ZURICH, Switzerland, Oct. 2, 2002 (PRIMEZONE) -- Credit Suisse Group (NYSE:CSR) (Other OTC:CSGKF) today announced that it has further strengthened the capital base of its insurance units with CHF 2.0 billion, as part of its capital plan for Winterthur communicated in the second quarter earnings release on August 14, 2002. This capital contribution will reinforce Winterthur's solvency capital to support the growth of its businesses in this challenging environment. The Group also announced that in the third quarter of 2002, its results will be impacted by a significant net loss in the insurance business, as well as by a modest overall negative effect from the Group's other businesses.
In its second quarter earnings release of August 14, 2002, Credit Suisse Group announced that it plans to implement further measures to strengthen the capital base of its insurance units in the second half of the year. As part of this capital plan, Credit Suisse Group has now increased the equity capital of Winterthur Insurance by CHF 0.6 billion and completed a direct capital injection of CHF 1.4 billion into Winterthur Life. These transactions were financed with excess liquidity from the Credit Suisse Group parent company and therefore do not impact banking capital ratios.
Winterthur has substantially reduced the equity exposure of its investment portfolio to mitigate the impact of international equity market volatility on its solvency capital as far as possible. However, related hedging costs and further realized losses again impacted Winterthur's capital base in the third quarter of 2002. In addition, Winterthur's solvency capital was reduced by growth in premium volumes, particularly from rate increases. With the CHF 2.0 billion capital injection, Winterthur's capital base has now been reinforced. Further measures to improve Winterthur's solvency capital are planned in line with market developments. Credit Suisse Group remains adequately capitalized.
Oswald J. Grubel, Chief Executive Officer of Credit Suisse Financial Services and Co-CEO of Credit Suisse Group as of January 1, 2003, said: "By reinforcing the solvency capital of our insurance units, we will enable Winterthur to take advantage of opportunities to grow and to improve its operating results through the realignment of its investment strategy, continued repricing and selective underwriting in light of new market conditions, as well as the accelerated realization of cost reductions."
Third Quarter Results Outlook
In the third quarter of 2002, Credit Suisse Group's consolidated results will be impacted by a significant net loss in the insurance business due to further realized losses and the income statement recognition of lower equity valuations, as well as by a modest overall negative effect from the Group's other businesses.
Credit Suisse First Boston will report an operating loss in the third quarter, mainly as a result of lower revenues and further provisioning, reflecting the current environment. Private Banking will report a net profit below the result achieved in the second quarter, due mainly to market conditions and a one-time restructuring charge in its European Financial Services Initiative. Swiss Corporate and Retail Banking will continue to post good results. Detailed third quarter results will be announced on November 14, 2002.
Credit Suisse Group
Credit Suisse Group is a leading global financial services company headquartered in Zurich. The business unit Credit Suisse Financial Services provides private clients and small and medium-sized companies with private banking and financial advisory services, banking products, and pension and insurance solutions from Winterthur. The business unit Credit Suisse First Boston, an investment bank, serves global institutional, corporate, government and individual clients in its role as a financial intermediary. Credit Suisse Group's registered shares (CSGN) are listed in Switzerland, Frankfurt and Tokyo, and in the form of American Depositary Shares (CSR) in New York. The Group employs around 80,000 staff worldwide. As of June 30, 2002, it reported assets under management of CHF 1,293.2 billion.
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