Credit Suisse Group Reports Net Profit of Chf 2.0 Billion for The Third Quarter of 2003

Private Banking Reports Net New Assets of CHF 8.4 Billion; Both Business Units Further Reduced Costs


ZURICH, Switzerland, Nov. 04, 2003 (PRIMEZONE) -- Credit Suisse Group today announced a net profit of CHF 2.0 billion for the third quarter of 2003, including a gross after-tax gain of CHF 1.6 billion, or CHF 1.3 billion net of related provisions, from divestitures at Winterthur. Additionally, the Group's third quarter 2003 net profit includes the strengthening by CHF 383 million after tax of certain provisions related to Winterthur's current and former international business portfolio. Private Banking reported a strong net new asset inflow of CHF 8.4 billion. Credit Suisse Financial Services posted strong third quarter results in banking. Credit Suisse First Boston reported lower results compared with the second quarter of 2003, primarily reflecting dampened Fixed Income trading revenue, but continued to achieve significant progress on cost reduction.

Oswald J. Grubel, Co-CEO of Credit Suisse Group and Chief Executive Officer of Credit Suisse Financial Services, stated, "I am especially pleased by the good results in Private Banking, where the increase in operating income is all the more significant given the seasonally lower revenue trends usually expected in the third quarter. At the same time, the strong growth in net new assets reflects our clients' confidence in our company."

John J. Mack, Co-CEO of Credit Suisse Group and Chief Executive Officer of Credit Suisse First Boston, said, "The sound profit reported by Credit Suisse First Boston in the third quarter, in spite of lower results in Fixed Income, demonstrates that we are continuing to make progress towards our goal of sustained profitability. Although our strict cost management over the last two years has provided us with a more competitive cost structure, our overall profitability is still not satisfactory as we continue to work through historical issues. I am confident that if we continue to focus on clients and their needs while building a unified culture, we will have consistently strong financial results in addition to a strong franchise."

Group Results

Credit Suisse Group reported a net profit of CHF 2.0 billion in the third quarter of 2003, compared with a net profit of CHF 1.3 billion in the second quarter of 2003 and a net loss of CHF 2.1 billion in the third quarter of 2002. For the first nine months of 2003, the Group reported a net profit of CHF 4.0 billion, compared with a net loss of CHF 2.4 billion for the first nine months of 2002. The net profit of CHF 2.0 billion in the third quarter of 2003 includes a gross after-tax gain of CHF 1.6 billion, or CHF 1.3 billion net of related provisions, from the divestitures of Winterthur's Republic operations in the US, its Churchill operations in the UK and Winterthur Italy. Additionally, the Group's net profit in the third quarter of 2003 includes the strengthening by CHF 383 million after tax of certain provisions related to Winterthur's current and former international business portfolio. Earnings per share were CHF 1.66 for the third quarter of 2003, compared with earnings of CHF 1.09 per share for the second quarter of 2003. The Group's return on equity was 26.3% in the third quarter of 2003, compared with 18.5% in the second quarter of 2003.

The Group's operating income totaled CHF 6.5 billion in the third quarter of 2003, down 13% from the second quarter of 2003 but up 15% from the third quarter of 2002. The decrease compared with the second quarter of 2003 was mainly attributable to a decline in trading income at Credit Suisse First Boston, which was partially offset by improved results within Private Banking.

The Group's operating expenses in the third quarter of 2003 decreased 13% from the second quarter of 2003 and 18% from the third quarter of 2002, to CHF 4.4 billion. Personnel expenses declined 18% overall compared with the second quarter of 2003, reflecting lower incentive compensation accruals at Credit Suisse First Boston -- in line with reduced operating income -- and the impact of reversing the first six months of 2003 accrual for stock compensation in the third quarter of 2003 due to the previously announced change in the vesting of stock awards.

The Group's total valuation adjustments, provisions and losses were CHF 215 million in the third quarter of 2003, compared with CHF 131 million in the second quarter of 2003. In the third quarter of 2003, net credit-related valuation allowances and provisions decreased slightly to CHF 96 million from the already low level of CHF 99 million in the second quarter of 2003. Compared with the third quarter of 2002, valuation adjustments, provisions and losses decreased CHF 758 million, or 78%, due primarily to lower credit valuation allowances and provisions reflecting an improvement in the credit environment, loan repayments and loan sales.

The Group's consolidated BIS tier 1 ratio was 11.1% as of September 30, 2003, an increase from 10.3% as of June 30, 2003. Winterthur's capital base was strengthened during the third quarter of 2003 as a result of earnings generation and the divestitures referred to above. In isolation, these divestitures increased Winterthur's EU solvency surplus capital by approximately CHF 3.5 billion, due to the combination of lower required capital and higher available capital.

Credit Suisse Financial Services

Credit Suisse Financial Services posted a net profit of CHF 1.8 billion in the third quarter of 2003, including a gross after-tax gain of CHF 1.6 billion, or CHF 1.3 billion net of related provisions, from divestitures at Winterthur. Additionally, the business unit's third quarter 2003 net profit includes the strengthening by CHF 383 million after tax of certain provisions related to Winterthur's current and former international business portfolio. The third quarter of 2003 net profit of CHF 1.8 billion compares with a net profit of CHF 851 million in the second quarter of 2003 and a net loss of CHF 1.2 billion in the third quarter of 2002.

In the third quarter of 2003, Credit Suisse Financial Services' banking segments improved their results for the third consecutive quarter. The Private Banking segment reported a 3% increase in operating income in the third quarter of 2003 compared with the second quarter of 2003, due mainly to higher commission and fee income as a result of the higher average asset base and increased client activity. Due to this growth in operating income, together with a 4% decrease in operating expenses compared with the second quarter of 2003, Private Banking's cost/income ratio improved by a further 4.0 percentage points to 55.1%, the lowest ratio in the past six quarters. Corporate & Retail Banking continued to improve its overall profitability and efficiency in the third quarter of 2003. The segment reported a further decrease in operating expenses of 4% compared with the second quarter of 2003, due mainly to lower personnel expenses in line with headcount development. The segment's net interest margin rose 3 bp in the third quarter of 2003, to 215 bp. Corporate & Retail Banking's cost/income ratio further improved to 64.4% in the third quarter of 2003, the lowest ratio in the last seven quarters. Additionally, the segment further strengthened its credit portfolio, with a reduction in impaired loans.

The insurance segments reported solid results for the first nine months of 2003, due primarily to the divestiture-related gains, strong investment performance, reduced administration costs and improved underwriting results. Life & Pensions reported a reduction in gross premiums written in the first nine months of 2003 compared with the first nine months of 2002, primarily reflecting its ongoing selective underwriting policy. The segment significantly reduced its administration costs in the first nine months of 2003, and its expense ratio decreased by 0.3 percentage points. Life & Pensions achieved an improved investment performance in the first nine months of 2003, with a total return on invested assets of 5.0%, compared with 1.5% in the first nine months of 2002. Insurance (casualty and property) recorded an increase in net premiums earned in the first nine months of 2003, due primarily to tariff increases across all major markets. The Insurance segment strengthened its net underwriting result before dividends to policyholders by CHF 218 million compared with the first nine months of 2002, reflecting an improvement in the combined ratio of 1.9 percentage points, to 101.6%, mainly as a result of improved pricing and the continued streamlining of its business portfolio. Demonstrating its continued progress in ongoing efficiency measures, the segment reduced its administration costs in the first nine months of 2003 compared with the first nine months of 2002. Investment performance improved in the first nine months of 2003, with a total return on invested assets of 3.8% compared with -0.3% in the first nine months of 2002.

Credit Suisse First Boston

Credit Suisse First Boston reported a net profit of USD 224 million (CHF 308 million) for the third quarter of 2003, down USD 58 million (CHF 65 million) compared with the second quarter of 2003. The business unit's net operating profit of USD 358 million (CHF 491 million), which excludes the amortization of acquired intangible assets and goodwill net of tax, also declined compared with the second quarter 2003 results. The favorable resolution of certain outstanding income tax matters resulted in a 16% effective income tax rate in the third quarter of 2003, compared with 27% in the second quarter of 2003.

The Institutional Securities segment reported a decrease in operating income in the third quarter of 2003 compared with the second quarter of 2003, as the Fixed Income business was significantly impacted by conservative risk positioning which dampened its trading results but resulted in lower Value-at-Risk. While the Equity and Investment Banking divisions continued to see steady year-to-date improvements in cash trading and M&A activities, revenues in both units declined modestly compared with the second quarter of 2003. As a result of lower compensation accruals -- discussed in the Group Results section above -- and continued cost management, Institutional Securities reported a 24% decrease in operating expenses in the third quarter of 2003 compared with the second quarter of 2003. Credit Suisse First Boston's franchise continued to benefit from its leading position in the high yield business. Within the CSFB Financial Services segment, Credit Suisse Asset Management's operating income was comparable to the second quarter of 2003 and operating expenses increased marginally.

Net new assets

Credit Suisse Group's net new asset inflow in the third quarter of 2003 was dominated by an inflow from Private Banking of CHF 8.4 billion. Corporate & Retail Banking recorded an inflow of CHF 1.8 billion, whereas Life & Pensions had an outflow of CHF 0.7 billion. CSFB Financial Services recorded an outflow of CHF 5.6 billion. As of September 30, 2003, the Group's total assets under management were CHF 1,199.2 billion, practically unchanged compared with June 30, 2003.

Business transfers

In the third quarter of 2003, the Group completed the transfer of its securities and treasury execution platform in Switzerland from Credit Suisse First Boston to Credit Suisse Financial Services and the transfer of Credit Suisse First Boston's Private Client Services UK business from CSFB Financial Services to Private Banking. All comparative figures have been restated to reflect these business transfers.

Outlook

Credit Suisse Group is benefiting from the measures taken in 2002 and 2003. Going forward, the Group will continue to concentrate on enhancing efficiency and building its client franchise, and it remains focused on producing sound profitability.

Commentary on Results -- Non-GAAP Financial Information

For additional information with respect to Credit Suisse Group's results for the third quarter and the first nine months of 2003, we refer you to the Group's Quarterly Report Q3 2003, as well as the Group's slide presentation for analysts and press, posted on the Internet at www.credit-suisse.com/results. This press release may contain non-GAAP financial information. A reconciliation of such non-GAAP financial information to the most directly comparable measures under Swiss Generally Accepted Accounting Principles (as well as other related information) is also included in the Quarterly Report Q3 2003. The operating basis business unit results described above reflect the results of the separate segments constituting the respective business units and certain acquisition-related costs not allocated to the segments.

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 and Frankfurt, and in the form of American Depositary Shares (CSR) in New York. The Group employs around 61,300 staff worldwide. As of September 30, 2003, it reported assets under management of CHF 1,199.2 billion.

Cautionary statement regarding forward-looking information

This press release contains statements that constitute forward-looking statements. In addition, in the future we, and others on our behalf, may make statements that constitute forward-looking statements. Such forward-looking statements may include, without limitation, statements relating to our plans, objectives or goals; our future economic performance or prospects; the potential effect on our future performance of certain contingencies; and assumptions underlying any such statements. Words such as "believes," "anticipates," "expects," "intends" and "plans" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. We do not intend to update these forward-looking statements except as may be required by applicable laws. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include (i) market and interest rate fluctuations; (ii) the strength of the global economy in general and the strength of the economies of the countries in which we conduct our operations in particular; (iii) the ability of counterparties to meet their obligations to us; (iv) the effects of, and changes in, fiscal, monetary, trade and tax policies, and currency fluctuations; (v) political and social developments, including war, civil unrest or terrorist activity; (vi) the possibility of foreign exchange controls, expropriation, nationalization or confiscation of assets in countries in which we conduct our operations; (vii) the ability to maintain sufficient liquidity and access capital markets; (viii) operational factors such as systems failure, human error, or the failure to properly implement procedures; (ix) actions taken by regulators with respect to our business and practices in one or more of the countries in which we conduct our operations; (x) the effects of changes in laws, regulations or accounting policies or practices; (xi) competition in geographic and business areas in which we conduct our operations; (xii) the ability to retain and recruit qualified personnel; (xiii) the ability to maintain our reputation and promote our brands; (xiv) the ability to increase market share and control expenses; (xv) technological changes; (xvi) the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users; (xvii) acquisitions, including the ability to integrate successfully acquired businesses; (xviii) the adverse resolution of litigation and other contingencies; and (xix) our success at managing the risks involved in the foregoing. We caution you that the foregoing list of important factors is not exclusive; when evaluating forward-looking statements, you should carefully consider the foregoing factors and other uncertainties and events, as well as the risks identified in our most recently filed Form 20-F and reports on Form 6-K furnished to the US Securities and Exchange Commission.

Cautionary statement regarding non-GAAP financial information

This press release may contain non-GAAP financial information. A reconciliation of such non-GAAP financial information to the most directly comparable measures under generally accepted accounting principles, is posted on our website at http://www.credit-suisse.com/sec.html.

Presentation of Credit Suisse Group's Third Quarter Results 2003 via Webcast and Telephone Conference

Date Tuesday, November 4, 2003

Time 15.00 CET / 14.00 GMT / 09.00 EST

Speakers

Philip K. Ryan, CFO of Credit Suisse Group Ulrich Korner, CFO of Credit Suisse Financial Services Barbara Yastine, CFO of Credit Suisse First Boston All presentations will be held in English.

Webcast www.credit-suisse.com/results

Telephone Europe: +41 91 610 5600 UK:+44 207 107 0611 USA: +1 866 291 4166 Reference: "Credit Suisse Group quarterly results"

Q&A

You will have the opportunity to ask the speakers questions via telephone conference following the presentations.

Playback Video on demand - available approximately three hours after the event at www.credit-suisse.com/results Telephone - available approximately one hour after the event; please dial: Europe: +41 91 612 4330 UK: +44 207 866 4300 USA: +1 412 858 1440

Conference ID: 332#

Note

We recommend that you dial in approximately ten minutes before the start of the presentation for the webcast and telephone conference. Further instructions and technical test functions are now available on our website.

The full press release including tables can be downloaded from the following link: http://hugin.info/100174/R/923414/125148.pdf



            

Coordonnées