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Enquiries

Credit Suisse Group, Media Relations Telephone +41 1 333 8844

Credit Suisse Group, Investor Relations Telephone +41 1 333 4570

The Quarterly Report Q1 2003 and the slide presentation will be available from around 07.30 CET / 06.30 BST / 01.30 EST at www.credit-suisse.com/results/docu.

Credit Suisse Group
Credit Suisse Group is a leading global financial services company headquartered in Zurich. The business unit Credit Suisse Financial Services provides private clients and small and medium-sized companies with Private Banking and financial advisory services, banking products, and Pension and Insurance solutions from Winterthur. The business unit Credit Suisse First Boston, an Investment Bank, serves global institutional, corp­or­ate, government and individual clients in its role as a financial intermediary. Credit Suisse Group’s registered shares (CSGN) are listed in Switzer­land and Frankfurt, and in the form of American Depositary Shares (CSR) in New York. The Group employs around 73,000 staff worldwide. As of March 31, 2003, it reported assets under management of CH 1,160.5 billion.

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

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

7

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Presentation of Credit Suisse Group’s First Quarter Results 2003 via Webcast and Telephone Conference

Date	Tuesday, May 6, 2003
Time	15.00 CET / 14.00 BST / 09.00 EST
Speakers	Philip K. Ryan, CFO of Credit Suisse Group
	Ulrich Körner, CFO of Credit Suisse Financial Services
	Barbara Yastine, CFO of Credit Suisse First Boston
	All presentations will be held in English.
Webcast	http://www.credit-suisse.com/results
Telephone	Europe: +41 91 610 5600
	UK:       +44 207 866 4111
	USA: +1 412 858 4600
	Reference: “Credit Suisse Group quarterly results”
Q&A	You will have the opportunity to ask the speakers questions via telephone conference following the presentations.
Playback	Video on demand – available approximately three hours after the event at http://www.credit-suisse.com/results
	Telephone – available approximately one hour after the event; please dial:
	Europe:  +41 91 612 4330
	UK:      +44 207 866 4300
	USA:     +1 412 858 1440
	Conference ID: 631#
Note	We recommend that you dial in approximately ten minutes before the start of the presentation for the webcast and telephone conference. Further instructions and technical test functions are now available on our website.

 

8

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QUARTERLY REPORT 2003  Q1


Credit Suisse Group is a leading global financial services company headquartered in Zurich. Credit Suisse Financial Services provides private clients and small and medium-sized companies with private banking and financial advisory services, banking products, and pension and insurance solutions from Winterthur. Credit Suisse First Boston, the investment bank, serves global institutional, corporate, government and individual clients in its role as a financial intermediary. Credit Suisse Group’s registered shares (CSGN) are listed in Switzerland and Frankfurt, and in the form of American Depositary Shares (CSR) in New York. The Group employs around 73,000 staff worldwide.

QUARTERLY REPORT 2003 
EDITORIAL
CREDIT SUISSE GROUP FINANCIAL HIGHLIGHTS Q1/2003
AN OVERVIEW OF CREDIT SUISSE GROUP
Equity capital
Net new assets
Operating income and expenses
Valuation adjustments, provisions and losses
Outlook
RISK MANAGEMENT
Overall risk trends
Trading risks
Credit risk exposure
REVIEW OF BUSINESS UNITS | CREDIT SUISSE FINANCIAL SERVICES
Private Banking
Corporate & Retail Banking
Life & Pensions
Insurance
REVIEW OF BUSINESS UNITS | CREDIT SUISSE FIRST BOSTON
Institutional Securities
CSFB Financial Services
RECONCILIATION OF OPERATING TO CONSOLIDATED RESULTS
Reconciliation of operating to consolidated results
CONSOLIDATED RESULTS | CREDIT SUISSE GROUP
LOANS
INFORMATION FOR INVESTORS
Enquiries
Financial Publications
This symbol is used to indicate topics on which further information is available on our website. Go to www.credit-suisse.com/results/bookmarks.html to find links to the relevant information. The additional information -indicated is openly accessible and does not form part of the Quarterly Report. Some areas of Credit Suisse Group’s websites are only available in English.

Cautionary statement regarding forward-looking information

This Quarterly Report contains statements that constitute forward-looking statements. In addition, in the future we, and others on our behalf, may make statements that constitute forward-looking statements. Such forward-looking statements may include, without limitation, statements relating to our plans, objectives or goals; our future economic performance or prospects; the potential effect on our future performance of certain contingencies; and assumptions underlying any such statements.

Words such as "believes," "anticipates," "expects," "intends" and "plans" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. We do not intend to update these forward-looking statements except as may be required by applicable laws.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include (i) market and interest rate fluctuations; (ii) the strength of the global economy in general and the strength of the economies of the countries in which we conduct our operations in particular; (iii) the ability of counterparties to meet their obligations to us; (iv) the effects of, and changes in, fiscal, monetary, trade and tax policies, and currency fluctuations; (v) political and social developments, including war, civil unrest or terrorist activity; (vi) the possibility of foreign exchange controls, expropriation, nationalization or confiscation of assets in countries in which we conduct our operations; (vii) the ability to maintain sufficient liquidity and access capital markets; (viii) operational factors such as systems failure, human error, or the failure to properly implement procedures; (ix) actions taken by regulators with respect to our business and practices in one or more of the countries in which we conduct our operations; (x) the effects of changes in laws, regulations or accounting policies or practices; (xi) competition in geographic and business areas in which we conduct our operations; (xii) the ability to retain and recruit qualified personnel; (xiii) the ability to maintain our reputation and promote our brands; (xiv) the ability to increase market share and control expenses; (xv) technological changes; (xvi) the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users; (xvii) acquisitions, including the ability to integrate successfully acquired businesses; (xviii) the adverse resolution of litigation and other contingencies; and (xix) our success at managing the risks involved in the foregoing.

We caution you that the foregoing list of important factors is not exclusive; when evaluating forward-looking statements, you should carefully consider the foregoing factors and other uncertainties and events, as well as the risks identified in our most recently filed Form 20-F and reports on Form 6-K furnished to the US Securities and Exchange Commission.

Cautionary statement regarding non-GAAP financial information

This Quarterly Report may contain non-GAAP financial information. A reconciliation of such non-GAAP financial information to the most directly comparable measures under generally accepted accounting principles is contained in this report and is posted on our website at www.credit-suisse.com/sec.html.



EDITORIAL



Oswald J. Grübel
Co-CEO Credit Suisse Group
Chief Executive Officer
Credit Suisse Financial Services


John J. Mack
Co-CEO Credit Suisse Group
Chief Executive Officer
Credit Suisse First Boston
Dear shareholders, clients and colleagues

In the first quarter of 2003 Credit Suisse Group returned to profitability. The Group recorded a net profit of CHF 652 million in a challenging environment, after reporting a net loss of CHF 950 million in the previous quarter. The measures that we took across the Group to restore earnings strength and adapt the cost structure to the current business environment are beginning to pay off. The Group expects continuing challenging conditions for the remainder of the year. However, we are fully committed to achieving our goal of profitability in 2003.

All segments of Credit Suisse Financial Services improved profitability and reported better results than in the fourth quarter of 2002. Credit Suisse Financial Services posted a net profit of CHF 666 million in the first quarter of 2003, compared with a net profit of CHF 705 million in the previous quarter, which included the one-time positive cumulative effect of a change in accounting principle in the amount of CHF 266 million for periods prior to 2002. Private Banking recorded an increased segment profit and an increased level of net new assets compared with the fourth quarter of 2002. Corporate & Retail Banking increased its segment profit considerably compared to a weak fourth quarter.

Our insurance segments, Life & Pensions and Insurance, further improved their operating performance in the first quarter of 2003 and both segments increased their segment profits compared to the previous quarter. These improvements resulted primarily from tariff increases and stronger investment income. The realignment of the Winterthur organization has resulted in the merger of its two Corporate Centers and redefined management levels for the countries where the life and non-life businesses are being merged.

Credit Suisse First Boston restored its profitability in the first quarter of 2003, with a net profit of USD 161 million (CHF 221 million) compared to a net loss of USD 811 million (CHF 1.3 billion) in the previous quarter. Its Institutional Securities segment improved significantly from the fourth quarter of 2002, benefiting in particular from a strong performance by the Fixed Income division, notably lower cost levels and credit provisions. In the fourth quarter of 2002, the business unit reached an agreement in principle with certain US regulators involving research analyst independence and IPO allocations to corporate executives, and an ultimate settlement was recently finalized. In addition, certain structural and financial legacies and costs were reduced considerably.

The Group's consolidated BIS tier 1 ratio increased further to 10.0%, compared to 9.7% as of December 31, 2002 reflecting the quarter’s earnings and the sale of Pershing, partly offset by moderate growth in risk-weighted assets in the banking business.

While we are not yet satisfied with our results, we are pleased that the first quarter performance is the first tangible result of our efforts to return the Group to profitability. We expect 2003 to be challenging and will continue to focus on cost control and the strength of our franchises.

Oswald J. Grübel John J. Mack
May 2003


CREDIT SUISSE GROUP FINANCIAL HIGHLIGHTS Q1/2003

Consolidated income statement
									Change		Change
									in % from		in % from
in CHF m			1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Operating income			7,024		6,395		8,330		10		(16)
Gross operating profit			2,004		1,284		1,832		56		9
Net profit/(loss)			652		(950)		368		–		77

Return on equity

Change

Change

in % from

in % from

in %

1Q2003

4Q2002

1Q2002

4Q2002

1Q2002

Return on equity

9.2

(13.0)

4.1

–

124

Consolidated balance sheet
											Change
											in % from
in CHF m							31.03.03		31.12.02		31.12.02
Total assets							992,143		955,656		4
Shareholders' equity							31,402		31,394		0
Minority interests in shareholders' equity							2,879		2,878		0

Capital data
											Change
											in % from
in CHF m							31.03.03		31.12.02		31.12.02
BIS risk-weighted assets							205,548		201,466		2
BIS tier 1 capital							20,517		19,544		5
of which non-cumulative perpetual preferred securities							2,146		2,162		(1)
BIS total capital							34,685		33,290		4

Capital ratios
in %									31.03.03		31.12.02
BIS tier 1 ratio	Credit Suisse								7.5		7.4
	Credit Suisse First Boston	1)							10.5		10.3
	Credit Suisse Group	2)							10.0		9.7
BIS total capital ratio	Credit Suisse Group								16.9		16.5

Assets under management/client assets
											Change
											in % from
in CHF bn							31.03.03		31.12.02		31.12.02
Advisory assets under management							588.5		605.6		(3)
Discretionary assets under management							572.0		589.7		(3)
Total assets under management							1,160.5		1,195.3		(3)
Client assets							1,256.7		1,793.2		(30)

Net new assets

Change

Change

in % from

in % from

in CHF bn

1Q2003

4Q2002

1Q2002

4Q2002

1Q2002

Net new assets

(3.5)

(6.6)

13.5

(47)

–

1) Ratio is based on a tier 1 capital of CHF 11.2 bn (31.12.02: CHF 10.6 bn), of which non-cumulative perpetual preferred securities is CHF 1.0 bn (31.12.02: CHF 1.0 bn).

2) Ratio is based on a tier 1 capital of CHF 20.5 bn (31.12.02: CHF 19.5 bn), of which non-cumulative perpetual preferred securities is CHF 2.1 bn (31.12.02: CHF 2.2 bn).

Number of employees (full-time equivalents)
										Change
										in % from
						31.03.03		31.12.02		31.12.02
Switzerland	banking					20,952		21,270		(1)
	insurance					6,876		7,063		(3)
Outside Switzerland	banking					20,726		25,057		(17)
	insurance					24,817		25,067		(1)
Total employees Credit Suisse Group						73,371		78,457		(6)

Share data
										Change
										in % from
						31.03.03		31.12.02		31.12.02
Shares issued						1,189,891,720		1,189,891,720		0
To be issued upon conversion of MCS	1)					40,413,838		40,413,838		0
Shares outstanding						1,230,305,558		1,230,305,558		0
Share price in CHF						23.50		30.00		(22)
Market capitalization in CHF m						28,912		36,909		(22)
Book value per share in CHF						23.18		23.18		0
1) Maximum number of shares related to Mandatory Convertible Securities (MCS) issued by Credit Suisse Group Finance (Guernsey) Ltd. in December 2002.

Share price
								Change		Change
								in % from		in % from
in CHF		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
High (closing price)		34.45		35.70		73.60		(4)		(53)
Low (closing price)		20.70		20.60		56.50		0		(63)

Earnings per share
								Change		Change
								in % from		in % from
in CHF		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Basic earnings per share		0.53		(0.80)		0.31		–		71
Diluted earnings per share		0.53		(0.80)		0.31		–		71

AN OVERVIEW OF CREDIT SUISSE GROUP



Credit Suisse Group returned to profitability in the first quarter of 2003, reporting a net profit of CHF 652 million, compared with a net loss of CHF 950 million in the fourth quarter of 2002. Compared to the first quarter of 2002, the net profit increased CHF 284 million, or 77%. Credit Suisse Financial Services recorded a net profit of CHF 666 million, with all segments posting improved results. Credit Suisse First Boston recorded a net profit of USD 161 million (CHF 221 million) with a significant improvement in the results of the Institutional Securities segment.

The first quarter 2003 results demonstrate Credit Suisse Group's progress on returning to profitability despite continuing challenging market conditions.

Winterthur’s results continued to recover in the first quarter of 2003, with both Life & Pensions and Insurance improving profitability compared to the previous quarter due to stronger investment income and tariff increases. Private Banking recorded a higher segment profit than in the fourth quarter of 2002, primarily due to lower operating expenses. Corporate & Retail Banking increased its segment profit considerably compared to a weak fourth quarter. Overall, Credit Suisse Financial Services reported a net profit of CHF 666 million in the first quarter of 2003, down 6% compared to the fourth quarter of 2002 and up 13% compared to the corresponding period of the previous year. In the fourth quarter of 2002, Credit Suisse Financial Services’ results benefited from the one-time cumulative effect of a change in accounting principle for periods prior to 2002.

Credit Suisse First Boston posted a first quarter net profit of USD 161 million (CHF 221 million), compared with a net loss of USD 811 million (CHF 1.3 billion) in the previous quarter, which was impacted by exceptional items of USD 813 million (CHF 1.3 billion) after-tax. Compared to the first quarter of 2002, the business unit’s net profit increased USD 180 million (CHF 253 million). Institutional Securities improved its segment result in the first quarter of 2003 significantly compared to the previous quarter, benefiting particularly from strong results in the Fixed Income business. CSFB Financial Services reported a lower segment result compared to the fourth quarter of 2002, mainly due to weak equity markets and lower assets under management.

After accounting for the Corporate Center, which includes writedowns on the Group’s investments in Swiss Life and Swiss International Airlines of CHF 73 million and CHF 77 million, respectively, the Group reported a net profit of CHF 652 million for the first quarter of 2003, compared with a net loss of CHF 950 million in the previous quarter. In the first quarter of 2003, net profit included CHF 204 million of amortization of acquired intangible assets and goodwill after-tax. The fourth quarter 2002 results were impacted by exceptional items of CHF 1.3 billion after-tax and the positive one-time cumulative effect of a change in accounting principle for periods prior to 2002 in the amount of CHF 520 million. Compared to the first quarter of 2002, net profit increased CHF 284 million, or 77%. Earnings per share for the first quarter of 2003 were CHF 0.53 versus a loss of CHF 0.80 for the fourth quarter of 2002 and a profit of CHF 0.31 for the first quarter of 2002. The Group’s return on equity was 9.2% in the first quarter of 2003 versus -13.0% in the fourth quarter and 4.1% in the first quarter of 2002.


Equity capital
During the first quarter of 2003, Credit Suisse Group further improved its capital base in addition to the improvements reported in the fourth quarter of 2002. The Group’s consolidated BIS tier 1 ratio stood at 10.0% as of March 31, 2003, up from 9.7% as of December 31, 2002. This increase was due to earnings generated in the first quarter of 2003, offset by moderate growth in risk-weighted assets in the banking business and slightly lower equity in the insurance business. The Pershing sale transaction also had a positive impact on core capital.

On the basis of the final local statutory accounts of Winterthur’s operating entities for 2002, which were completed in April 2003, Credit Suisse Group updated Winterthur’s consolidated EU solvency ratio effective December 31, 2002, to 142%. At year-end 2002, the local solvency ratios of Winterthur’s operating entities worldwide continued to exceed regulatory requirements: for the ten largest entities, the average local coverage was above 200% and the lowest ratio was 135% at year-end. The consolidated EU solvency ratio is a supplementary financial disclosure for Winterthur and has no impact on published financial statements and note disclosures, regulatory insurance filings, or the Group’s internal economic risk capital models. This update does not change the Group’s view regarding the capitalization of Winterthur.


Net new assets
Credit Suisse Financial Services reported net new assets of CHF 0.3 billion in the first quarter of 2003, with net inflows of CHF 1.5 billion at Private Banking and CHF 2.2 billion at Life & Pensions, offset by a net outflow of CHF 3.4 billion from Corporate & Retail Banking due to a shift from time deposit into transaction accounts, which do not qualify as assets under management. Credit Suisse First Boston reported a net asset outflow of CHF 3.8 billion in the first quarter of 2003, as CHF 1.5 billion of net new assets from Private Client Services were offset by a net outflow of CHF 5.2 billion from Credit Suisse Asset Management and CHF 0.1 billion from Institutional Securities. For Credit Suisse Group, an overall net asset outflow of CHF 3.5 billion was recorded in the first quarter of 2003, compared with a net asset outflow of CHF 6.6 billion recorded in the fourth quarter of 2002. The Group’s total assets under management stood at CHF 1,160.5 billion as of March 31, 2003, corresponding to a decline of 2.9% versus December 31, 2002.


Operating income and expenses
The Group’s operating income was CHF 7.0 billion in the first quarter of 2003, up 10% on the previous quarter but down 16% on the first quarter of 2002. Credit Suisse Financial Services reported operating income of CHF 3.4 billion in the first quarter of 2003, a decrease of 4% versus the previous quarter and an increase of 3% versus the first quarter of 2002. At Private Banking, operating income decreased 2% versus the previous quarter due to investor passivity and a reduced asset base. Corporate & Retail Banking posted a 3% increase in operating income quarter-on-quarter, mainly driven by higher transaction-based and trading income. At Credit Suisse First Boston, first quarter 2003 operating income increased 24% on a US dollar basis versus the previous quarter to USD 2.9 billion (CHF 4.0 billion), mainly reflecting a significant increase in revenue in the Fixed Income business within Institutional Securities from USD 587 million (CHF 806 million) to USD 1.4 billion (CHF 1.9 billion). Compared to the first quarter of 2002, Credit Suisse First Boston’s operating income decreased 11%, reflecting weak market conditions in the mergers and acquisitions and equity new issuance markets. The increase in operating income versus the fourth quarter of 2002 was partially offset by a decline in operating income at CSFB Financial Services of 37% versus the previous quarter, principally related to the sale of Pershing. Excluding Pershing, operating income of CSFB Financial Services was flat compared with the fourth quarter of 2002 and decreased 5% compared to the first quarter of 2002.

The Group’s operating expenses decreased 2% quarter-on-quarter to CHF 5.0 billion, and were down 23% on the first quarter of 2002. At Credit Suisse Financial Services, first quarter operating expenses decreased 7% compared to the previous quarter and 5% versus the first quarter of 2002. At Credit Suisse First Boston, first quarter operating expenses increased 16% versus the previous quarter due to a rise in incentive compensation linked to improved performance and compared to an unusually low fourth quarter incentive compensation level. Compared to the first quarter of 2002, Credit Suisse First Boston’s operating expenses decreased 16%, reflecting headcount reductions and cost containment measures. For the first quarter of 2003, Credit Suisse First Boston’s other operating expenses were down 18% compared with the fourth quarter of 2002 and 15% compared with the first quarter of 2002.


Valuation adjustments, provisions and losses
Total valuation adjustments, provisions and losses were CHF 233 million in the first quarter of 2003 compared with CHF 2.4 billion in the fourth quarter of 2002, which included a charge of CHF 778 million in respect of an adjustment in the method of estimating inherent losses related to lending activities. In the first quarter of 2003, valuation adjustments, provisions and losses included a charge of CHF 32 million related to inherent loan loss risks. Compared to the first quarter of 2002, valuation adjustments, provisions and losses decreased 51%.


Outlook
Credit Suisse Group remains cautious in its outlook for 2003 given the continued challenging market environment and global uncertainty. The Group made progress towards its goal to return to profitability in 2003 but remains exposed to continued volatility in the financial markets.

Overview of business unit results 1)
		Credit Suisse Financial Services						Credit Suisse First Boston						Adjust. incl. Corporate Center						Credit Suisse Group
in CHF m		1Q2003		4Q2002		1Q2002		1Q2003		4Q2002		1Q2002		1Q2003		4Q2002		1Q2002		1Q2003		4Q2002		1Q2002
Operating income		3,393		3,517		3,306		3,915		3,321		5,338		(284)		(443)		(314)		7,024		6,395		8,330
Personnel expenses		1,369		1,408		1,443		2,177		1,896		3,216		93		160		178		3,639		3,464		4,837
Other operating expenses		779		896		814		904		1,184		1,302		(302)		(433)		(455)		1,381		1,647		1,661
Operating expenses		2,148		2,304		2,257		3,081		3,080		4,518		(209)		(273)		(277)		5,020		5,111		6,498
Gross operating profit		1,245		1,213		1,049		834		241		820		(75)		(170)		(37)		2,004		1,284		1,832
Depreciation of non-current assets	2)	220		334		205		130		156		207		70		144		69		420		634		481
Amortization of acquired intangible assets and goodwill		25		92		29		206		308		357		1		3		(1)		232		403		385
Valuation adjustments, provisions and losses		81		105		99		176		1,977		338		(24)		342		34		233		2,424		471
Profit/(loss) before extraordinary items, cumulative effect of change in accounting principle and taxes		919		682		716		322		(2,200)		(82)		(122)		(659)		(139)		1,119		(2,177)		495
Extraordinary income/(expenses), net		7		24		(3)		0		220		0		(56)		125		(2)		(49)		369		(5)
Cumulative effect of change in accounting principle	3)	–		266		–		–		254		–		–		0		–		–		520		–
Taxes	3)	(252)		(318)		(119)		(101)		474		50		(25)		162		(18)		(378)		318		(87)
Net profit/(loss) before minority interests		674		654		594		221		(1,252)		(32)		(203)		(372)		(159)		692		(970)		403
Minority interests		(8)		51		(2)		0		0		0		(32)		(31)		(33)		(40)		20		(35)
Net profit/(loss)	3)	666		705		592		221		(1,252)		(32)		(235)		(403)		(192)		652		(950)		368
1) The Group’s consolidated results are prepared in accordance with Swiss GAAP, while the Group’s segment reporting principles are applied to the presentation of segment results. The business unit results reflect the results of the separate segments comprising the respective business units as well as certain acquisition-related costs, exceptional items and cumulative effect of change in accounting principle that are not allocated to the segments. For a complete reconciliation of the business unit results to the Group’s consolidated results and a discussion of the material reconciling items, please refer to “Reconciliation of operating to consolidated results”.
2) Includes amortization of Present Value of Future Profits (PVFP) from the insurance business within Credit Suisse Financial Services.
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 4Q2002 and 1Q2002 for Credit Suisse Financial Services of CHF –635 m and CHF –85 m, respectively, for Credit Suisse First Boston of CHF 276 m and CHF 50 m, respectively, and for Credit Suisse Group of CHF –198 m and CHF –53 m, respectively.

Assets under management/client assets
										Change
										in % from
in CHF bn						31.03.03		31.12.02		31.12.02
Credit Suisse Financial Services
Private Banking	1)
Assets under management						457.0		465.7		(1.9)
of which discretionary						118.2		121.5		(2.7)
Client assets						486.3		494.8		(1.7)
Corporate & Retail Banking	1)
Assets under management						64.1		70.3		(8.8)
Client assets						82.6		86.3		(4.3)
Life & Pensions
Assets under management (discretionary)						111.7		110.8		0.8
Client assets						111.7		110.8		0.8
Insurance
Assets under management (discretionary)						31.0		30.7		1.0
Client assets						31.0		30.7		1.0
Credit Suisse Financial Services
Assets under management						663.8		677.5		(2.0)
of which discretionary	1)					262.1		264.2		(0.8)
Client assets						711.6		722.6		(1.5)
Credit Suisse First Boston
Institutional Securities
Assets under management						30.8		31.3		(1.6)
of which Private Equity on behalf of clients (discretionary)						20.8		20.9		(0.5)
Client assets						79.2		83.9		(5.6)
CSFB Financial Services
Assets under management						465.9		486.5		(4.2)
of which discretionary						281.9		297.2		(5.1)
Client assets						465.9		986.7		(52.8)
Credit Suisse First Boston
Assets under management						496.7		517.8		(4.1)
of which discretionary						309.9		325.5		(4.8)
Client assets						545.1		1,070.6		(49.1)
Credit Suisse Group
Assets under management						1,160.5		1,195.3		(2.9)
of which discretionary	1)					572.0		589.7		(3.0)
Client assets						1,256.7		1,793.2		(29.9)
1) 2002 comparative figures have been restated to reflect the realignment of the private client business as of 01.01.2003. This entailed moving certain client segments in Switzerland from Private Banking to Corporate & Retail Banking as well as re-evaluating the balances of 2002 discretionary assets.

Net new assets
								Change		Change
								in % from		in % from
in CHF bn		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Credit Suisse Financial Services
Private Banking	1)	1.5		0.9		9.2		66.7		(83.7)
Corporate & Retail Banking	1)	(3.4)		(0.2)		(1.4)		–		142.9
Life & Pensions		2.2		(1.3)		3.0		–		(26.7)
Credit Suisse Financial Services		0.3		(0.6)		10.8		–		(97.2)
Credit Suisse First Boston
Institutional Securities		(0.1)		–		3.5		–		–
CSFB Financial Services		(3.7)		(6.0)		(0.8)		(38.3)		362.5
Credit Suisse First Boston		(3.8)		(6.0)		2.7		(36.7)		–
Credit Suisse Group		(3.5)		(6.6)		13.5		(47.0)		–
1) 2002 comparative figures have been restated to reflect the realignment of the private client business as of 01.01.2003. This entailed moving certain client segments in Switzerland from Private Banking to Corporate & Retail Banking.

RISK MANAGEMENT

Credit Suisse Group’s overall position risk fell by 3% in the first quarter of 2003 compared to the previous quarter, predominantly due to further equity position reductions and lower credit risks. Credit Suisse First Boston’s average trading Value-at-Risk, or VaR, increased primarily as a consequence of higher interest rate positions. The Group’s credit risk exposures increased by 3% quarter-on-quarter.


Overall risk trends
Economic risk capital, or ERC, is an emerging best practice for measuring and reporting all quantifiable risks across a financial organization on a consistent and comprehensive basis. It is referred to as “economic” capital because it treats positions solely on an economic basis, irrespective of differences in accounting or regulatory treatment. Credit Suisse Group has established this tool over the last few years to achieve several objectives: to better assess the composition and trend of our risk portfolio; to improve risk control and limits; to allocate capital; to bettter assess our risk-bearing capacity in relation to financial resources; and to provide a benchmark for risk/return analysis by business. ERC is defined as the economic capital needed to remain solvent even under extreme market, business and operational conditions, based on conservative assumptions.

Credit Suisse Group distinguishes among three fundamental sources of risk. Position risk ERC measures the potential unexpected loss in economic value associated with the Group’s portfolio of positions over a 1-year horizon that is exceeded with a given, small probability (1% for daily risk management purposes; 0.03% for capital management purposes). Business risk ERC captures the risk related to the Group’s commission and fee-based activities by estimating the potential worst-case negative margin for these activities during a severe market downturn. Operational risk ERC represents the estimated worst-case loss resulting from inadequate or failed internal processes and systems, human error or external events.

Position risk ERC constitutes the most important risk category. Total 99%, 1-year position risk ERC was down 3% in the first quarter of 2003 compared with the previous quarter, due primarily to further equity position reductions and lower credit risks. At the end of the first quarter of 2003, 51% of the Group’s position risk ERC was with Credit Suisse First Boston, 45% with Credit Suisse Financial Services (of which 68% was with the insurance units and 32% was with the banking units) and 4% with the Corporate Center.


Trading risks
The average 1-day, 99% VaR at Credit Suisse First Boston in the first quarter of 2003 was USD 49.2 million, compared to USD 39.4 million in the fourth quarter of 2002. The increase was primarily attributable to an increase in interest rate positions. As shown in the backtesting chart, Credit Suisse First Boston had no backtesting exceptions in the first quarter of 2003. Over the last 12 months, Credit Suisse First Boston had one backtesting exception (on average, an accurate 1-day, 99% VaR model would have no more than 2.5 exceptions per annum).


Credit risk exposure
Credit-related balance sheet exposure increased 3% for Credit Suisse Group in the first quarter of 2003, as a slight decline in exposure at Credit Suisse Financial Services was offset by an increase in exposure at Credit Suisse First Boston.

Effective in the first quarter of 2003, loans held for sale are no longer reported as part of total due from banks and customers, gross with the related credit provisions reported separately, instead they are presented on a net lower of cost or market basis. This change resulted in a reclassification in the tables on page 10 which impacted both the loans, impaired loans and the valuation accounts as of March 31, 2003.

Impaired loans for Credit Suisse Group declined as of the end of the first quarter due to a reduction in impaired loans at both business units. Total non-performing loans declined 9% at Credit Suisse Financial Services. The decline in impaired loans at Credit Suisse First Boston is primarily attributable to the previously mentioned change in presentation and a decrease in non-performing loans. Coverage of non-performing loans increased slightly for both business units and Credit Suisse Group. Coverage of total impaired loans at Credit Suisse Group improved during the quarter, as coverage at Credit Suisse First Boston improved from 66.5% at December 31, 2002 to 71.6% at March 31, 2003, while coverage of impaired loans declined slightly at Credit Suisse Financial Services. Credit quality for the Group was largely unchanged from year-end 2002.

Key Position Risk Trends
				Change in % from				Change Analysis: Brief Summary
in CHF m		1Q2003		4Q2002		1Q2002		1Q2003 vs 4Q2002
Developed Market Fixed Income & Foreign Exchange ERC		3,922		7%		(28%)		Reduced risk-offset between CSFB and Winterthur with respect to interest rate-sensitive positions
Equity Investment ERC		3,071		(16%)		(65%)		Mostly due to lower equity exposures at Winterthur
Swiss & Retail Lending ERC		2,057		(2%)		(3%)		Continued write-off of aged exposures, offsetting increase in default risk due to downgrades
International Lending ERC		3,455		(10%)		(14%)		Reduced exposures and lower US dollar exchange rate
Emerging Markets ERC		1,755		(11%)		(29%)		Exposure reductions in Brazil and counterparty rating upgrade
Real Estate ERC & Structured Asset ERC	1)	4,284		1%		(9%)		No material change
Insurance Underwriting ERC		1,019		24%		15%		Due to refined insurance loss distribution modelling and assumed growth in volume
Simple sum across risk categories		19,563		(4%)		(31%)		Lower Equity and Lending ERC
Diversification Benefit		(6,465)		(5%)		(39%)		In line with overall risk reduction
Total position risk ERC		13,098		(3%)		(26%)		Lower Equity and ERC
99%, 1-year position risk ERC, excluding foreign exchange translation risk. For an assessment of the total risk profile, operational risk ERC and business risk ERC have to be considered as well. For a more detailed description of the Group’s ERC model, please refer to our Annual Report 2001 and 2002, which are available on our website: www.credit-suisse.com. Note that prior period risk data have been restated for methodology changes.
1) This category comprises the real estate investments of Winterthur, Credit Suisse First Boston’s commercial real estate exposures, Credit Suisse First Boston’s residential real estate exposures, Credit Suisse First Boston’s asset-backed securities exposures as well as the real estate acquired at auction and real estate for own use in Switzerland.

CSFB trading exposures (1-day, 99% VaR)
in USD m		1Q2003	4Q2002	3Q2002	2Q2002
Total VaR
Period end		54.5	41.3	38.9	59.3
Average		49.2	39.4	43.7	46.4
Maximum		76.3	46.5	57.4	59.3
Minimum		39.4	31.9	37.6	36.8
in USD m		31.03.03	31.12.02	30.09.02	30.06.02
VaR by risk type
Interest rate		56.9	48.3	59.3	54.7
Foreign exchange		15.3	10.8	7.6	18.7
Equity		17.6	10.1	12.1	16.5
Commodity		0.8	1.0	1.2	0.5
Subtotal		90.6	70.2	80.2	90.4
Diversification benefit		(36.1)	(28.9)	(41.3)	(31.1)
Total		54.5	41.3	38.9	59.3
Credit Suisse First Boston computes these VaR estimates separately for each risk type and for the whole portfolio using the historical simulation methodology. Diversification benefit reflects the net difference between the sum of the 99% percentile loss for each risk type and for the total portfolio.

Total credit risk exposure 1)
		Credit Suisse Financial Services				Credit Suisse First Boston				Credit Suisse Group
in CHF m		31.03.03		31.12.02		31.03.03		31.12.02		31.03.03		31.12.02
Due from banks	2)	29,889		32,752		56,851		44,016		57,569		39,469
Due from customers and mortgages	2)	133,372		132,353		72,941		82,395		205,030		213,206
Total due from banks and customers, gross	2)	163,261		165,105		129,792		126,411		262,599		252,675
Contingent liabilities		12,460		12,349		28,280		27,862		39,866		39,104
Irrevocable commitments		2,917		2,263		80,403		86,599		84,415		90,048
Total banking products		178,638		179,717		238,475		240,872		386,880		381,827
Loans held for sale	3)	0		–		18,373		–		18,373		–
Derivative instruments	4)	1,957		2,375		56,230		54,243		57,016		54,757
Securities lending – banks		0		0		37		0		37		0
Securities lending – customers		0		0		30		64		30		64
Reverse repurchase agreements – banks		2,052		2,270		157,862		158,544		156,312		156,397
Reverse repurchase agreements – customers		11,989		13,944		53,399		57,571		65,081		71,384
Total traded products		15,998		18,589		267,558		270,422		278,476		282,602
Total credit risk exposure, gross		194,636		198,306		524,406		511,294		683,729		664,429
Loan valuation allowances and provisions		(3,820)		(4,092)		(3,271)		(3,817)		(7,092)		(7,911)
Total credit risk exposure, net		190,816		194,214		521,135		507,477		676,637		656,518
1) Credit Suisse Financial Services/Credit Suisse First Boston reflect business unit amounts. Total consolidated Credit Suisse Group amounts include adjustments and Corporate Center.
2) Excluding loans held for sale, securities lending and reverse repurchase transactions.
3) Effective 1Q2003, loans held for sale are presented net of the related loan valuation allowances.
4) Positive replacement values considering netting agreements.

Total loan portfolio exposure and allowances and provisions for credit risk 1)
		Credit Suisse Financial Services				Credit Suisse First Boston				Credit Suisse Group
in CHF m		31.03.03		31.12.02		31.03.03		31.12.02		31.03.03		31.12.02
Non-performing loans		2,749		3,004		2,616		3,351		5,365		6,355
Non-interest earning loans		1,897		2,108		402		217		2,299		2,325
Total non-performing loans		4,646		5,112		3,018		3,568		7,664		8,680
Restructured loans		80		52		201		229		281		281
Potential problem loans		1,726		1,723		1,123		1,685		2,848		3,408
Total other impaired loans		1,806		1,775		1,324		1,914		3,129		3,689
Total impaired loans		6,452		6,887		4,342		5,482		10,793		12,369
Total due from banks and customers, gross		163,261		165,105		129,792		126,411		262,599		252,675
Valuation allowances		3,779		4,053		3,111		3,647		6,891		7,703
of which on principal		3,010		3,201		2,866		3,416		5,875		6,617
of which on interest		769		852		245		231		1,016		1,086
Total due from banks and customers, net		159,482		161,052		126,681		122,764		255,708		244,972
Provisions for contingent liabilities and irrevocable commitments		41		39		160		170		201		208
Total valuation allowances and provisions		3,820		4,092		3,271		3,817		7,092		7,911
Ratios
Valuation allowances as % of total non-performing loans		81.3%		79.3%		103.1%		102.2%		89.9%		88.7%
Valuation allowances as % of total impaired loans		58.6%		58.9%		71.6%		66.5%		63.8%		62.3%
1) Credit Suisse Financial Services/Credit Suisse First Boston reflect business unit amounts. Total consolidated Credit Suisse Group amounts include adjustments and the Corporate Center.

REVIEW OF BUSINESS UNITS | CREDIT SUISSE FINANCIAL SERVICES





Credit Suisse Financial Services recorded a net profit of CHF 666 million and a net operating profit, excluding the amortization of acquired intangible assets and goodwill, of CHF 690 million in the first quarter of 2003. Winterthur achieved an improved operating performance through tariff increases, a selective underwriting policy and stronger investment results. Primarily as a result of lower operating expenses, Private Banking recorded a higher segment profit than in the fourth quarter of 2002. Corporate & Retail Banking increased its segment result considerably compared to a weak fourth quarter of 2002.

Credit Suisse Financial Services recorded a net profit of CHF 666 million in the first quarter of 2003, down 6% versus the fourth quarter of 2002 and up 13% versus the corresponding period in the previous year. Fourth quarter 2002 results benefited from the one-time cumulative effect of a change in accounting principle of CHF 266 million for periods prior to 2002. Net operating profit before the amortization of acquired intangible assets and goodwill for the first quarter of 2003 amounted to CHF 690 million. The net operating profit was positively impacted by the investment income in the insurance segments, which increased by CHF 1.1 billion to CHF 1.5 billion compared to the previous quarter.

The refocusing of the European initiative on Private Banking clients is progressing well and has already led to cost improvements. With regard to the realignment of the Winterthur organization, the merger of the two Corporate Centers has been completed and the management levels have been defined in the countries in which the life and non-life businesses are being merged.

Credit Suisse Financial Services made progress towards its goal to return to profitability in 2003 but remains exposed to continued volatility in the financial markets, particularly in Life & Pensions.


Private Banking
In the first quarter of 2003, Private Banking reported a segment profit of CHF 371 million, up 10% versus the previous quarter and down 39% versus the corresponding period in the previous year. Operating income decreased 2% versus the previous quarter to CHF 1.3 billion. The decrease in operating income of 21% versus the first quarter of 2002 was mainly attributable to lower transaction volumes in the securities business due to investor passivity and the market-driven lower asset base. Operating expenses decreased 7% compared to the previous quarter and 8% versus the first quarter of 2002. The gross margin stood at 113.8 bp in the first quarter of 2003, compared with 112.4 bp in the previous quarter and 126.4 bp in the first quarter of 2002.

Net new assets amounted to CHF 1.5 billion in the first quarter of 2003, compared to CHF 0.9 billion in the previous quarter. Assets under management decreased 1.9% versus year-end 2002 to CHF 457.0 billion, due to market performance and the foreign exchange impact.

In Europe, substantial progress was achieved in the refocusing of the European initiative on private banking clients, most significantly in Germany and Spain. In onshore Europe and in Asia, Private Banking achieved above-average growth of net new assets. To protect clients’ capital and improve risk-return profiles, Private Banking launched a number of innovative products, tailored to market conditions, as an alternative to direct investments in equities or fixed income products. In the second quarter of 2003, Private Banking is introducing a new advisory concept that will focus on in-depth client asset and liability management.


Corporate & Retail Banking
Corporate & Retail Banking posted a segment profit of CHF 124 million in the first quarter of 2003, up 158% versus the previous quarter and down 15% versus the corresponding period in the previous year. Operating income rose 3% quarter-on-quarter to CHF 734 million, due primarily to increased commission and trading income, which compensated for the lower interest income. In the first quarter of 2003, the net interest margin stood at 214 bp, down from 219 bp in the previous quarter. Compared with the first quarter of 2002, operating income decreased by 7%, mainly driven by lower transaction-based commission income and the lower interest rate environment.

Operating expenses decreased 14% versus the previous quarter to CHF 473 million, partly due to seasonality. The credit-related provisions recorded were CHF 24 million below the statistical valuation adjustments. In the first quarter of 2003, total impaired loans declined by CHF 397 million to CHF 6.1 billion as of March 31, 2003. The cost/income ratio stood at 67.4% in the first quarter of 2003, compared with 80.8% in the previous quarter. The return on average allocated capital increased quarter-on-quarter from 4.0% to 10.7%.

Assets under management stood at CHF 64.1 billion at the end of the first quarter of 2003, down 8.8% versus year-end 2002. The net asset outflow of CHF 3.4 billion in the first quarter of 2003 was attributable to shifts from time deposit accounts of corporate clients to transaction accounts. These transaction accounts do not qualify as assets under management. In the first quarter of 2003, Corporate & Retail Banking, together with Private Banking, achieved good growth in the Swiss private mortgage business.


Life & Pensions
In the first quarter 2003, Life & Pensions reported a segment profit of CHF 111 million, an increase of CHF 96 million versus the corresponding period in the previous year. Compared to the fourth quarter of 2002, segment profit increased CHF 18 million or 19%. This result was primarily driven by a reduction in administration costs and a positive investment performance.

In the first quarter of 2003, Life & Pensions reported a decrease in gross premiums written of 4%, or CHF 263 million, to CHF 6.5 billion compared to the corresponding period in the previous year. Adjusted for acquisitions, divestitures and exchange rate impacts, premium volume decreased by 2%. The first quarter decline was due both to Life & Pensions’ ongoing selective underwriting and strong reported single premium growth in Italy, the UK and Belgium in the first quarter of 2002. Net new assets in the first quarter of 2003 amounted to CHF 2.2 billion, compared to CHF 3.0 billion in the first quarter of 2002, reflecting lower premium volume.

Administration costs decreased 6% to CHF 322 million, compared to the first quarter of 2002, largely due to cost reduction measures. The total expense ratio in the first quarter of 2003 stood at 6.8%, compared to 6.4% in the corresponding period of the previous year, primarily due to the reduction in premium income and higher amortization of deferred acquisition costs (DAC), in line with the development of investment income.

Investment income increased CHF 429 million to CHF 1.2 billion in the first quarter of 2003, compared to the corresponding period in the previous year. The increase of CHF 888 million compared to the fourth quarter of 2002 partly reflects a decrease in impairments of CHF 481 million, to CHF 268 million, recorded in the first quarter of 2003. In the reporting period, the total return on invested assets amounted to 4.9%, compared with 3.2% in the first quarter of 2002. Current income thereof was 3.9%, whereas realized gains/losses and other income/expenses were 1.1%. The proportion of investments held in equities was 5% as of March 31, 2003, compared with 8% as of December 31, 2002.


Insurance
Insurance reported a segment profit of CHF 92 million in the first quarter of 2003, an increase of CHF 239 million compared to the corresponding period of the previous year. Compared to the fourth quarter of 2002, segment profit increased CHF 86 million. The strong recovery of the Insurance result in the first quarter of 2003 is mainly driven by a significant improvement in the underwriting result due to the continued implementation of tariff increases and a strict underwriting policy, as well as improvements in investment income, compared to the first quarter of 2002. This result was partially offset by charges of CHF 63 million after-tax for the realignment of the organization and the international business portfolio.

In the first quarter of 2003, Insurance’s net premiums earned increased CHF 227 million, or 6%, to CHF 4.0 billion compared to the corresponding period in the previous year. Adjusted for acquisitions, divestitures and exchange rate impacts, the increase was 13%, primarily due to tariff increases across all major markets.

Insurance improved its net underwriting result by CHF 137 million in the first quarter of 2003 versus the corresponding period of the previous year, resulting in a decrease in the combined ratio of 3.2 percentage points to 100.7% in the first quarter of 2003, compared to 103.9% in the first quarter of 2002. This improvement resulted mainly from a decrease in the claims ratio of 4.2 percentage points to 71.0% in the first quarter of 2003 versus the corresponding period in the previous year, reflecting improved pricing and continued streamlining of the portfolio. In addition, fewer large losses resulting from natural catastrophes were reported during the quarter.

In the first quarter of 2003, administration costs decreased by 6% to CHF 472 million versus the corresponding period in the previous year. The overall expense ratio increased 1.0 percentage point to 29.7% in the first quarter of 2003, compared to the corresponding period of the previous year, due to higher policy acquisition costs mainly related to premium growth and the effect of fully integrating the book of business acquired from Prudential plc.

Insurance reported an increase in net investment income of CHF 202 million in the first quarter of 2003, to CHF 289 million, versus the corresponding period in the previous year. Compared with the fourth quarter of 2002, net investment income increased by CHF 230 million. In the first quarter of 2003, total return on invested assets amounted to 3.5%, compared with 1.2% in the first quarter of 2002. Current income was 3.9%, whereas realized gains/losses and other income/expenses were -0.5%. The proportion of investments held in equities was 5% as of March 31, 2003, compared with 7% as of December 31, 2002.

Credit Suisse Financial Services business unit income statement 1)
								Change		Change
								in % from		in % from
in CHF m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Operating income	2)	3,393		3,517		3,306		(4)		3
Personnel expenses		1,369		1,405		1,443		(3)		(5)
Other operating expenses		779		897		814		(13)		(4)
Operating expenses		2,148		2,302		2,257		(7)		(5)
Gross operating profit		1,245		1,215		1,049		2		19
Depreciation of non-current assets		168		256		162		(34)		4
Amortization of Present Value of Future Profits (PVFP)		52		62		43		(16)		21
Valuation adjustments, provisions and losses		81		105		99		(23)		(18)
Net operating profit before extraordinary and exceptional items, cumulative effect of change in accounting principle and taxes		944		792		745		19		27
Extraordinary income/(expenses), net		7		24		(3)		(71)		–
Taxes	3) 4)	(253)		(332)		(120)		(24)		111
Net operating profit before exceptional items, cumulative effect of change in accounting principle and minority interests		698		484		622		44		12
Amortization of acquired intangible assets and goodwill		(25)		(37)		(29)		(32)		(14)
Exceptional items		0		(73)		0		(100)		–
Tax impact		1		14		1		(93)		–
Cumulative effect of change in accounting principle	3)	–		266		–		–		–
Net profit before minority interests		674		654		594		3		13
Minority interests		(8)		51		(2)		–		300
Net profit		666		705		592		(6)		13
1) The business unit results reflect the results of the separate segments comprising the business unit. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill, exceptional items and cumulative effect of change in accounting principle not allocated to the segments are included in the business unit results. For a complete reconciliation of the business unit results to the Group’s consolidated results and a discussion of the material reconciling items, please refer to “Reconciliation of operating to consolidated results”.
2) For the purpose of the consolidated financial statements, operating income for the insurance business is defined as net premiums earned, less claims incurred and change in technical provisions and expenses for processing claims, less commissions, plus net investment income from the insurance business.
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 4Q2002 and 1Q2002 of CHF –649 m and CHF –86 m, respectively.
4) Excluding tax impact on amortization of acquired intangible assets and goodwill as well as exceptional items.

Reconciliation to net operating profit
								Change		Change
								in % from		in % from
in CHF m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Net profit		666		705		592		(6)		13
Amortization of acquired intangible assets and goodwill		25		37		29		(32)		(14)
Exceptional items		0		73		0		(100)		–
Tax impact		(1)		(14)		(1)		(93)		–
Cumulative effect of change in accounting principle		–		(266)		–		–		–
Net operating profit		690		535		620		29		11

Credit Suisse Financial Services business unit key information
						1Q2003		4Q2002		1Q2002
Cost/income ratio	1)					69.8%		75.0%		74.5%
Cost/income ratio (operating)	2) 3)					68.3%		72.7%		73.2%
Cost/income ratio (operating), banking	2)					64.7%		71.1%		56.9%
Return on average allocated capital	1)					21.8%		20.8%		19.1%
Return on average allocated capital (operating)	2)					22.6%		15.4%		20.0%
Average allocated capital in CHF m						12,369		12,600		12,431
Growth in assets under management						(2.0%)		(1.3%)		1.0%
of which net new assets						0.0%		(0.1%)		1.4%
of which market movement and structural effects						(2.1%)		(1.3%)		–
of which acquisitions/(divestitures)						–		0.1%		(0.4%)
of which discretionary						(0.3%)		(0.7%)		0.7%
								31.03.03		31.12.02
Assets under management in CHF bn								663.8		677.5
Number of employees								52,871		53,755
1) Based on the business unit results including certain acquisition-related costs, exceptional items and cumulative effect of change in accounting principle not allocated to the segments. Please refer to “Reconciliation of operating to consolidated results”.
2) Based on the results of the separate segments comprising the business unit, which exclude certain acquisition-related costs, exceptional items and cumulative effect of change in accounting principle not allocated to the segments. Please refer to “Reconciliation of operating to consolidated results”.
3) Excluding amortization of PVFP from the insurance business within Credit Suisse Financial Services.

Overview of business unit Credit Suisse Financial Services 1)
										Credit
				Corporate						Suisse
		Private		& Retail		Life &				Financial
1Q2003, in CHF m		Banking		Banking		Pensions		Insurance		Services
Operating income	2)	1,310		734		622		727		3,393
Personnel expenses		515		300		203		351		1,369
Other operating expenses		256		173		136		214		779
Operating expenses		771		473		339		565		2,148
Gross operating profit		539		261		283		162		1,245
Depreciation of non-current assets		57		22		47		42		168
Amortization of Present Value of Future Profits (PVFP)		–		–		51		1		52
Valuation adjustments, provisions and losses		4		77		–		–		81
Net operating profit before extraordinary items and taxes		478		162		185		119		944
Extraordinary income/(expenses), net		7		0		0		0		7
Taxes	3)	(114)		(38)		(74)		(27)		(253)
Net operating profit before minority interests		371		124		111		92		698
Amortization of acquired intangible assets and goodwill										(25)
Tax impact										1
Net profit before minority interests										674
Minority interests										(8)
Net profit										666
Average allocated capital	4)	2,261		4,656		5,452				12,369
1) The business unit results reflect the results of the separate segments comprising the business unit. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill not allocated to the segments are included in the business unit results. For a complete reconciliation of the business unit results to the Group’s consolidated results and a discussion of the material reconciling items, please refer to “Reconciliation of operating to consolidated results”.
2) Operating income for the insurance business is defined as net premiums earned, less claims incurred and change in technical provisions and expenses for processing claims, less commissions, plus net investment income from the insurance business.
3) Excluding tax impact on amortization of acquired intangible assets and goodwill.
4) Life & Pensions and Insurance segments amount represents the average shareholders' equity of “Winterthur” Swiss Insurance Company.

Private Banking income statement 1)
								Change		Change
								in % from		in % from
in CHF m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Net interest income		310		311		326		0		(5)
Net commission and service fee income		889		901		1,183		(1)		(25)
Net trading income		102		114		145		(11)		(30)
Other ordinary income		9		13		6		(31)		50
Operating income		1,310		1,339		1,660		(2)		(21)
Personnel expenses		515		502		553		3		(7)
Other operating expenses		256		323		283		(21)		(10)
Operating expenses		771		825		836		(7)		(8)
Gross operating profit		539		514		824		5		(35)
Depreciation of non-current assets		57		58		49		(2)		16
Valuation adjustments, provisions and losses	2)	4		27		11		(85)		(64)
Net operating profit before extraordinary and exceptional items, cumulative effect of change in accounting principle and taxes		478		429		764		11		(37)
Extraordinary income/(expenses), net		7		23		(2)		(70)		–
Taxes	3)	(114)		(115)		(154)		(1)		(26)
Net operating profit before exceptional items, cumulative effect of change in accounting principle and minority interests (segment result)		371		337		608		10		(39)
Increased/(decreased) credit-related valuation adjustments	2)	0		(9)		2
1) 2002 comparative figures have been restated to reflect the realignment of the private client business as of 01.01.2003. This entailed moving certain client segments in Switzerland from Private Banking to Corporate & Retail Banking. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill, exceptional items and cumulative effect of change in accounting principle not allocated to the segments are included in the business unit results.
2) Increased/(decreased) valuation adjustments taken at Group level resulting from the difference between the statistical and actual credit provisions.
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 4Q2002 and 1Q2002 of CHF –117 m and CHF –140 m, respectively.

Private Banking balance sheet information 1)
										Change
										in % from
in CHF m						31.03.03		31.12.02		31.12.02
Total assets						152,910		155,363		(2)
Due from customers						33,493		35,580		(6)
Mortgages						23,603		22,935		3
1) 2002 comparative figures have been restated to reflect the realignment of the private client business as of 01.01.2003. This entailed moving certain client segments in Switzerland from Private Banking to Corporate & Retail Banking.

Private Banking key information 1)
						1Q2003		4Q2002		1Q2002
Cost/income ratio	2)					63.2%		65.9%		53.3%
Average allocated capital in CHF m						2,261		2,304		2,340
Pre-tax margin	2)					37.0%		33.8%		45.9%
Fee income/operating income						67.9%		67.3%		71.3%
Net new assets in CHF bn						1.5		0.9		9.2
Growth in assets under management						(1.9%)		(1.3%)		2.3%
of which net new assets						0.3%		0.2%		1.8%
of which market movement and structural effects						(2.2%)		(1.6%)		0.5%
of which acquisitions/(divestitures)						–		0.1%		–
Net margin	3)					32.2 bp		28.3 bp		46.3 bp
Gross margin	4)					113.8 bp		112.4 bp		126.4 bp
								31.03.03		31.12.02
Assets under management in CHF bn								457.0		465.7
Number of employees								12,249		12,587
1) 2002 comparative figures have been restated to reflect the realignment of the private client business as of 01.01.2003. This entailed moving certain client segments in Switzerland from Private Banking to Corporate & Retail Banking.
2) Based on the segment results, which exclude certain acquisition-related costs, exceptional items and cumulative effect of change in accounting principle not allocated to the segment.
3) Net operating profit before exceptional items, cumulative effect of change in accounting principle and minority interests (segment result)/average assets under management.
4) Operating income/average assets under management.

Corporate & Retail Banking income statement 1)
								Change		Change
								in % from		in % from
in CHF m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Net interest income		502		521		540		(4)		(7)
Net commission and service fee income		149		131		172		14		(13)
Net trading income		69		60		63		15		10
Other ordinary income		14		1		15		–		(7)
Operating income		734		713		790		3		(7)
Personnel expenses		300		297		294		1		2
Other operating expenses		173		250		194		(31)		(11)
Operating expenses		473		547		488		(14)		(3)
Gross operating profit		261		166		302		57		(14)
Depreciation of non-current assets		22		29		22		(24)		0
Valuation adjustments, provisions and losses	2)	77		78		88		(1)		(13)
Net operating profit before extraordinary items, cumulative effect of change in accounting principle and taxes		162		59		192		175		(16)
Extraordinary income/(expenses), net		0		1		(1)		(100)		(100)
Taxes	3)	(38)		(12)		(45)		217		(16)
Net operating profit before cumulative effect of change in accounting principle and minority interests (segment result)		124		48		146		158		(15)
Increased/(decreased) credit-related valuation adjustments	2)	(24)		94		(6)
1) 2002 comparative figures have been restated to reflect the realignment of the private client business as of 01.01.2003. This entailed moving certain client segments in Switzerland from Private Banking to Corporate & Retail Banking. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results.
2) Increased/(decreased) valuation adjustments taken at Group level resulting from the difference between the statistical and actual credit provisions.
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would not have had an impact on the taxes reported for 4Q2002 and 1Q2002.

Corporate & Retail Banking balance sheet information 1)
										Change
										in % from
in CHF m						31.03.03		31.12.02		31.12.02
Total assets						93,104		94,203		(1)
Due from customers						26,952		27,179		(1)
Mortgages						57,927		57,165		1
Due to customers in savings and investment deposits						27,830		27,081		3
Due to customers, other						27,561		27,509		0
1) 2002 comparative figures have been restated to reflect the realignment of the private client business as of 01.01.2003. This entailed moving certain client segments in Switzerland from Private Banking to Corporate & Retail Banking.

Corporate & Retail Banking key information 1)
						1Q2003		4Q2002		1Q2002
Cost/income ratio	2)					67.4%		80.8%		64.6%
Return on average allocated capital	2)					10.7%		4.0%		11.4%
Average allocated capital in CHF m						4,656		4,815		5,116
Pre-tax margin	2)					22.1%		8.4%		24.2%
Personnel expenses/operating income						40.9%		41.7%		37.2%
Net interest margin						214 bp		219 bp		231 bp
Loan growth						0.6%		(1.7%)		2.3%
Net new assets in CHF bn						(3.4)		(0.2)		(1.4)
								31.03.03		31.12.02
Deposit/loan ratio								65.3%		64.7%
Assets under management in CHF bn								64.1		70.3
Number of employees								8,929		9,038
Number of branches								221		223
1) 2002 comparative figures have been restated to reflect the realignment of the private client business as of 01.01.2003. This entailed moving certain client segments in Switzerland from Private Banking to Corporate & Retail Banking.
2) Based on the segment results, which exclude certain acquisition-related costs not allocated to the segment.

Life & Pensions income statement 1)
								Change		Change
								in % from		in % from
in CHF m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Gross premiums written		6,499		4,218		6,762		54		(4)
Reinsurance ceded		(23)		(14)		(96)		64		(76)
Net premiums written		6,476		4,204		6,666		54		(3)
Change in provision for unearned premiums		(10)		29		(39)		–		(74)
Net premiums earned		6,466		4,233		6,627		53		(2)
Death and other benefits incurred		(4,100)		(5,373)		(3,813)		(24)		8
Change in provision for future policyholder benefits (technical)		(2,871)		1,116		(3,289)		–		(13)
Change in provision for future policyholder benefits (separate account)	2)	211		80		(141)		164		–
Dividends to policyholders incurred		(24)		738		135		–		–
Policy acquisition costs (including change in DAC/PVFP)		(120)		(160)		(80)		(25)		50
Administration costs		(322)		(409)		(344)		(21)		(6)
Investment income general account		1,221		333		792		267		54
Investment income separate account	2)	(211)		(80)		141		164		–
Interest received and paid		(19)		(39)		(27)		(51)		(30)
Interest on bonuses credited to policyholders		(33)		(41)		(29)		(20)		14
Other income/(expenses)		(13)		(24)		6		(46)		–
Net operating profit/(loss) before cumulative effect of change in accounting principle and taxes		185		374		(22)		(51)		–
Taxes	3)	(74)		(281)		37		(74)		–
Net operating profit before cumulative effect of change in accounting principle and minority interests (segment result)		111		93		15		19		–
1) The presentation of segment results differs from the presentation of the Group's consolidated results as it reflects the way the insurance business is managed, which is in line with peers in the insurance industry. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill and cumulative effect of change in accounting principle not allocated to the segments are included in the business unit results.
2) This represents the market impact for separate account (or unit-linked) business, where the investment risk is borne by the policyholder.
3) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 4Q2002 and 1Q2002 of CHF –540 m and CHF 63 m, respectively.

Life & Pensions key information
						1Q2003		4Q2002		1Q2002
Expense ratio	1)					6.8%		13.4%		6.4%
Growth in gross premiums written						(3.9%)		(13.9%)		9.3%
Return on invested assets (excluding separate account business)
Current income						3.9%		3.6%		4.0%
Realized gains/losses and other income/expenses						1.1%		(2.5%)		(0.8%)
Total return on invested assets	2)					4.9%		1.2%		3.2%
Net new assets in CHF bn	3)					2.2		(1.3)		3.0
Total sales in CHF m	4)					7,372		5,283		7,783
								31.03.03		31.12.02
Assets under management in CHF bn	5)							111.7		110.8
Technical provisions in CHF m								108,490		105,939
Number of employees								7,629		7,815
1) Operating expenses (i.e. policy acquisition costs and administration costs)/net premiums earned.
2) Total return on invested assets includes depreciation on real estate and investment expenses as well as investment income and realized gains and losses.
3) Based on change in technical provisions for traditional business, adjusted for technical interests, net inflow of separate account business and change in off-balance sheet business such as funds.
4) Includes gross premiums written and off-balance sheet sales.
5) Based on savings-related provisions for policyholders plus off-balance sheet assets.

Insurance income statement 1)
								Change		Change
								in % from		in % from
in CHF m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Gross premiums written		6,835		3,846		6,668		78		3
Reinsurance ceded		(427)		(299)		(415)		43		3
Net premiums written		6,408		3,547		6,253		81		2
Change in provision for unearned premiums and in provision for future policy benefits (health)		(2,430)		485		(2,502)		–		(3)
Net premiums earned		3,978		4,032		3,751		(1)		6
Claims and annuities incurred, net		(2,826)		(3,034)		(2,819)		(7)		0
Dividends to policyholders incurred, net		(45)		109		(67)		–		(33)
Policy acquisition costs (including change in DAC/PVFP)		(710)		(647)		(574)		10		24
Administration costs		(472)		(481)		(503)		(2)		(6)
Underwriting result, net		(75)		(21)		(212)		257		(65)
Net investment income		289		59		87		390		232
Interest received and paid		(47)		(39)		(3)		21		–
Other income/(expenses), net		(48)		(69)		(61)		(30)		(21)
Net operating profit/(loss) before cumulative effect of change in accounting principle and taxes		119		(70)		(189)		–		–
Taxes	2)	(27)		76		42		–		–
Net operating profit/(loss) before cumulative effect of change in accounting principle and minority interests (segment result)		92		6		(147)		–		–
1) The presentation of segment results differs from the presentation of the Group's consolidated results as it reflects the way the insurance business is managed, which is in line with peers in the insurance industry. Certain acquisition-related costs, including amortization of acquired intangible assets and goodwill and cumulative effect of change in accounting principle not allocated to the segments are included in the business unit results.
2) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes for 4Q2002 and 1Q2002 of CHF 20 m and CHF 36 m, respectively.

Insurance key information
						1Q2003		4Q2002		1Q2002
Combined ratio (excluding dividends to policyholders)						100.7%		103.2%		103.9%
Claims ratio	1)					71.0%		75.2%		75.2%
Expense ratio	2)					29.7%		28.0%		28.7%
Return on invested assets
Current income						3.9%		3.9%		3.9%
Realized gains/losses and other income/expenses						(0.5%)		(3.4%)		(2.7%)
Total return on invested assets	3)					3.5%		0.5%		1.2%
								31.03.03		31.12.02
Assets under management in CHF bn								31.0		30.7
Technical provisions in CHF m								31,429		28,745
Number of employees								24,064		24,315
1) Claims and annuities incurred, net/net premiums earned.
2) Operating expenses (i.e. policy acquisition costs and administration costs)/net premiums earned.
3) Total return on invested assets includes depreciation on real estate and investment expenses as well as investment income and realized gains and losses.

REVIEW OF BUSINESS UNITS | CREDIT SUISSE FIRST BOSTON





Credit Suisse First Boston reported a net profit of USD 161 million (CHF 221 million) in the first quarter of 2003, compared with a net loss of USD 811 million (CHF 1.3 billion) in the fourth quarter of 2002 and a net loss of USD 19 million (CHF 32 million) in the first quarter of 2002. Excluding the amortization of acquired intangible assets and goodwill, and, for the fourth quarter 2002, exceptional items and the cumulative effect of a change in accounting principle, net operating profit in the first quarter of 2003 was USD 292 million (CHF 400 million), compared with a net operating profit of USD 11 million (CHF 15 million) in the fourth quarter of 2002 and a net operating profit of USD 155 million (CHF 259 million) in the first quarter of 2002.

First quarter 2003 operating income increased 24% compared with the fourth quarter of 2002 to USD 2.9 billion (CHF 4.0 billion), primarily as a result of a 39% increase in the operating income of the Institutional Securities segment. Compared with the first quarter of 2002, Credit Suisse First Boston’s operating income decreased 11%, with the Institutional Securities segment down 5%, reflecting challenging conditions in the mergers and acquisitions and equity new issuance markets. Excluding Pershing, operating income increased 34% compared with the fourth quarter of 2002 and declined 5% compared with the first quarter of 2002.

For the first quarter of 2003, Pershing’s net result of USD 15 million (CHF 21 million) was reported within the operating income of the CSFB Financial Services segment. Pershing’s fourth and first quarter 2002 operating income was USD 195 million (CHF 284 million) and USD 231 million (CHF 388 million), respectively. The fourth and first quarter of 2002 operating expenses for Pershing were USD 156 million (CHF 229 million) and USD 169 million (CHF 284 million), respectively. The sale of Pershing to The Bank of New York Company, Inc. closed on May 1, 2003.

Cost control continues to be a priority, and Credit Suisse First Boston significantly improved its pre-tax margin in the first quarter of 2003 compared with the fourth and first quarter of 2002. Excluding Pershing, operating expenses increased 27% on a rise in incentive compensation linked to improved performance, compared with an unusually low fourth quarter of 2002. Compared to the first quarter of 2002, and excluding Pershing, operating expenses declined 10%, due to a 12% reduction in headcount and cost containment measures. Credit Suisse First Boston is continuing to take measures to bring costs in line with operating income.

First quarter 2003 valuation adjustments, provisions and losses of USD 128 million (CHF 176 million) decreased 81% and 37%, respectively, compared with the fourth and first quarter of 2002. The first quarter of 2003 included a charge of USD 22 million (CHF 30 million) for credit provisions related to the risk of loss inherent in the portfolio of non-impaired loans and commitments compared with a similar charge of USD 340 million (CHF 530 million) in the fourth quarter of 2002 related to a change in estimate for the inherent loss in this portfolio. In the fourth quarter of 2002, Credit Suisse Group released a portion of its reserve for general banking risks, allocating USD 245 million (CHF 382 million) of this release to Credit Suisse First Boston to offset the after-tax impact of this change in estimate of the inherent loan loss. This release was reported as extraordinary income in the Group's consolidated financial statements. Excluding the provision for non-impaired loans and commitments, valuation adjustments, provisions and losses in the first quarter of 2003 declined 66% compared with the fourth quarter of 2002 and 47% compared with the first quarter of 2002. In line with a lower level of corporate credit provisions, impaired loans at the end of the first quarter of 2003 declined 6% on a US dollar basis compared to December 31, 2002, as a result of the impact of held for sale real estate loans presented on the basis of lower of cost or market net of related credit provisions, which, effective March 31, 2003, were no longer reported within the impaired loan exposure. Real estate loans of USD 541 million (CHF 752 million) were included in the impaired loan exposure as of December 31, 2002.

The fourth quarter of 2002 included pre-tax exceptional items of USD 890 million (CHF 1.4 billion), or USD 813 million (CHF 1.3 billion) after tax, consisting of a loss related to the sale of Pershing, a charge related to the agreement in principle with US regulators involving research analyst independence and the allocation of IPO shares to corporate executive officers (a settlement of which was recently finalized), a provision for private litigation involving research analyst independence, certain IPO allocation practices, Enron and other related litigation, and a charge related to a cost reduction program. Additionally, the fourth quarter of 2002 reflected the positive cumulative effect of a change in accounting principle for periods prior to 2002 of USD 162 million (CHF 254 million) relating to the recognition of deferred tax assets on net operating losses.

Assets under management, including private equity, totaled USD 364.4 billion (CHF 496.7 billion) as of March 31, 2003, down 2.2% on a US dollar basis from December 31, 2002, primarily due to market depreciation. Discretionary assets under management as of March 31, 2003, totaled USD 227.3 billion (CHF 309.9 billion), a decrease of 2.9% on a US dollar basis from December 31, 2002. Advisory assets under management as of March 31, 2003, totaled USD 137.1 billion (CHF 186.8 billion), a decrease of 0.9% on a US dollar basis from December 31, 2002.


Institutional Securities
The Institutional Securities segment reported a segment profit of USD 348 million (CHF 476 million) in the first quarter of 2003, compared with USD 63 million (CHF 88 million) in the fourth quarter of 2002 and USD 218 million (CHF 367 million) in the first quarter of 2002. First quarter operating income of USD 2.6 billion (CHF 3.6 billion) increased 39% compared with the fourth quarter of 2002. The increase reflected improved results in the Fixed Income division and lower write-downs related to the non-continuing businesses in the Other division. This increase was partially offset by a decline in Investment Banking’s operating income, due, in part, to the inclusion of a gain in the fourth quarter 2002 operating income resulting from the sale of an investment in Swiss Re. Compared with the first quarter of 2002, operating income declined 5%. Both the Equity and Investment Banking divisions were adversely impacted by weak market conditions. Operating expenses in the first quarter of 2003 increased 31% compared with the fourth quarter of 2002, reflecting the unusually low personnel expenses in the fourth quarter of 2002, and decreased 11% compared with the first quarter of 2002. First quarter 2003 valuation adjustments, provisions and losses were 83% and 44% lower than the fourth and first quarters of 2002, respectively.

For consistency, the results of certain legacy private equity investments, including investments in mature third-party leverage buyout funds which had been monitored and reported separately within the Investment Banking division, were formally transferred to the Other division in the first quarter of 2003. Accordingly, the operating income of the Investment Banking and Other divisions were reclassified for all periods presented to reflect management’s determination to report results from the non-continuing businesses in the Other division.

Fixed Income's   operating income for the first quarter of 2003 increased 142% compared with the fourth quarter of 2002 to USD 1.4 billion (CHF 1.9 billion). The increase was primarily driven by secondary trading in the developed markets credit products business, the seasonal impact of increased customer flow and increased mortgage activity. Additionally, fourth quarter 2002 credit products results were adversely impacted by a write-down on notes issued by affiliates of National Century Financial Enterprises, Inc. First quarter 2003 increases were also recorded in interest rate derivatives, due to a favorable environment with a steep yield curve and increased volatility, and in the leveraged and bank finance business. First quarter 2003 operating income increased 12% compared with the first quarter of 2002, primarily due to an increase in the interest rate products business, particularly in the derivatives area, reflecting a favorable interest rate environment and increased client demand following the decline in the equity markets in early 2002.

First quarter 2003 operating income of the Equity division increased 7% compared with the fourth quarter of 2002 to USD 602 million (CHF 825 million). The increase was principally related to options and structured products derivatives transactions, which benefited from an increase in customer volume compared with relatively low demand during the fourth quarter of 2002. Convertible trading activity also increased in the first quarter of 2003 due to renewed investor interest. Partially offsetting these increases was a decline in the cash customer business, which was adversely impacted by declines in volume, general margin compression and a decrease in equity new issuance activity. Compared with the first quarter of 2002, operating income decreased 30% due to declines in the cash customer business, principally in the United States, for the reasons cited previously. Operating income from derivatives activity was in line with the first quarter of 2002. Despite the challenging market, rankings in research, sales and trading generally remained consistent or improved.

Investment Banking’s   first quarter 2003 operating income, which includes private equity, declined 42% versus the fourth quarter 2002 to USD 545 million (CHF 748 million). The decline was principally attributable to a gain reported in the fourth quarter of 2002 on the sale of an investment in Swiss Re of USD 309 million (CHF 473 million), with the remainder principally attributable to a decrease in equity new issuance revenue. Globally, equity new issuance activity in the reporting period declined 24% compared with the fourth quarter of 2002, but Credit Suisse First Boston continued to exhibit strength in the middle-market sector. Operating income from mergers and acquisitions was comparable to the fourth quarter of 2002, despite a 19% decline in global merger and acquisition industry volume. Results from the leverage and bank finance business benefited from a 60% increase in global high-yield new issuance activity and an increase in market share. High-yield new issuance market share increased from 12% for the fourth quarter of 2002 to 22% for the first quarter of 2003, and Credit Suisse First Boston retained its number one ranking in global high-yield new issuances. First quarter 2003 operating income decreased 26% compared with the first quarter of 2002, which included a USD 110 million (CHF 185 million) gain on the sale of an investment in Swiss Re, reflecting mainly the impact of a decline in merger and acquisition and equity new issuance operating income. Industry-wide global new issuance activity declined 52% compared with the first quarter of 2002.

Active private equity investments net gains (both realized and unrealized gains and losses) were USD 30 million (CHF 41 million) in the first quarter of 2003, compared with net gains of USD 347 million (CHF 533 million) in the fourth quarter of 2002 and net gains of USD 55 million (CHF 92 million) in the first quarter of 2002, including gains from the sale of an investment in Swiss Re. Management and performance fees were USD 44 million (CHF 60 million) in the first quarter of 2003, compared with USD 50 million (CHF 73 million) in the fourth quarter of 2002 and USD 59 million (CHF 99 million) in the first quarter of 2002. The book value of the active private equity investments was USD 858 million (CHF 1.2 billion) and fair value was USD 902 million (CHF 1.2 billion) as of March 31, 2003.

First quarter 2003 operating income for the Other division was USD 47 million (CHF 64 million), compared with operating losses of USD 208 million (CHF 312 million) and USD 124 million (CHF 210 million) in the fourth and first quarters of 2002, respectively. The increase in operating income was principally related to fewer write-downs on the non-continuing businesses, which include real estate, distressed trading and private equity investments. The aggregate operating loss related to all non-continuing legacy businesses in the first quarter of 2003 was USD 42 million (CHF 57 million) compared with USD 272 million (CHF 401 million) and USD 202 million (CHF 339 million) in the fourth and first quarters of 2002, respectively. Credit Suisse First Boston continues to reduce the net exposure of the non-continuing portfolio as market conditions permit. As of March 31, 2003, the net exposure of the entire non-continuing portfolio, including unfunded commitments on the real estate portfolio, was USD 2.7 billion (CHF 3.7 billion), a decrease of USD 303 million (CHF 495 million) compared with December 31, 2002.


CSFB Financial Services
CSFB Financial Services reported a segment profit of USD 37 million (CHF 51 million) for the first quarter of 2003, a decline of 23% compared with the fourth quarter of 2002 and 47% compared with the first quarter of 2002. Operating income for the first quarter of 2003 was USD 304 million (CHF 416 million), down 37% and 43% from the fourth and first quarters of 2002, respectively, and operating expenses declined 41% and 44%, respectively. Excluding Pershing, operating income was flat compared with the fourth quarter of 2002 and decreased 5% compared with the first quarter of 2002.

Credit Suisse Asset Management’s   operating income in the first quarter of 2003 was flat compared to the fourth quarter of 2002. Operating income compared with the first quarter of 2002 declined as a result of market depreciation and asset outflows. Assets under management decreased USD 5.3 billion (CHF 15.2 billion), or 1.8%, compared with December 31, 2002 to USD 291.7 billion (CHF 397.6 billion) due to market declines and a net USD 3.8 billion (CHF 5.2 billion) outflow of assets. Discretionary assets under management decreased USD 5.8 billion (CHF 13.4 billion) compared with December 31, 2002.

Private Client Services’   operating income for the first quarter of 2003 was flat compared with the fourth quarter of 2002 despite a 5.6% decrease in assets under management on a US dollar basis. Compared with the first quarter of 2002, operating income declined, reflecting the weak equity markets. Decreased customer debit balances adversely impacted net interest income and lower trading activity and assets under management resulted in decreased commission and service fee income. Customer debit balances averaged USD 539 million in the first quarter of 2003 compared with USD 637 million and USD 839 million in the fourth and first quarters of 2002, respectively. Total transactions in the first quarter of 2003 totaled 316,900, down from 325,700 and 393,400 in the fourth and first quarters of 2002, respectively. Private Client Services’ net new assets were USD 1.1 billion (CHF 1.5 billion) for the first quarter of 2003.

On a net basis, the first quarter 2003 after-tax operating results of Pershing decreased compared with the fourth and first quarters of 2002. During the first quarter of 2003, trades per day averaged 123,000 compared with 122,600 and 134,300 during the fourth and first quarters of 2002, respectively. In the first quarter of 2003, customer debit balances averaged USD 4.8 billion compared with USD 4.2 billion and USD 4.9 billion in the fourth and first quarters of 2002, respectively.

Credit Suisse First Boston business unit income statement 1)
								Change		Change
								in % from		in % from
in USD m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Operating income		2,920		2,361		3,277		24		(11)
Personnel expenses		1,509		1,068		1,808		41		(17)
Other operating expenses		660		802		775		(18)		(15)
Operating expenses		2,169		1,870		2,583		16		(16)
Gross operating profit		751		491		694		53		8
Depreciation of non-current assets		94		107		123		(12)		(24)
Valuation adjustments, provisions and losses		128		657		202		(81)		(37)
Net operating profit/(loss) before extraordinary and exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and taxes		529		(273)		369		–		43
Extraordinary income/(expenses), net		0		246		0		–		–
Taxes	2) 3)	(144)		138		(81)		–		78
Net operating profit before exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and minority interests		385		111		288		247		34
Acquisition interest		(63)		(57)		(99)		11		(36)
Amortization of retention payments		(80)		(97)		(107)		(18)		(25)
Amortization of acquired intangible assets and goodwill		(151)		(209)		(213)		(28)		(29)
Exceptional items		0		(890)		0		(100)		–
Tax impact		70		169		112		(59)		(38)
Cumulative effect of change in accounting principle	2)	–		162		–		–		–
Net profit/(loss) before minority interests		161		(811)		(19)		–		–
Minority interests		0		0		0		–		–
Net profit/(loss)		161		(811)		(19)		–		–
See page 22 for footnotes.

Reconciliation to net operating profit
								Change		Change
								in % from		in % from
in USD m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Net profit/(loss)		161		(811)		(19)		–		–
Amortization of acquired intangible assets and goodwill		151		209		213		(28)		(29)
Exceptional items		0		890		0		(100)		–
Tax impact		(20)		(115)		(39)		(83)		(49)
Cumulative effect of change in accounting principle		–		(162)		–		–		–
Net operating profit		292		11		155		–		88

Credit Suisse First Boston business unit income statement 1)
								Change		Change
								in % from		in % from
in CHF m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Operating income		4,001		3,401		5,505		18		(27)
Personnel expenses		2,067		1,512		3,037		37		(32)
Other operating expenses		904		1,184		1,302		(24)		(31)
Operating expenses		2,971		2,696		4,339		10		(32)
Gross operating profit		1,030		705		1,166		46		(12)
Depreciation of non-current assets		130		156		207		(17)		(37)
Valuation adjustments, provisions and losses		176		993		338		(82)		(48)
Net operating profit/(loss) before extraordinary and exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and taxes		724		(444)		621		–		17
Extraordinary income/(expenses), net		0		383		0		(100)		–
Taxes	2) 3)	(197)		220		(137)		–		44
Net operating profit before exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and minority interests		527		159		484		231		9
Acquisition interest		(86)		(80)		(167)		8		(49)
Amortization of retention payments		(110)		(142)		(179)		(23)		(39)
Amortization of acquired intangible assets and goodwill		(206)		(308)		(357)		(33)		(42)
Exceptional items		0		(1,389)		0		(100)		–
Tax impact		96		254		187		(62)		(49)
Cumulative effect of change in accounting principle	2)	–		254		–		–		–
Net profit/(loss) before minority interests		221		(1,252)		(32)		–		–
Minority interests		0		0		0		–		–
Net profit/(loss)		221		(1,252)		(32)		–		–
1) The business unit results reflect the results of the separate segments comprising the business unit. Certain acquisition-related costs, including acquisition interest, amortization of retention payments and amortization of acquired intangible assets and goodwill, exceptional items and cumulative effect of change in accounting principle not allocated to the segments are included in the business unit results. Certain other items, including brokerage, execution and clearing expenses, contractor costs and expenses related to certain redeemable preferred securities classified as minority interests, have been reclassified in the segment and business unit results and are adjusted at the Corporate Center in accordance with Swiss GAAP and reflected in the Group’s consolidated results. For a complete reconciliation of the business unit results to the Group’s consolidated results and a discussion of the material reconciling items, please refer to “Reconciliation of operating to consolidated results”.
2) In 4Q2002, Credit Suisse Group adopted a change in accounting principle relating to the recognition of deferred tax assets on net operating losses. The retroactive application of this change in accounting principle would have resulted in taxes of CHF 22 m (USD 14 m) for 4Q2002 and would not have had an impact on the taxes reported for 1Q2002.
3) Excluding tax impact on acquisition-related costs as well as exceptional items.

Reconciliation to net operating profit
								Change		Change
								in % from		in % from
in CHF m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Net profit/(loss)		221		(1,252)		(32)		–		–
Amortization of acquired intangible assets and goodwill		206		308		357		(33)		(42)
Exceptional items		0		1,389		0		(100)		–
Tax impact		(27)		(176)		(66)		(85)		(59)
Cumulative effect of change in accounting principle		–		(254)		–		–		–
Net operating profit		400		15		259		–		54

Credit Suisse First Boston business unit key information
based on CHF amounts						1Q2003		4Q2002		1Q2002
Cost/income ratio	1)					82.0%		97.4%		88.5%
Cost/income ratio (operating)	2)					77.5%		83.9%		82.6%
Return on average allocated capital	1)					6.9%		(36.1%)		(0.9%)
Return on average allocated capital (operating)	2)					12.4%		0.4%		6.9%
Average allocated capital in CHF m						12,889		13,864		14,913
Pre-tax margin	1)					8.2%		(52.0%)		(1.5%)
Pre-tax margin (operating)	2)					13.2%		(8.3%)		5.0%
Personnel expenses/operating income	1)					55.6%		57.1%		60.2%
Personnel expenses/operating income (operating)	2)					51.7%		44.5%		55.2%
								31.03.03		31.12.02
Number of employees								19,218		23,424
1) Based on the business unit results including certain acquisition-related costs, exceptional items and cumulative effect of change in accounting principle not allocated to the segments. Please refer to “Reconciliation of operating to consolidated results”.
2) Based on the results of the separate segments comprising the business unit, which exclude certain acquisition-related costs, exceptional items and cumulative effect of change in accounting principle not allocated to the segments. Please refer to “Reconciliation of operating to consolidated results”.

Overview of business unit Credit Suisse First Boston 1)
		in USD m						in CHF m
				CSFB						CSFB
		Institutional		Financial		Credit Suisse		Institutional		Financial		Credit Suisse
1Q2003		Securities		Services		First Boston		Securities		Services		First Boston
Operating income		2,616		304		2,920		3,585		416		4,001
Personnel expenses		1,361		148		1,509		1,864		203		2,067
Other operating expenses		574		86		660		787		117		904
Operating expenses		1,935		234		2,169		2,651		320		2,971
Gross operating profit		681		70		751		934		96		1,030
Depreciation of non-current assets		86		8		94		119		11		130
Valuation adjustments, provisions and losses		112		16		128		154		22		176
Net operating profit before extraordinary items, acquisition-related costs and taxes		483		46		529		661		63		724
Extraordinary income/(expenses), net		0		0		0		0		0		0
Taxes	2)	(135)		(9)		(144)		(185)		(12)		(197)
Net operating profit before acquisition-related costs		348		37		385		476		51		527
Acquisition interest						(63)						(86)
Amortization of retention payments						(80)						(110)
Amortization of acquired intangible assets and goodwill						(151)						(206)
Tax impact						70						96
Net profit						161						221
Average allocated capital		9,092		433		9,360		12,519		595		12,889
1) The business unit results reflect the results of the separate segments comprising the business unit. Certain acquisition-related costs, including acquisition interest, amortization of retention payments and amortization of acquired intangible assets and goodwill, not allocated to the segments are included in the business unit results. Certain other items, including brokerage, execution and clearing expenses, contractor costs and expenses related to certain redeemable preferred securities classified as minority interests, have been reclassified in the segment and business unit results and are adjusted at the Corporate Center in accordance with Swiss GAAP and reflected in the Group’s consolidated results. For a complete reconciliation of the business unit results to the Group’s consolidated results and a discussion of the material reconciling items, please refer to “Reconciliation of operating to consolidated results”.
2) Excluding tax impact on acquisition-related costs.

Institutional Securities income statement 1)
								Change		Change
								in % from		in % from
in USD m		1Q2003		4Q2002		1Q2002		4Q2002		1Q2002
Fix