credit-suisse Business Review 2005

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Credit Suisse Group Business Review 2005

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Transcript of credit-suisse Business Review 2005

Page 1: credit-suisse Business Review 2005

Credit Suisse GroupBusiness Review 2005

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The vision of Credit Suisse is to become the world’spremier bank, renowned for its expertise in investmentbanking, private banking and asset management, andmost valued for its advice, innovation and execution.

Our vision

Brand launch in Hong KongOn January 16, 2006, we launchedour new Credit Suisse brand andlogo worldwide. The façades ofCredit Suisse buildings in HongKong, London, New York, Singaporeand Zürich were illuminated tocelebrate the new brand.

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Credit Suisse Group financial highlightsYear ended December 31, in CHF m, except where indicated 2005 2004 2003

Consolidated income statement

Net revenues 60,632 55,139 52,515

Income from continuing operations beforecumulative effect of accounting changes 5,863 5,684 1,585

Net income 5,850 5,628 770

Return on equity

Return on equity – Group 15.4% 15.9% 2.2%

Return on equity – Banking 16.2% 17.8% 12.6%

Return on equity – Winterthur 11.7% 9.2% (26.9%)

Earnings per share

Basic earnings per share in CHF 5.17 4.80 0.64

Diluted earnings per share in CHF 5.02 4.75 0.63

Net new assets in CHF bn 58.4 32.9 5.0

December 31, in CHF m, except where indicated 2005 2004

Assets under management in CHF bn 1,484.3 1,220.7

Consolidated balance sheet

Total assets 1,339,052 1,089,485

Shareholders’ equity 42,118 36,273

Consolidated BIS capital data

Risk-weighted assets 232,891 199,249

Tier 1 ratio 11.3% 12.3%

Total capital ratio 13.7% 16.6%

Number of employees

Switzerland – banking segments 20,194 19,558

Switzerland – insurance segments 5,928 6,147

Outside Switzerland – banking segments 24,370 21,606

Outside Switzerland – insurance segments 13,031 13,221

Number of employees (full-time equivalents) 63,523 60,532

Stock market data

Market price per registered share in CHF 67.00 47.80

Market price per American Depositary Share in USD 50.95 42.19

Market capitalization 75,399 53,097

Market capitalization in USD m 57,337 46,865

Book value per share in CHF 37.43 32.65

2003 2004 2005

Share performance

Swiss Market Index (rebased) Credit Suisse Group

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Market capitalization

As of end of reporting period (in CHF bn)

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Our 2005 results show that we are making goodprogress in transformingthe underlying profitability of our business. Our newintegrated structure willhelp us to further enhanceour growth and returns forour shareholders.

Key Highlights 2005

CHF 5,850 millionNet income for 2005 totaled CHF 5,850 million, up 4% compared to 2004.

CHF 42.7 billionPrivate Banking recorded net new assets of CHF 42.7 billion,reflecting excellent inflows across all regions. This corresponded to a strong annual growth rate of 7.9%.

CHF 1,484.3 billionThe Group’s total assets under management stood at CHF 1,484.3 billion as of December 31, 2005, up 21.6% fromDecember 31, 2004.

63,523As of year-end 2005, Credit Suisse Group employed 63,523people, of which 44,564 in its banking business, Credit Suisse,and 18,959 in its insurance business, Winterthur.

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Credit Suisse Group

Business Review 2005

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For a detailed presentation of Credit Suisse Group’s financial statement 2005, its company structure, risk management, an in-depth review of the operating andfinancial results and additional information on corporate governance, please refer to the Annual Report 2005 and the Supplemental Information 2005.

Cover image: Daria Mihaesco,

Private Banking (Geneva)

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Contents4 Credit Suisse at a glance

6 Message from Walter B. Kielholz, Chairman of the Board of Directors

8 Message from Oswald J. Grübel, Chief Executive Officer

10 Our vision and our mission

11 Our three principles12 A relentless focus on the needs of our clients16 Teamwork must be at the heart of all we do20 Our reputation is everything

24 Operating review24 Credit Suisse Group and Credit Suisse28 Winterthur

30 Aiming for Operational Excellence

32 Credit Suisse Group in society

36 Corporate governance and management36 Corporate governance38 Executive Boards of Credit Suisse Group and Credit Suisse40 Summary of the responsibilities of the Board of Directors

and the Executive Boards of Credit Suisse Group and Credit Suisse

42 Financial tables

The content of this Business Review is for information purposes only and constitutesneither an offer for sale of any product nor investment advice.

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In Investment Banking, Credit Suisse offers securitiesproducts and financial advisory services to corporations,governments and institutional investors. Operating in 69 locations in 33 countries, this business specializes in creating innovative solutions to clients’ challenges,drawing on expertise from across the full spectrum of products: debt and equity underwriting, sales andtrading, mergers and acquisitions, investment research,correspondent and prime brokerage services.

Credit Suisseat a glance

Credit SuisseAs one of the world’s leading banks, Credit Suisseprovides its clients with investment banking, private banking and asset management servicesworldwide. Credit Suisse offers advisory services,comprehensive solutions and innovative products tocompanies, institutional clients and high-net-worthprivate clients globally, as well as retail clients inSwitzerland. Credit Suisse is active in over 50countries and employs more than 44,000 peoplefrom 100 different nations.

Credit Suisse’s parent company, Credit SuisseGroup, is a leading global financial servicescompany headquartered in Zürich. Credit SuisseGroup also includes Winterthur, the leadinginsurance company in Switzerland and one of thetop 10 composite insurers in Europe. Credit SuisseGroup’s registered shares (CSGN) are listed inSwitzerland and, in the form of American Deposi-tary Shares (CSR), in New York.

You can find further information about Credit Suisse Group and Credit Suisse atwww.credit-suisse.com and further informationabout Winterthur at www.winterthur.com.

Investment Banking

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Credit Suisse Group Business Review 2005 5

In Private Banking, Credit Suisse provides comprehen-sive advice and a broad range of investment productsand services tailored to the complex needs of high-net-worth individuals all over the world. Credit Suisse’sstructured advisory process encompasses both assetand liability management. Furthermore, the bank is aleading provider of innovative alternative investmentproducts. Wealth management solutions include taxplanning, pension planning, life insurance solutions,wealth and inheritance advice, trusts and foundations.Credit Suisse offers multiple booking platforms andglobal execution capabilities. In Switzerland, CreditSuisse supplies banking products and services to busi-ness and retail clients as well as to private banking clients.

In Asset Management, Credit Suisse managesportfolios, mutual funds and other investment vehiclesfor a broad spectrum of clients globally, fromgovernments, institutions and corporations to privateindividuals. It offers investment products across the fullrange of asset classes, including equity and fixedincome securities, commodities and multiple-asset classproducts. The bank is a world leader in providingalternative asset solutions and offers alternativeinvestments including real estate, hedge funds, privateequity and volatility management. This business is aglobally integrated network, sharing information acrossborders to deliver our best investment ideas andcapabilities to clients around the world.

Private Banking

Asset Management

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Message from the Chairman

Dear shareholders, clients and colleaguesThe year 2006 marks the occasion of Credit Suisse’s 150th anniversary. This milestonegives us an opportunity to thank those who have helped to build our company andthose who place their trust in us. At the same time, we want to continue to foster thespirit of innovation that has been a hallmark of our bank.

Alfred Escher, who founded Credit Suisse in 1856, was one of the most importantpoliticians and commercial pioneers of his time. In addition to founding Credit Suisse,he played a crucial role in the founding of two important railway lines, a technicaluniversity, and two insurance companies. I am convinced that Escher’s strength in innovation continues to influence us even now that we are a global institution. Our ability to implement new ideas while maintaining the tried and tested is the goldenthread that runs through our 150-year history and one which will stand us in good steadfor the future.

Our long tradition of innovation is evident not only in the way we develop products andservices to meet our clients’ high expectations – but also in the way we developed aresponse to our rapidly changing business environment in 2005.

Technology and the globalization of markets have increased the complexity of thefinancial services industry and transformed the needs of our clients. In 2005 weresponded swiftly and effectively to this challenging environment by building anorganizational structure that enables us to combine our wealth of experience andexpertise of the financial markets from across our banking business to meet our clients’demand for sophisticated and holistic solutions.

Credit Suisse began operating as an integrated global bank on January 1, 2006.Focused on investment banking, private banking and asset management, we are nowwell-placed to strengthen our competitive position globally and seize opportunities in ourkey markets.

Our 150 years of experience has been the solid foundation that has enabled us toconstantly look ahead, create novel solutions for our clients and define the marketplaceof the future. We are proud to have a strong Investment Banking business that is oneof the most innovative on Wall Street; a Private Banking business that is the benchmarkin terms of profitability and innovation, and an Asset Management business that is amarket leader in alternative investments. Our transition to an integrated structure meanswe can use our resources more effectively and our people can work together on aglobal basis – from all three areas of our bank – for the benefit of our clients.

Crucially, while implementing our strategic plan, we remained committed to enhancingprofitability and creating value for our shareholders. We reported net income of CHF 5,850 million for the full year. The Board of Directors will propose a dividend of CHF 2.00 per share to the Annual General Meeting on April 28, 2006.

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Walter B. Kielholz

Chairman of the Board of Directors

Credit Suisse Group

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Two markets have, so far, accounted for a significant amount of our business volume:Switzerland and the US. Both markets will remain very important to the bank. However,we see a shift towards the emerging economies. We are operating in a globalenvironment; if we want to be close to our clients and the markets in which theyoperate, we know we must increase our global footprint. This will complement thestrong bases we will continue to develop in our home markets.

Our global business strategy will be underpinned by our proximity to our clients, theexpertise and commitment of our people, and the effective use of technology. We aretherefore committed to investing in our global expansion, to recruiting and training thevery best people in our industry and to dedicating resources to technology. This willenable us to create a competitive advantage through customized solutions andeconomies of scale.

In 2005 we demonstrated our ability to deliver good results, while at the same timerefocusing our business. I am confident that with our integrated global structure, we willbe able to capitalize on our strong operating business and solid capital base to achievesustained and profitable growth.

Yours sincerely

Walter B. Kielholz

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Message from the Chief Executive Officer

Dear shareholders, clients and colleaguesChange is the driving dynamic of the banking business – change that is fueled by thegrowth of an increasingly global economy and the new, wired world of global networksand instant communications.

In our constantly changing business environment, it is all too easy for the individualclient to become marginalized, even neglected. That is why we are dedicated to puttingour clients first in every single phase of our business. Clients are at the heart ofeverything we do. Meeting their needs, earning their trust and keeping that trustthrough the successful delivery of products and services tailored to their requirementsare our highest priorities.

Our success depends upon our ability to unlock the considerable experience andknowledge of the financial markets from across our organization. We have thereforebuilt an integrated global bank, focused on our core strengths in investment banking,private banking and asset management. Our new organizational structure, which welaunched on January 1, 2006, enables our people to work together closely on a globalbasis for the benefit of our clients.

Our ability to create innovative solutions has been evident throughout our 150-yearhistory. We think independently, finding new ways of solving problems and developingnew services in response to client-specific needs.

Preserving and enhancing our reputation is a major element of our service to clients.We know that it can take decades to develop a reputation – and an instant to lose it. Our reputation is determined by our capital and how we use it, by the ability and integrity of our people, and by the results we achieve – the value we bring to our clients.

A relentless dedication to our clients, a ceaseless determination to earn and keep theirtrust, and a deep commitment to teamwork and integrity – these are the foundationstones of the integrated global Credit Suisse.

While we implemented our integration strategy in 2005 and prepared Credit Suisse forfuture growth, we remained fully focused on our clients and succeeded in growing ourbusiness. Net income for the full year reached CHF 5,850 million, strengthening theunderlying profitability of our business. We maintained strong capital ratios with aconsolidated BIS tier 1 ratio of 11.3% at year-end 2005. Net new assets of CHF 58.4billion for the full year 2005 underscore the trust our clients place in us to increase andprotect their wealth. As of December 31, 2005, we had assets under management ofCHF 1,484.3 billion. These figures also include Winterthur, which further improved itsprofitability in 2005.

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Oswald J. Grübel

Chief Executive Officer

Credit Suisse Group

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The year 2005 was decisive for Credit Suisse. I am convinced that we are nowin an excellent position to build on our success by meeting our clients’ demand for sophisticated and holistic solutions across Investment Banking, Private Banking and Asset Management.

In Investment Banking, we see attractive trends in areas in which we have historicallybeen strong, and we will stay focused on these strengths – such as in leveragedfinance, prime brokerage, advanced execution services and initial public offerings(IPOs). The latter performed very well in 2005 and Credit Suisse was ranked first in theglobal market share for IPOs for the full year, having participated in a number of high-profile transactions, including the IPO for China Construction Bank, the world’s largestIPO since 2001 and the largest IPO ever in China and in non-Japan Asia.

In Private Banking, we set the industry benchmark for profitability and we fully expect to continue to do so. The demographics of this market are attractive, and we are well-placed to benefit from projected growth. We are broadening our global footprint in Private Banking: in 2005 we created a Private Banking hub in Dubai (United ArabEmirates) – a further milestone in our global strategy to grow the wealth managementbusiness. In addition, we opened local representative offices in Bangkok (Thailand),Guangzhou (China), Mumbai (India) and St. Petersburg (Russia).

In Asset Management, the integration of our skills and know-how into one divisionempowers us to take full advantage of our leading position in discretionary mandatesand alternative capital. It provides us with the opportunity to adjust swiftly and effectivelyto each and every change in this dynamic industry. I am confident that as an integratedbank, Credit Suisse will force the pace of innovation in asset management.

The future of our industry in today’s rapidly changing global marketplace will be shapedby the banks that can stay close to their clients and their needs, by the banks that canefficiently turn their expertise into effective products and solutions, and by the banksthat embrace change for the benefit of their shareholders, clients and employees. AtCredit Suisse, we understand this new marketplace. We have created the integratedorganization to thrive in it. And we have the talent and dedication to become the best in our business.

Yours sincerely

Oswald J. Grübel

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Our vision and our mission

The vision of Credit Suisse is to become the world’s premier bank,renowned for its expertise in investment banking, private banking and asset management, and most valued for its advice, innovation and execution.

Our mission describes how we will achieve our vision. Credit Suissewill set new standards: new standards in partnering with our clientsand new standards in providing them with innovative and integratedsolutions. Cultural diversity is essential to the success of Credit Suisse.As an integrated global bank, Credit Suisse will empower people towork openly and respectfully with each other and with clients to deliversuperior results that will lead to success and prosperity for all itsstakeholders.

Charlene Yu, Roderick Ng,

Private Banking (Hong Kong)

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The financial world is becoming ever more sophisticated and its clients consequentlymore demanding: they expect superior results. Clients are at the center of what we do. We must understand their business, consider their goals from the outset, and anticipate their needs. Nothing short of excellence will suffice in helping them to maximize their potential.

If we are to succeed in becoming an integrated global bank that delivers truly world-class, innovative solutions to its clients, we must work together across our businesses in a spirit of respect and collaboration. We have an obligation to bring together thecombined intelligence of the entire organization to present a seamless service that will set us apart in our industry.

Reputations are built over decades but can be lost in an instant. Ours is built on trust,and has enabled us to build a global business. We understand the past but are shapedby the future, so we must preserve and nurture our reputation at all times. Ourreputation is determined by our capital and how we use it; by our people, their integrity,openness and respect; and, ultimately, by the results we achieve – the value we bringto our clients.

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Our three principles

Three principles guide our actions, ambitions and decision-making: we want to give our clients maximum value through our integratedapproach; we optimize the expertise from our Investment Banking,Private Banking and Asset Management businesses through teamwork;and we preserve and nurture our reputation at every opportunity.

A relentless focuson the needs of our clients

Teamwork must be at the heart of all we do

Our reputation is everything

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A relentless focus on the needs of our clients

The measure of our successTo build strong relationships with our clients, it is crucial that we understand their needs– what they need today and what they will need in the future. But as their requirementsare rapidly changing, how do we stay ahead?

We make sure we understand their business inside out; asking the right questions;finding the best solution. Like a team of Formula One engineers fine-tuning a car tosuit the driver and the requirements of the track, we take pride in providing the perfectproduct and service to fulfill the client’s need and circumstance.

Our talent for innovation is born of a desire to continually find better ways of serving our clients, to produce ideas triggered by the issues they face. We have pioneeredtechniques and business practices that are now standard in the industry, thanks to theimagination and creativity of our people in response to our clients’ objectives.

Through our experience in investment banking, private banking and asset management,we can respond to the needs of a broad range of private, corporate and institutionalclients. Through the global scope of our business, we can be close to our clients andtheir markets and we are able to give the service they expect.

Of course, it is no good just talking about it; actually achieving what we say we will isthe key to earning the satisfaction of our clients, by far the most important measure ofour success.

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Yvonne Siu, Kehinde Longe,

Product Control (Hong Kong)

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Principle in action: client focus

Our relentless focus on the needs of our clients – coupled with our product and marketknowledge – means we can provide advice that works. This sounds fine in theory, buthow does it work in practice? The following cases show the first of our three principlesin action.

Innovative debt restructuring for BrazilOur Investment Banking business managed a major Brazilian bond exchange in July2005. The transaction’s success was largely due to its design, which grew out of ourLiability Management expertise, solid experience in Latin America, and two years’ongoing dialogue with our client, the government of Brazil. We focused the transactionon what the client wanted to accomplish – in effect, to retire the inefficient andunderperforming C Bond (Capitalization Bond – a widely-held issue with interestaccruing on the principal and capitalized interest) – one of the last reminders of thecountry’s previous instability.

Our solution removed unpopular elements such as a call option, in return for a longermaturity, yet retained many of the attractive features of the old bond. However, in termsof success, the really novel move was to offer this to investors in an auction based onthe maturity they would accept, rather than price.

This innovation was vindicated when the transaction achieved the highest participationrate ever recorded for a Brazilian exchange, including every major holder, with over80% of the old bonds retired. It extends the bond’s maturity by 3.75 years – and, as well as retiring USD 4.3 billion of bonds that came out of the Brady plan debtrestructuring, it relieves Brazil of over USD 500 million in annual amortization paymentsthrough 2009. With this transaction, Brazil could confirm its strengthening economicprosperity, just 11 years after its restructuring.

Largest IPO in China…We also showed marketing leadership and innovation when in October 2005 wesuccessfully priced and executed the largest initial public offering (IPO) in the world thatyear, which was also the largest ever IPO in China: the USD 9.2 billion offering forChina Construction Bank. This was the first of China’s large state-owned banks to listshares overseas and was also the largest ever for a bank. Investment Banking obtaineda high-quality and diverse investor base, actively addressing any enquiries andconcerns, and converting these to orders through roadshows and one-to-one meetings.The offering, and the strong institutional demand for it, are seen as fresh evidence ofinvestor confidence in China’s booming growth.

… and in RussiaIn 2005, Credit Suisse also handled the largest ever IPO in Russia, helping Sistemaraise USD 1.56 billion in the form of global depositary receipts traded on the LondonStock Exchange. The offering was more than 2.6 times oversubscribed in the face ofuncertain investor sentiment towards Russia. Sistema is the largest private sectorconsumer services company in Russia and the Commonwealth of Independent States,owning a 51% stake in Russia’s largest mobile phone company, plus additionalinterests in telecoms, financial services, real estate, technology and media. Thecompany plans to use the proceeds to participate in the upcoming privatization ofnational telecom holding company Svyazinvest and to consolidate its leadershippositions in selected industries.

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Michael Schoen,

Debt Capital Markets – Latin America,

Investment Banking (New York)

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Crafting solutions to meet individual requirementsOur focus on clients’ needs runs through every part of the bank. Our Private Bankingclients have known for years that their dedicated relationship manager affords access to the entire spectrum of knowledge and services Credit Suisse has to offer.

For one such client, Credit Suisse provided asset allocation, security selection andtrading services. We hedged and monetized a single stock position worth CHF 500million – and we also helped him close on a USD 2 billion private equity transaction byarranging a tailor-made escrow service. In addition, we structured a private investmentfund for his family and friends to participate in his investment activities, and havearranged financing for a new yacht and private aircraft.

Similarly, another private client was looking to buy a medium-sized enterprise when heretired from the Executive Board of a listed company. We assessed and recommendedseveral candidate firms whose owners were considering succession planning and wearranged financing of CHF 5 million for the selected acquisition.

For a key executive of a South Asian company, colleagues from Credit Suisse’s PrivateBanking and Investment Banking divisions cooperated in 2005 to complete a pioneer-ing corporate equity derivative deal. The transaction allowed the executive to generatecash to pay off a loan secured by shares in his company, while still maintaining upwardexposure to the company’s performance through the purchase of a call option. Thetransaction was well received by the market with the stock opening higher than itsprevious day close after the executive had disclosed the deal publicly.

One point of contact at a single bank is the most efficient way for many of our privateclients to manage their wealth. A Hong Kong client, with a significant investmentportfolio, used to deal separately with different divisions of leading financial institutions.As such, his advisors often focused on promoting products rather than offeringobjective advice. Now, with a single contact point at Credit Suisse to coordinate hisdifferent needs, he enjoys comprehensive banking and wealth management servicesbased on our global resources.

New products, new ideas, new perspectives – for our clientsIn 2005, our Asset Management division developed a high dividend yield equity productto offer Japanese clients exposure to global markets. Faced with the low yield ofgovernment bonds at around 1.5%, this product offers Japanese retail investors above4.0% and pays a monthly dividend payment. We developed the product and won the mandate in response to a request from Nikko Cordial, one of the top threeJapanese brokerage firms, for a product to distribute through their network to retailclients. This is a good example of how we can design a specific new product to meetthe needs of clients in certain market environments.

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Iana Schlaeppi,

Private Banking (Geneva)

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Teamwork must be at the heart of all we do

Combining our experience, knowledge and expertise What use is an orchestra of talented musicians who play only solos? To perform well,we must perform together. Teamwork creates enormous value. Our people collaborateacross the business with one common goal: bringing value to our clients.

Credit Suisse has a global reach – over 44,000 people in locations as diverse asMexico City, Tokyo and Geneva. Performing as one team is not always simple. Itrequires dedication, determination and dialogue. It means we have to trust each other,listen attentively and be generous with our talent and ideas. We have to understand andbelieve in our goals, and recognize we are part of a global team.

We make our talent work for our clients by sharing our wealth of experience,knowledge and expertise throughout the entire business in investment banking, privatebanking and asset management.

Working as a team is not something we can choose to do some days but not others. It is the means by which we can make the most of our inherent strengths – our globalreach, our first-class advice and our business experience – and reach our full potentialfor the benefit of our clients and our shareholders.

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Yong Cai, Charles Jin, Michael Daniel, Manish Kumar,

Collateralized Mortgage Obligations,

Investment Banking (New York)

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Principle in action: teamwork

Developing market-leading innovations – or acquiring them – represent two routes togrowth for large organizations such as Credit Suisse. Putting those innovations to worksuccessfully for different clients, internal and external, across a global, multi-businesscompany, can create huge competitive advantage. But it takes teamwork to develop the structures, processes and relationships to pursue cross-business opportunities.

The following cases provide a practical demonstration of our teamwork and the tangiblebenefits it can create for our clients.

Building on knowledge from experts and clientsHOLT, a platform to analyze the financial performance of companies, offers CreditSuisse divisions and clients unique insights into corporate strategy, performance andvaluation, through one of the most advanced frameworks available, with a databasecovering over 18,000 companies in more than 55 countries. It works on the premisethat stock markets set prices based on fundamentals such as cash flow, rather thantraditional accounting measures. Therefore, it removes accounting distortions andinflation, and calculates performance on Cash Flow Return on Investment (CFROI).

Brought into the Cash Equities business of Credit Suisse in 2002, HOLT has lived abroad vision from day one to become a shared resource, or strategic advisory boutique,for many different areas within the bank. It is used for research, publications, structuredand tailored products, insights and sometimes purely to demonstrate the competitiveadvantage of Credit Suisse to win pitches.

Better still, HOLT enjoys a natural upward spiral in quality every time it is used. Diverseenough to cater for the needs of over 600 external clients, as well as our thousands of internal users, the framework and database improve as more people look at it,contributing their own unique insights, and customizing it to meet their own specificneeds. The moment each improvement is in the database, every HOLT user gets thebenefit of it. In effect, it is building a community that people want to be part of, bringingthe ability to create niche businesses within Credit Suisse, and becoming a case studyin how to engender innovation across a large organization.

Raising funds through teamworkCoordinated team efforts feature across many parts of the bank. Since 2001, theLeveraged Investment Group of our Alternative Capital business and colleagues fromFixed Income have raised USD 4.8 billion of leveraged loan Collateralized DebtObligations (CDOs) across nine transactions. Private Banking played a critical role in raising funds for several of these. The latest of these is Castle Garden Funding, a USD 850 million CDO structured and underwritten by Fixed Income.

An integrated approach, a wealth of resourcesSuccessful company executives and leaders of industry will, by the nature of their work,have a strong relationship with an investment bank. Their very success means they willalso need private banking facilities. So it’s natural to choose a bank that can offer bothservices – and where the two can work seamlessly together.

In 2005, our Paris office arranged a number of services for a client who owned a privatecompany. He wanted to monetize part of this wealth and also raise funds to grow the company. Our investment bankers evaluated his options and found a buyer for two-thirds of the company, then subsequently took the company public. In the end, theclient entrusted our Private Banking division with the task of structuring and managinghis private wealth.

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Tim Bixler,

HOLT, Investment Banking (Chicago)

Nicole Nahass,

HOLT, Investment Banking (New York)

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In addition, a number of other leading executives wanting to exercise stock optionscould not find the specific and speedy cash management service they required fromtheir retail banks. Colleagues from the Investment Banking and Private Bankingdivisions worked together before the transaction to arrive at the best approach for theexecutives concerned, as well as the company and its employees. We then advisedeach client from a tax and wealth organization perspective, including assets the clientsheld with other banks.

Working in close partnership with our clientsOur work with Hiag Holding AG, a leading Swiss forestry products group and itsowners, provides a similar illustration of maintaining a client relationship across severalparts of the bank. We have worked with them for many years, including on theestablishment in 2000 of their joint venture Nybron Flooring International Corporation,Europe’s leading wooden flooring company. In 2005, our clients, on the initiative oftheir private equity partner in Nybron, decided to monetize their investment and awardedCredit Suisse’s Investment Banking business the mandate. We ran a successfuldivestiture process, which raised a sum considerably above the sellers’ target, whilealso providing financing to the purchasers based on Nybron’s credit status, and pre-hedging the expected euro proceeds into Swiss francs for Hiag and its owners. Hereagain, thanks to our integrated approach, we were able to offer our clients not onlyinvestment banking, but also private banking services.

Advice without boundaries In asset management, there is no single product or selection that will suit every client.So to reach our goal of bringing value to clients, we need close cooperation across thebusiness, generally coordinated by a relationship manager.

Our work for a German insurance company, who came to us with a quite specificproduct request, crosses borders. With the relationship managed from Frankfurt, andour teams there also taking care of reporting and compliance issues, we were able tobring in our portfolio management team in London to work on a sophisticated solution.This changed the structure of the product, keeping the out-performance ability theclient wanted, yet building in other features to provide a perfect fit for the client’sneeds.

Credit Suisse is a market leader in the field of alternative investments, managing overUSD 100 billion in a broad range of alternative asset classes, including real estate,private equity and hedge funds, among others. The alternative investments area isgrowing rapidly around the world, as both institutional and individual investors areincreasingly seeking new investment areas that provide diversification from traditionalasset classes, and are shifting to a focus on absolute returns. Our experience in thisarea allows us to advise clients on an ever broader selection of investment choices thatsuit their circumstances and needs and put us at the forefront of an exciting newopportunity for our clients.

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Laurent Bouvier,

Mergers and Acquisitions,

Investment Banking (London)

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Our reputation is everything

Our most valuable assetIn today’s competitive financial services industry, complacency is not an option. We are continually judged on the strength of the results we achieve, the attitude of ourpeople, the respect we show for others and the value we bring to our shareholders and our clients.

Like a chess grandmaster planning a move, we take great care over the immediaterequirement, but always with an eye on the greater long-term consequences of ouractions. To earn and preserve the long-term trust and support of our clients, we mustanticipate, meet and beat their expectations. Their faith is crucial to our ability to growour business and meet our goals.

Our clients want more than just a product; they want a solution to their specific financialneeds. They want more than just information; they want guidance from a specialist withan in-depth knowledge of their business.

We take pride in rising to the challenges they set. We care about the difference wemake. We serve our clients well and act professionally, and our experience shows thatour own success follows.

When our clients turn to us over and over again, it is because they enjoy working withour people. They value our straightforward approach, our integrity and our willingness to listen. They admire our commitment, energy and creativity. They appreciate ourdesire for finding the answers to their complex and rapidly changing requirements,supported by our wealth of experience in investment banking, private banking and asset management.

We want them to know that we have the talent and resources to provide outstandingadvice and expertise. And we want them to know that when we say we will dosomething, we will do it.

Credit Suisse Group Business Review 2005 21

Piers Cox, Richard Hitchcox, Shane O’Cuinn,

Fixed Income,

Investment Banking (London)

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The knowledge that our reputation is everything is crucial to our ability to serve ourclients. Reputation is the third principle that guides us in our daily activities. In the finalpart of this chapter, we look to our people and the way they interact with our clients toillustrate this principle in action.

Meeting and beating clients’ expectationsCredit Suisse is reinforcing its reputation as an innovative partner for small and medium-sized enterprises (SMEs) in Switzerland. We are meeting their demand for growthfinancing options with some alternative forms of financing, which do not affectownership structure – CSA Mezzanine and Preferred Pooled Shares (PREPS).

Generally, SMEs are largely financed by bank loans, and it is difficult for many companiesto support their expansion plans, as they cannot access the capital markets. CreditSuisse is therefore offering CSA Mezzanine financing, issued in the form of subordi-nated loans from Credit Suisse Investment Foundation, and managed by experts in the Asset Management division, as a vehicle for pension funds to tap into thisalternative investment segment. PREPS, on the other hand, give both institutional andprivate investors a Pan-European platform to invest in larger SME companies in abroadly diversified, pooled manner. Prior to this, access to the capital markets to obtainresources similar to equity funding was unavailable for smaller companies.

Reliable partner for US pension fundsCredit Suisse is helping a growing number of US states with investment managementprograms that use state pension funds to invest in small and start-up enterprises withinthe state – these are often under-served by the large private equity firms. Central to the concept is the belief each state has in the quality of its entrepreneurs, and theendorsement of this by a global brand with the reputation of Credit Suisse.

22 Credit Suisse Group Business Review 2005

Edyta Lopizzo, Ernest Durussel,

Trade Finance Services,

Private Banking (Geneva)

Principle in action: reputation

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The state of Indiana chose Credit Suisse to manage a fund of funds, created to providecapital for innovation and investment in the state’s wealth of intellectual property in lifesciences. Having raised USD 73 million, not just from the state employees’ pensionfund but also from corporate investors and educational institutes, Credit Suisse nowinvests the money through carefully chosen venture capital firms.

On the strength of this success, Credit Suisse operates similar schemes in Oregon andOhio, with other states soon to follow. To demonstrate confidence in the funds, CreditSuisse also invests, usually at far higher than the standard 1%. Our involvement adds a confidence factor, which in itself can bring in greater investment, including from outside the state. It also has the benefit of shining the spotlight on different areas ofentrepreneurial expertise within different states.

While the outcome of these programs is a boost to economic development within thestate, the main focus is the investment return for the states’ pension funds – and thefunds are monitored strictly with this in mind. This is where the in-depth knowledge andexperience of Credit Suisse plays such an important role. Clients place their faith in usand trust us to deliver.

Finding new ways to improve client serviceAt Credit Suisse, our reputation for smooth-running client service is due in no small part to our people, and the skills of every employee are important to us. We run aseries of training programs and efficiency initiatives to support our aims. For example,Private Banking Switzerland runs the Next Pace initiative to improve staff familiarity with our five-step customer advisory process, while Retail Banking’s Come On Campinitiative helps client advisors position Credit Suisse as a committed bank that offersfriendly service.

Trusted advice, trusted relationshipsClients know we will rise to the challenge of their changing requirements, and we areproud of the faith they put in us. A multi-billion dollar pension plan in the entertainmentindustry is a case in point. Clients of Asset Management in New York, they expressedconcern about the future expected return environment for US fixed income.

Because of our strong relationship with them, we were able to work in partnership withtheir investment consultant to discuss the potential to expand their investment guide-lines to take in fixed income globally. This would bring the benefits of diversification,plus the opportunity to take advantage of other markets. We introduced them to ourLondon team and they made the decision to exit US fixed income and move to a global mandate.

So we retained the business, and the fund enjoyed the comfort of a seamless move.They didn’t have to hire a new manager, and could continue working with the sametrusted firm to arrive at a different solution – and of course they retained all theirexisting client services relationships with our New York office.

Credit Suisse Group Business Review 2005 23

Sébastien Lerjen,

Private Banking (Geneva)

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Operating review: Credit Suisse Group and Credit Suisse

Our 2005 results show that we are making good progress in transforming the underlying profitability of our business. Our new integrated structure will help us to further enhance our growth and returns for our shareholders. The following discussion is based on the operational and management structure in place in 2005.

2005 was a year of decisive change and significant progress for Credit Suisse Group.In May 2005, Credit Suisse Group merged its two banking entities, Credit Suisse andCredit Suisse First Boston, to create an integrated global bank. The integrated globalstructure, combining the core businesses of Investment Banking, Private Banking andAsset Management, began operations on January 1, 2006. On January 16, 2006, thenew Credit Suisse brand was launched.

While Credit Suisse Group implemented the integration strategy of its banking businessin 2005, the results for the full year demonstrate that it was at the same time makinggood progress in strengthening the underlying profitability of its business. The Groupproved its ability to benefit from an increase in client activity and the continued favorablecredit environment. Net income totaled CHF 5,850 million, up 4% compared to 2004.This result includes a non-cash charge in the fourth quarter of 2005 of CHF 421million after tax relating to a change in the Group’s accounting for share-based awards,as well as a CHF 624 million after-tax charge in Institutional Securities in 2005 toincrease the reserve for certain private litigation matters.

Credit Suisse Group’s return on equity was 15.4% in 2005. The Group maintained itsstrong capitalization, with a consolidated BIS tier 1 ratio of 11.3% at year-end 2005.Furthermore, Credit Suisse Group recorded net new assets of CHF 58.4 billion for thefull year 2005.

Private Banking provides wealth management products and services to high-net-worth individuals in Switzerland and many other markets around the world.

This segment reported net income of CHF 2,647 million for 2005, up 7% compared to2004. The increase in net income primarily reflected improved commissions and feesand trading revenues, partly offset by higher compensation and benefits.

As part of its growth in strategic key markets, Private Banking expanded its businessduring 2005 in areas such as Asia, the Middle East and Russia. A Private Banking hubwas created in Dubai (United Arab Emirates) – a further milestone in the global strategyto grow the wealth management business. In addition, local representative offices wereopened in Bangkok (Thailand), Guangzhou (China), Mumbai (India) and St. Petersburg(Russia). In 2006, Private Banking intends to establish a presence in Saudi Arabia byentering into a joint venture with experienced local partners in the Saudi SwissSecurities consortium, with an office in Riyadh.

Private Banking increased its net revenues by 8%. This improvement was mainly drivenby higher commissions and fees, reflecting the increase in assets under managementand higher brokerage volumes. Furthermore, Private Banking recorded higher tradingrevenues, reflecting higher client transaction volume.

The segment recorded higher costs, with a 7% increase in total operating expensescompared to 2004. This increase was mainly due to higher compensation and benefits,while other expenses increased only marginally. Compensation and benefits increaseswere driven by higher performance-related compensation, in line with higher pre-taxincome and ongoing strategic investments in growth markets, including front-officerecruitment.

24 Credit Suisse Group Business Review 2005

Credit Suisse Groupin CHF m, except where indicated 2005 2004

Net revenues 60,632 55,139

Total operating expenses 27,954 24,534

Net income 5,850 5,628

Return on equity – Group 15.4% 15.9%

Return on equity – Banking 16.2% 17.8%

Return on equity – Winterthur 11.7% 9.2%

Basic earnings per share in CHF 5.17 4.80

BIS Tier 1 ratio 11.3% 12.3%

Number of employees (full-time equivalents) 63,523 60,532

Assets under management in CHF bn 1484.3 1220.7

Private Bankingin CHF m, except where indicated 2005 2004

Net revenues 7,729 7,170

Total operating expenses 4,431 4,143

Net income 2,647 2,473

Cost/income ratio 57.3% 57.8%

Gross margin 129.2 bp 133.7 bp

Net new assets in CHF bn 42.7 26.4

Assets under management in CHF bn 659.3 539.1

Number of employees (full-time equivalents) 13,077 12,342

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The gross margin for 2005 was 129.2 basis points. Compared to 2004, the grossmargin decreased 4.5 basis points, mainly related to lower net interest income.

Assets under management were CHF 659.3 billion as of December 31, 2005, anincrease of 22% compared to December 2004. The main drivers of this growth werestrong net new asset inflows, the impact of favorable foreign exchange rate fluctuationsand higher equity valuations.

Private Banking continued to achieve healthy money inflows from strategic key marketsin Asia and from the onshore business in Europe, where double-digit growth rates wereachieved. The segment recorded CHF 42.7 billion of net new assets for 2005.

Corporate & Retail Banking, which offers banking products and services toCorporate & Retail clients in Switzerland, reported a 19% increase in net income toCHF 1,069 million, a record result.

Net revenues for 2005 were up 3% versus 2004, reflecting strong increases incommissions and fees from increased brokerage volumes and increased tradingrevenues. Net interest income remained stable as an increase in lending volume wasoffset by margin pressure in the low interest rate environment.

Key drivers for the segment’s strong result were stable net reserves and releases ofprovisions in 2005 compared to net provisions for credit losses in 2004. For 2005, netreleases of provisions for credit losses of CHF 96 million were recorded compared tonet provisions of CHF 122 million in 2004. The release of provisions reflected theongoing favorable credit environment for lenders.

For 2005, total operating expenses increased 7% compared to 2004, due to higherperformance-related compensation in line with higher pre-tax income, while otherexpenses only marginally increased.

Corporate & Retail Banking achieved a strong return on average allocated capital of20.7% in 2005, which was well above the mid-term target of 15%.

In 2005, Corporate & Retail Banking further expanded its Swiss residential mortgagebusiness, reporting growth of approximately 9%. The growth in this business reflectedincreased marketing efforts and Credit Suisse’s wide range of mortgage products.

In line with the strategic aim of gaining market share in the high-end retail business,particularly in investment products, Credit Suisse launched a new investment productduring 2005: Credit Suisse Triamant. This new product combines the advantages ofprofessional asset management with those of an investment fund by providing activelymanaged asset allocation, broad diversification and transparent reporting, and,furthermore, underscores Corporate & Retail Banking’s strategy to provide moreinnovative investment products to retail clients.

Credit Suisse Group Business Review 2005 25

Corporate & Retail Bankingin CHF m, except where indicated 2005 2004

Net revenues 3,458 3,348

Total operating expenses 2,186 2,051

Net income 1,069 901

Cost/income ratio 63.2% 61.3%

Return on average allocated capital 20.7% 18.0%

Number of employees (full-time equivalents) 8,469 8,314

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Operating review: Credit Suisse (continued)

Institutional Securities provides securities and investment banking services toinstitutional, corporate and government clients worldwide.

Institutional Securities reported net income of CHF 1,080 million in 2005, a decreaseof 18% compared to 2004. Excluding the CHF 624 million after-tax charge in thesecond quarter of 2005 to increase the reserve for certain private litigation matters, net income for the full year was CHF 1,704 million, an increase of 30% compared to2004. This improvement, excluding the litigation charge, was driven by higher revenues,lower income tax expenses and lower credit provisions (including the release ofsignificant credit provisions), offset in part by higher operating expenses. Net income for 2005 was positively impacted by certain tax-related items.

Institutional Securities increased its revenues by 15% versus 2004, reflecting higherinvestment banking and trading revenues and increased industry-wide activity. Thisimprovement demonstrates Credit Suisse’s strength and leadership position in keybusiness areas, including initial public offerings (IPOs), leveraged finance, advancedexecution services, emerging markets, prime brokerage and the increasingly importantfinancial sponsor client base.

Investment banking net revenues include debt underwriting, equity underwriting andadvisory and other fees. Total investment banking revenues improved 16% in 2005.This strong investment banking performance reflected the impact of the newlyestablished financing platform, which integrated the capital markets, leveraged financeorigination and structuring teams. Institutional Securities also benefited from a leadingposition in the financial sponsors business.

Debt underwriting revenues were up 8% versus 2004, primarily reflecting higher resultsin investment grade capital markets, leveraged finance and residential mortgage-backedsecurities. Equity underwriting revenues increased 25%. These improvements were dueto higher industry-wide equity issuance activity and increased IPO market share in theAmericas and Europe. Advisory and other fees increased 23%, due primarily to anincrease in industry-wide activity and increased market share.

Total trading revenues increased 14% compared to 2004. The increase in fixed incometrading revenues reflected improvements in commercial and residential mortgage-backed securities as well as Latin America and other emerging markets trading, all ofwhich are key growth areas in the industry. The increase in equity trading revenuesreflected higher revenues in prime services, the global cash business and proprietarytrading.

Institutional Securities reported a 20% increase in total operating expenses versus2004. This included the impact of the CHF 960 million charge in 2005 to increase thereserve for certain private litigation matters. Excluding the impact of this litigationcharge, total operating expenses in 2005 increased 11%, primarily reflecting highercompensation accruals in line with higher revenues and higher other expenses.

26 Credit Suisse Group Business Review 2005

Institutional Securitiesin CHF m, except where indicated 2005 2004

Net revenues 15,102 13,120

Total operating expenses 13,643 11,375

Net income 1,080 1,313

Cost/income ratio 90.3% 86.7%

Pre-tax margin 10.1% 13.6%

Return on average allocated capital 8.6% 12.8%

Number of employees (full-time equivalents) 18,809 16,498

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Credit Suisse was ranked first in the global market share for IPOs for the full year2005, having participated in a number of high-profile transactions, including the USD9.2 billion IPO for China Construction Bank, the world’s largest IPO since 2001 andthe largest IPO ever in China and in non-Japan Asia. Other notable transactions includethe USD 1.8 billion IPO for chemical company Huntsman, the IPO of Neustar, thelandmark USD 21 billion sale of AT&T, the historic USD 4.4 billion “Brady Bond”exchange for Brazil, and the leveraged buyout of SunGard Data Systems, which wasthe largest ever technology buyout.

Wealth & Asset Management offers international asset management services –including a broad range of investment funds – to institutional and private investors. It also provides financial advisory services to corporate clients.

The Wealth & Asset Management segment reported net income of CHF 663 million in2005, an increase of 25% compared to 2004. The increase primarily reflected a higherlevel of investment-related gains in Alternative Capital.

Wealth & Asset Management measures business performance based on assets undermanagement, discretionary assets under management and net new assets. Assetsunder management as of December 31, 2005 amounted to CHF 608.8 billion, up26.2% versus December 31, 2004, while discretionary assets under managementincreased 28.7%. Wealth & Asset Management had a net asset inflow of CHF 11.5billion, a significant improvement from the 2004 net asset inflow of CHF 2.6 billion.

Wealth & Asset Management increased its net revenues in 2005 by 25% compared to 2004. Revenues before investment-related gains increased 5% from 2004, due to higher placement fees in Alternative Capital and higher management fees in CreditSuisse Asset Management. Investment-related gains increased 28% in 2005, driven by a higher level of private equity gains resulting from the sale of private equityinvestments.

Operating expenses in 2005 increased 6% from 2004, primarily reflecting higher pro-fessional fees in Alternative Capital. The increase in professional fees was due primarilyto consulting fees paid to managers who continue to assist in managing portfolios ofcertain funds spun off from Alternative Capital. Compensation and benefits expensesincreased slightly in 2005, reflecting higher performance-related compensation, offsetin part by lower severance costs.

Detailed information on the financial results of Credit Suisse Group can be found in theAnnual Report 2005 and the Supplemental Information 2005.

Credit Suisse Group Business Review 2005 27

Wealth & Asset Managementin CHF m, except where indicated 2005 2004

Net revenues 5,234 4,202

Total operating expenses 2,687 2,539

Net income 663 530

Total assets under management in CHF bn 608.8 482.4

Total net new assets in CHF bn 11.5 2.6

Number of employees (full-time equivalents) 3,035 2,981

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Operating review: Winterthur

Winterthur achieved good progress in 2005 as it improvedits overall financial results and strengthened its operatingperformance. This underscores the effectiveness of themeasures implemented over the past three years.Winterthur still has further potential to grow and to enhance its profitability.

Winterthur is the leading insurance company in Switzerland and is one of the top 10composite insurers in Europe. Building on its 130-year history, Winterthur operates itsLife & Pensions and Non-Life businesses primarily in Western Europe, as well as inCentral and Eastern Europe, the US and Asia. It distributes a well-balanced productportfolio through multiple channels and focuses on private clients and small andmedium-sized enterprises (SMEs). The Winterthur brand reflects a straightforward andentrepreneurial approach to business, a commitment to high-quality products andsuperior customer services.

Winterthur is active in 17 countries and has approximately 19,000 employees serving13 million clients worldwide.

Credit Suisse Group’s strategy regarding Winterthur is to secure its leading marketposition in Switzerland and to strengthen its international operations. The Groupcontinues to manage Winterthur as a financial investment and is preparing it for a potential capital markets transaction.

2005 results2005 was a successful year for Winterthur, which strongly contributed to Credit SuisseGroup’s results. Considerable efforts, initiated in 2002, to systematically improveWinterthur’s risk profile and to implement strict and selective underwriting processeshave proved beneficial. Solid operational progress contributed in 2005 to a significantincrease in net income. The return on equity reached 11.7% in 2005 after 9.2% in theprevious year.

Both reporting segments, Life & Pensions and Non-Life, succeeded in furtherstrengthening the underlying business performance in 2005. Life & Pensions continuedits focus on technical performance, reflected by an improved risk margin, whilemaintaining good growth dynamics. For the full year 2005, Life & Pensions reportednet income of CHF 490 million. This 6% decrease compared to 2004 was primarilyattributable to specific effects related to taxes and changes in actuarial models andassumptions. In Non-Life, net income for 2005 increased from CHF 206 million to CHF 578 million. This improvement was partly driven by the after-tax charge of CHF 242 million booked in the fourth quarter of 2004 to increase provisions forcontingencies related to the sale of Winterthur International in 2001. The main factorscontributing to the improvement of Non-Life’s operating performance were a favorableclaims experience and continued strict cost and claims management.

Recent developmentsWinterthur has not only achieved a solid level of profitable growth but has alsosucceeded in further strengthening its business portfolio. It withdrew from the Canadianmarket in 2005, while further improving its position in promising pension markets inCentral and Eastern Europe via the acquisition of the Polish pension fund Dom, forwhich regulatory approval is expected in 2006. A significant milestone was thecompletion in December 2005 of the seasoning process relating to the sale ofWinterthur International to XL Insurance (Bermuda) Limited in 2001. Substantialprogress has also been made in other areas, including the establishment by CreditSuisse Group of a new Board of Directors for Winterthur and the preparations for a potential listing of Winterthur on the stock market. In view of the accomplishments in2005, Winterthur is well-positioned to successfully seize new business opportunities.

28 Credit Suisse Group Business Review 2005

Life & Pensionsin CHF m, except where indicated 2005 2004

Net revenues 18,197 16,618

Total operating expenses 1,883 1,776

Total business volume 17,685 16,777

Net income 490 522

Number of employees (full-time equivalents) 6,913 6,524

Non-Lifein CHF m, except where indicated 2005 2004

Net revenues 11,688 11,533

Total operating expenses 2,850 3,134

Net income 578 206

Combined ratio 96.6% 100.1%

Number of employees (full-time equivalents) 12,046 12,844

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Beyond 2005The market environment in which Winterthur operates is characterized by sustained lowinterest rates and competitive pressure. Strict cost management, flexibility and, crucially,the spirit to shape market trends are key to coping with these challenges. Winterthur’sexpertise with regard to risk and asset-liability management will provide a truecompetitive advantage as it captures new Life & Pensions opportunities resulting fromgrowing pension markets and demographic trends. In Non-Life, the continued focus oncustomer needs and service quality, the streamlining of administration processes andthe sophisticated underwriting approach set the foundations for Winterthur to achieve itstarget of generating profitable growth across the insurance cycle.

In both Life & Pensions and Non-Life, Winterthur’s initiatives continue to be based oncommon business sense, hands-on entrepreneurial leadership and proximity to clients –as well as creativity and skillful execution. Winterthur will continue to focus on retailcustomers and SMEs, which will allow the insurer to further standardize processes andproducts. Winterthur will pursue its targeted underwriting policy and further developpricing and claims-handling processes.

Detailed information on Winterthur and its financial results can be found in the CreditSuisse Group and Winterthur Group Annual Reports 2005.

Credit Suisse Group Business Review 2005 29

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Aiming for Operational Excellence

Operational Excellence is a key business initiative that aimsto support the growth strategy of Credit Suisse and topromote innovation through the implementation of more than300 targeted projects in all areas of the bank. The individualprojects focus on the improvement of customer service,profitability and processes and aim to generate results withinseveral months of their launch.

Operational Excellence was launched at Credit Suisse in fall 2004 and initiallyintroduced to Private Banking. After conducting benchmarking analysis, particularly inthe US, Credit Suisse selected Lean Sigma as the basis for its Operational Excellenceinitiative. This is a well-established, systematic methodology for the improvement ofbusiness processes and service quality. Credit Suisse was one of the first companies inthe European financial services industry to implement a full-scale Lean Sigma program.

Lean Sigma provides Credit Suisse with a common language for the execution of its Operational Excellence activities and thus supports its efforts to better align keyprocesses to client needs and expectations. These measures are focused on theclient’s perspective and begin with a systematic, fact-based analysis of clientrequirements. Before initiating any improvements, Credit Suisse first asks its clients and then takes actions to best improve service, increase quality or minimize errors.

Credit Suisse is now rolling out Operational Excellence within the entire bank and willcoordinate the initiative across its Investment Banking, Private Banking and AssetManagement divisions as well as across the bank’s support functions (SharedServices). The positive momentum of Operational Excellence in Private Banking and the experience gained so far will benefit the entire organization. In addition, it will bepossible to incorporate the evaluation of client satisfaction into the assessment of amanager’s performance, whereas performance-related compensation was previouslydetermined exclusively on the basis of financial results.

Operational Excellence is, of course, an ongoing and long-term initiative. Its aim is tocreate and foster a culture of continuous improvement focused on delivering excellentclient service, leading to profitable and sustainable growth. While the first series ofprojects focused on urgent issues or on improvements that could be realized rapidly,Credit Suisse is now addressing areas that may be less prominent internally but have asignificant impact on client service. To date, around 200 employees have been trainedas Lean Sigma project leaders or “Black Belts” and Credit Suisse has provided morethan 6,000 days of project training for senior management and team members.

In terms of benefits arising from our Operational Excellence projects, we have so faridentified a net income contribution of around CHF 150 million per annum. 70% of thetotal benefits are expected to come from revenue increases, while the other 30% willstem from efficiency improvements. This underscores the key role of OperationalExcellence as a driver of Credit Suisse’s growth strategy.

30 Credit Suisse Group Business Review 2005

Ali Baradar, Richard Shilling,

Product Control (London)

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Credit Suisse is renowned for its innovative strength. Operational Excellence also servesto promote innovation by providing a platform for the realization of new ideas. Itsstandard Lean Sigma methodology supports the implementation of new solutions andthus leads to continuous advances in product and service quality. This is of particularimportance within growth areas, where Operational Excellence ensures the smoothfunctioning of new processes.

Operational Excellence reflects Credit Suisse’s commitment to placing its clients at thecenter of all that it does. It also serves to strengthen its reputation by ensuring flawlessexecution and promotes the principle of teamwork by fostering cooperation across thebank. Credit Suisse will continue to roll out further strategically-aligned OperationalExcellence projects and to train more employees in Lean Sigma. Going forwardOperational Excellence will be central to the way Credit Suisse works.

Credit Suisse Group Business Review 2005 31

Charles Wittenoom,

Equities, Investment Banking (Hong Kong)

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Credit Suisse Group in society

The key function of a business is to create value for itsshareholders, clients and employees. This way, it cancontribute to the prosperity of society by meeting thedemand for goods and services; by providing a source of income and retirement provision; and by paying taxes. As it is exposed to competition, the company mustcontinuously enhance productivity and develop new ideas,so adding to the pool of collective knowledge and helping to devise solutions for the challenges of society.

Credit Suisse Group is aware of its responsibility towards its various stakeholder groups:shareholders, clients and employees, as well as the local community and the broadersocial environment. We strive to achieve economic success by consciously addressingexternal expectations regarding our profitability and environmental and social activities,as well as by making decisions that take account of the current and future needs of society.

The Credit Suisse Group Code of Conduct contains binding values that all employeesare expected to observe. Together with the company’s sustainability policy, itdemonstrates our commitment to the principle of sustainability and also refers to relatedinternational conventions that we have pledged to uphold. These include the UnitedNations Environment Programme (UNEP) Declaration for Financial Services Providers,and the United Nations Global Compact, an initiative under which companies committhemselves to 10 principles relating to environmental protection, working conditions,human rights and anti-corruption efforts.

In this section of the review we elaborate on key factors relating to sustainability,contributing to long-term business success:

– Sustainability-oriented products and services– A prudent approach to business– The efficient use of resources– A responsible human resources policy– An active exchange of views and ideas with society

Sustainability investmentsAmong the wide variety we offer, sustainability-oriented investment products represent a small, yet innovative, selection.

The Credit Suisse Global Sustainability Fund and Credit Suisse Fellowship Fund aregeared towards sustainable, ethical and ecological investing. Our Global Water Basketand Alternative Energy Basket (launched in 2005) provide topical investmentopportunities in the fields of environmental technology and eco-efficiency, seen againstthe shortage of natural resources and demands for a reduction in greenhouse gasemissions. The Leu Prima Cat Bond allows for the financial hedging of risks such asflooding and hurricanes that are difficult to insure in the traditional insurance market.Finally, the responsAbility Global Microfinance Fund, available for public sale inSwitzerland since March 2005 – on time for the UN Year of Microcredit – providesloans for micro-entrepreneurs in developing and newly-industrialized countries.

The newest products with a social benefit are Charity Notes, launched in November2005. These generate a return for the investor, while enabling the charitable foundationSymphasis to combat youth unemployment in Switzerland. Services such as individualportfolio screening with specialist advice complement our sustainability offerings.

32 Credit Suisse Group Business Review 2005

Franziska Burckhardt,

Legal and Compliance (Zürich)

Page 37: credit-suisse Business Review 2005

responsAbility Global Microfinance Fund: key facts

– Launched in November 2003; available for public sale in Switzerland since March 2005

– Volume as of December 31, 2005: USD 45 million

– Assets managed in the fund reach 95 microfinance institutions worldwide,

which supply micro loans to around 65,000 small businesses;

69% of these micro-entrepreneurs are women

– The largest direct investments are made in Georgia, Russia, Kyrgyzstan,

Mexico and Ecuador

– Investment return in 2005: 3.91% (Fund currency USD)

A prudent approach to businessAs well as complying with all relevant legislation, considering the environmental andsocial aspects of corporate activity is a prerequisite for business success. Thecorresponding due diligence requirements are therefore very important, and alsosafeguard the company’s reputation.

As we operate internationally, we must prevent our products and services from beingabused, while still respecting the privacy of our clients. Besides all relevant local laws,everywhere we operate we apply the robust Swiss regulations for preventing moneylaundering and terrorist financing. Furthermore, financial intermediaries are subject togrowing demands regarding their credibility and trustworthiness. For these purposes weare helping to establish industry-wide standards, as one of 12 international banks in theWolfsberg Group.

Concerning the ecological and social implications of our business activities, it isessential we consider credit-, liability- and reputation-related risks as an integral part of risk management. Examining ecological risks when making credit decisions has been standard practice for several years. In addition to internal directives, we have adopted the Equator Principles, a voluntary agreement between financial services providers to address ecological and social risks in project finance in accordance with World Bank guidelines.

Sustainability ratingsCredit Suisse has been included in the Dow Jones Sustainability Indexes and theFTSE4Good Index Series for several years. These indices, which are reviewed annually,are based on ratings that evaluate companies according to various aspects ofsustainability.

You can also consult a comprehensive sustainability reporting package – comprising a description of the environmental management system and indicators, as well asmilestones in 2005 – to evaluate the performance of Credit Suisse. This information is available at: www.credit-suisse.com/responsibility.

Efficient use of resourcesCredit Suisse strives to ensure that its internal processes make careful use of naturalresources. To monitor the appropriate measures centrally and set targets, we run anenvironmental management system, certified under ISO 14001 since 1997, which alsoincludes key external partners such as facility management and catering services.

Credit Suisse Group Business Review 2005 33

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Several examples illustrate our resource-saving activity in 2005: replacing tube monitorswith flat screens has reduced our energy consumption throughout Switzerland; installingwater-saving tap fittings has halved water consumption, without any loss of comfort;increasing the proportion of our paper produced using sustainable forestry practices has further added to a reduction in environmental impacts; and we have reached amilestone in our pilot project (see panel) aimed at achieving greenhouse gas neutrality.These measures contribute to the more efficient handling of natural resources, whilealso saving money.

The company’s environmental management efforts have also received public recog-nition in the award from the Climate Group, presented in Montreal in December 2005,to acknowledge the continuous improvements we have achieved in recent years.

Greenhouse gas neutral in Switzerland from 2006

In 2005, we launched a pilot project aimed at achieving greenhouse gas neutrality in our activities

in Switzerland from 2006, based on:

1. Increasing energy-efficiency by consciously optimizing operations and controlling investments

at existing facilities

2. Substitution measures (e.g. the purchase of “green” electricity)

3. Offsetting of the remaining amount through emission certificates

A responsible human resources policyEmployees are vital to the success of Credit Suisse: they provide the service and advicethat our clients require, and they represent the company. As banking grows increasinglycomplex, it is important not only that we acquire employees who have the requisiteskills, but also that we train them and help them develop. Our training activity is run byCredit Suisse Business School, which aligns various sales and management trainingprograms to our business strategy. For example, Campus Asia, which opened inSingapore in 2005, prepares employees for their roles in the Asian growth market. The School also offers specialist training in conjunction with external partners.

Promoting equal opportunity is particularly important and units dedicated to diversitymanagement support our efforts in meeting the requirements of our Code of Conductwith regard to a work environment that is free from discrimination. These measuresenable us to serve a diverse global clientele with our employees’ wide range ofexperience and perspectives. In 2005 we received external recognition for our effortsfrom the US magazine Working Mother and the UK organization Opportunity Now.

Credit Suisse Business School: key facts

– Opened January 1, 2004

– Comprises Business Faculty and Leadership Faculty

– Present on two continents: Europe (Zürich) and Asia (Singapore, Hong Kong)

– Awarded Corporate Learning Improvement Process (CLIP) certification by European Foundation

for Management Development in spring 2005 – the first bank worldwide to receive this

– In 2005, a total of 3,469 courses involving 4,719 days of training and 45,137 participants

were carried out

– Over the last eight years, Credit Suisse in Switzerland has, on average, had:

– 600 commercial and IT apprenticeships

– 350 positions for high school and university graduates

34 Credit Suisse Group Business Review 2005

Derek Chan,

Private Banking (Hong Kong)

Page 39: credit-suisse Business Review 2005

Active exchange of views and ideas with societyIn addition to shareholders, clients, analysts and the media, Credit Suisse alsoexchanges views and ideas with competitors, regulators, associations, governmentrepresentatives, international bodies and non-governmental organizations (NGOs),creating understanding and helping to find solutions to social challenges. Regularstudies produced by our Economic Research department – about current issues suchas family policy, the eastward expansion of the EU and innovative approaches to taxreforms – attract considerable attention. There is also a great deal of interest in theCredit Suisse Sorgenbarometer, an annual survey of the Swiss public’s concerns. In2005 it identified unemployment, healthcare and retirement provision as the mainsources of worry.

Discussions with NGOs enable us to present our viewpoint and also to critically examineour own perspective, as in the case of the meeting we hosted in February 2005regarding the implementation of the Equator Principles. All of these exchanges enableus to identify new developments, trends and expectations that could be relevant in thefuture. The large number of our employees who hold positions in associations, specialistgroups and political bodies also help to actively shape society.

The varied charitable commitments of Credit Suisse as a company, as well as those of its employees, are born of a sense of responsibility for our global community and in an effort to preserve a stable environment. Various foundations and donationsdepartments, each with a thematic or geographic focus, make contributions to promoteartistic talent, to support the integration of people with disabilities, to construct andequip schools and libraries, to mentor young people, and to address the needs of thesick and elderly.

A number of devastating natural disasters occurred in late 2004 and 2005. CreditSuisse and many of its employees provided emergency financial aid to enableimmediate support for the victims of these catastrophes. In the context of corporatevolunteering, many employees also lent a helping hand in their spare time. Activitiesranged from assisting in the renovation of playgrounds and community centers, cleaningup green spaces, performing craftwork with children, tutoring young people with theirhomework or mentoring students at the start of their careers. Credit Suisse’ssponsorship of sports and culture on a national and international level is yet anothercomponent of our interaction with society, and ensures that Credit Suisse is recognizedby a broad public.

Rebuilding after the tsunamiIn October 2005 and January 2006, two teams of 20 Credit Suisse employeesvolunteered with Habitat for Humanity, an international NGO focused on providingaffordable housing, to help rebuild homes near Galle, Sri Lanka, a region severelyaffected by the tsunami. This was in addition to financial aid to support reconstructionefforts provided by the Credit Suisse Group Foundation, which was endowed with USD 10 million.

During one week, the volunteers worked alongside local families to construct newhomes. Under the guidance of Habitat for Humanity, employees produced concretecomponents, laid foundations, erected concrete walls and built wooden roofs. Theirefforts helped the population return to a normal life, and gave them hope for the future.

Credit Suisse Group Business Review 2005 35

Adrienne Bull,

Internal Audit (New York)

Page 40: credit-suisse Business Review 2005

Corporate governance

The way we interact with our stakeholders has afundamental impact on our business and, ultimately, on our reputation. We therefore strive to act with integrity,responsibility, fairness, transparency and discretion at all times in order to secure the trust of our shareholders,clients and employees and other members of the financial community, as well as the broader public.

Credit Suisse Group’s corporate governance policies and procedures comply with high international standards. We are committed to safeguarding the interests of ourstakeholders and recognize the importance of corporate governance in achieving this.Transparent disclosure helps stakeholders to assess the quality of our business andmanagement and assists our investors in their investment decisions.

Abiding by the rulesWe adhere to the principles set out in the Swiss Code of Best Practice. In connectionwith our primary listing on the SWX Swiss Exchange, we are subject to the SWXDirective governing the disclosure of information on corporate governance. Our sharesare also listed on the New York Stock Exchange (NYSE) in the form of AmericanDepositary Shares. As a result, we are subject to certain US rules and regulations.Moreover, we adhere to the NYSE Corporate Governance rules, with a few minorexceptions where the rules are not applicable to foreign private issuers.

Our guidelinesOur corporate governance policies and procedures are defined in a series of documentsgoverning the organization and management of the company. Our Board of Directorshas adopted a set of Corporate Governance Guidelines, designed to explain andpromote an understanding of our governance structures. Other important corporategovernance documents include the Articles of Association, the Regulations Governingthe Conduct of Business, the Board of Directors’ Committee Charters and the Code of Conduct.

Code of ConductOur Code of Conduct focuses on 12 core ethical and performance values, which areapplicable to all of our employees and guide them in their activities. We are present in over 50 countries and employ individuals from over 100 different nations. The Code is therefore intended to promote a sense of unity and to help our employees to identify with our shared values, methods and objectives. It also plays an importantrole in guiding our efforts to inspire and maintain the trust and confidence of all our stakeholders.

Involving our shareholdersAs investors and bearers of risk, our shareholders have the right to decide on keyissues within our Group at the Annual General Meeting. We want our investors to knowthat they can depend on the accuracy and transparency of our reporting publications.We are therefore committed to producing precise, reliable and comprehensible financialreports that clearly explain our performance, our mission and our strategic rationale.

36 Credit Suisse Group Business Review 2005

Page 41: credit-suisse Business Review 2005

Our Board of DirectorsOur Board of Directors is responsible for the overall direction, supervision and control ofthe Group. It regularly assesses our competitive position and approves our strategic andfinancial plans. The Board is actively involved in significant Group projects. The Boardconsists solely of directors who have no executive function within the Group andincludes a majority of independent directors. The Board holds at least six ordinarymeetings per year and, in addition, convenes as often as required to discuss any urgentmatters. It has established four committees that support the Board in appropriatelydischarging its responsibilities: the Chairman’s and Governance Committee, the AuditCommittee, the Compensation Committee and the Risk Committee.

Our managementThe Board of Directors delegates management authority and the power to implementits resolutions to executive management bodies or executive officers. The most seniorexecutive body is the Group Executive Board, which – under the lead of the GroupChief Executive Officer – is responsible for the operational management of the Group.

Managing riskOur Risk Management function contributes to our company’s success by promoting adisciplined risk culture and creating the appropriate transparency. It also ensures that weadopt a prudent and intelligent approach to risk-taking that appropriately balances riskand return and optimizes the allocation of capital throughout the Group to benefitshareholders and other stakeholders. A significant number of employees andconsiderable technological resources are focused on ensuring that Credit Suisse Groupremains a leader in the field of risk management. Moreover, through our proactive riskmanagement culture and the appropriate qualitative and quantitative tools, we strive tominimize the potential for undesired risk exposure in our operations.

Committed to complianceOur employees are committed to maintaining the highest standards of compliance with all legal, regulatory and internal requirements and they observe strict standards of professional conduct at all times. The implementation of compliance begins whenselecting employees and ranges from training, detailed processes and rules to effectivesupervisory and control systems.

Rewarding excellenceWe are committed to employing a compensation philosophy that rewards excellence,encourages personal contribution and professional growth and aligns the employees’values with the Group’s core ethical and performance values and thus motivates thecreation of shareholder value. Long-term corporate success depends on the strength of human capital and our goal is to therefore be the employer of choice in the marketsand business segments in which we operate.

Further information on corporate governance can be found in the Credit Suisse GroupAnnual Report 2005.

Credit Suisse Group Business Review 2005 37

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38 Credit Suisse Group Business Review 2005

Executive Boards of Credit Suisse Group and Credit Suisse

1 2 3 4 5 6

1 Thomas J. Sanzone***Chief Information Officer, Credit Suisse

2 Tobias Guldimann**Chief Risk Officer,Credit Suisse Group

3 Renato Fassbind*Chief Financial Officer,Credit Suisse Group and Credit Suisse

4 Leonhard H. Fischer**Chief Executive Officer,Winterthur

5 Brady W. Dougan*Chief Executive Officer,Investment Banking and Chief Executive Officer, Credit Suisse Americas

6 Oswald J. Grübel*Chief Executive Officer, Credit Suisse Group and Credit Suisse

* Member of the Executive Boards of Credit Suisse Group and Credit Suisse

** Member of the Executive Board of Credit Suisse Group

*** Member of the Executive Board of Credit Suisse

Page 43: credit-suisse Business Review 2005

Credit Suisse Group Business Review 2005 39

7 8 9 10 11 12 13

7 Walter Berchtold*Chief Executive Officer,Private Banking

8 David J. Blumer*Chief Executive Officer,Asset Management

9 Urs Rohner*General Counsel, Credit SuisseGroup and Credit Suisse, Chief Operating Officer, Credit Suisse

10 D. Wilson Ervin***Chief Risk Officer,Credit Suisse

11 Ulrich Körner***Chief Executive Officer,Credit Suisse Switzerland

12 Michael G. Philipp***Chief Executive Officer,Credit Suisse Europe, Middle East and Africa

13 Paul Calello***Chief Executive Officer,Credit Suisse Asia-Pacific

Page 44: credit-suisse Business Review 2005

Summary of the responsibilities of the Board of Directors and the Executive Boards of Credit Suisse Group and Credit Suisse

Credit Suisse Group Board of DirectorsCredit Suisse Group’s Board of Directors is responsible for the overall direction,supervision and control of the company. The Board regularly assesses the Group’scompetitive position and approves its strategic and financial plans.

The Board holds at least six regular meetings per year. In addition, the Board convenesas often as required to discuss any urgent matters.

At each meeting, the Board receives a status report on the financial results of theGroup. In addition, the Board regularly receives information on the performance andfinancial status of the Group, risk reports and updates on key issues. All members ofthe Board have access to all information concerning the Group.

The Board also reviews and approves significant changes in the Group’s structure andorganization and is actively involved in significant projects including acquisitions,divestitures and investments and other major projects. The Board and its committeesare entitled to engage independent advisors to look into any matters subject to theirauthority, as they deem appropriate. The Board also performs a self-assessment once a year.

40 Credit Suisse Group Business Review 2005

Walter B. KielholzChairmanBorn 1951Swiss citizen

Hans-Ulrich DoerigVice-ChairmanBorn 1940Swiss citizen

Thomas W. BechtlerBorn 1949Swiss citizen

Robert H. BenmoscheBorn 1944US citizen

Peter Brabeck-LetmatheBorn 1944Austrian citizen

Noreen DoyleBorn 1949US and Irish citizen

Jean LanierBorn 1946French citizen

Anton van RossumBorn 1945Dutch citizen

Aziz R. D. SyrianiBorn 1942Canadian citizen

David W. SyzBorn 1944Swiss citizen

Ernst TannerBorn 1946Swiss citizen

Peter F. WeibelBorn 1942Swiss citizen

The Board of Directors has proposed Mr. Richard E. Thornburgh for election to theBoard of Directors at the Annual General Meeting of April 28, 2006.

Page 45: credit-suisse Business Review 2005

Executive Board of Credit Suisse GroupEffective January 1, 2006, Credit Suisse realigned its executive management bodies.The most senior executive body of Credit Suisse Group is the Group Executive Board.The Group Executive Board under the lead of the Group Chief Executive Officer isresponsible for the day-to-day operational management of the Group as a whole andthe implementation of the principal business strategy and the financial plans approvedby the Board. It coordinates significant Group-wide initiatives, projects and businessdevelopments and establishes general Group-wide policies.

Credit Suisse Group Business Review 2005 41

Oswald J. GrübelChief Executive Officer, Credit Suisse Group

Walter BerchtoldChief Executive Officer,Private Banking

David J. Blumer Chief Executive Officer,Asset Management

Brady W. Dougan Chief Executive Officer,Investment Banking

Renato Fassbind Chief Financial Officer,Credit Suisse Group

Leonhard H. FischerChief Executive Officer,Winterthur

Tobias GuldimannChief Risk Officer,Credit Suisse Group

Urs RohnerGeneral Counsel,Credit Suisse Groupand Credit Suisse

Executive Board of Credit SuisseEffective January 1, 2006, the most senior executive body of the banking organizationis the Executive Board of Credit Suisse. It is responsible for the day-to-day operationalmanagement of the Group’s banking business. It develops and implements thestrategic business plans for the bank subject to approval by the Board and reviews andcoordinates significant initiatives and projects in the divisions and regions or in theShared Services functions.

The Executive Board is comprised of the heads of Credit Suisse’s business divisions(Investment Banking, Private Banking and Asset Management) as well as the heads ofits Shared Services functions (the Chief Financial Officer, the Chief Operating Officerand General Counsel, the Chief Risk Officer and the Chief Information Officer) and theheads of its geographic regions (the Americas; Asia-Pacific; Europe, Middle East andAfrica; and Switzerland).

These members report directly to Oswald J. Grübel in his role as Chief ExecutiveOfficer of Credit Suisse.

Oswald J. GrübelChief Executive Officer,Credit Suisse

Walter Berchtold Chief Executive Officer,Private Banking

David J. BlumerChief Executive Officer,Asset Management

Paul CalelloChief Executive Officer,Credit Suisse Asia-Pacific

Brady W. Dougan Chief Executive Officer,Investment Banking, and Chief Executive Officer, Credit Suisse Americas

D. Wilson ErvinChief Risk Officer,Credit Suisse

Renato Fassbind Chief Financial Officer,Credit Suisse

Ulrich KörnerChief Executive Officer,Credit Suisse Switzerland

Urs RohnerGeneral Counsel and Chief Operating Officer, Credit Suisse

Michael G. PhilippChief Executive Officer,Credit Suisse Europe,Middle East and Africa

Thomas J. SanzoneChief Information Officer,Credit Suisse

Page 46: credit-suisse Business Review 2005

Year ended December 31, in CHF m 2005 2004 2003

Interest and dividend income 40,928 30,953 28,341

Interest expense (29,335) (19,006) (16,637)

Net interest income 11,593 11,947 11,704

Commissions and fees 14,617 13,577 12,917

Trading revenues 7,507 4,559 3,528

Realized gains/(losses) from investment securities, net 1,489 1,143 1,527

Insurance net premiums earned 20,970 20,580 21,443

Other revenues 4,456 3,333 1,396

Total noninterest revenues 49,039 43,192 40,811

Net revenues 60,632 55,139 52,515

Policyholder benefits, claims and dividends 23,569 22,295 24,184

Provision for credit losses (140) 78 600

Total benefits, claims and credit losses 23,429 22,373 24,784

Insurance underwriting, acquisition and administration expenses 4,307 4,103 4,419

Banking compensation and benefits 13,971 11,951 11,042

Other expenses 9,672 8,395 8,949

Goodwill impairment 0 0 1,510

Restructuring charges 4 85 135

Total operating expenses 27,954 24,534 26,055

Income from continuing operations before taxes, minority interests, extraordinary items and cumulative effect of accounting changes 9,249 8,232 1,676

Income tax expense/(benefit) 1,356 1,421 (11)

Dividends on preferred securities for consolidated entities 0 0 133

Minority interests 2,030 1,127 (31)

Income from continuing operations before extraordinary items and cumulative effect of accounting changes 5,863 5,684 1,585

Income/(loss) from discontinued operations, net of tax (27) (50) (256)

Extraordinary items, net of tax 0 0 7

Cumulative effect of accounting changes, net of tax 14 (6) (566)

Net income 5,850 5,628 770

Basic earnings per share, in CHF

Income from continuing operations before extraordinary items and cumulative effect of accounting changes 5.18 4.85 1.34

Income/(loss) from discontinued operations, net of tax (0.02) (0.04) (0.22)

Extraordinary items, net of tax 0.00 0.00 0.01

Cumulative effect of accounting changes, net of tax 0.01 (0.01) (0.49)

Net income available for common shares 5.17 4.80 0.64

Diluted earnings per share, in CHF

Income from continuing operations before extraordinary items and cumulative effect of accounting changes 5.03 4.79 1.32

Income/(loss) from discontinued operations, net of tax (0.02) (0.04) (0.22)

Extraordinary items, net of tax 0.00 0.00 0.01

Cumulative effect of accounting changes, net of tax 0.01 0.00 (0.48)

Net income available for common shares 5.02 4.75 0.63

42 Credit Suisse Group Business Review 2005

Consolidated statements of income

Page 47: credit-suisse Business Review 2005

December 31, in CHF m 2005 2004

Assets

Cash and due from banks 27,577 25,648

Interest-bearing deposits with banks 6,143 4,947

Central bank funds sold, securities purchased under resale agreements and securities borrowing transactions 352,281 267,169

Securities received as collateral 23,950 20,289

Trading assets (of which CHF 151,793 m and CHF 110,047 m encumbered) 435,250 346,469

Investment securities (of which CHF 2,456 m and CHF 2,346 m encumbered) 121,565 100,365

Other investments 20,736 22,258

Loans, net of allowance for loan losses of CHF 2,241 m and CHF 3,038 m 205,671 184,399

Premises and equipment 7,427 7,231

Goodwill 12,932 11,564

Intangible assets 3,091 3,689

Assets held for separate accounts 11,875 4,490

Other assets (of which CHF 4,860 m and CHF 4,785 m encumbered) 110,554 90,967

Total assets 1,339,052 1,089,485

Liabilities and shareholders’ equity

Deposits 364,238 299,341

Central bank funds purchased, securities sold under repurchase agreements and securities lending transactions 309,803 239,724

Obligation to return securities received as collateral 23,950 20,289

Trading liabilities 194,225 150,130

Short-term borrowings 19,472 15,343

Provisions from the insurance business 148,414 137,161

Long-term debt 132,975 106,261

Liabilities held for separate accounts 11,875 4,489

Other liabilities 84,135 74,296

Minority interests 7,847 6,178

Total liabilities 1,296,934 1,053,212

Common shares 624 607

Additional paid-in capital 24,639 23,435

Retained earnings 24,584 20,501

Treasury shares, at cost (5,823) (4,547)

Accumulated other comprehensive income/(loss) (1,906) (3,723)

Total shareholders’ equity 42,118 36,273

Total liabilities and shareholders’ equity 1,339,052 1,089,485

Credit Suisse Group Business Review 2005 43

Consolidated balance sheets

Page 48: credit-suisse Business Review 2005

44 Credit Suisse Group Business Review 2005

Ticker symbols/Stock exchange listingsBloomberg Reuters Telekurs

SWX Swiss Exchange/virt-x CSGN VX CSGN.VX CSGN,380

New York Stock Exchange (ADS) 1) CSR US CSR.N CSR,065

CSG share ADS

Swiss security number 1213853 570660

ISIN number CH0012138530 US2254011081

CUSIP number 225 401 108

1) 1 ADS represents 1 registered share.

RatingsMoody’s Standard & Poor’s Fitch Ratings

Credit Suisse Group Short term – A-1 F1+

Long term Aa3 A AA-

Outlook Stable Positive Stable

Credit Suisse 1) Short term P-1 A-1 F1+

Long term Aa3 A+ AA-

Outlook Stable Positive Stable

Insurer financialWinterthur strength A1 A- A+

Outlook Negative Stable Stable

1) The ratings refer to the merged bank.

Share dataDecember 31 2005 2004

Shares issued 1,247,752,166 1,213,906,217

Treasury shares (122,391,983) (103,086,736)

Shares outstanding 1,125,360,183 1,110,819,481

Share pricein CHF 2005 2004 2003

High (closing price) 68.50 49.50 48.70

Low (closing price) 46.85 37.35 20.70

Financial calendarAnnual General Meeting Friday, April 28, 2006

First quarter results 2006 Tuesday, May 2, 2006

Dividend payment Thursday, May 4, 2006

Second quarter results 2006 Wednesday, August 2, 2006

Third quarter results 2006 Thursday, November 2, 2006

The following table shows principal Swiss franc foreign exchange rates:Closing rate Average rate

in CHF 31.12.05 31.12.04 2005 2004 2003

1 US dollar (USD) 1.3137 1.1320 1.24 1.24 1.35

1 Euro (EUR) 1.5572 1.5439 1.55 1.54 1.52

1 British pound sterling (GBP) 2.2692 2.1834 2.26 2.28 2.20

100 Japanese yen (JPY) 1.1190 1.1023 1.13 1.15 1.16

Page 49: credit-suisse Business Review 2005

Cautionary statement regarding forward-looking information This Business Review contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. 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 tothe following:– 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 meansof identifying such statements. We do not intend to update these forward-looking statements except as may be required by applicable securities 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 otheroutcomes 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 theplans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include: – Market and interest rate fluctuations; – 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; – The ability of counterparties to meet their obligations to us; – The effects of, and changes in, fiscal, monetary, trade and tax policies, and currency fluctuations; – Political and social developments, including war, civil unrest or terrorist activity; – The possibility of foreign exchange controls, expropriation, nationalization or confiscation of assets in countries in which we conduct our operations; – The ability to maintain sufficient liquidity and access capital markets; – Operational factors such as systems failure, human error, or the failure properly to implement procedures; – Actions taken by regulators with respect to our business and practices in one or more of the countries in which we conduct our operations; – The effects of changes in laws, regulations or accounting policies or practices; – Competition in geographic and business areas in which we conduct our operations; – The ability to retain and recruit qualified personnel; – The ability to maintain our reputation and promote our brands; – The ability to increase market share and control expenses; – Technological changes; – The timely development and acceptance of our new products and services and the perceived overall value of these products and services by users; – Acquisitions, including the ability to integrate successfully acquired businesses; – The adverse resolution of litigation and other contingencies; and – 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 otheruncertainties and events, as well as the information set forth in our Form 20-F Item 3 – Key Information – Risk factors.

EnquiriesCredit Suisse GroupInvestor RelationsIan Roundell, Tel. +41 44 333 17 48Marc Buchheister, Tel. +41 44 333 31 69Manuela Luzio, Tel. +41 44 332 60 98

Credit Suisse GroupCorporate CommunicationsCharles Naylor, Andrés LutherTel. +41 844 33 88 [email protected]

Additional informationEditorial: Credit Suisse Group, Corporate CommunicationsDesign: addison corporate marketing, LondonProduction: Management Digital Data AG, ZürichPrinter: NZZ Fretz AG, ZürichCredit Suisse Group’s Business Review 2005 is printed on totally chlorine-free (TCF)paper and is fully recyclable.

PhotographyThe English photographer John Wildgoose captured images of Credit Suisseemployees and locations worldwide during January and February 2006. Credit SuisseGroup’s financial reports published in 2006 are illustrated with the work that resultedfrom this project.

Page 50: credit-suisse Business Review 2005

CREDIT SUISSE GROUPParadeplatz 88070 ZürichSwitzerland

www.credit-suisse.com 5520

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