2. PART I
2 Financial highlights 2000
4 Editorial
PART II
6 An overview of Credit Suisse Group
8 Strategic review
12 Organisation
14 Financial review
PART III
18 Review of business units
20 Credit Suisse Financial Services
26 Credit Suisse Private Banking
29 Credit Suisse Asset Management
32 Credit Suisse First Boston
36 Risk management
PART IV
38 Our broader responsibilities
PART V
44 Consolidated results
46 Income statement
47 Balance sheet
48 Off-balance sheet business
48 Selected notes to the consolidated financial
statements
52 Management
57 Main offices
58 Information for investors
www.credit-suisse.com 19
3. REVIEW OF BUSINESS UNITS
Credit Suisse Financial Services
For the business year 2000, results are
Credit Suisse Financial Services, the
reported according to the previous struc-
new business area created in mid-
ture of Credit Suisse, Winterthur and
2000, posted net profit growth of 15%
Personal Financial Services Europe.
to CHF 1.7 billion. Its assets under
management grew to CHF 303.0 billion
(+8.9%), of which net new assets were Winterthur strengthens position in
Thomas Wellauer CHF 8.1 billion. Excluding the Personal Europe and Asia
Winterthur (comprising Winterthur
Chief Executive Officer Financial Services Europe initiative,
Insurance and Winterthur Life &
which is still in investment mode, the
Pensions in the new structure)
business area’s net profit was CHF
increased its net profit by 22% to CHF
2.0 billion.
1.3 billion. This good performance was
Since 1 July 2000, the business area attributable to strong earnings growth
Credit Suisse Financial Services includes in both areas of business. Reflecting
Winterthur Insurance, Winterthur Life & portfolio strategy changes and market
Pensions, Credit Suisse Banking, Credit conditions, Winterthur’s investment
Suisse Personal Finance and Credit return stood at 7.1%, which was
Suisse e-Business, as well as the infra- modestly higher than in 1999. Assets
structure unit Technology and Services. under management grew by 12.6% to
Overview of business area Credit Suisse Financial Services Personal
Financial Credit Suisse
2000 Winterthur Winterthur Credit Services Financial
in CHF m Insurance Life & Pensions Suisse Europe Services
3,459 1) 2,075 1)
Operating income 3,925 61 9,520
2,160 1) 1,208 1)
Operating expenses 2,450 317 6,135
1,299 1) 867 1)
Gross operating profit 1,475 (256) 3,385
Depreciation and write-offs on non-current assets 2) 159 101 84 12 356
Valuation adjustments, provisions and losses 3) 0 0 562 1 563
Profit before extraordinary items, taxes 3) 1,140 766 829 (269) 2,466
Extraordinary expenses/(income), net 0 0 (20) 0 (20)
Taxes 305 101 203 (62) 547
Net operating profit before minority interests 2) 835 665 646 (207) 1,939
Amortisation of acquired intangible assets,
net of tax, and goodwill 16 15 12 5 48
Net profit before minority interests 819 650 634 (212) 1,891
Minority interests (90) (56) (1) 0 (147)
Net profit 729 594 633 (212) 1,744
Net operating profit 1) 745 609 645 (207) 1,792
5,580 4) 10,093 4)
Average allocated equity capital 4,401 112
26.3% 4) 18.7% 4)
Return on average equity capital 14.4% n/a
Return on average equity capital (operating) 2) 26.9% 4) 19.2% 4)
14.7% n/a
Equity capital allocation as of 1.1.2001 9,149 4,697 27 13,873
Assets under management (in CHF bn) 32.5 116.1 147.8 6.6 303.0
– of which net new assets – 0.7 4.8 2.6 8.1
– of which discretionary 32.5 116.1 2.5 2.5 153.6
1)
Defined as premiums earned (net), less claims incurred and expenses for processing claims, as well as actuarial provisions, less commissions (net), plus investment
income from insurance business; expenses from the handling of both claims and investments are allocated to revenue; personnel expenses non-life: CHF 400 m,
life: CHF 125 m, other operating expenses non-life: CHF 214 m, life: CHF 141 m.
2)
Excl. amortisation of acquired intangible assets, net of tax, and goodwill.
– – (151) – (151)
3)
Net of allocation to (-)/release of (+) reserves for general banking risks.
4)
For Winterthur Group, average invested capital is used for calculation of return on invested capital (ROIC).
20
4. Winterthur non-life business Previously Change to
New basis reported previously
2000 1999 1999 reported
in CHF m in CHF m in CHF m in %
Gross premiums 16,508 13,901 13,993 13,993
18
Net premiums 14,632 12,604 12,678 12,678
15
Premiums earned, net 13,519 12,057 12,102 12,102
12
Claims incurred, net (10,432) (9,145) (9,144) (9,144)
14
Dividends to policyholders incurred, net (376) (387) (312) (312)
21
Operating expenses, net (including commissions paid) (3,969) (3,639) (3,591) (3,591)
11
Underwriting result, net (1,258) (1,114) (945) (945)
33
Net investment income 2,385 1,691 1,942 1,942
23
Interest on deposits and bank accounts 96 90 70 37
70
Other interest paid (136) (78) (75) (75)
81
Other income and expenses (including exchange rate differences) 1) 53 26 (35) (39)
–
Profit before extraordinary items and taxes 1,140 615 957 953
19
Technical provisions as of 31.12. 26,653 25,422 23,041 30,7923,041
16
Combined ratio (excl. dividends to policyholder) 106.5% 106.0% 105.2% 1
105.2%
Claims ratio 77.2% 75.8% 75.6% 2
75.6%
Expense ratio 29.4% 30.2% 29.7% 29.7%)
(1
Insurance reserve ratio 197.2% 210.8% 190.4% 4
190.4%
Assets under management as of 31.12. in CHF bn 32.5 31.4 31.6 3
Number of employees as of 31.12. 21,796 20,662 20,662 5
1)
Excl. amortisation of goodwill.
CHF 148.6 billion. The return on in- In non-life business Winterthur strong growth in southern Europe. In
vested capital rose to 26.3%. achieved an 18% increase in gross pre- Germany – a key health insurance mar-
In February 2001 Winterthur an- miums to CHF 16.5 billion, as a result ket – the growth in premiums was
nounced the sale of its large multi- of higher premiums in the US, UK and hampered by health reform. Overall,
national corporates insurance business, several countries in continental Europe. non-life business generated profit
Winterthur International, for a total The UK market contributed additional before extraordinary items and taxes of
consideration of USD 600 million. As a growth, with Winterthur now ranking CHF 1.1 billion, up 19%.
result of this transaction, Winterthur will sixth in terms of premium volume Life business saw an 8% rise in its
be able to concentrate fully on life and thanks to additional partnerships en- gross premium volume, with the weak
non-life business with private clients tered into by Churchill and the acquisi- euro impacting negatively on premium
and small and medium-sized compa- tion of NIG. Excluding acquisitions, pre- growth in Swiss francs. Fund-linked
nies in Switzerland, Europe and other mium growth stood at 10%. The products posted very strong growth of
selected markets. Subject to the expense ratio in non-life business was 90%, with their share of the total
approval of the relevant authorities, the reduced further from 29.7% to 29.4%. volume advancing to 20%. With the
transaction should be completed in the However, the combined ratio rose acquisition of Japanese insurer Nicos
first half of 2001. slightly from 105.2% to 106.5% Life (renamed Credit Suisse Life) and
Webinsurance, the award-win- resulting from a number of natural Colonial Life UK in Britain, as well as
ning homeowners and property, motor, catastrophes in the UK, Switzerland and with its alliance with Chinese life insurer
travel and life insurance offering from US Midwest; a backlog of claims from Tai Kang Life, Winterthur further ex-
Winterthur, was extended to include the winter storms in Europe at end- panded its portfolio in attractive life
the Italian and Belgian markets. This December 1999; and unfavourable loss insurance and pension markets. In
online insurance package is now experiences in the motor insurance 2000, Winterthur became the first life
available to clients in eight European business in Spain and Portugal. In insurer to develop a pan-European,
countries and the US. health insurance, Winterthur posted Internet-based business system that
www.credit-suisse.com 21
5. REVIEW OF BUSINESS UNITS
Winterthur life business Previously Change to
New basis reported previously
2000 1999 1999 reported
in CHF m in CHF m in CHF m in %
Gross premiums 15,452 14,182 14,264 8
Net premiums 15,172 14,089 14,170 7
Premiums earned, net 15,171 14,090 14,101 8
Claims incurred, net (9,734) (8,033) (7,726) 26
Change in actuarial provision, net (6,377) (7,944) (8,092) (21)
Allocation to participation, net (1,982) (1,384) (1,846) 7
Operating expenses, net (including commissions paid) (1,680) (1,257) (1,535) 9
Net investment income 6,051 5,048 5,865 3
Interest on deposits and bank accounts 88 135 124 (29)
Interest on bonuses credited to policyholders (116) (117) (130) (11)
Other interest paid (239) (220) (217) 10
Other income and expenses (including exchange rate differences) 1) (416) (722) 17 –
Profit before extraordinary items and taxes 766 (404) 561 37
Technical provisions as of 31.12. 105,522 88,559 84,519 25
Expense ratio 11.1% 8.9% 10.9% 2
Net return on technical provisions 68 bp (33) bp 65 bp 5
Claims incurred and change in actuarial
provisions in relation to premiums earned 106.2% 113.4% 112.2% (5)
Assets under management as of 31.12. in CHF bn 116.1 102.0 100.4 16
Number of employees as of 31.12. 6,562 5,167 5,167 27
1)
Excl. amortisation of goodwill.
simplifies processing and distribution. or 3.4%, was attributable to net new client advisors at 34 regional locations.
This platform was introduced in assets. The risk profile of the credit These new, larger teams improve client
Germany in mid-year, and other portfolio improved noticeably: actual service, while also facilitating the inter-
launches in key European markets are valuation adjustments were CHF 151 nal exchange of knowledge and infor-
planned for 2001. Despite large-scale million below the statistically anticipated mation. The new system establishes
investments in strategic projects, profit value of CHF 565 million. sector teams, which offer clients added
in life business, before extraordinary In private client business, the con- benefits through their expertise in
items and taxes, increased by 37% to tinuing popularity of investment savings specific areas. In addition, Berne now
CHF 766 million. was reflected by significant growth in boasts a central Business Center – a
investment fund holdings (+14%) and contact unit with extended opening
increased sales in the investment fund hours available free of charge to
Credit Suisse significantly improves
business (+18%). The Flex investment clients.
return on equity
Credit Suisse (Credit Suisse Banking in account, a new savings product Credit Suisse grew its position in
the new structure) achieved net profit launched by Credit Suisse in spring the direct banking market even
of CHF 633 million, up 40% on the 2000, attracted considerable interest further, with the number of Direct Net
previous year. Return on equity rose and reached a volume of CHF 1 billion customers soaring to 262,000, a 53%
from 10.3% to 14.4%. Despite high- by year-end. Private mortgage busi- increase on the previous year. 42% of
level investment in strategic projects, ness (+6%) and leasing (+20%) both all orders for securities transactions are
technology and e-business, the recorded strong growth, while the now placed electronically via Direct Net
cost/income ratio improved from number of Credit Suisse credit card and youtrade, while the number of pay-
66.6% to 64.9%. Assets under man- holders climbed to 775,000 – an in- ment orders executed via the Internet
agement grew by CHF 7.0 billion crease of 136,000. currently stands at 700,000 per
(+5.0%) to stand at CHF 147.8 billion Credit Suisse reorganised its ser- month – an increase of 100%. January
at end-2000; CHF 4.8 billion thereof, vicing of corporate clients, regrouping 2000 saw the launch of yourhome, an
22
6. Credit Suisse income statement
2000 1999 Change Change
Financial Centers:
in CHF m in CHF m in % in %
Net interest income 2,378 2,227 7 7
flagships of future
Net commission and service fee income 1,159 946 23 23
Net trading income 342 230 49 49
banking
Other ordinary income 46 75 (39) (39
Operating income 3,925 3,478 13 13
Personnel expenses 1,535 1,401 10 10
Other operating expenses 915 866 6 6
Credit Suisse’s new Financial Centers
Operating expenses 2,450 2,267 8 8
are a pioneering alternative to conven-
Gross operating profit 1,475 1,211 22 22
tional branches. The first ever such
Depreciation and write-offs on non-current assets 1) 84 38 121 121
centre, in Milan’s Piazza dei Mercanti,
Valuation adjustments, provisions and losses 2) 562 610 (8) (8
enables clients to call up financial
Profit before extraordinary items, taxes 1) 829 563 47 47
market data and product information
Extraordinary expenses/(income), net (41 the latest technology — though
via
(20) (34) (41)
Taxes 203 130 56 56
personal advice is, of course, readily
Net operating profit before minority interests 1) 38 hand. Having opened its doors in
on
646 467 38
March 2000, Milan’s Financial Center
Amortisation of goodwill 12 13 (8) (8
had already attracted more than
Net profit before minority interests 634 454 40 40
30,000 visitors by the end of the year.
Minority interests (1) (3) (67) (67
Credit Suisse plans to set up similar
Net profit 633 451 40 40
centres in other major European loca-
tions as it grows its business with
affluent clients.
Net operating profit 1) 645 464 39 39
1)
Excl. amortisation of goodwill.
2)
Net of allocation (–)/release(+) of
reserves for general banking risks. (151) (68) )
www.credit-suisse.com 23
7. REVIEW OF BUSINESS UNITS
Credit Suisse balance sheet information Internet portal providing comprehensive
information on homes and home
1999
31 Dec. 2000 31 Dec.1999 ownership. Attracting around 17,000
in CHF m in CHF m
4,411 visitors per month, this new offering
103,063 99,903
Total assets 4,611 has met with a positive response from
29,042 27,816
Due from customers 7.1% customers.
64,616 63,024
Mortgages
66.6%
33,511 36,330 66.3% Personal Financial Services Europe
Due to customers in savings and investment accounts
31,391 28,530
Due to customers, other targets new markets
10.3%
The Personal Financial Services
11,404
Europe initiative (Credit Suisse
16.8% Personal Finance and parts of Credit
61.8% Suisse e-Business) targets affluent
40.3% clients in selected European markets
239 via a multi-channel strategy. The
Credit Suisse ratios/key performance indicators clients, who are typically seeking to
2.35%
invest between EUR 50,000 and
2000 1999
7.8%
1 million, have access to a comprehen-
Average allocated equity capital CHF m 4,401 4,411
71.4% sive palette of products and services to
Allocated equity capital in CHF m (1.1.2001/2000) 4,697 4,611
141 meet all their financial needs. Ranging
BIS tier 1 ratio as of 31.12. 1) 7.1% 6.8% from investment products and life
Cost/income ratio 64.9% 66.6% insurance to loans and tax optimisation,
Cost/income ratio 2) 64.6% 66.3% the offering also encompasses products
from third-party providers.
Return on average equity capital (reported) 14.4% 10.3%
Return on average equity capital (operating) 2) Credit Suisse (Italy) continued
14.7% 10.6%
to grow its presence in Italy, with net
Number of employees as of 31.12. 11,701 11,404
new assets increasing 84.5% year-on-
Pre-tax margin (reported) 21.3% 16.8%
year to ITL 2,700 billion (CHF 2.2
Pre-tax margin (operating) 2) 21.6% 17.2%
billion). Overall, assets under manage-
Personnel expenses/operating expenses 62.7% 61.8%
ment increased by 40% to stand at
Personal expenses/operating income 39.1% 40.3%
ITL 7,100 billion (CHF 5.6 billion).
Number of branches as of 31.12. 235 239 The second half of the year saw pre-
parations get underway for the launch
Net interest margin 2.39% 2.35%
of Credit Suisse Personal Finance in
Loan growth 3.7% 7.8%
Germany and Spain, scheduled for
Deposit/loan ratio as of 31.12. 69.3% 71.4%
2001.
Assets under management in CHF bn as of 31.12. 147.8 140.8
The e-business area of Personal
Financial Services posted revenues of
1)
Legal entity Credit Suisse.
2)
Excl. amortisation of goodwill. CHF 38 million versus expenses of
CHF 256 million, reflecting the heavy
investment in an asset gathering strat-
egy targeting affluent clients in Europe.
The Swiss online broker youtrade grew
its customer base by 164% to over
25,000. Assets under management
stood at CHF 950 million at year-end.
Personal Financial Services Europe
posted a loss for the year of CHF 212
million.
24
8. Personal Financial Services Europe key performance indicators
Credit Suisse (Italy) youtrade Total
31 Dec. 2000 31 Dec. 1999 31 Dec. 2000 31 Dec. 1999 31 Dec. 2000 31 Dec. 1999
Assets under management (in CHF bn) 5.6 4.0 1.0 0.5 6.6 4.5
Number of clients 18,587 12,395 25,228 9,603 43,815 21,998
Number of personal bankers 331 230
Banking goes mobile
youtrade on WAP and youtrade on Palm are the latest addi-
tions to Credit Suisse’s successful youtrade palette. Already
Switzerland’s leading tool for share trading via telephone and
the Internet, youtrade went portable in December 2000.
Now customers can use a mobile phone or digital personal
assistant to obtain quick market information, check on
their safekeeping accounts or trade shares easily from
any location. On average, Credit Suisse mobile
banking registers 100,000 market data requests
via mobile telephone every month. With new
transmission technology and customised
services, mobile banking is rapidly becoming
a popular way for Credit Suisse to interact with
and serve its customers.
www.youtrade.com
www.credit-suisse.com 25
9. REVIEW OF BUSINESS UNITS
Credit Suisse Private Banking
Market activity in 2000 was charac- 2000, total assets under management
terised by high volume and volatility. amounted to CHF 488.2 billion. Total
Developments were highly influenced revenues rose by 33% to CHF 6.3 bil-
by the technology boom at the begin- lion and net profit increased by 38% to
ning of the year and its subsequent over CHF 2.6 billion. This rise was
correction, and by the general mainly attributable to interest income
strengthening of the US dollar on the (+39%), commissions (+31%) and, to
Oswald J. Grübel
back of a strong US economy. In the a smaller extent, trading income
Chief Executive Officer
equity markets, 2000 was far from (+27%). Operating expenses in-
rosy. Most international stock markets creased by 20%. The cost/income
Credit Suisse Private Banking achieved
ended the year below where they ratio improved from 47.3% to 42.6%.
record results once again in 2000,
started, as many sectors failed to live
posting net profit of more than CHF
up to market expectations.
2.6 billion (+38%). With innovative Innovative products and services
Even against this backdrop, Credit Credit Suisse Private Banking
products and premier service quality
Suisse Private Banking succeeded in launched four affiliated alternative
as its hallmarks, Credit Suisse Private
reporting strong results for 2000. Net investment companies with a total vol-
Banking has grown its international
new asset growth doubled in compari- ume of CHF 4.0 billion in the course
presence and further strengthened its
son to the previous year to stand at of the year: Absolute Europe, Absolute
position as one of the world’s leading
CHF 21.0 billion, contributing 4.4% of Technology, Absolute U.S. and
private banks.
assets under management. At end- Absolute Private Equity. All of the
Credit Suisse Private Banking income statement
Change 1) Change
1999 1)
2000
in %
in CHF m in CHF m in %
39
Net interest income 1,247 898 39
31
Net commission and service fee income 1) 4,171 3,187 31
27
Net trading income 752 592 27
113
Other ordinary income 1) 81 38 113
33
Operating income 6,251 4,715 33
22
Personnel expenses 1,734 1,418 22
15
Other operating expenses 883 768 15
20
Operating expenses 2,617 2,186 20
44
Gross operating profit 3,634 2,529 44
5
Depreciation and write-offs on non-current assets 2) 41 39 5
191
Valuation adjustments, provisions and losses 3) 160 55 191
41
Profit before extraordinary items, taxes 2) 3,433 2,435 41
(94) $
Extraordinary expenses/(income), net (1) (18)
Taxes 766 516 48
Net operating profit before minority interests 2) 2,668 1,937 38
Amortisation of goodwill 7 7 0
Net profit before minority interests 2,661 1,930 38
Minority interests (29) (19) 53
Net profit 2,632 1,911 38
Net operating profit 2) 2,639 1,918 38
1)
Reclassification of trust income from other ordinary income
to net commission and service fee income
beginning from 1.1.2000.
2)
Excl. amortisation of goodwill.
Net of allocation (-)/release (+) of reserves for general banking risks. (40) (31)
3)
26
10. MyCSPB – the personal
private bank online
MyCSPB is the innovative new private banking solu-
tion to perfectly round off the relationship between
client and advisor. At the click of a mouse, the pass-
word-protected application www.cspb.com provides
users with a full range of information, products, and
primary and supplementary services — and can be
customised directly in line with a client’s personal
requirements. Comprising around twenty modules,
this finance portal offers everything from share analysis
to lifestyle issues, and can be combined with per-
sonal account data. As well as enabling clients to
keep track of their portfolios, MyCSPB also offers
graphic analysis and customised news – and can
even send out warnings via e-mail or SMS if speci-
fied limits are exceeded. The first application of its
kind anywhere in the world, www.cspb.com is setting
new standards in the world of private banking.
www.cspb.com
www.credit-suisse.com 27
11. REVIEW OF BUSINESS UNITS
companies pursue diversified invest- Check-Up Online is a straightforward
ment strategies with a view to achiev- solution to assist clients in their finan-
ing an attractive investment perform- cial planning. Fund Lab, the Internet
ance irrespective of market climate. platform for comparing and selecting
Dream Team is a comprehensive investment funds, was expanded to
range of asset management and insur- cover around 830 funds from 32 in-
ance services engineered by Credit vestment companies as of end-2000.
Suisse Private Banking in response to What’s more, clients can now track
the special financial needs of top and select 2,500 different equities
sporting athletes. Credit Suisse Private using a range of criteria via Stock
Banking also began offering advisory Tracker. A major step forward was the
services and support for entrepreneurs introduction of Tradelink, which allows
looking for growth capital or consider- clients to not only compare proprietary
ing selling their business. and third-party investment products via
Credit Suisse Private Banking has www.cspb.com, but also to buy and
invested considerably in its client sell them directly via Fund Lab or
services. One example is the new Stock Tracker.
client management system FrontNet,
which lightens the administrative load
on advisors and allows them to devote
more time to their clients. Continued
Credit Suisse Private Banking balance sheet information
investment is planned for 2001 to
further enhance the quality of client
service. 31 Dec. 1999
31 Dec. 2000
in CHF m
in CHF m
99,651
101,153
Total assets
Stronger international foothold
Credit Suisse Private Banking contin- 31,902
33,717
Due from customers
ued to grow its international presence, 7,667
9,206
– of which secured by mortgages
22,731
with the spotlight on Europe and Asia. 22,621
– of which secured by other collateral
It underpinned its London-based opera-
tions through the acquisition of JO Ratios/key performance indicators
Hambro Investment Management 1999
2000
Limited (JOHIM), and transformed its 2,771
3,117
Average allocated equity capital in CHF m
existing representative office in Vienna
2,875
3,031
Allocated equity capital in CHF m (1.1. 2001/2000)
into an investment management com-
47.3%
42.6%
Cost/income ratio
pany. Looking eastwards, Credit
Cost/income ratio 1) 47.2%
42.5%
Suisse Private Banking obtained a
8,371
8,665
Number of employees as of 31.12.
banking licence in Hong Kong. New
representative offices also opened 51.9%
54.8%
Pre-tax margin (reported)
their doors in Jakarta, Cape Town and Pre-tax margin (operating) 1) 52.0%
54.9%
Valencia, bringing the number of Fee income/operating income 2) 67.6%
66.7%
offices outside Switzerland to over 40. Fee income/operating expenses 2) 145.8%
159.4%
A further expansion of private banking
476.7
488.2
Assets under management in CHF bn as of 31.12.
operations in Europe, Asia and Latin
18.4%
2.4%
Growth in assets under management
America is on the agenda for 2001.
– of which net new assets 3) 2.9%
4.4%
(2.0%) 15.5%
– of which market movement and structural effects
Setting the pace in Internet banking
44 bp
53 bp
Net profit before minority interests/average AuM
Credit Suisse Private Banking en-
Net operating profit before minority interests/average AuM 1) 45 bp
hanced its www.cspb.com site in 2000 54 bp
with several new applications. Estate 1)
Excl. amortisation of goodwill.
Lab is a platform focusing on real es- 2)
Incl. reclassified trust income.
tate investments, while Financial 3)
Excl. interests and dividends.
28
12. Credit Suisse Asset Management
Credit Suisse Asset Management CHF 48 billion to overall assets un-
increased its total assets under der management as of 31 December
management by 14.7% in 2000 to 2000. Revenues increased by 36%
finish the year at CHF 487.2 billion. to CHF 1.6 billion, which includes
Discretionary assets under manage- two months of DLJ’s Asset
ment grew to CHF 360.1 billion as of Management Group results. Revenue
31 December 2000, up CHF growth was strongly supported by the
Phillip M. Colebatch
35.9 billion or 11.1% over 1999. Of strategic focus on higher margin
Chief Executive Officer
this amount, net new assets (exclusive assets in the equity and alternative
of assets acquired in the DLJ acqui- investment classes. Net operating
Credit Suisse Asset Management ex-
sition) was CHF 24.4 billion, an in- profit rose 32% year-on-year to CHF
panded its global position through
crease of 31.9%. The retail and high- 338 million.
strong organic growth and the acqui-
net-worth individual segments
sition of Donaldson, Lufkin & Jenrette
recorded 24% growth over the year to
Asset Management Group in the US Regional markets: strong growth
CHF 161 billion. The acquisition of In the Americas, Credit Suisse Asset
market. The unit made significant
Donaldson, Lufkin & Jenrette Asset Management saw a year of market
progress in building its domestic posi-
Management Group in the US added volatility, including turbulence on the
tion in all of its key markets in 2000.
NASDAQ. Including the assets
acquired with DLJ, assets under
management grew from USD 76 bil-
lion to USD 94 billion. The combina-
tion provides Credit Suisse Asset
Management’s US business with
further access to the private client
Credit Suisse Asset Management income statement
business and the investment banking
channel, and also enhances the
2000 1999 Change Change
in CHF m in CHF m in %
unit’s in %
alternative investment product
1,006 757 33 33
Management and advisory fees platform. In the early part of 2000,
513 330 55
Net mutual fund fees Congress passed the Financial
43 62 (31) (31)
Other revenues Modernization Act, which includ-
36
1,562 1,149 36 ed repealing the “firewall” rules which
Operating income
40
had until then prevented Credit
656 467 40
Personnel expenses
28
Suisse Asset Management from
481 377 28
Other operating expenses
35
working with Credit Suisse First
1,137 844 35
Operating expenses 39
Boston. This puts the unit on level
425 305 39)
Gross operating profit 32
terms with other major financial
1) 29 22 32
Depreciation and write-offs on non-current assets -
groups in the US at a crucial time of
0 0 –
Valuation adjustments, provisions and losses
industry consolidation. As a more
Profit before extraordinary items, taxes 1) 396 283 40 40
sophisticated population is seeking
1 2 (50) (50)
Extraordinary expenses/(income), net ever more comprehensive financial
Taxes 2) 57 24 138 138
advice, global distribution networks
are in 32position to take an increasing
a
Net operating profit before minority interests 1) 338 257 32
share of the growing asset manage-
Amortisation of acquired intangible assets,
ment136 market. Credit Suisse Asset
net of tax, and goodwill 2) 52 22 136)
Management is now well positioned
286 235 22 22
Net profit before minority interests
to leverage referral opportunities with
0 0 – -
Minority interests
Credit Suisse First Boston.
286 235 22 22
Net profit
In Switzerland, Credit Suisse
Asset Management remained a mar-
Net operating profit 1) 338 257 32 ket leader, with strong retail growth
and particular success in the institu-
1)
Excl. amortisation of acquired intangible assets and goodwill.
tional segment. In the pooled pen-
2)
Tax impact on amortisation of acquired intangible assets CHF 1 m in 2000.
www.credit-suisse.com 29
13. REVIEW OF BUSINESS UNITS
Global début
Credit Suisse Asset Management’s leadership in specialist
equity products is typified by the worldwide rollout of its
Global Post Venture Capital mutual fund through both retail
and institutional distribution channels in 2000. The product
was gained as part of the acquisition of Warburg Pincus
Asset Management in 1999, and invests in companies which
have passed through the initial venture capital stage. Already
with top rankings in the US, Global Post Venture is now
catching the attention of investors worldwide. In 2000,
Global Post Venture funds were launched in retail markets in
Australia, the UK and Japan. Institutional investors have also
shown strong interest, with mandates signed or in the
pipeline with leading institutions in Switzerland, Germany and
the UK.
30
14. sion market, the unit’s Credit Suisse Post Venture Fund and Credit Suisse
Investment Foundation (CSA) ended Portfolio Funds. These and other
the year as market leader. Key equity products aim to capitalise on the grow-
products, such as Swiss and European ing willingness of Japanese investors
small & mid cap, Swiss and European to invest in mutual funds.
Blue Chips, high-tech and pharmaceu-
tical sector funds performed well. Looking ahead: equity products
Equity and index products were ex- of interest
panded to address market trends. The increasing emphasis on equities in
Swiss Prime Site, a real-estate invest- sales of retail funds globally is shaping
ment company newly-launched and Credit Suisse Asset Management’s
listed on the stock exchange, gathered activities in the coming months.
CHF 750 million. Prime New Energy, Further integration of DLJ’s Asset
another listed investment company with Management Group and the accom-
CHF 120 million in assets, was the panying cooperation with Credit Suisse
first company launched in Switzerland First Boston’s distribution channels,
in the year 2000 in the alternative en- particularly the online channel
ergy sector. Also new in Switzerland is CSFBdirect, will be important in the
CSA’s private equity investment fund for Americas. The fast-growing Australian
small to medium-sized pension funds. market will continue to be a focus for
Credit Suisse Asset Management the unit’s activities, while product
Australia was named the Australian development and retail marketing
fund manager of the year in 2000. across Europe will also continue to be
Over the past two years the unit’s mar- developed in 2001.
ket share has doubled. Total inflows
Credit Suisse Asset Management ratios/
in the unit’s retail business were just
under AUD 2.5 billion in 2000, and key performance indicators
assets under management in the insti-
2000 1999 1999
tutional business grew by 52% to AUD 1,147 540
Average allocated equity capital in CHF m 540
15.3 billion over the year.
1,296 1,054
Allocated equity capital in CHF m (1.1. 2001/2000) 1,054
In Europe Credit Suisse Asset
78.0% 77.3%
Cost/income ratio
Management continues to build its or-
Cost/income ratio 1) 74.6% 75.4%
ganisation to take advantage of the op- 77.3%
6.3 bp 6.6 bp
portunities of European convergence. Net profit/average AuM 75.4%
Net operating profit 1)/average AuM 7.5 bp 7.2 bp
The unit’s Luxembourg family of mutu- 6.6 bn
al funds, which is one of the largest in 2,350 2,000
Number of employees as of 31.12.
Europe, enjoyed 13% net new busi- 21.9% 22.5%
Pre-tax margin (reported)
2,000
ness growth in 2000. This growth was Pre-tax margin (operating) 1) 25.3% 24.5%
2,000
enhanced by the successful addition of 57.7% 55.3%
Personnel expenses/operating expenses
an institutional share class and a regis- 2,000
42.0% 40.6%
Personnel expenses/operating income
tered share form, which broadened the 22.5%
487.2 424.6
Assets under management in CHF bn as of 31.12.
base of potential investors. 55.3%
360.1 324.2
Discretionary funds in CHF bn as of 31.12.
Product sales and client relation-
40.6%
ships in Japan are set to improve 136.9 120.9
Mutual funds distributed in CHF bn as of 31.12.
425
after two difficult years in which growth 127.1 100.4
Advisory assets in CHF bn as of 31.12.
324
rates and net new inflows slowed sig- 14.7% 43.1%
Growth in assets under management
nificantly from their 1998-1999 levels. 121
11.1% 52.8%
Growth in discretionary assets under management
Together with a concentrated advertis- 100
7.5% 8.7%
– of which net new assets
ing campaign to promote the Credit 324
(8.1%) 27.1%
– of which market movement
Suisse Asset Management name, 11.7% 17.0%
– of which acquisition
several new funds were launched in
Japan in 2000, including the Global 1)
Excl. amortisation of acquired intangible assets and goodwill.
www.credit-suisse.com 31
15. REVIEW OF BUSINESS UNITS
Credit Suisse First Boston
crease was supported primarily by the
Credit Suisse First Boston’s merger
Equity and Investment Banking divi-
with Donaldson, Lufkin & Jenrette (DLJ)
sions. The business unit also achieved
in 2000 was completed in record time,
record profitability, posting gross oper-
and the two businesses have now
ating profit of USD 2.8 billion (CHF
been successfully integrated. The
4.7 billion), up 10% (24%), and net
business unit also made great
operating profit of USD 1.6 billion
Allen D. Wheat progress in its equities businesses and
(CHF 2.6 billion), up 20% (34%). Net
Chief Executive Officer continued to expand its investment
profit was USD 1.4 billion (CHF 2.4
banking franchise, strengthening client
billion), 12% (25%) higher than in
relationships and playing a leading role
1999. Credit Suisse First Boston’s
in many significant transactions.
global reach is apparent: while North
Credit Suisse First Boston achieved America accounts for 51% of rev-
record results in 2000. In US dollar enues, Europe supplies 36% and the
terms, revenues rose 25% to USD rest of the world, 13%.
12.2 billion, and 40% in Swiss franc The main event of the year was
terms to CHF 20.4 billion. This in- the merger with US investment bank
Credit Suisse First Boston income statement 1)
2000 1999 Change 2000 1999 Change Change
in CHF m in CHF m in % in USD m in USD m in % in %
Fixed Income 4,874 6,651 (27) 2,919 4,464 (35) (26)
Equity 8,477 4,786 77 5,076 3,212 58 58
Investment Banking 6,148 3,453 78 3,681 2,318 59 59
Financial Services Group 447 n/a – 268 n/a –
Other 417 (358) – 250 (241) – n/a
6.756
Operating income 20,363 14,532 40 12,194 9,753 25
26
Personnel expenses 12,011 7,999 50 7,192 5,368 34
32
Other operating expenses 3,634 2,714 34 2,176 1,822 19
19
Operating expenses 15,645 10,713 46 9,368 7,190 30
29
Gross operating profit 4,718 3,819 24 2,826 2,563 10
2)
Depreciation and write-offs on non-current assets 644 371 74 386 249 55
Valuation adjustments, provisions and losses 3) 537 786 (32) 322 527 (39)
(39)
Profit before extraordinary items, taxes 2) 3,537 2,662 33 2,118 1,787 19
n/a
4)
Taxes 925 715 29 554 480 15
n/a
Net operating profit before minority interests 2) 2,612 1,947 34 1,564 1,307 20
19
Amortisation of acquired intangible assets,
21
net of tax, and goodwill 4) 254 66 285 152 45 238
18
Net profit before minority interests 2,358 1,881 25 1,412 1,262 12
Minority interests (3) (1) 200 (2) 0 –
202
Net profit 2,355 1,880 25 1,410 1,262 12
12
-
2)
Net operating profit 2,609 1,946 34 1,562 1,307 20
12
1)
The business unit income statement differs from the Group’s legal
accounts in presenting brokerage, execution and clearing expenses
as part of operating expenses in common with US competitors,
rather than netted against revenues.
2)
Excl. amortisation of acquired intangible assets and goodwill.
6 0 4 0
3)
Net of allocation (-)/release (+) of reserves for general banking risks.
4)
Tax impact on amortisation of acquired intangible assets CHF 42 m
in 2000, and CHF 2 m in 1999.
32
16. Donaldson, Lufkin & Jenrette. The
equity and fixed income businesses
were integrated less than seven weeks
after the merger was announced on
30 August, and the transaction was
New revenue generators
completed on 3 November. Infra-
structure and technology were put in
place quickly to ensure a seamless
One major gain for Credit Suisse First Boston through
transition of services to clients.
the merger with DLJ was the Financial Services Group,
Credit Suisse First Boston now has
which produced USD 2 billion in revenues in 2000. The
over USD 10 billion (CHF 16.3 billion)
unit added three businesses: Private Client Services,
in allocated equity capital, 28,000 em-
with 500 financial advisors servicing affluent individual
ployees worldwide and total assets in
investors, mainly in the US; the top-rated, full-service
excess of USD 400 billion. On the in-
online broker CSFBdirect; and Pershing, which alone
stitutional side, the merger augments
accounted for half the Financial Services Group rev-
the unit’s rankings in a number of key
enue. Pershing’s technology works behind the scenes,
areas. In the US, Credit Suisse First
clearing share trades and providing margin lending and
Boston is now ranked number one in
other related financial services to institutions, investment
equity and high yield research, equity
advisors and brokerage firms. With over 4 million active
trading and high yield underwriting,
customers worldwide, Pershing is a consistent source of
and number two in equity underwriting
revenue for the business unit and has strong growth po-
and mergers and acquisitions (M&A).
tential. The fourth Financial Services Group component,
Credit Suisse First Boston also now
asset management, was merged with Credit Suisse
has Wall Street’s leading Private Equity
Asset Management’s US business.
franchise and is ranked number one in
equity research in Europe. In addition,
its financial services businesses
(Pershing, Private Client Services and
CSFBdirect) provide earnings
diversification.
Credit Suisse First Boston played a
leading role in a number of pivotal
deals around the world last year. Major
transactions included the demutualisa-
tion of Met Life, the acquisition of
Orange by France Télécom, the
restructuring of AT&T, the Texaco/
Chevron merger and Pacific Century
CyberWorks’ merger with Cable &
Wireless Hong Kong Telecom.
Investment Banking increases global
market share
Division revenues increased 59%, led
by M&A and equity capital markets. In
the Americas, M&A revenues in-
creased by 85% over 1999; Credit
Suisse First Boston’s ranking improved
to number two, with a pro-forma mar-
ket share of 32%. Globally, it now
ranks third in M&A with a pro-forma
market share of 27%, versus a rank of
www.credit-suisse.com 33
