latter as a result of the strategic decision taken by CreditSuisse First Boston to reduce risk post 1998 events.

Competitive pay practices in the industry combined with the continued investmentin the customer businesses in equities and investment banking have resulted in the firsthalf compensation costs rising 28% versus the previous comparable period. Headcountin investment banking is up 17% while equity headcount is up 28% versus June 1999;total firm headcount is up 10% to 15,863. Non-compensation related expenses rose8% versus 1999 reflecting growth in the businesses and IT expense. The firm con-tinues to focus on the optimization of capital. Credit Suisse First Boston in the first halfof the year utilized 12% less regulatory capital in its businesses versus a year ago,while maintaining a very healthy tier 1 ratio of 11.2%. The improvement in the tier 1ratio is due to the implementation of historical simulation for measuring market risk. The individual divisions performed as follows (percentages reflect dollar figures):

Investment Banking (IBD): Revenues increased 41%, despite, as was the case forthe prior three years, a continued decrease in net interest income and fees from thelending business. Equity capital markets revenue in 2000 is up 105% from the first halfof 1999. Meanwhile M&A revenue increased 44%. All other product areas within IBDwere relatively flat to slightly down versus their first half 1999 levels.Expenses before incentive compensation accruals were up 28%reflective of the headcount increase. IBD net profit continues to beunsatisfactory due to the high level of investment spending.

Equity: Revenues increased 74%. The customer “cash” businesses,particularly in the US and Western Europe, have performed extremelywell doubling the prior year’s record revenues. The derivatives andconvertibles area has also generated outstanding results, chiefly inthe index arbitrage and convertible securities product areas. A mix-ture of generally increasing market shares in both primary and sec-ondary areas underlie the greater 2000 results in all geographicareas. The technology sector has also been a key contributor to thesuccess of the Equity division, and for IBD.

Fixed Income (FID): Revenues have decreased 42% versus thecomparable prior year period. ROE was 10% excluding the results of

RATIOS/KEY PERF

1st half

Average allocated equityin CHF m

Allocated equity capital in CHF m (1 July/1 Jan

BIS tier 1 ratio* 30.6./3

Cost/income ratio – excl. amortisation of g

Return on average equi

Number of employees p30.6./31.12.

Pre-tax margin

Staff expenses/total ex

Staff expenses/total inc

* legal entity Credit Suisse F

ORMANCE INDICATORS

2000 1999

capital 10,748 9,910

uary) 10,786 10,494

1.12. 11.2% 9.9%

78.3% 73.2%oodwill 77.9% 72.7%

ty capital 23.1% 20.5%

er 15,863 15,185

18.5% 20.1%

penses 79.8% 77.0%

ome 59.8% 54.1%

irst Boston

19

Page 18: credit-suisse Credit Suisse Group Interim Report 2000

the discontinued Real Estate Investment group. Importantly, Credit Suisse FirstBoston’s global debt capital markets underwriting position remained at #4 and marketshare has continued to increase. The drop in revenue, vis-à-vis the prior year, is areflection of the difficult fixed income market which is hampered by rising interest rates,widening credit spreads and declining high yield new issuance activity. The “customerflow business” in the three major businesses (Rates, Credit Products, EmergingMarkets) remained solid, though slightly below levels of the same period in 1999.Results from proprietary areas declined materially; this reflected the risk reductionstrategy pursued since the end of 1998 as well as poor results in option books and incomparison to the very good results of the first half of 1999.

Private Equity (PE): During the first half, the division made twelve investments. PE signed contracts of sale on two transactions, which will close in the third quarter.Funds under management approximate USD 3.7 bn.

20

Page 19: credit-suisse Credit Suisse Group Interim Report 2000

30 June 2000in CHF m

2,159

26,501

215,748

170,203

2,322

64,465

25,601

8,203

141,584

6,611

936

2,693

1,094

6,200

41,696

37,749

520,212

318,328

28,479

285,763

82,512

9,317

64

92,423

35,506

33,553

11,215

43,606

37,126

2,379

13,413

520,212

318,328

Changein %

86

16

28

27

– 6

19

8

12

15

4

– 9

7

–3

6

–3

– 4

18

16

–5

28

23

–2

– 42

33

13

–3

8

– 9

– 9

1

8

18

16

31 Dec. 1999in CHF m

1,161

22,893

169,030

134,406

2,478

54,132

23,783

7,352

122,837

6,354

1,023

2,515

1,128

5,823

43,055

39,413

439,781

275,224

30,118

222,802

67,150

9,536

110

69,550

31,357

34,478

10,410

47,956

40,644

2,366

12,455

439,781

275,224

BALANCE SHEET

Cash

Money market paper

Due from banks

– of which securities lending andreverse repurchase agreements

Due from other business units

Due from customers

– of which securities lending andreverse repurchase agreements

Mortgages

Securities and precious metalstrading portfolio

Financial investments

Participations

Tangible fixed assets

Goodwill

Accrued income and prepaid expenses

Other assets

– of which replacement value of derivatives

TOTAL ASSETS

TOTAL ASSETS (in USD m)

Money market liabilities

Due to banks

– of which securities borrowing and repurchase agreements

Due to other business units

Due to customers, in savingsand investment deposits

Due to customers, other

– of which securities borrowing andrepurchase agreements

Bonds and mortgage-backed bonds

Accrued expenses and deferred income

Other liabilities

– of which replacement value of derivatives

Valuation adjustments and provisions

Capital

TOTAL LIABILITIES

TOTAL LIABILITIES (in USD m)

21

Page 20: credit-suisse Credit Suisse Group Interim Report 2000

During the first half of 2000, Credit Suisse Asset Management generatedrevenues of CHF 733 m compared to CHF 462 m for the same period last year. Discretionary assets under management increased by 3% to CHF 334 bn and total assets under management, including advisory,amounted to CHF 443 bn (up 4%) at 30 June 2000. Cash earnings were CHF 161 m versus CHF 116 m for the first six months of 1999.

SERVICES FOR INSTITUTIONAL, PRIVATE CLIENT AND MUTUAL FUND INVESTORS WORLDWIDE

22

Discretionary assets under management totalled CHF 334 bn, an increase of CHF 10.0 bn or 3.1% since the beginning of the year; the combined effect of an increase of CHF 14.6 bn, or 4.5%, due to net new business and reduction ofCHF 4.5 bn, or 1.4%, due to market movements including foreign exchange. Thestrongest net new business growth was in equity assets, which was also the assetsegment most affected by market movements. Particularly strong net new businessgrowth was achieved in Switzerland and in Australia. Mutual funds have grown by10.7% since the start of the year to CHF 134 bn reflecting strong growth primarily in the Luxembourg, Swiss and Australian domiciled mutual funds.

Results first half 2000: Total revenue growth of 59% was largely the result of higherassets under management for the first half of 2000 compared to the first half of 1999. This growth in assets reflected both organic growth as well as the impact of theacquisition of Warburg Pincus Asset Management in July 1999. Normalising for theeffect of this acquisition, revenues increased by 30%.

1st half 1999in CHF m

328

118

16

462

184

135

319

143

5

1

0

138

0

5

22

111

0

111

116

Changein %

44

114

–50

59

67

67

67

40

22

77

16

16

39

1st half 2000in CHF m

472

253

8

733

308

225

533

200

32

22

0

168

0

0

39

129

0

129

161

INCOME STATEMENT

Management and advisory fees

Net mutual fund fees

Other revenues

TOTAL REVENUE

Personnel expenses

Other operating expenses

TOTAL OPERATING EXPENSES

GROSS OPERATING PROFIT

Depreciation and write-offs on non-current assets

– of which amortisation of goodwill

Valuation adjustments, provisions and losses

PROFIT BEFORE EXTRAORDINARYITEMS AND TAXES

Extraordinary income

Extraordinary expenses

Taxes

NET PROFIT

– of which minority interests

NET PROFIT (after minority interests)

CASH EARNINGS

Page 21: credit-suisse Credit Suisse Group Interim Report 2000

Total Operating expenses were CHF 533 m versus CHF 319 m, up 67%, reflect-ing increased expenses due to the Warburg Pincus Asset Management acquisition as well as Credit Suisse Asset Management’s continued investment in the business. Total Operating Expenses increased by CHF 98 m, or 31%, due to the inclusion ofWarburg Pincus Asset Management and associated relocation and merger expenditure.Credit Suisse Asset Management’s investment spending has been in part to support itsrapidly growing mutual funds business as well as its E-commerce initiatives. CreditSuisse Asset Management has begun to offer institutional clients in the USA a secureinternet site for direct transmission of information. During 2000 Credit Suisse AssetManagement enhanced its Luxembourg family of funds by adding an institutional shareclass and a registered share form thereby broadening the base of potential investors inthe funds.

Net profit increased by 16% to CHF 129 m. Cash earnings (net profit including depreciation and write-offs on non-current assets, and goodwill amortisation),increased by 39% to CHF 161 m compared to the same period of 1999.

RATIOS/KEY PERFORMANCE INDICATORS

1st half 2000 1999

Average allocated equity capital CHF m 1,066 241

Allocated equity capital CHF m (1 July/1 January) 1,092 1,054

Cost/income ratio 77.1% 70.1%– excl. amortisation of goodwill 74.1% 69.9%

After-tax profit/AUM 5.9 bp 6.9 bp

Cash earnings/average AUM 7.4 bp 7.3 bp

Number of employees 30.6./31.12. 2,067 2,000

Pre-tax margin 22.9% 28.8%

Staff expenses/total expenses 57.8% 57.7%

Staff expenses/total income 42.0% 39.8%

Total assets under management CHF bn 30.6./31.12. 443 425

Total discretionary fundsCHF bn 30.6/31.12 334 324

Total mutual fundsdistributed CHF bn 30.6./31.12. 134 121

Total advisory assetsCHF bn 30.6./31.12. 109 100

Growth in assets under management 4.4% 13.1%

Growth in discretionary assets under management 3.1% 17.9%

– of which net new business 4.5% 8.6%– of which performance –1.4% 9.3%

23

Page 22: credit-suisse Credit Suisse Group Interim Report 2000

Changein %

48

–33

50

49

–17

9

57

14

88

51

49

3

3

4

14

22

–18

36

166

– 63

22

–10

41

29

33

16

28

31

36

108

–31

– 8

47

–30

68

36

74

35

Changein CHF m

3,728

–730

120

3,604

– 486

25

2,709

27

209

2,552

1,778

467

461

42

537

501

– 43

24

48

–24

4

– 40

246

–301

4,044

2,194

388

2,582

1,462

170

43

–272

–102

1,564

–19

120

437

988

43

945

1st half 1999in CHF m

7,767

2,216

240

7,406

2,817

286

4,741

194

238

4,983

3,618

13,525

14,065

1,019

3,819

2,260

238

67

29

38

18

398

595

126

13,804

6,723

2,410

9,133

4,671

472

40

878

1,350

3,321

63

14

647

2,723

58

2,665

1st half 2000in CHF m

11,495

1,486

360

11,010

2,331

311

7,450

221

447

7,535

5,396

13,992

14,526

1,061

4,356

2,761

195

91

77

14

22

358

841

–175

17,848

8,917

2,798

11,715

6,133

642

83

606

1,248

4,885

44

134

1,084

3,711

101

3,610

Interest and discount income

Interest and dividend income from trading portfolios

Interest and dividend income from financial investments

Interest expenses

NET INTEREST INCOME FROM BANKING BUSINESS

Commission income from lending activities

Commissions from securities and investment transactions

Commissions from other services

Commission expenses

NET COMMISSION AND SERVICE FEE INCOME

NET TRADING INCOME

Premiums earned, net

Claims incurred and actuarial provisions

Commission expenses, net

Investment income from insurance business

NET INCOME FROM INSURANCE BUSINESS

Income from the sale of financial investments

Income from investment activities

– of which from participations valued according to the equity method

– of which from other non-consolidated participations

Real estate income

Sundry ordinary income

Sundry ordinary expenses

OTHER ORDINARY INCOME/EXPENSES, NET

NET OPERATING INCOME

Personnel expenses

Other operating expenses

TOTAL OPERATING EXPENSES

GROSS OPERATING PROFIT

Depreciation and write-offs of non-current assets

– of which amortisation of goodwill

Valuation adjustments, provisions and losses from banking business

DEPRECIATION, VALUATION ADJUSTMENTS, LOSSES

GROUP PROFIT BEFORE EXTRAORDINARY ITEMS AND TAXES

Extraordinary income

Extraordinary expenses

Taxes

GROUP PROFIT

Minority interests

NET PROFIT (AFTER MINORITY INTERESTS)

CONSOLIDATED INCOME STATEMENT

24

Page 23: credit-suisse Credit Suisse Group Interim Report 2000

30 June 2000in CHF m

4,027

30,708

210,292

8,747

118,850

89,212

147,506

21,161

121,334

1,741

6,671

3,505

9,899

43,540

817,193

716

1,013

31 Dec. 1999in CHF m

3,141

28,994

164,901

6,457

104,931

86,553

126,746

18,828

117,222

1,823

6,828

2,990

9,023

44,309

722,746

1,792

928

Changein CHF m

886

1,714

45,391

2,290

13,919

2,659

20,760

2,333

4,112

– 82

–157

515

876

–769

94,447

–1,076

85

Changein %

28

6

28

35

13

3

16

12

4

– 4

–2

17

10

–2

13

– 60

9

ASSETS

Cash and other liquid assets

Money market claims

Due from banks

Receivables from the insurance business

Due from customers

Mortgages

Securities and precious metals trading portfolios

Financial investments from the banking business

Investments from the insurance business

Non-consolidated participations

Tangible fixed assets

Intangible assets

Accrued income and prepaid expenses

Other assets

TOTAL ASSETS

Total subordinated assets

Total due from non-consolidated participations

30 June 2000in CHF m

22,656

272,125

6,293

41,458

198,500

3,587

47,538

15,101

49,814

8,104

115,629

2,243

5,478

11,919

6,144

4,372

2,622

3,610

36,388

817,193

18,194

795

31 Dec. 1999in CHF m

22,120

198,324

6,268

44,007

182,249

3,885

47,905

14,916

52,577

8,566

107,561

2,131

5,444

11,696

6,977

1,152

1,747

5,221

34,368

722,746

18,194

749

Changein CHF m

536

73,801

25

–2,549

16,251

–298

–367

185

–2,763

– 462

8,068

112

34

223

– 833

3,220

875

–1,611

2,020

94,447

0

46

Change in %

2

37

0

– 6

9

– 8

–1

1

–5

–5

8

5

1

2

–12

280

50

–31

6

13

0

6

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities in respect of money market papers

Due to banks

Payables from the insurance business

Due to customers in savings and investment accounts

Due to customers, other

Medium-term notes (cash bonds)

Bonds and mortgage backed bonds

Accrued expenses and deferred income

Other liabilities

Valuation adjustments and provisions

Technical provisions for the insurance business

Reserves for general banking risks

Share capital

Capital reserve

Revaluation reserves from the insurance business

Retained earnings

Minority interests in shareholders’ equity

Net profit (after minority interests)

Total shareholders’ equity

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

Total subordinated liabilities

Total liabilities due to non-consolidated participations

CONSOLIDATED BALANCE SHEET

25

Page 24: credit-suisse Credit Suisse Group Interim Report 2000

Changein %

3

–14

–18

3

–5

10

0

–25

14

Changein CHF m

189

–726

–569

116

– 990

11,837

0

–56

5,380

31 Dec.1999in CHF m

6,755

5,262

3,224

3,870

19,111

120,560

50

226

37,371

30 June 2000in CHF m

6,944

4,536

2,655

3,986

18,121

132,397

50

170

42,751

CONTINGENT LIABILITIES

Credit guarantees in form of avals, guarantees and indemnity liabilities

Bid bonds, delivery and performance bonds, letters of indemnity, other performance-related guarantees

Irrevocable commitments in respect of documentary credits

Other contingent liabilities

TOTAL CONTINGENT LIABILITIES

IRREVOCABLE COMMITMENTS

LIABILITIES FOR CALLS ON SHARES AND OTHER EQUITY

CONFIRMED CREDITS

FIDUCIARY TRANSACTIONS

31 Dec. 1999Negative gross

replacementvalue

in CHF bn

60.0

28.0

1.9

24.1

0.7

114.7

31 Dec. 1999Positive gross

replacementvalue

in CHF bn

62.2

25.2

2.1

22.7

0.8

113.0

31 Dec. 1999Notionalamount

in CHF bn

5,782.1

1,068.7

28.8

439.9

25.3

7,344.8

30 June 2000Negative gross

replacementvalue

in CHF bn

55.5

24.0

1.8

19.9

1.6

102.8

30 June 2000Positive gross

replacement value

in CHF bn

55.6

23.5

1.5

21.5

1.7

103.8

30 June 2000Notionalamount

in CHF bn

5,834.0

1,214.9

40.9

396.4

20.9

7,507.1

DERIVATIVE INSTRUMENTS

Interest rate products

Foreign exchange products

Precious metals products

Equity/index-related products

Other products

TOTAL DERIVATIVE INSTRUMENTS

CONSOLIDATED OFF-BALANCE SHEET BUSINESS

SELECTED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

USD TRANSLATION RATES 1st half 2000 1st half 1999

Income statement 1.63 1.45

Balance sheet 1.6342 1.55

30 June 2000in CHF m

87,932

55,187

32,745

331

57,533

4,429

2,041

147,506

45,245

31 Dec. 1999in CHF m

79,636

49,458

30,178

151

45,152

3,392

1,958

126,746

43,297

Changein CHF m

8,296

5,729

2,567

180

12,381

1,037

83

20,760

1,948

Change in %

10

12

9

119

27

31

4

16

4

SECURITIES AND PRECIOUS METALS TRADING PORTFOLIOS

Interest bearing securities and rights

listed on stock exchange

unlisted

– of which own bonds and medium-term notes

Equities

– of which own shares

Precious metals

TOTAL SECURITIES AND PRECIOUS METALS TRADING PORTFOLIOS

– of which securities rediscountable or pledgeable at central banks

26

Page 25: credit-suisse Credit Suisse Group Interim Report 2000

SELECTED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1st half 1999in CHF m

2,817

4,983

3,618

2,260

126

13,804

6,723

2,410

9,133

4,671

472

40

878

1,350

3,321

63

14

647

2,723

58

2,665

1st half 2000in CHF m

2,331

7,535

5,396

2,761

–175

17,848

8,917

2,798

11,715

6,133

642

83

606

1,248

4,885

44

134

1,084

3,711

101

3,610

1st half 1999in CHF m

0

0

0

2,260

–73

2,187

888

560

1,448

739

48

0

0

48

691

0

0

138

553

46

507

1st half 2000in CHF m

0

0

0

2,761

–219

2,542

960

661

1,621

921

67

4

0

67

854

0

0

183

671

52

619

1st half 1999in CHF m

2,817

4,983

3,618

0

199

11,617

5,835

1,850

7,685

3,932

424

40

878

1,302

2,630

63

14

509

2,170

12

2,158

1st half 2000in CHF m

2,331

7,535

5,396

0

44

15,306

7,957

2,137

10,094

5,212

575

79

606

1,181

4,031

44

134

901

3,040

49

2,991

Banking business Insurance business TotalSPLIT OF INCOME STATEMENT INTO BANKINGAND INSURANCE BUSINESS

Net interest income

Net commission and service income

Net trading income

Net income from insurance business

Other ordinary income/expenses net

NET OPERATING INCOME

Personnel expenses

Other operating expenses

Total operating expenses

GROSS OPERATING PROFIT

Depreciation and write-offs on non-current assets

– of which amortisation of goodwill

Valuation adjustments, provisions and losses

Total depreciation, valuation adjustments

GROUP PROFIT BEFORE EXTRAORDINARY ITEMS AND TAXES

Extraordinary income

Extraordinary expenses

Taxes

GROUP PROFIT

Minority interests

NET PROFIT (AFTER MINORITY INTERESTS)

STATEMENT OF SHAREHOLDERS’ EQUITY

SHAREHOLDERS’ EQUITY AT 1 JANUARY

Creation/release of reserves for general banking risks, net

Dividends paid

Capital increases, par value and capital surplus

Capital increases, minority interests

Acquisition of minority interests

Changes in scope of consolidation affecting minority interests

Foreign exchange differences

Change in revaluation reserves from the insurance business, net

Net profit (after minority interests)

Net profit minority interests

SHAREHOLDERS’ EQUITY AT 30 JUNE

Changein %

22

39

–70

366

– 94

–100

–102

22

35

74

20

Changein CHF m

6,206

156

–558

–526

725

254

–22

–1,011

–168

945

43

6,044

2000in CHF m

34,368

112

–1,977

223

923

–17

0

–22

– 933

3,610

101

36,388

1999in CHF m

28,162

– 44

–1,419

749

198

–271

22

989

–765

2,665

58

30,344

27

Page 26: credit-suisse Credit Suisse Group Interim Report 2000

SELECTED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

INVESTMENTS FROM THE INSURANCE BUSINESS

Non-life

Life

REAL ESTATE AT MARKET VALUE, TOTAL

Non-life

Life

MORTGAGES AT REDEMPTION VALUE, TOTAL

Non-life

Life

BONDS AND LOANS AT AMORTISED COSTS, TOTAL

Non-life

Life

SHARES AT MARKET VALUE, TOTAL

Non-life

Life

NON-CONSOLIDATED PARTICIPATIONS AT COST, TOTAL

Non-life

Life

SHORT-TERM INVESTMENTS AT PAR VALUE, TOTAL

Real estate at market

Bonds and loans at amortised cost

Shares at market value

Short-term investments at par value

INVESTMENTS WHERE THE INVESTMENT RISK IS BORNE BY THE POLICYHOLDERS, TOTAL

Less mortgages and non-consolidated participations not included in investments from the insurance business

TOTAL INVESTMENTS FROM THE INSURANCE BUSINESS

ADDITIONAL DATA ON INVESTMENTS

Non-life

Life

REAL ESTATE AT COST VALUE, TOTAL

Non-life

Life

SHARES AT COST VALUE, TOTAL

Non-life

Life

BONDS AND LOANS AT MARKET VALUE, TOTAL

Changein %

0

1

1

1

0

0

6

3

4

–1

–2

–2

4

0

3

22

91

42

7

28

22

14

21

0

4

1

1

1

6

6

6

6

2

3

Changein CHF m

7

125

132

14

–18

– 4

1,024

1,305

2,329

–76

–399

– 475

15

0

15

270

436

706

7

218

1,065

130

1,420

11

4,112

20

78

98

269

885

1,154

977

856

1,833

30 June 2000in CHF m

4,183

8,964

13,147

1,350

7,436

8,786

17,616

49,782

67,398

7,061

23,222

30,283

362

87

449

1,471

913

2,384

111

1,006

5,977

1,028

8,122

9,235

121,334

3,600

8,329

11,929

5,143

16,646

21,789

17,573

49,592

67,165

31 Dec. 1999in CHF m

4,176

8,839

13,015

1,336

7,454

8,790

16,592

48,477

65,069

7,137

23,621

30,758

347

87

434

1,201

477

1,678

104

788

4,912

898

6,702

9,224

117,222

3,580

8,251

11,831

4,874

15,761

20,635

16,596

48,736

65,332

28

Page 27: credit-suisse Credit Suisse Group Interim Report 2000

SELECTED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

in US

ASSET QUALITYCREDIT EXPOSURE & PROVISION DEVELOPMENT

Non-performing loans (NPLs)1)

Capital provisions against NPLs2)

Coverage ratio of NPLs

30.06.2000

31.12.1999

NPLs as percentage of credit exposure

30.06.2000

31.12.1999

1) Includes loans and loan equivalents2) Excludes total interest of CHF 2,003 m (fully provided)

Reported Adjusted

TRADING BOOK RISK – 99% 1 DAY VAR

Period end

Average

Maximum

Minimum

Full year 1999in USD m

113.4

131.8

198.8

89.7

Half year 2000 in USD m

84.3

119.5

151.5

84.3

Half year 2000in USD m

84.3

141.6

201.9

84.3

Full year 1999in USD m

151.2

175.7

265.1

119.6

300

250

200

150

100

–50

0

50

D m

Daily trading income

1st quarter 1999

One-day VaR (99%)

2nd quarter 1999 3rd quarter 1999 4th quarter 1999

VAR MODEL BACKTESTING RESULTS

1st quarter 2000 2nd quarter 2000

No backtesting exceptions throughout all of 1999 and first half 2000All figures shown on reported basis; VaR impact of move to new historical simulation VaR model can be seen in mid April 2000

– At 30 June 2000 trading book risk was down 44% compared to 31 December1999. Risks were down 68% compared to the 1999 high.

– The decrease in the reported risk arose from true risk reductions and methodologychanges.

– In the second quarter of 2000 CSFB’s new historical simulation value-at-risk modelwas approved by the Swiss Federal Banking Commission; this reduced reported riskby approximately 25%.

– When the prior figures are adjusted for the new methodology, at 30 June 2000 thetrading book “real” risk is down 26% compared to 31 December 1999 and down58% compared to the 1999 high.

CreditSuisseGroup

in CHF m

10,505

6,449

61%

63%

2.8%

3.4%

CreditSuisse

FirstBoston

in CHF m

1,012

778

77%

84%

0.5%

0.9%

CreditSuisse

FinancialServices

in CHF m

9,363

5,581

60%

60%

7.4%

8.7%

CreditSuissePrivate

Bankingin CHF m

130

90

69%

75%

0.3%

0.3%

29

Page 28: credit-suisse Credit Suisse Group Interim Report 2000

CREDIT SUISSE GROUP

Paradeplatz 8 P.O. Box 1 8070 Zurich SwitzerlandTel. + 41 1 212 16 16 Fax + 41 1 333 25 87 Internet www.credit-suisse.com


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