Prepared and filed by St Ives Burrups

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Dated February 12, 2004

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the month of February 12, 2004

Commission File Number 001-15244

CREDIT SUISSE GROUP
(Translation of registrant's name into English)

Paradeplatz 8, P.O. Box 1, CH-8070 Zurich, Switzerland
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F        Form 40-F  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):       

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):       

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes        No  

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-       

 

 

Media Relations

CREDIT SUISSE GROUP
P.O. Box 1
CH-8070 Zurich

Telephone +41-1-333 8844
Fax             +41-1-333 8877

e-mail media.relations@credit-suisse.com
 


CREDIT SUISSE GROUP REPORTS NET PROFIT OF
CHF 5.2 BILLION FOR FULL YEAR 2003

Credit Suisse Financial Services Records Strong 2003 Results
In Both Banking And Insurance

Credit Suisse First Boston Achieves Remarkable Turnaround
From 2002 With Solid Profits in 2003


Group Achieves Significant Cost Reductions in 2003

Financial Highlights                        
 
in CHF million 4Q2003   4Q2002   Change in %   12 months   12 months   Change in % vs  
          vs 4Q2002   2003   2002   12 mths 2002  
 
 
 
 
Operating income 5,721   6,395   -11   26,825   28,038   -4  
 
 
 
 
 
 
Operating expenses 4,423   5,111   -13   18,901   23,529   -20  
 
 
 
 
 
 
Net profit 1,166   -950   n/ a   5,209   -3,309   n/ a  
 
 
 
 
 
 
Return on equity in % 14.6   -13.0   n/ a   17.2   -10.0   n/ a  
 
 
 
 
 
 
Earnings per share in CHF 0.94   -0.80   n/ a   4.31   -2.78   n/ a  
 
 
 
 
 
 
n/ a: not applicable                        

Zurich, February 12, 2004 – Credit Suisse Group today announced a net profit of CHF 5.2 billion for 2003, representing a significant turnaround from the net loss of CHF 3.3 billion in 2002. The Group’s fourth quarter 2003 net profit amounted to CHF 1.2 billion, compared to a net loss of CHF 950 million in the fourth quarter of 2002. At Credit Suisse Financial Services, a lower fourth quarter 2003 result in the banking segments was more than offset by strong investment results in the insurance segments; net profit for 2003 amounted to CHF 4.3 billion. Credit Suisse First Boston reported a net profit of USD 870 million (CHF 1.2 billion) for 2003 and had steady operating income in the fourth quarter, demonstrating strong investment banking results and sustainable business activity.

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Oswald J. Gruebel, Co-CEO of Credit Suisse Group and CEO of Credit Suisse Financial Services, and John J. Mack, Co-CEO of Credit Suisse Group and CEO of Credit Suisse First Boston, stated, “At the end of 2002, we defined the measures necessary to return the Group to profitability. Those measures included reducing costs in our banking business, realigning our onshore private banking activities in Europe, returning Winterthur to profitability, strengthening our capital base and reducing the impact of the legacy asset portfolios at Credit Suisse First Boston. We are pleased that, thanks to our strong management teams and dedicated staff, the Group has successfully completed these measures and more in 2003.”

Oswald J. Gruebel added, “Credit Suisse Financial Services achieved a strong performance last year, with a remarkable turnaround at Winterthur and continued good results in Private Banking and Corporate & Retail Banking. We will continue to strive to offer our clients outstanding service, while keeping costs firmly under control and actively capturing market opportunities to further enhance revenues in 2004.”

John J. Mack concluded, “2003 was clearly a critical turning point for CSFB. We set out to be consistently profitable, and we were. Now that we have strict and effective cost controls in place, we will focus on growing revenues and continuing to build a one-firm culture that emphasizes and rewards effective teamwork. I am confident that CSFB is now well positioned to build on its progress and achieve growth in 2004 as global markets rebound.”

Swiss GAAP Changes

As pre-announced with the third quarter 2003 results, the Group adopted mandatory changes in Swiss Federal Banking Commission guidelines (Swiss GAAP) in the fourth quarter of 2003, which were retroactively applied as of January 1, 2003. Significant changes for Credit Suisse Group relate to accounting for own shares and derivatives. The total impact of these changes in the fourth quarter of 2003 was a decrease of CHF 189 million in the Group’s net profit.

Capital Management

Credit Suisse Group strengthened its balance sheet and its capital base in 2003 through earnings generation and the divestitures at Winterthur, as well as the sale of Credit Suisse First Boston’s settlement and clearing platform Pershing. The Group’s consolidated BIS tier 1 ratio stood at 11.7% as of December 31, 2003, up from 11.1% as of September 30, 2003 – reflecting earnings generation and a reduction of risk-weighted assets – and up from 9.0% as of December 31, 2002.

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Credit Suisse Financial Services

CSFS Business Unit Results                        
 
in CHF million 4Q2003   4Q2002   Change in %   12 months   12 months   Change in % vs  
          vs 4Q2002   2003   2002   12 mths 2002  
 
Operating income 2,801   3,566   -21   14,395   12,152   18  
 
Operating expenses 1,977   2,378   -17   8,501   9,569   -11  
 
Net profit 977   620   58   4,310   -271   n/ a  
 
Net operating profit 1,091   514   112   4,471   -151   n/ a  
 

Note: net operating profit is net profit excluding the amortization of acquired intangible assets and goodwill, exceptional items and the cumulative effect of changes in accounting principles, all net of tax.

Credit Suisse Financial Services posted a net profit of CHF 977 million in the fourth quarter of 2003. This compared to a net profit of CHF 620 million in the fourth quarter of 2002 and a net profit of CHF 1.8 billion in the third quarter of 2003, which included an after-tax gain of CHF 1.3 billion net of related provisions from divestitures at Winterthur, and certain provisions of CHF 383 million related to its current and former international business portfolio. Included in the fourth quarter 2003 result are: a charge of CHF 46 million after tax related to the further realignment of European Private Banking; extraordinary income of CHF 106 million (CHF 81 million after tax) from a divestiture at Private Banking; and a tax credit of CHF 782 million in the insurance segments related to tax law changes in Germany, which – after the related increase in dividends to policyholders incurred of CHF 711 million – resulted in a positive impact on net profit of CHF 71 million. For the full year 2003, the business unit recorded a net profit of CHF 4.3 billion compared to a net loss of CHF 271 million in 2002.

CSFS Segment Results                        
 
in CHF million 4Q2003   4Q2002   Change in %   12 months   12 months   Change in % vs  
          vs 4Q2002   2003   2002   12 mths 2002  
 
Private Banking 508   314   62   1,914   1,696   13  
 
Corporate & Retail Banking 120   50   140   565   414   36  
 
Life & Pensions 369   93   297   723   -1,400   n/ a  
 
Insurance 153   6   n/ a   1,338   -992   n/ a  
 

At Private Banking, fourth quarter 2003 operating income increased 5% compared to the fourth quarter of 2002 but was down 9% from the third quarter of 2003. This decline was primarily due to lower commission income, impacted by the weaker US dollar, as well as fewer trading days and lower transaction volumes.

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For the full year 2003, operating income was down slightly to CHF 5.9 billion. Operating expenses decreased 7% compared to the fourth quarter of 2002 and remained almost unchanged compared to the third quarter of 2003. For the full year 2003, operating expenses were down 8%. The cost/income ratio decreased 3.3 percentage points to 59.8% for the full year 2003. The gross margin was almost stable at 121.3 bp for the full year 2003.

At Corporate & Retail Banking, operating income increased 7% compared to the fourth quarter of 2002 and remained almost unchanged compared to the third quarter of 2003. Operating income also remained virtually unchanged for the full year 2003 compared to 2002. Operating expenses decreased 9% in the fourth quarter of 2003 compared to the fourth quarter of 2002 but rose 7% compared to the third quarter of 2003 due mainly to IT project costs and marketing activities. For the full year 2003, operating expenses were 9% lower than in 2002, and the cost/income ratio improved 5.9 percentage points to 67.2% in 2003.

The insurance segments achieved a strong recovery in 2003, driven primarily by significant improvements in investment performance, substantially reduced administration costs and improved underwriting results and claims management. Life & Pensions reported a 9% decrease in gross written premiums in 2003, due primarily to profit-oriented underwriting reflecting market conditions. Adjusted for divestitures and exchange rate impacts, premium volumes were down 3%. Total operating expenses, comprising acquisition and administration costs, declined 9% in 2003 compared to 2002, reflecting ongoing efficiency measures. Administration costs decreased 24% over the same period. The total return on invested assets rose to 5.2% in 2003, from 1.4% in 2002.

The Insurance segment recorded a 7% decrease in net premiums earned in 2003. Adjusted for divestitures and exchange rate impacts, net premiums earned increased 6% due primarily to tariff increases across all major markets. The segment’s net underwriting result before dividends to policyholders incurred rose by CHF 392 million in 2003 compared to 2002, and the combined ratio improved by 2.4 percentage points to 101.0% over the same period. In the fourth quarter of 2003, the combined ratio fell below 100% for the first time to stand at 98.3%. Administration costs decreased 17% in 2003 compared to 2002. The total return on invested assets was 3.8% in 2003, compared to -0.1% in 2002.

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Credit Suisse First Boston

CSFB Business Unit Results                        
 
in USD million 4Q2003   4Q2002   Change in %   12 months   12 months   Change in % vs  
          vs 4Q2002   2003   2002   12 mths 2002  
 
Operating income 2,420   2,326   4   10,783   11,559   -7  
 
Operating expenses 1,957   1,816   8   8,124   9,052   -10  
 
Net profit 220   -795   n/ a   870   -1,178   n/ a  
 
Net operating profit 344   27   n/ a   1,389   156   n/ a  
 
                       
Excluding Swiss GAAP changes                      
 
in USD million 4Q2003   4Q2002   Change in %   12 months   12 months   Change in % vs  
          vs 4Q2002   2003   2002   12 mths 2002  
 
Operating income 2,567   2,326   10   10,930   11,559   -5  
 
Net profit 283   -795   n/ a   933   -1,178   n/ a  
 
Net operating profit 545   27   n/ a   1,590   156   n/ a  
 

Credit Suisse First Boston reported a net profit of USD 870 million (CHF 1.2 billion) in 2003, a substantial improvement from the net loss of USD 1.2 billion (CHF 1.8 billion) in 2002. Net operating profit for 2003 – which excludes the amortization of goodwill and acquired intangible assets and the related impairment charge, the cumulative effect of changes in accounting principles from prior periods and, for the fourth quarter of 2002, exceptional items, all net of tax – rose to USD 1.4 billion (CHF 1.9 billion), from USD 156 million (CHF 245 million) in 2002. Excluding the impact of mandatory Swiss GAAP changes, full year 2003 net profit would have been USD 933 million (CHF 1.3 billion) and net operating profit would have totaled USD 1.6 billion (CHF 2.1 billion).

For the fourth quarter of 2003, Credit Suisse First Boston reported a net profit of USD 220 million (CHF 290 million), compared to a net loss of USD 795 million (CHF 1.2 billion) in the fourth quarter of 2002. The fourth quarter 2003 results include an impairment of USD 200 million (CHF 270 million), or USD 130 million (CHF 176 million) net of tax, of acquired intangible assets related to Credit Suisse First Boston’s high-net-worth asset management business. Net operating profit was USD 344 million (CHF 455 million) for the fourth quarter of 2003, up from USD 27 million (CHF 40 million) in the fourth quarter of 2002. Excluding the impact of the mandatory Swiss GAAP changes, fourth quarter 2003 net profit would have been USD 283 million (CHF 375 million), representing a significant improvement from the loss in the fourth quarter of 2002, and net operating profit would have increased significantly to USD 545 million (CHF 726 million) from USD 27 million (CHF 40 million) in the fourth quarter of 2002.

Page 5 of 10

As previously announced, Credit Suisse Group now expenses stock options, and Credit Suisse First Boston has introduced a three-year vesting period for share awards in line with its long-term retention strategy as well as industry practice. As a result of its updated compensation policies, Credit Suisse First Boston increased the amount of compensation deferred in the form of shares, versus its previous practice of combining share awards with other performance-based plans as well as option awards.

CSFB Segment Results                        
 
in USD million 4Q2003   4Q2002   Change in %   12 months   12 months   Change in % vs  
          vs 4Q2002   2003   2002   12 mths 2002  
 
Institutional Securities 286   78   267   1,420   407   249  
 
CSFB Financial Services 92   49   88   201   227   -11  
 
                         
Institutional Securities segment results excluding Swiss GAAP changes          
 
in USD million 4Q2003   4Q2002   Change in %   12 months   12 months   Change in % vs  
          vs 4Q2002   2003   2002   12 mths 2002  
 
Operating income 2,260   1,863   21   9,775   9,568   2  
 
Segment result 487   78   n/ a   1,621   407   298  
 

The Institutional Securities segment reported a 2% increase in operating income for the full year 2003 excluding Swiss GAAP changes compared to 2002, as favorable Fixed Income markets were partially offset by volume declines and margin compression in the US cash equity business as well as lower equity new issuance and M&A investment banking fees. Full year 2003 operating expenses decreased 4% compared to 2002, primarily as a result of reduced headcount and cost containment efforts. Segment profit was up 298% in 2003, excluding Swiss GAAP changes, compared to 2002. In the fourth quarter of 2003, the Institutional Securities segment recorded strong operating income compared to the fourth quarter of 2002, primarily as a result of improvements in Fixed Income and lower write-downs related to the legacy portfolio despite a one-time gain on the sale of a private equity investment in the fourth quarter of 2002. Fourth quarter 2003 operating expenses were up 18% compared to the fourth quarter of 2002 as a result of higher compensation costs related to increased operating income, partially offset by lower operating expenses from cost containment efforts.

Page 6 of 10

Within the CSFB Financial Services segment, Credit Suisse Asset Management reported a 3% increase in operating income for the full year 2003, mainly reflecting an increase in assets under management on a US dollar basis. The segment’s operating expenses decreased over the same period primarily due to the sale of Pershing. Furthermore, the sale of its interest in a Japanese online broker generated USD 99 million (CHF 134 million), or USD 71 million (CHF 96 million) net of tax.

Net New Assets

Net New Assets and Assets under Management (AuM) for the full year 2003      
 
in CHF billion Net New Assets   Total AuM   Change in AuM in  
          % vs 2002  
 
Private Banking 17.9   511.7   9.9  
Corporate & Retail Banking -1.4   70.0   -0.4  
Life & Pensions 0.0   112.9   1.9  
Insurance n/ a   25.8   -16.0  
 
Credit Suisse Financial Services 16.5   720.4   6.3  
 
Institutional Securities 2.3   29.8   -4.8  
CSFB Financial Services -14.0   448.8   -0.5  
 
Credit Suisse First Boston -11.7   478.6   -0.8  
 
             
 
Credit Suisse Group 4.8   1,199.0   3.4  
 

Credit Suisse Group’s net new asset inflow for the fourth quarter and full year 2003 was driven primarily by inflows from Private Banking of CHF 4.2 billion and CHF 17.9 billion, respectively. For the full year 2003, Corporate & Retail Banking reported a net asset outflow of CHF 1.4 billion. CSFB Financial Services recorded a net asset outflow of CHF 14.0 billion for 2003, only slightly offset by a net new asset inflow of CHF 2.3 billion from the Institutional Securities segment. The net result for Credit Suisse Group was a net new asset inflow of CHF 2.9 billion in the fourth quarter of 2003 and of CHF 4.8 billion for the full year 2003. As of December 31, 2003, the Group’s total assets under management amounted to CHF 1,199.0 billion, an increase of 3.4% compared to December 31, 2002, and flat compared to September 30, 2003.

Dividend Proposal

The Board of Directors of Credit Suisse Group has decided to propose a reduction in par value of CHF 0.50 per share for the financial year 2003 in lieu of a dividend to the Annual General Meeting on April 30, 2004. This compares to a dividend of CHF 0.10 per share for the financial year 2002. If approved by the shareholders at the Annual General Meeting on April 30, 2004, this capital reduction is expected to be paid out on July 12, 2004.

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Change In Primary Accounting Standard

As a result of its long-term plan to move to an internationally recognized accounting standard, as well as the requirement of the Swiss Exchange for listed companies to adopt US GAAP or IFRS, Credit Suisse Group switched from Swiss GAAP to US GAAP for all its business activities on January 1, 2004. Credit Suisse Group’s reconciled 2003 US GAAP net profit will differ substantially from its 2003 net profit reported under Swiss GAAP. These differences include, among other factors, the difference in the accounting treatment of the combination of Credit Suisse Group and Winterthur in 1997, which was accounted for as a ‘pooling of interest’ under Swiss GAAP and as a ‘purchase’ under US GAAP. This alone will result in a reduction of over CHF 3 billion in the 2003 net profit under US GAAP versus Swiss GAAP, due primarily to the movement in the balance of goodwill related to the combination when accounted for in accordance with US GAAP, as announced in the third quarter 2003 earnings release. The charge in the US GAAP net profit related to this movement in goodwill is absorbed by corresponding additional shareholders' equity under US GAAP, which resulted from the 'purchase accounting' treatment of the combination between Credit Suisse Group and Winterthur in 1997. Other factors contributing to a differing reconciled net profit under US GAAP include accounting for derivatives, software capitalization, taxation and pension costs.

Going forward, the primary drivers in the Group’s businesses remain unchanged. Credit Suisse Group plans to publish its reconciled 2003 US GAAP results on its website on April 27, 2004. Key first quarter 2004 results will be pre-released in connection with the Annual General Meeting on April 30, 2004, and first quarter 2004 results will be disclosed in full on May 5, 2004.

Outlook

Given Credit Suisse Group’s return to sound profitability in 2003, the Group is well positioned to compete successfully in its primary markets. While the Group’s businesses remain tied to fluctuations and risks in the capital markets, management is optimistic about 2004 given the current levels of client activity and improving economic conditions. The Group’s accomplishments were significant in 2003 and it expects to continue to make progress towards achieving leading performance in its respective businesses.

Page 8 of 10

Enquiries

Credit Suisse Group, Media Relations Telephone+41 1 333 8844
Credit Suisse Group, Investor Relations Telephone+41 1 333 4570
Internet www.credit-suisse.com

Commentary On Results – Non-GAAP Financial Information

For additional information with respect to Credit Suisse Group’s results for the fourth quarter and the full year 2003, we refer you to the Group’s Quarterly Report Q4 2003, as well as the Group’s slide presentation for analysts and press, posted on the Internet at www.credit-suisse.com/results. This press release contains non-GAAP financial information. A reconciliation of such non-GAAP financial information to the most directly comparable measures under Swiss GAAP (as well as other related information) is also included in the Quarterly Report Q4 2003. The operating basis business unit results described above reflect the results of the separate segments constituting the respective business units and certain acquisition-related and other costs not allocated to the segments.

Credit Suisse Group

Credit Suisse Group is a leading global financial services company headquartered in Zurich. The business unit Credit Suisse Financial Services provides private clients and small and medium-sized companies with private banking and financial advisory services, banking products, and pension and insurance solutions from Winterthur. The business unit Credit Suisse First Boston, an investment bank, serves global institutional, corporate, government and individual clients in its role as a financial intermediary. Credit Suisse Group’s registered shares (CSGN) are listed in Switzer­land and in the form of American Depositary Shares (CSR) in New York. The Group employs around 60,800 staff worldwide. As of December 31, 2003, it reported assets under management of CHF 1,199.0 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.

Page 9 of 10

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 contains non-GAAP financial information. A reconciliation of such non-GAAP financial information to the most directly comparable measures under generally accepted accounting principles is available in Credit Suisse Group’s Quarterly Report Q4 2003 posted on the Internet at http://www.credit-suisse.com/sec.html .

Page 10 of 10

Today’s Presentation of the Results

Analysts’ Presentation, Zurich (English)

• February 12, 2004, 9.00 a.m. CET / 8.00 a.m. GMT / 3.00 a.m. EST at the Credit Suisse Forum St. Peter, Zurich
• Internet:
  - Live broadcast at www.credit-suisse.com/results
  - Video playback available approximately 3 hours after the event
• Telephone:
  - Live audio dial-in on +41 91 610 5600 (Europe), +44 207 107 0611 (UK), or
+1 866 291 4166 (USA), ask for “Credit Suisse Group quarterly results”; please dial in 10 minutes before the start of the presentation
  - Telephone replay available approximately 1 hour after the event on
+41 91 612 4330 (Europe), +44 207 866 4300 (UK) or +1 412 858 1440 (USA), conference ID 153#

Speakers

• Oswald J. Gruebel, Co-CEO of Credit Suisse Group and Chief Executive Officer of
Credit Suisse Financial Services
• John J. Mack, Co-CEO of Credit Suisse Group and Chief Executive Officer of
Credit Suisse First Boston
• Philip K. Ryan, Chief Financial Officer of Credit Suisse Group
• Ulrich Koerner, Chief Financial Officer of Credit Suisse Financial Services
• Barbara Yastine, Chief Financial Officer of Credit Suisse First Boston

Media Conference, Zurich (English/German)

• February 12, 2004, 11.00 a.m. CET / 10.00 a.m. GMT / 5.00 a.m. EST at the Credit Suisse Forum St. Peter, Zurich
• Simultaneous interpreting: German – English, English – German
• Internet:
  - Live broadcast at www.credit-suisse.com/results
  - Video playback available approximately 3 hours after the event
• Telephone:
  - Live audio dial-in on +41 91 610 5600 (Europe), +44 207 107 0611 (UK), or
+1 866 291 4166 (USA), ask for “Credit Suisse Group quarterly results”; please dial in 10 minutes before the start of the presentation
  - Telephone replay available approximately 1 hour after the event on
+41 91 612 4330 (Europe), +44 207 866 43 00 (UK) or +1 412 858 1440 (USA), conference ID 246# (English)or 283# (German)

Speakers

• Oswald J. Gruebel, Co-CEO of Credit Suisse Group and Chief Executive Officer of Credit Suisse Financial Services
• John J. Mack, Co-CEO of Credit Suisse Group and Chief Executive Officer of Credit Suisse First Boston
• Philip K. Ryan, Chief Financial Officer of Credit Suisse Group
• Ulrich Koerner, Chief Financial Officer of Credit Suisse Financial Services
• Barbara Yastine, Chief Financial Officer of Credit Suisse First Boston

Page 11 of 10









QUARTERLY REPORT Q4






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 in the form of American Depositary Shares (CSR) in New York. The Group employs around 60,800 staff worldwide.





QUARTERLY REPORT
EDITORIAL
CREDIT SUISSE GROUP FINANCIAL HIGHLIGHTS Q4/2003
AN OVERVIEW OF CREDIT SUISSE GROUP
Equity capital
Net new assets
Operating income and expenses
Stock awards
Valuation adjustments, provisions and losses
Taxes
Swiss GAAP changes
Dividend proposal
Change in primary accounting standard
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 RESULTS TO SWISS GAAP
Introduction
Credit Suisse Financial Services business unit
Credit Suisse First Boston business unit
CONSOLIDATED RESULTS | CREDIT SUISSE GROUP
LOANS
INFORMATION FOR INVESTORS



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 contains 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

In 2003, Credit Suisse Group fulfilled its pledge to return to sound profitability. The Group reported a net profit of CHF 5.2 billion for 2003 and CHF 1.2 billion for the fourth quarter of 2003.

In the third quarter of 2002, we defined the measures we would take to return the Group to profitability. Those measures included aligning costs with revenues, refocusing the onshore European private banking activities, returning Winterthur to profitability, strengthening the capital base and reducing the legacy asset portfolios at Credit Suisse First Boston. We are pleased that the Group has completed these measures successfully.

In 2003, the Group benefited from a better market environment and higher transaction volumes in certain areas and reported improvements in all business segments. Private Banking’s segment result for the full year 2003 increased 13% compared to the prior year. Private Banking’s continued leading market position in performance and innovation, together with a reduction in overall cost levels and a recovery in net new assets from the second half of 2002, contributed to this year’s good performance. Corporate & Retail Banking benefited from continued efficiency improvements, stable net interest margins and the expansion of its private mortgage business. Compared to the full year 2002, Corporate & Retail Banking’s segment result increased 36% in 2003. Winterthur’s strong recovery in 2003 was mainly attributable to increased investment income, reflecting its goal of more dynamically managing its investment portfolio. Additionally, Winterthur continued to improve its underwriting result and claims management and made significant progress in reducing administration costs. The full year result for 2003 at Winterthur of CHF 2.1 billion was positively impacted by an after-tax gain from divestitures in the third quarter of 2003 in the amount of CHF 1.3 billion net of related provisions, compared with a net loss of CHF 2.4 billion in 2002.

Credit Suisse First Boston reported a net profit of CHF 1.2 billion for the full year 2003, a successful turnaround from 2002. In 2003, Credit Suisse First Boston focused on profitability and cost discipline and received notable recognition in several areas including the number one market share in high yield debt. Significant progress was also made during the year towards building an equity compensation culture by changing the incentive equity award strategy, while maintaining a strong risk culture. In 2003, the Institutional Securities segment benefited from stable operating income, while CSFB Financial Services was impacted by disposals.

The focus on cost management was a key priority throughout the Group during the entire year. In 2003, the implementation of efficiency measures resulted in a 12% reduction in operating expenses at Credit Suisse Financial Services, while Credit Suisse First Boston reduced operating expenses by 15% on a US dollar basis. As a result of a markedly improved credit environment, credit provisions decreased significantly for the year compared to 2002, particularly at Credit Suisse First Boston.

The Group’s earnings in 2003, combined with managed balance sheet growth and the divestitures at Winterthur, resulted in a stronger capital position. The Group’s Board of Directors decided to propose a reduction in par value of CHF 0.50 per share for the financial year 2003, which compares to a dividend of CHF 0.10 per share for the financial year 2002.

Given our return to sound profitability in 2003, Credit Suisse Group is well positioned to compete successfully in its primary markets. While our businesses remain tied to fluctuations and risks in the capital markets, we are optimistic about 2004, given the current levels of client activity and improving economic conditions. We are proud of what our employees have accomplished in 2003 and expect to continue to make progress towards achieving leading performance in our respective businesses.
Oswald J. Grübel John J. Mack
February 2004


CREDIT SUISSE GROUP FINANCIAL HIGHLIGHTS Q4/2003


Consolidated income statement  
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in CHF m4Q20033Q20034Q20023Q20034Q2002200320022002
Operating income5,7216,5316,395(12)(11)26,82528,038(4)
Gross operating profit1,2982,1441,284(39)17,9244,50976
Net profit/(loss)1,1662,045(950)(43)–5,209(3,309)–


Return on equity  
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in %4Q20033Q20034Q20023Q20034Q2002200320022002
Return on equity14.626.3(13.0)(44)–17.2(10.0)–


Consolidated balance sheet  
    ChangeChange
    in % fromin % from
in CHF m31.12.0330.09.0331.12.0230.09.0331.12.02
Total assets962,121994,555955,656(3)1
Shareholders' equity34,99234,87331,394011
Minority interests in shareholders' equity3,0412,9712,87826


Capital data  
    ChangeChange
    in % fromin % from
in CHF m31.12.0330.09.0331.12.0230.09.0331.12.02
BIS risk-weighted assets 190,761197,412196,486(3)(3)
BIS tier 1 capital22,39421,90117,613227
   of which non-cumulative perpetual
    preferred securities		 2,1692,1842,162(1)0
BIS total capital33,20732,01028,311417


Capital ratios  
in % 31.12.0330.09.0331.12.02
BIS tier 1 ratioCredit Suisse 8.27.67.4
 Credit Suisse First Boston 1)13.612.210.3
 Credit Suisse Group 2)11.711.19.0
BIS total capital ratio Credit Suisse Group17.416.214.4


Assets under management/client assets  
    ChangeChange
    in % fromin % from
in CHF bn31.12.0330.09.0331.12.0230.09.0331.12.02
Advisory assets under management609.6615.1577.9(1)5
Discretionary assets under management589.4584.1582.111
Total assets under management1,199.01,199.21,160.003
Client assets 1,342.91,299.41,757.93(24)


Net new assets  
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in CHF bn4Q20033Q20034Q20023Q20034Q2002200320022002
Net new assets2.94.0(6.3)(28)–4.8(1.4)–
1) Ratio is based on a tier 1 capital of CHF 12.1 bn (30.09.03: CHF 12.1 bn; 31.12.02: CHF 10.6 bn), of which non-cumulative perpetual preferred securities is CHF 1.0 bn (30.09.03: CHF 1.0 bn; 31.12.02: CHF 1.0 bn).
2) Ratio is based on a tier 1 capital of CHF 22.4 bn (30.09.03: CHF 21.9 bn; 31.12.02: CHF 17.6 bn), of which non-cumulative perpetual preferred securities is CHF 2.2 bn (30.09.03: CHF 2.2 bn; 31.12.02: CHF 2.2 bn).


Number of employees (full-time equivalents)
      ChangeChange
      in % fromin % from
  31.12.0330.09.0331.12.0230.09.0331.12.02
Switzerlandbanking19,66120,04221,270(2)(8)
 insurance6,4266,6497,063(3)(9)
Outside Switzerlandbanking20,31020,17825,0571(19)
 insurance14,44014,46325,0670(42)
Total employees Credit Suisse Group60,83761,33278,457(1)(22)


Share data 
    ChangeChange
    in % fromin % from
 31.12.0330.09.0331.12.0230.09.0331.12.02
Shares issued 1,195,005,9141,194,682,3301,189,891,72000
To be issued upon conversion of MCS 1)40,413,83840,413,83840,413,83800
Own shares, net 2)(21,220,018)––––
Shares outstanding 1,214,199,7341,235,096,1681,230,305,558(2)(1)
Share price in CHF 45.2542.2530.00751
Market capitalization in CHF m54,94352,18336,909549
Book value per share in CHF26.3125.8323.18214
1) Maximum number of shares related to Mandatory Convertible Securities (MCS) issued by Credit Suisse Group Finance (Guernsey) Ltd. in December 2002.
2) Reflects applied mandatory changes in Swiss Federal Banking Commission guidelines.


Share price  
            Change  Change        Change 
            in % from  in % from        in % from 
                 12 months  
in CHF   4Q2003  3Q2003  4Q2002  3Q2003  4Q2002  2003  2002  2002 
High (closing price)  48.70  48.65  35.70  0  36  48.70  73.60  (34) 
Low (closing price)  42.10  34.75  20.60  21  104  20.70  20.60  0 
   

Calculation of earnings per share (EPS)  
            Change  Change        Change 
            in % from  in % from        in % from 
                 12 months  
   4Q2003  3Q2003  4Q2002  3Q2003  4Q2002  2003  2002  2002 
Net profit/(loss) in CHF m  1,166  2,045  (950)  (43)  –  5,209  (3,309)  – 
Diluted net profit/(loss) in CHF m  1,166  2,045  (950)  (43)  –  5,209  (3,309)  – 
Weighted average shares outstanding  1,235,316,285  1,230,710,975  1,193,153,538  0  4  1,209,297,2902)1,190,206,2071)2 
Dilutive impact   24,736,572  19,673,449  03)26  –  31,562,9452)03)– 
Weighted average shares, diluted  1,260,052,857  1,250,384,424  1,193,153,538  1  6  1,240,860,2352)1,190,206,207  4 
Basic earnings per share in CHF  0.94  1.66  (0.80)  (43)  –  4.31  (2.78)  – 
Diluted earnings per share in CHF  0.93  1.64  (0.80)  (43)  –  4.20  (2.78)  – 
1) Adjusted for weighted average shares repurchased.
2) Reflects applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003.
3) The calculation for the diluted loss per share excludes the effect of the potential exchange of convertible bonds and the potential exercise of options to purchase shares, as the effect would be anti-dilutive.




AN OVERVIEW OF CREDIT SUISSE GROUP




Credit Suisse Group reported a net profit of CHF 1.2 billion in the fourth quarter of 2003 and CHF 5.2 billion for the full year 2003. This compares with a net profit of CHF 2.0 billion in the third quarter of 2003, which included an after-tax gain of CHF 1.3 billion net of related provisions from divestitures at Winterthur, and a net loss of CHF 3.3 billion for the full year 2002. Credit Suisse Financial Services recorded a net profit of CHF 4.3 billion in 2003, compared to a net loss of CHF 271 million in 2002, and reported a significant increase in its fourth quarter 2003 net profit to CHF 977 million compared to the third quarter 2003 net profit excluding the after-tax gain of CHF 1.3 billion mentioned above, as the strong investment results in the insurance segments more than offset the lower quarterly results in the banking segments. Credit Suisse First Boston reported stable operating income in the fourth quarter 2003 compared with the previous quarter. Net profit declined 6% to CHF 290 million in the fourth quarter of 2003, compared to CHF 308 million in the previous quarter. For the full year 2003, Credit Suisse First Boston reported a net profit of CHF 1.2 billion compared with a net loss of CHF 1.8 billion for the previous year. As a result of the measures taken in 2002 and 2003, the Group’s full year result represents a return to sound profitability.



Credit Suisse Group reported a net profit of CHF 1.2 billion in the fourth quarter of 2003, compared to the previous quarter’s net profit of CHF 2.0 billion, which included an after-tax gain of CHF 1.3 billion net of related provisions from divestitures at Winterthur , and compared to a net loss of CHF 950 million in the fourth quarter of 2002. The Group’s fourth quarter 2003 net profit was impacted by several items including an impairment of acquired intangible assets in respect of Credit Suisse First Boston’s high-net-worth asset management business in the amount of CHF 270 million, markedly improved investment performance within the Credit Suisse Financial Services insurance segments, extraordinary gains from disposals at CSFB Financial Services and Private Banking as well as the mandatory changes in Swiss Federal Banking Commission guidelines (Swiss GAAP) discussed on page 8. Net profit for the fourth quarter of 2003 was also impacted by the changes in German tax legislation, which resulted in a tax benefit of CHF 782 million and a corresponding increase in dividends to policyholders of CHF 711 million.

Net profit for the full year 2003 was CHF 5.2 billion, compared to a net loss of CHF 3.3 billion for 2002. The turnaround in earnings in 2003 was driven by a decrease in operating expenses of CHF 4.6 billion, or 20%, for the full year, lower valuation adjustments, provisions and losses, a turnaround in investment income in the insurance segments and gains from divestitures. The results also reflect the successful completion of measures taken in 2002 and 2003 to return the Group to profitability.

Earnings per share for the fourth quarter of 2003 were CHF 0.94, compared to CHF 1.66 for the third quarter of 2003, and a loss per share of CHF 0.80 for the fourth quarter of 2002. Earnings per share for the full year 2003 amounted to CHF 4.31, compared to a loss per share of CHF 2.78 for 2002. The Group’s return on equity was 14.6% in the fourth quarter of 2003 versus 26.3% in the third quarter of 2003 and 17.2% for the full year 2003 versus –10.0% for the full year 2002.

Credit Suisse Financial Services posted a net profit of CHF 977 million in the fourth quarter of 2003. This result compares with a net profit of CHF 1.8 billion in the third quarter of 2003, which included the after-tax gain of CHF 1.3 billion mentioned above. Net profit for the fourth quarter of 2003 increased 58% from CHF 620 million in the fourth quarter of 2002. Net profit for the fourth quarter of 2003 included an extraordinary gain of CHF 106 million, or CHF 81 million net of tax, from the disposal of a minority investment reported within the Private Banking segment. Operating expenses in the banking segments increased in the fourth quarter of 2003 compared to the third quarter of 2003, but significant cost reductions were made compared to the fourth quarter of 2002. Private Banking reported net new assets of CHF 17.9 billion in 2003. Winterthur’s 2003 result reflects a strong investment performance at Life & Pensions and substantially reduced administration costs in both insurance segments.

Credit Suisse First Boston reported a net profit of CHF 290 million for the fourth quarter of 2003, which was 6% below the previous quarter’s net profit of CHF 308 million, but significantly improved compared to a net loss of CHF 1.2 billion reported in the fourth quarter of 2002. Credit Suisse First Boston’s fourth quarter 2003 net profit included the negative impact of Swiss GAAP changes in the amount of CHF 85 million net of tax discussed on page 8. Excluding these changes, net profit for the fourth quarter was CHF 375 million, an increase of 22% versus the third quarter of 2003. In addition, Credit Suisse First Boston’s fourth quarter 2003 result includes a writedown of CHF 270 million, or CHF 176 million net of tax, on acquired intangible assets related to CSFB Financial Services’ high-net-worth asset management business, and extraordinary income of CHF 166 million, or CHF 120 million net of tax, including the sale of a 50% interest in a Japanese online broker. Institutional Securities’ fourth quarter 2003 result includes strong Investment Banking operating income.

Equity capital
Credit Suisse Group’s consolidated BIS tier 1 ratio was 11.7% as of December 31, 2003, up from 11.1% as of September 30, 2003. This increase is attributable to continued earnings generation in the fourth quarter of 2003 as well as a reduction of risk-weighted assets.

The Group strengthened its balance sheet and its capital base during 2003 through earnings generation and the sale of Winterthur’s Republic operations in the US, its Churchill operations in the UK and Winterthur Italy, as well as the divestiture of Credit Suisse First Boston’s settlement and clearing platform, Pershing. The Group aims to remain one of the best capitalized financial institutions in its peer group and will continue to build capital, particularly in light of the transition to US GAAP and the new Basel II capital accord.

Net new assets
Credit Suisse Group’s net new asset inflow in the fourth quarter of 2003 was driven by a net new asset inflow from Private Banking of CHF 4.2 billion. For the full year 2003, the inflow of net new assets was dominated by a net new asset inflow of CHF 17.9 billion from Private Banking, whereas Corporate & Retail Banking recorded a net asset outflow of CHF 1.4 billion. CSFB Financial Services recorded a net asset outflow of CHF 14.0 billion for 2003, only slightly offset by a net new asset inflow of CHF 2.3 billion from the Institutional Securities segment.

For Credit Suisse Group, the net result was a net new asset inflow of CHF 2.9 billion in the fourth quarter of 2003 and CHF 4.8 billion for the full year 2003. As of December 31, 2003, the Group’s total assets under management amounted to CHF 1,199.0 billion, an increase of 3.4% compared to December 31, 2002.

Operating income and expenses
Credit Suisse Group’s operating income was CHF 5.7 billion in the fourth quarter of 2003, a decline of 12% from the previous quarter and 11% from the fourth quarter of 2002. The decrease compared with the third quarter of 2003 was primarily due to higher dividends to policyholders incurred at Winterthur as a result of changes in German tax legislation in the amount of CHF 711 million, which, in terms of net profit, was more than offset by a corresponding tax credit of CHF 782 million. For the full year 2003, the Group’s operating income was CHF 26.8 billion, down 4% from 2002.

The Group’s operating expenses of CHF 4.4 billion in the fourth quarter of 2003 were almost unchanged compared to the previous quarter and decreased 13% from the fourth quarter of 2002, reflecting continued strict cost management. In the fourth quarter of 2003, personnel expenses declined 3% overall compared with the previous quarter and 12% compared with the same quarter in the previous year. For the Group, operating expenses in 2003 declined 20% from the previous year. At Credit Suisse Financial Services, the continued focus on productivity improvements resulted in a year-on-year decrease in operating expenses of 12%. For Credit Suisse First Boston, the year-on-year decrease in operating expenses was 15% on a US dollar basis.

Amortization of acquired intangible assets and goodwill for the fourth quarter of 2003 reflected an impairment of CHF 270 million, or CHF 176 million net of tax, in respect of the intangible assets related to Credit Suisse First Boston’s high-net-worth asset management business.

Stock awards
In 2003, Credit Suisse Group adopted the fair value method of expensing stock option awards, changed the vesting of stock option awards across the Group and changed the vesting of share awards at Credit Suisse First Boston. As a result of the changes in share plans and vesting, Credit Suisse First Boston increased the amount of compensation deferred in the form of shares and replaced performance-based plans and option awards with share awards. In 2003, Credit Suisse First Boston deferred USD 873 million of compensation in the form of shares to future periods, compared to USD 869 million of value awarded in 2002 that was deferred or otherwise not expensed (in the case of options).

Valuation adjustments, provisions and losses
The Group’s total valuation adjustments, provisions and losses were CHF 282 million in the fourth quarter of 2003, up 31% compared to the low level in the third quarter of 2003. The full year 2003 valuation adjustments, provisions and losses were CHF 861 million, down from CHF 4.4 billion in 2002, primarily reflecting an improved credit environment and lower litigation provisions. In the fourth quarter of 2003, net credit-related valuation allowances and provisions increased to CHF 192 million compared to the low level of CHF 96 million in the third quarter of 2003, and the high level of CHF 1.4 billion in the fourth quarter of 2002. The increase from the third to the fourth quarter of 2003 was due mainly to two major defaults partially offset by a release of valuation allowances. Total net credit-related valuation allowances and provisions for the full year 2003 decreased to CHF 575 million from CHF 3.1 billion in 2002, as a result of the aforementioned reasons.

Taxes
Credit Suisse Group reported a notable tax benefit in the fourth quarter of 2003, mainly as a result of tax credits reported at Winterthur. Winterthur’s taxes were significantly impacted by the change in German tax legislation in December 2003, which now allows life and health insurance companies to deduct impairments and realized losses on equity investments. The change in tax legislation allowed a retroactive deduction of 80% of all impairments and realized losses incurred from equity investments since 2001. This resulted in a tax benefit, recorded in the fourth quarter of 2003, of CHF 782 million. This tax benefit, net of the related increase in dividends to policyholders of CHF 711 million, resulted in a positive net impact on net profit before minority interests in the amount of CHF 71 million. Credit Suisse First Boston’s effective tax rate in the fourth quarter of 2003 was also reduced as a result of a favorable geographic mix of taxable profits in the fourth quarter.

Swiss GAAP changes
Reported earnings in the fourth quarter of 2003 were affected by mandatory changes in Swiss Federal Banking Commission guidelines (Swiss GAAP), that were retroactively applied as of January 1, 2003. Significant changes for Credit Suisse Group relate to the accounting for own shares and derivatives. In line with US GAAP, the changes in accounting related to derivatives imposed more prescriptive requirements with respect to hedge effectiveness for derivatives hedging transactions. The majority of the Group’s derivative transactions are entered into for trading purposes and are therefore not affected by these changes in Swiss GAAP. The Group also uses derivatives to hedge risks associated with certain lending and funding activities. Certain of these hedges no longer qualify for hedge accounting under Swiss GAAP and, accordingly, changes in the fair value of such hedges must be reflected in earnings.

The changes in accounting for own shares resulted in the reclassification of treasury shares from assets to shareholders’ equity and the recognition in shareholders’ equity of realized gains and losses on trading in own shares. In addition, obligations to deliver shares in respect of share compensation plans are no longer recorded as a liability but reclassified to shareholders’ equity.

The impact from the change in accounting for own shares resulted in a decrease of CHF 94 million in net profit for the Group, accounted for in the Corporate Center, and a decrease in shareholders’ equity of CHF 396 million in the fourth quarter of 2003. The change in accounting for derivatives resulted in a decrease of CHF 258 million in the Group’s fourth quarter 2003 net profit and a cumulative positive effect of the change in accounting for periods prior to 2003 of CHF 319 million, or CHF 187 million net of tax.

Dividend proposal
Credit Suisse Group’s Board of Directors decided to propose a reduction in par value of CHF 0.50 per share for the financial year 2003 in lieu of a dividend, to the Annual General Meeting on April 30, 2004. This compares to a dividend of CHF 0.10 per share for the financial year 2002. If approved by the shareholders at the Annual General Meeting on April 30, 2004, this capital reduction will be paid out on July 12, 2004.

Change in primary accounting standard
As a result of its long-term plan to move to an internationally recognized accounting standard, as well as the requirement of the Swiss Exchange for listed companies to adopt US GAAP or IFRS, Credit Suisse Group switched from Swiss GAAP to US GAAP for all its business activities on January 1, 2004. Credit Suisse Group’s reconciled 2003 US GAAP net profit will differ substantially from its 2003 net profit reported under Swiss GAAP. These differences include, among other factors, the difference in the accounting treatment of the combination of Credit Suisse Group and Winterthur in 1997, which was accounted for as a ‘pooling of interest’ under Swiss GAAP and as a ‘purchase’ under US GAAP. This alone is expected to result in a reduction of over CHF 3 billion in the 2003 net profit under US GAAP versus Swiss GAAP, due primarily to the movement in the balance of goodwill related to the combination when accounted for in accordance with US GAAP, as announced in the third quarter of 2003. The charge in the US GAAP net profit related to this movement in goodwill is absorbed by corresponding additional shareholders’ equity under US GAAP, which resulted from the ’purchase accounting’ treatment of the combination between Credit Suisse Group and Winterthur in 1997. Other factors contributing to a differing reconciled net profit under US GAAP include accounting for derivatives, software capitalization, taxation and pension costs.

Going forward, the primary drivers in the Group’s businesses remain unchanged. Credit Suisse Group plans to publish its reconciled 2003 US GAAP results on its website on April 27, 2004. Key first quarter 2004 results will be pre-released in connection with the Annual General Meeting on April 30, 2004, and first quarter 2004 results will be disclosed in full on May 5, 2004.

Outlook
Given Credit Suisse Group’s return to sound profitability in 2003, the Group is well positioned to compete successfully in its primary markets. While the Group’s businesses remain tied to fluctuations and risks in the capital markets, management is optimistic about 2004 given the current levels of client activity and improving economic conditions. The Group’s accomplishments were significant in 2003, and it expects to continue to make progress towards achieving leading performance in its respective businesses.


Overview of Credit Suisse Group 1)
  Credit Suisse Financial Services  Credit Suisse First Boston  Corporate Center  Credit Suisse Group 
in CHF m  4Q2003  3Q2003  4Q2002  4Q2003  3Q2003  4Q2002  4Q2003  3Q2003  4Q2002  4Q2003  3Q2003  4Q2002 
Operating income  2,827  3,387  3,628  2,953  3,113  3,082  (59)  31  (315)  5,721  6,531  6,395 
Personnel expenses  1,202  1,385  1,447  1,785  1,681  1,933  55  59  84  3,042  3,125  3,464 
Other operating expenses  775  732  933  612  594  858  (6)  (64)  (144)  1,381  1,262  1,647 
Operating expenses  1,977  2,117  2,380  2,397  2,275  2,791  49  (5)  (60)  4,423  4,387  5,111 
Gross operating profit  850  1,270  1,248  556  838  291  (108)  36  (255)  1,298  2,144  1,284 
Depreciation of non-current assets 2)  277  279  335  162  125  155  82  67  144  521  471  634 
Amortization of acquired intangible assets and goodwill  25  25  92  472  211  308  (3)  2  3  494  238  403 
Valuation adjustments, provisions and losses  232  104  190  48  111  1,977  2  0  257  282  215  2,424 
Profit/(loss) before extraordinary items, cumulative effect of change in accounting principle and taxes   316  862  631  (126)  391  (2,149)  (189)  (33)  (659)  1  1,220  (2,177) 
Extraordinary income/(expenses), net   83  1,164  (38)  166  2  220  43  2  187  292  1,168  369 
Cumulative effect of change in accounting principle  1  0  266  318  0  254  0  0  0  319  0  520 
Taxes 3)  636  (256)  (290)  (49)  (65)  467  63  4  141  650  (317)  318 
Net profit/(loss) before minority interests   1,036  1,770  569  309  328  (1,208)  (83)  (27)  (331)  1,262  2,071  (970) 
Minority interests  (59)  8  51  (19)  (20)  (19)  (18)  (14)  (12)  (96)  (26)  20 
Net profit/(loss)  977  1,778  620  290  308  (1,227)  (101)  (41)  (343)  1,166  2,045  (950) 
1) Business unit results in accordance with Swiss GAAP. For a reconciliation of operating basis business unit results (reflecting the results of the separate segments comprising the business units) to Swiss GAAP basis, please refer to “Reconciliation of operating results to Swiss GAAP”. In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated. For additional discussion see page 8.
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 for Credit Suisse Financial Services of CHF –607 m, for Credit Suisse First Boston of CHF 269 m, and for Credit Suisse Group of CHF –197 m.

In the “Overview of Credit Suisse Group”, the business unit results are presented in accordance with Swiss GAAP. Elsewhere in this Quarterly Report, business unit results are presented on an operating basis.

For a reconciliation of operating basis business unit results (reflecting the results of the separate segments comprising the business units) to the Swiss GAAP basis, a discussion of the material reconciling items and a discussion of the purpose of the operating basis results and the reasons why management believes they provide useful information for investors, please refer to “Reconciliation of operating results to Swiss GAAP” on pages 35 – 39.


Assets under management/client assets  1)
                Change   Change  
                in % from   in % from  
in CHF bn   31.12.03   30.09.03   31.12.02   30.09.03   31.12.02  
Credit Suisse Financial Services                      
   Private Banking                      
   Assets under management   511.7   505.1   465.7   1.3   9.9  
      of which discretionary   133.0   129.2   121.5   2.9   9.5  
   Client assets   540.7   532.3   494.8   1.6   9.3  
   Corporate & Retail Banking                      
   Assets under management   70.0   69.4   70.3   0.9   (0.4)  
   Client assets   95.2   90.3   86.9   5.4   9.6  
   Life & Pensions                      
   Assets under management (discretionary)   112.9   112.3   110.8   0.5   1.9  
   Client assets   112.9   112.3   110.8   0.5   1.9  
   Insurance                      
   Assets under management (discretionary)   25.8   27.1   30.7   (4.8)   (16.0)  
   Client assets   25.8   27.1   30.7   (4.8)   (16.0)  
Credit Suisse Financial Services                      
Assets under management   720.4   713.9   677.5   0.9   6.3  
   of which discretionary   272.9   269.8   264.2   1.1   3.3  
Client assets   774.6   762.0   723.2   1.7   7.1  
Credit Suisse First Boston                      
   Institutional Securities                      
   Assets under management   29.8   29.1   31.3   2.4   (4.8)  
      of which Private Equity on behalf of clients
       (discretionary)		   19.5   19.7   20.9   (1.0)   (6.7)  
   Client assets   101.5   73.3   83.3   38.5   21.8  
   CSFB Financial Services 2)                      
   Assets under management   448.8   456.2   451.2   (1.6)   (0.5)  
      of which discretionary   290.4   288.9   289.6   0.5   0.3  
   Client assets   466.8   464.1   951.4   0.6   (50.9)  
Credit Suisse First Boston                      
Assets under management   478.6   485.3   482.5   (1.4)   (0.8)  
   of which discretionary   316.5   314.3   317.9   0.7   (0.4)  
Client assets   568.3   537.4   1,034.7   5.7   (45.1)  
Credit Suisse Group                      
Assets under management   1,199.0   1,199.2   1,160.0   0.0   3.4  
   of which discretionary   589.4   584.1   582.1   0.9   1.3  
Client assets   1,342.9   1,299.4   1,757.9   3.3   (23.6)  
1) In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated.
2) Excluding assets managed on behalf of other entities within Credit Suisse Group.


Net new assets 1)
                Change   Change           Change  
                in % from   in % from           in % from  
                12 months    
in CHF bn   4Q2003   3Q2003   4Q2002   3Q2003   4Q2002   2003   2002   2002  
Credit Suisse Financial Services                                  
   Private Banking   4.2   8.4   0.9   (50.0)   366.7   17.9   19.1   (6.3)  
   Corporate & Retail Banking   (0.3)   1.8   (0.2)   –   50.0   (1.4)   (3.6)   (61.1)  
   Life & Pensions   (2.0)   (0.7)   (1.3)   185.7   53.8   0.0   3.4   (100.0)  
Credit Suisse Financial Services   1.9   9.5   (0.6)   (80.0)   –   16.5   18.9   (12.7)  
Credit Suisse First Boston                                  
   Institutional Securities   1.3   0.1   –   –   –   2.3   1.9   21.1  
   CSFB Financial Services 2)   (0.3)   (5.6)   (5.7)   (94.6)   (94.7)   (14.0)   (22.2)   (36.9)  
Credit Suisse First Boston   1.0   (5.5)   (5.7)   –   –   (11.7)   (20.3)   (42.4)  
Credit Suisse Group   2.9   4.0   (6.3)   (27.5)   –   4.8   (1.4)   –  
1) In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated.
2) Excluding assets managed on behalf of other entities within Credit Suisse Group.

 



Impact on income statement from mandatory Swiss GAAP changes 
 CreditCredit  
 SuisseSuisseCor- 
 FinancialFirstporateTotal
4Q2003, in CHF mServicesBostonCenterchanges
Operating income6(199)(106)(299)
Personnel expenses0088
Valuation adjustments, provisions and losses01970197
Cumulative effect of change in accounting principle13180319
Taxes(2)(7)5(4)
Net profit/(loss)5(85)(109)(189)


RISK MANAGEMENT


Credit Suisse Group’s overall position risk, measured on the basis of Economic Risk Capital (ERC), decreased 6% in the fourth quarter of 2003 compared with the previous quarter. The reduction was largely due to the impact of the lower US dollar – Swiss franc exchange rate as well as a significant reduction in Winterthur’s risk profile driven by lower interest rate, foreign exchange and real estate risks. The more narrowly defined average Value-at-Risk (VaR) in US dollar terms for the trading book of Credit Suisse First Boston decreased 24% during the fourth quarter of 2003, due mainly to lower interest rate positions, a reduction in market volatility and the introduction of a refined methodology for mortgages during the third quarter of 2003. The Group’s credit-related balance sheet exposure decreased 6% as of December 31, 2003, compared with September 30, 2003.



Overall Risk Trends
Credit Suisse Group’s 1-year, 99% position risk ERC decreased 6% in the fourth quarter of 2003 compared with the previous quarter. The reduction was largely due to two factors. First, the decrease in the US dollar – Swiss franc exchange rate impacted Credit Suisse First Boston’s ERC in Swiss franc terms (6% lower versus a 2% increase in US dollar terms). Second, Winterthur’s ERC decreased 11% in the fourth quarter of 2003, mainly due to lower interest rate and foreign exchange rate risks, as well as lower real estate exposures.

At the end of the fourth quarter of 2003, 52% of the Group’s position risk ERC was with Credit Suisse First Boston, 44% was with Credit Suisse Financial Services (of which 28% was with the insurance units and 16% with the banking units) and 4% was with the Corporate Center.

Trading risks
The table below shows the trading-related market risk for Credit Suisse First Boston, Credit Suisse Financial Services and Credit Suisse Group on a consolidated basis, as measured by a 10-day VaR scaled to a 1-day holding period and 99% confidence level. Credit Suisse Group assumes trading risks through the trading activities of the Institutional Securities segment of Credit Suisse First Boston and – to a lesser extent – the trading activities of the banking segments of Credit Suisse Financial Services.

Credit Suisse First Boston’s average 1-day, 99% VaR in the fourth quarter of 2003 was CHF 51.3 million, compared to CHF 69.3 million during the third quarter of 2003. In US dollar terms, Credit Suisse First Boston’s average 1-day, 99% VaR decreased 24% during the fourth quarter (USD 39.9 million compared to USD 52.4 million during the third quarter), primarily due to reduced interest rate positions, a reduction in market volatility observed over the last two years (third quarter 2001 data falling out of the rolling two-year data set used to compute VaR) and the introduction of a refined methodology for mortgages during the third quarter of 2003 (a portion of the third quarter VaR figures were calculated on the basis of the old methodology, which resulted in higher VaR figures). Favorable market conditions at the end of the fourth quarter of 2003 resulted in the period-end VaR being observed at the higher end of the quarterly range. As shown on the backtesting chart, which shows actual 1-day, 99% VaR versus backtesting profit and loss, Credit Suisse First Boston had no backtesting exceptions over the last 12 months (an accurate 1-day, 99% VaR model should have no more than 4 exceptions on an annual basis).

Credit Suisse Financial Services’ average 1-day, 99% VaR in the fourth quarter of 2003 was CHF 12.5 million compared to CHF 15.0 million during the previous quarter. The decrease mainly reflects the higher degree of portfolio diversification within the equity portfolio and across risk types following the transfer of the securities and treasury execution platform in Switzerland from Credit Suisse First Boston to Credit Suisse Financial Services during the third quarter of 2003.

Credit risk exposure
Credit Suisse Group’s total credit-related exposure was 6% lower at December 31, 2003, compared with September 30, 2003. Exposure at Credit Suisse Financial Services was largely unchanged, while exposure at Credit Suisse First Boston was 10% lower, partially due to a decline in the value of the US dollar.

Compared to September 30, 2003, non-performing and total impaired loans at Credit Suisse Group declined 22% and 18%, respectively, as of the end of the fourth quarter of 2003, with reductions reported in both business units. The significant reduction in non-performing loans at Credit Suisse First Boston was largely attributable to higher write-offs of older, highly reserved non-performing loans while the reduction in total impaired loans additionally reflects a reduction in potential problem loans. Non-performing loans declined 11% at Credit Suisse Financial Services, while total impaired loans declined 4%, as potential problem loans increased 13%, with much of the increase associated with one major counterparty in the corporate credit business in Switzerland. The decline in non-performing loans is more pronounced in comparison to December 31, 2002, as non-performing loans declined 46% at Credit Suisse Group, 65% at Credit Suisse First Boston and 33% at Credit Suisse Financial Services in 2003.

The net credit-related valuation allowances and provisions charged to the income statement for the fourth quarter of 2003 was CHF 192 million, an increase from the CHF 96 million recorded for the third quarter of 2003, but significantly below the CHF 1.4 billion recorded for the fourth quarter of 2002, particularly at Credit Suisse First Boston. Additions to the loan valuation allowance were largely attributable to the exposures to the above-mentioned counterparty in Switzerland and to Parmalat, with the total additions partially offset by a release of valuation allowances no longer required. Additionally, as further discussed in the Credit Suisse First Boston section, much of the Parmalat credit expense was offset by a gain from credit default swaps, which was included in net trading income. Presented on page 13 are the additions, releases, and recoveries included in calculating the net credit-related expense.

Coverage of non-performing loans by the valuation allowances was essentially unchanged at Credit Suisse Group, while coverage of total impaired loans declined slightly on a consolidated basis. Coverage of both non-performing loans and total impaired loans declined at Credit Suisse First Boston as a result of the increased write-offs, while coverage improved at Credit Suisse Financial Services. The quality of the credit exposure for Credit Suisse Group, as measured by counterparty rating, was slightly improved from the third quarter of 2003 as a result of the reduction in impaired loans.
   

Key position risk trends 
        Change Analysis: Brief Summary
  Change in % from  
in CHF m 4Q2003 3Q2003 4Q2002 4Q2003 vs 3Q2003
Real Estate ERC &      
   Structured Asset ERC 1) 3,445   (14%)   (20%)   Lower exposures at Winterthur (revaluation of investments in Switzerland and sales) and CSFB (loans sold via securitization and lower risk in CDO portfolio)
Developed Market Fixed Income &      
   Foreign Exchange ERC 3,222   (11%)   3%   Lower interest rate and foreign exchange exposures at Winterthur
Equity Investment ERC 2,631 (10%) (32%) Lower positions in CHF terms at CSFB due to the impact of the lower USD plus lower exposure at Winterthur (sales and hedges)
International Lending ERC 2,662 (2%) (31%) Lower positions in CHF terms at CSFB due to the impact of the lower USD (2% increase in USD terms)
Swiss & Retail Lending ERC 1,831 (4%) (13%) Write-offs of old impaired exposures at Corporate & Retail Banking
Emerging Markets ERC 1,699 8% (11%) Higher CSFB exposures in South Africa and Brazil
Insurance Underwriting ERC 2) 650 1% (31%) No material change
Simple sum across risk categories 16,140 (7%) (20%)  
Diversification benefit (5,405) (10%) (24%)  
Total position risk ERC 10,735 (6%) (18%)  

1-year, 99% 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 Credit Suisse Group's Annual Report 2002, which is available on the website: www.credit-suisse.com. Note that comparatives have been restated for methodology changes in order to maintain consistency over time.
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.
2) Excludes ERC for discontinued businesses.
   

Trading exposures (1-day, 99% VaR) 1)
Credit Suisse Credit Suisse
Financial Services First Boston 2) Credit Suisse Group 3)
in CHF m 4Q2003 3Q2003 4Q2003 3Q2003 4Q2003 3Q2003
Total VaR          
Period end 13.5 19.1 58.3 50.4 56.1 55.1
Average 12.5 15.0 51.3 69.3 52.5 56.3
Maximum 18.7 19.7 63.1 152.5 56.1 58.7
Minimum 10.1 11.3 38.5 35.1 45.5 55.1
             
in CHF m 31.12.03 30.09.03 31.12.03 30.09.03 31.12.03 30.09.03
VaR by risk type          
Interest rate 4.7 7.0 58.2 43.7 58.9 47.9
Foreign exchange 2.0 2.2 15.9 18.3 16.8 18.6
Equity 12.7 15.5 23.6 28.1 24.9 27.2
Commodity 0.5 0.5 0.9 1.5 0.8 1.3
Subtotal 19.9 25.2 98.6 91.6 101.4 95.0
Diversification benefit (6.4) (6.1) (40.3) (41.2) (45.3) (39.9)
Total 13.5 19.1 58.3 50.4 56.1 55.1
1) Represents 10-day VaR scaled to a 1-day holding period.
2) The CSFB VaR is calculated using the USD as the base currency. For the purpose of this disclosure, the CSFB VaR estimates are translated into CHF using the respective currency translation rates. Specifically, the average, maximum and minimum daily VaR estimates in CHF are calculated using the respective month end closing rates; the period end VaR and the risk type breakdown at period end are calculated using the CSG closing rate at quarter end.
3) As Credit Suisse Group does not manage its trading portfolios on a consolidated level, consolidated VaR calculations are performed on a monthly basis only. The average, maximum and minimum values therefore are based on the three month-ends during the quarter. The consolidated VaR calculations for Credit Suisse Group are net of diversification benefits between Credit Suisse First Boston and Credit Suisse Financial Services.




Total credit risk exposure 1)
Credit Suisse Financial ServicesCredit Suisse First BostonCredit Suisse Group
in CHF m31.12.0330.09.0331.12.0231.12.0330.09.0331.12.0231.12.0330.09.0331.12.02
Due from banks 2)39,28742,51233,30653,58866,78543,46247,18558,51139,469
Due from customers and mortgages 2)139,425138,060132,35350,17170,17582,395188,259206,794213,206
Total due from banks and customers, gross 2)178,712180,572165,659103,759136,960125,857235,444265,305252,675
Contingent liabilities12,08111,74312,34933,46838,14727,86240,83640,98139,104
Irrevocable commitments 3)3,9003,3412,26368,55277,67681,88472,75981,37085,333
Total banking products194,693195,656180,271205,779252,783235,603349,039387,656377,112
Loans held for sale 4)00–15,39017,028–15,39017,028–
Derivative instruments 5)4,5714,4015,01852,14054,28351,60055,82656,87754,757
Securities lending – banks 6)1,6520058,1540058,39000
Securities lending – customers 6)5,7720025,1051,7826430,8781,78264
Reverse repurchase agreements – banks 6)3,3365,2326,28385,041168,498154,53187,269169,427156,397
Reverse repurchase agreements – customers 6)1,5967,74514,52837,14741,09456,98738,67648,76771,384
Forward reverse repurchase agreements00012,53710,1157,61712,53710,1157,617
Total traded products16,92717,378 25,829270,124275,772 270,799283,576286,968 290,219
Total credit risk exposure, gross211,620213,034206,100491,293545,583506,402648,005691,652667,331
Loan valuation allowances and provisions(3,159)(3,098)(4,092)(1,494)(2,831)(3,817)(4,655)(5,932)(7,911)
Total credit risk exposure, net208,461209,936202,008489,799542,752502,585643,350685,720659,420
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) Excluding forward reverse repurchase agreements.
4) Effective 1Q2003, loans held for sale are presented net of the related loan valuation allowances.
5) Positive replacement values considering netting agreements.
6) In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated.


Total loan portfolio exposure and allowances and provisions for credit risk 1)
Credit Suisse Financial ServicesCredit Suisse First BostonCredit Suisse Group
in CHF m31.12.0330.09.0331.12.0231.12.0330.09.0331.12.0231.12.0330.09.0331.12.02
Non-performing loans 1,9172,2913,0049961,6793,3512,9133,9706,355
Non-interest earning loans1,5171,5772,1082464372171,7632,0152,325
Total non-performing loans3,4343,8685,1121,2422,1163,5684,6765,9858,680
Restructured loans242252256327229280349281
Potential problem loans1,6411,4481,7233617301,6852,0012,1783,408
Total other impaired loans1,6651,4701,7756171,0571,9142,2812,5273,689
Total impaired loans5,0995,3386,8871,8593,1735,4826,9578,51212,369
Total due from banks and customers, gross178,712180,572165,659103,759136,960125,857235,444265,305252,675
Valuation allowance3,1233,0614,0531,3912,7273,6474,5165,7907,703
   of which on principal 2,5562,4543,2011,1842,4663,4163,7424,9216,617
   of which on interest 5676078522072612317748691,086
Total due from banks and customers, net175,589177,511161,606102,368134,233122,210230,928259,515244,972
Provisions for contingent liabilities and irrevocable commitments363739103104170139142208
Total valuation allowances and provisions3,1593,0984,0921,4942,8313,8174,6555,9327,911
Ratios         
Valuation allowances as % of total non-performing loans90.9%79.1%79.3%112.0%128.9%102.2%96.6%96.7%88.7%
Valuation allowances as % of total impaired loans61.2%57.3%58.9%74.8%85.9%66.5%64.9%68.0%62.3%


Roll forward of loan valuation allowance 1)
Credit Suisse Financial ServicesCredit Suisse First BostonCredit Suisse Group
in CHF m4Q20033Q20034Q20024Q20033Q20034Q20024Q20033Q20034Q2002
At beginning of period3,0613,4464,0012,7272,9283,3765,7906,3737,377
Additions4262134753711418258053531,323
Releases(202)(133)(106)(407)(105)(44)(613)(238)(151)
Net additions charged to income statement22480369(36)367811921151,172
Gross write-offs(194)(438)(313)(1,207)(239)(334)(1,400)(676)(647)
Recoveries88101122192131
Net write-offs(186)(430)(303)(1,206)(227)(313)(1,391)(655)(616)
Balances acquired/(sold)200(5)00(3)00
Provisions for interest511753319583126
Foreign currency translation impact and other 17(36)(31)(142)(41)(206)(130)(74)(256)
At end of period3,1233,0614,0531,3912,7273,6474,5165,7907,703


Net credit-related valuation allowances and provisions 1)
Credit Suisse Financial ServicesCredit Suisse First BostonCredit Suisse Group
in CHF m4Q20033Q20034Q20024Q20033Q20034Q20024Q20033Q20034Q2002
Net additions to loan valuation allowances22480369(36)367811921151,172
Net additions to provisions for contingent liabilities and irrevocable commitments 2)(4)6246(26)2210(19)244
Total net credit-related valuation allowances and provisions charged to income statement22086393(30)101,002192961,416
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) For 2003, net additions for valuation allowances against debt securities are no longer included in net additions to provisions for contingent liabilities and irrevocable commitments.


REVIEW OF BUSINESS UNITS | CREDIT SUISSE FINANCIAL SERVICES






Credit Suisse Financial Services reported a net profit of CHF 977 million in the fourth quarter of 2003. For the full year 2003, Credit Suisse Financial Services recorded a net profit of CHF 4.3 billion. The lower results in the banking segments in the fourth quarter of 2003 versus the previous quarter were more than offset by a strong performance in the insurance segments. Assets under management stood at CHF 720.4 billion at the end of the fourth quarter of 2003, up 6.3% versus the end of the previous year. The Private Banking segment recorded net new assets of CHF 4.2 billion for the fourth quarter and CHF 17.9 billion for the full year 2003.



In the fourth quarter of 2003, Credit Suisse Financial Services reported a net profit of CHF 977 million, compared to CHF 1.8 billion in the previous quarter, which included divestiture gains of CHF 1.3 billion net of related provisions, and compared to CHF 620 million in the fourth quarter of 2002. Following a net loss of CHF 271 million for 2002, Credit Suisse Financial Services returned to sound profitability in 2003 and recorded a net profit of CHF 4.3 billion for the full year. This strong recovery was due primarily to significant cost reductions of CHF 1.1 billion as well as a marked improvement in investment income in both insurance segments.

Assets under management were up by 0.9% to CHF 720.4 billion in the fourth quarter of 2003 and rose 6.3% versus year-end 2002, due mainly to stronger equity markets, partially offset by the weaker US dollar. Assets under management increased despite the reduction of CHF 14.1 billion due to divestitures at Winterthur . Furthermore, the business unit recorded a net new asset inflow of CHF 1.9 billion in the fourth quarter and of CHF 16.5 billion for the full year 2003. The Private Banking segment recorded net new assets of CHF 4.2 billion in the fourth quarter and of CHF 17.9 billion for the full year 2003.

As noted on page 5, the results of the Credit Suisse Financial Services business unit and its segments are discussed on an operating basis. For a reconciliation of operating basis business unit results to Swiss GAAP and a discussion of the material reconciling items, the purpose of the operating results and the reasons why management believes they provide useful information for investors, please refer to the “Reconciliation of operating results to Swiss GAAP” on pages 35 – 39.

Private Banking
In the fourth quarter of 2003, Private Banking reported a segment profit of CHF 508 million, down 2% versus the previous quarter but up 62% versus the corresponding period of 2002. The results for the fourth quarter of 2003 include extraordinary income of CHF 106 million from the disposal of a minority investment, with an after-tax impact of CHF 81 million on segment profit. For the full year 2003, Private Banking recorded a segment profit of CHF 1.9 billion, up CHF 218 million, or 13%, versus 2002.

Operating income in the fourth quarter of 2003 decreased 9% to CHF 1.4 billion compared to the previous quarter, due primarily to lower commission income, impacted by the weaker US dollar, as well as fewer trading days and lower transaction volumes. These effects were only partially offset by income related to the increased asset base. For 2003, operating income was CHF 5.9 billion, down 2% versus 2002. This decrease was also mainly attributable to lower commission income primarily as a result of a lower average asset base in 2003, which was partially offset by higher trading income.

Operating expenses in the fourth quarter of 2003 amounted to CHF 822 million, almost unchanged compared to the previous quarter, with significantly lower personnel expenses in line with lower incentive-related compensation. The increase in other operating expenses in the fourth quarter was partially related to IT project costs and marketing activities. Additionally, operating expenses and depreciation rose as a result of costs related to the realignment of the European activities, with an after-tax impact of CHF 46 million on segment profit. For the full year 2003, operating expenses decreased to CHF 3.3 billion, down 8% from CHF 3.6 billion in 2002.

The cost/income ratio increased 7.1 percentage points to 62.2% in the fourth quarter of 2003 versus the previous quarter but was down 3.3 percentage points for the full year 2003, to 59.8%.

Private Banking recorded a gross margin of 111.5 bp in the fourth quarter of 2003, down 13.3 bp quarter-on-quarter due mainly to lower commission income. Year-on-year, the gross margin was almost stable, at 121.3 bp.

Net new assets of CHF 4.2 billion were recorded in the fourth quarter, versus a strong CHF 8.4 billion inflow in the third quarter of 2003. For the full year 2003, Private Banking’s net new assets totaled CHF 17.9 billion. Assets under management stood at CHF 511.7 billion at the end of 2003, up CHF 6.6 billion, or 1.3%, versus the end of the third quarter of 2003 and up CHF 46.0 billion, or 9.9%, versus year-end 2002.

Corporate & Retail Banking
Corporate & Retail Banking reported a segment profit of CHF 120 million for the fourth quarter of 2003, representing a decrease of 29% versus the previous quarter and an increase of 140% versus the fourth quarter of 2002. The segment profit for the full year 2003 amounted to CHF 565 million, representing an increase of CHF 151 million, or 36%, compared to 2002.

Operating income amounted to CHF 785 million in the fourth quarter of 2003, practically unchanged compared to the previous quarter and up 7% compared to the corresponding period of 2002. The positive trend in commission and service fee income as well as in trading income was offset by a decrease in net interest income and other ordinary income. For the full year 2003, operating income also remained virtually unchanged compared to the previous year. The net interest margin was 210 bp in the fourth quarter of 2003, down 5 bp versus the previous quarter, and stood at 212 bp for the full year 2003, nearly unchanged compared to 2002.

Operating expenses amounted to CHF 516 million in the fourth quarter of 2003, up 7% versus the previous quarter, but down 9% versus the fourth quarter of 2002. While personnel expenses remained practically unchanged quarter-on-quarter, other operating expenses increased CHF 32 million, or 18%, to CHF 213 million in the fourth quarter, related mainly to IT project costs and marketing activities. A comparison of 2003 versus 2002 demonstrates a notable reduction in costs at Corporate & Retail Banking, operating expenses declined 9% to CHF 2.0 billion year-on-year. The cost/income ratio increased 5.4 percentage points to 69.8% in the fourth quarter of 2003 versus the previous quarter but decreased 11.3 percentage points compared to the fourth quarter of 2002. For the full year 2003, the cost/income ratio was down 5.9 percentage points to 67.2%.

Valuation adjustments, provisions and losses based on statistical valuation adjustments increased CHF 27 million in the fourth quarter of 2003 compared to the previous quarter, due partly to an increased provision for consumer loans related to the new consumer lending law in Switzerland. The actual net credit-related valuation allowances and provisions amounted to CHF 226 million for the fourth quarter of 2003, CHF 139 million above the statistical credit-related valuation adjustments. This deviation was due to one major default in the corporate credit business in Switzerland in the fourth quarter of 2003, which was partially offset by a release of valuation allowances in the recovery portfolio no longer required. For the full year 2003, the actual net credit-related valuation allowances and provisions amounted to CHF 398 million, CHF 119 million above the statistical credit-related valuation adjustments. In the fourth quarter of 2003, impaired loans were reduced by a further CHF 189 million versus the end of the third quarter of 2003 and were down CHF 1.7 billion versus year-end 2002.

The return on average allocated capital decreased 3.9 percentage points in the fourth quarter of 2003 to 9.7% compared to the third quarter of 2003, but increased 5.6 percentage points compared to the fourth quarter of 2002. For the full year 2003, the return on average allocated capital improved by 3.4 percentage points to 11.6%.

Corporate & Retail Banking recorded a net asset outflow of CHF 0.3 billion in the fourth quarter of 2003 and a net asset outflow of CHF 1.4 billion for the full year 2003. This was attributable to shifts from the time deposit accounts of corporate clients to transaction accounts that do not qualify as assets under management. Assets under management stood at CHF 70.0 billion as of year-end 2003, up CHF 0.6 billion versus the end of the third quarter of 2003 and down CHF 0.3 billion versus year-end 2002.

Corporate & Retail Banking together with Private Banking, continued to achieve strong growth in the private mortgage business, with a net increase in volume of CHF 6.0 billion in 2003.

Life & Pensions
Life & Pensions reported a segment profit of CHF 723 million for the full year 2003, compared to a segment loss of CHF 1.4 billion in 2002. The strong year-on-year recovery was driven primarily by a significant improvement in investment performance, as well as a substantial reduction in administration costs. In addition, the segment profit for 2003 includes an after-tax gain of CHF 57 million from the divestiture of Winterthur Italy. For the fourth quarter of 2003, Life & Pensions recorded a segment profit of CHF 369 million, up from a segment profit of CHF 126 million in the third quarter of 2003. The improvement in the segment result quarter-on-quarter is mainly attributable to higher investment income, primarily reflecting favorable market conditions.

Life & Pensions reported a decrease in gross premiums written of 9%, or CHF 1.7 billion, to CHF 17.3 billion in 2003, compared to the previous year. Adjusted for divestitures and exchange rate impacts, premium volumes decreased 3% in 2003. The decline in reported premium volumes was due to profit-oriented underwriting reflecting market conditions. Included in the gross premiums written for 2003 are premiums of CHF 701 million from Winterthur Italy, which was divested in the third quarter of 2003. No net new assets were recorded in 2003, compared to CHF 3.4 billion in 2002, reflecting lower premium volumes and higher surrenders.

In 2003, total operating expenses, comprising acquisition and administration costs, decreased 9% versus the previous year despite higher amortization and write-downs of deferred acquisition costs (DAC) and present value of future profits (PVFP) due to lowered expectations for long-term investment returns. Administration costs decreased 24% in 2003, from CHF 1.5 billion to CHF 1.1 billion, compared to the previous year, mainly due to ongoing efficiency measures. The expense ratio for 2003 remained almost unchanged from 2002 at 11.4%.

Net investment income improved by CHF 3.9 billion to CHF 5.4 billion in 2003 compared to the previous year, due primarily to significantly reduced losses on equity investments. In 2003, the total return on invested assets was 5.2%, compared to 1.4% in 2002. Current income was 4.1%, whereas realized gains/losses and other income/expenses were 1.1%.

Life & Pensions reported a tax credit in the fourth quarter of 2003, resulting from changes in German tax law, which, after the related increase in dividends to policyholders incurred, had a positive net impact on segment profit of CHF 53 million.

The Life & Pensions segment remains exposed to the volatility of the financial markets due to the nature of its business. The implementation of the new employee benefit model, as well as the Swiss government’s further reduction of the guaranteed rate of return for the employee benefit business to 2.25%, effective January 1, 2004, is expected to partially mitigate the impact of the volatility.

Insurance
Insurance recorded a segment profit of CHF 1.3 billion for the full year 2003, compared to a segment loss of CHF 992 million in the previous year. The 2003 segment profit reflects a significant improvement in investment performance, as well as the positive development of its underwriting result before dividends to policyholders incurred and lower administration costs. The full year segment result also included after-tax gains recorded in the third quarter of 2003 from the divestitures of Insurance’s US subsidiary Republic Financial Services, Churchill Insurance Group in the UK and Winterthur Italy of CHF 1.3 billion net of related provisions and certain provisions of CHF 383 million for Winterthur’s current and former international business portfolio. For the fourth quarter of 2003, Insurance reported a segment profit of CHF 153 million, versus a segment profit of CHF 991 million in the third quarter of 2003.

In 2003, Insurance’s net premiums earned decreased by CHF 1.1 billion, or 7%, to CHF 14.6 billion compared to the previous year. Adjusted for divestitures and exchange rate impacts, net premiums earned increased 6%, primarily due to tariff increases across all major markets. Net premiums earned in 2003 included premium income of CHF 4.5 billion from the aforementioned divestitures.

In 2003, Insurance improved its underwriting result before dividends to policyholders incurred by CHF 392 million compared to the previous year. The combined ratio improved by 2.4 percentage points to 101.0% in 2003 and stood at 98.3% in the fourth quarter of 2003. The year-on-year decrease was mainly due to a decline in the claims ratio of 1.7 percentage points to 73.1%, mainly reflecting improved pricing, continued selective underwriting and more efficient claims management. In addition, a lower level of losses resulting from natural catastrophes was reported in 2003.

Administration costs decreased 17%, to CHF 1.6 billion in 2003, reflecting progress in efficiency measures. The expense ratio improved 1.4 percentage points to 25.7% in the fourth quarter of 2003 versus the previous quarter. For the full year 2003, the expense ratio improved to 27.9%, down 0.7 percentage points compared to the previous year.

Insurance reported net investment income of CHF 1.2 billion in 2003, compared to a net investment loss of CHF 10 million in 2002, due primarily to a significant decrease in losses on equity investments. In 2003, the total return on invested assets was 3.8%, compared to –0.1% in 2002. Current income was 3.9%, whereas realized gains/losses and other income/expenses were –0.1%.

Insurance reported a tax credit in the fourth quarter of 2003 resulting from changes in German tax law, which, after the related increase in dividends to policyholders incurred, had a positive net impact on segment profit of CHF 18 million.


Credit Suisse Financial Services business unit income statement – operating 1)
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in CHF m4Q20033Q20034Q20023Q20034Q2002200320022002
Operating income 2)2,8014,5483,566(38)(21)14,39512,15218
Personnel expenses1,2021,3851,444(13)(17)5,4345,944(9)
Other operating expenses7757329346(17)3,0673,625(15)
Operating expenses1,9772,1172,378(7)(17)8,5019,569(11)
Gross operating profit8242,4311,188(66)(31)5,8942,583128
Depreciation of non-current assets169177257(5)(34)672739(9)
Amortization of Present Value of Future Profits (PVFP)1081026267430026712
Valuation adjustments, provisions and losses11390105268374390(4)
Net operating profit before extraordinary and exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and taxes4342,062764(79)(43)4,5481,187283
Extraordinary income/(expenses), net 109324–35412748165
Taxes 3) 4)607(260)(325)––(135)(1,517)(91)
Net operating profit/(loss) before exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and minority interests1,1501,805463(36)1484,540(282)–
Amortization of acquired intangible assets and goodwill(25)(25)(37)0(32)(102)(139)(27)
Exceptional items00(73)–(100)0(192)(100)
Cumulative effect of change in accounting principle10266–(100)1266(100)
Tax impact0114(100)(100)216(88)
Business unit result before minority interests1,1261,781633(37)784,441(331)–
Minority interests(59)851––(69)151–
Business unit result 5)1,0671,789684(40)564,372(180)–
Increased/(decreased) credit-related valuation adjustments, net of tax 6)901164–416291(32)
Net profit/(loss)9771,778 620(45)584,310(271)–
       
1) The operating basis 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. Certain other items, including credit-related valuation adjustments resulting from the difference between the statistical and actual credit provisions and gains/losses from sales of investments within the insurance business are presented in the operating basis business unit results based on the Group’s segment reporting principles. For a reconciliation and a discussion of the material reconciling items, please refer to “Reconciliation of operating results to Swiss GAAP”. In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated. The impact on the results of Credit Suisse Financial Services was not considered material.
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. Gains or losses related to sales of investments within the insurance business are recorded as operating income at the business unit level and reclassified to extraordinary income/(expenses) in the consolidated financial statements in accordance with Swiss GAAP.
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 of CHF –642 m.
4) Excluding tax impact on amortization of acquired intangible assets and goodwill as well as exceptional items.
5) Represents net profit/(loss) excluding credit-related valuation adjustments resulting from the difference between the statistical and actual credit provisions, net of tax.
6) Increased/(decreased) credit-related valuation adjustments before tax of CHF 119 m, CHF 14 m, CHF 85 m, CHF 82 m and CHF 120 m for 4Q2003, 3Q2003, 4Q2002, 12 months 2003 and 12 months 2002, respectively.


Reconciliation to net operating profit/(loss)       
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in CHF m4Q20033Q20034Q20023Q20034Q2002200320022002
Business unit result1,0671,789684(40)564,372(180)–
Amortization of acquired intangible assets and goodwill, net of tax2524364(31)1001161)(14)
Exceptional items, net of tax0060–(100)0179(100)
Cumulative effect of change in accounting principle, net of tax(1)0(266)–(100)(1)(266)(100)
Net operating profit/(loss)1,0911,813514(40)1124,471(151)–
1) Excluding a CHF 20 m write-off relating to a participation.


Credit Suisse Financial Services business unit key information 
   12 months
 4Q20033Q20034Q200220032002
Cost/income ratio 1)79.7%70.7%74.8%71.1%87.2%
Cost/income ratio – operating 2) 3)76.6%50.4%73.9%63.7%84.8%
Cost/income ratio – operating, banking 2)64.9%58.2%73.1%62.4%66.5%
Return on average allocated capital 1)27.5%48.1%4)17.7%31.1%(3.4%)
Return on average allocated capital – operating 2)30.6%49.0%4)14.4%32.3%(2.4%)
Average allocated capital in CHF m15,05614,7204)12,87414,05912,519
Growth in assets under management0.9%0.5%(1.3%)6.3%(9.5%)
   of which net new assets 0.3%1.3%(0.1%)2.4%2.5%
   of which market movement and structural effects 0.6%1.1%(1.3%)6.0%(11.8%)
   of which acquisitions/(divestitures) –(1.9%)0.1%(2.1%)(0.2%)
   of which discretionary 0.4%(1.3%)(0.7%)1.3%(2.0%)
      
  31.12.0330.09.0331.12.02
Assets under management in CHF bn 720.4713.9677.5
Number of employees (full-time equivalents) 41,19541,83454,378
1) Based on the business unit results on a Swiss GAAP basis.
2) Based on the operating basis business unit results, which exclude certain acquisition-related costs, exceptional items and cumulative effect of change in accounting principle not allocated to the segments and reflect certain reclassifications discussed in the “Reconciliation of operating results to Swiss GAAP”.
3) Excluding amortization of PVFP from the insurance business within Credit Suisse Financial Services.
4) Restated.


Overview of business unit Credit Suisse Financial Services – operating 1)
     Credit
  Corporate  Suisse
 Private& RetailLife & Financial
4Q2003, in CHF mBankingBankingPensionsInsuranceServices
Operating income 2)1,4327851404442,801
Personnel expenses5123031672201,202
Other operating expenses310213125127775
Operating expenses8225162923471,977
Gross operating profit610269(152)97824
Depreciation of non-current assets68323534169
Amortization of Present Value of Future Profits (PVFP)––1062108
Valuation adjustments, provisions and losses2192––113
Net operating profit before extraordinary items, acquisition-related costs, cumulative effect of change in accounting principle and taxes521145(293)61434
Extraordinary income/(expenses), net 108100109
Taxes 3)(121)(26)66292607
Net operating profit before acquisition-related costs, cumulative effect of change in accounting principle and minority interests5081203691531,150
Amortization of acquired intangible assets and goodwill    (25)
Cumulative effect of change in accounting principle    1
Tax impact    0
Business unit result before minority interests    1,126
Minority interests    (59)
Business unit result 4)    1,067
     
Other data:    
Average allocated capital 5)3,0934,9656,998  15,056
1) The operating basis 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, and cumulative effect of change in accounting principle not allocated to the segments are included in the business unit results. Certain other items, including credit-related valuation adjustments resulting from the difference between the statistical and actual credit provisions and gains/losses from sales of investments within the insurance business, are presented in the operating basis business unit results based on the Group’s segment reporting principles. For a reconciliation and a discussion of the material reconciling items, please refer to “Reconciliation of operating results to Swiss GAAP”. In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. The impact on the results of Credit Suisse Financial Services was not considered material.
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. Gains or losses related to sales of investments within the insurance business are recorded as operating income at the business unit level and reclassified to extraordinary income/(expenses) in the consolidated financial statements in accordance with Swiss GAAP.
3) Excluding tax impact on amortization of acquired intangible assets and goodwill.
4) Represents net profit excluding credit-related valuation adjustments resulting from the difference between the statistical and actual credit provisions.
5) Amount relating to Life & Pensions and Insurance segments represents the average shareholders' equity of “Winterthur” Swiss Insurance Company.


Private Banking income statement 1)
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in CHF m4Q20033Q20034Q20023Q20034Q2002200320022002
Net interest income326334335(2)(3)1,3511,374(2)
Net commission and service fee income 9151,038918(12)(0)3,8474,121(7)
Net trading income16718899(11)6967051530
Other ordinary income 241114118715361(13)
Operating income1,4321,5711,366(9)55,9216,071(2)
Personnel expenses512560531(9)(4)2,1932,261(3)
Other operating expenses31025935120(12)1,1301,332(15)
Operating expenses8228198820(7)3,3233,593(8)
Gross operating profit610752484(19)262,5982,4785
Depreciation of non-current assets6847584517218240(9)
Valuation adjustments, provisions and losses 2)212527(16)(22)6978(12)
Net operating profit before extraordinary and excep- tional items, acquisition-related costs, cumulative effect of change in accounting principle and taxes521680399(23)312,3112,1607
Extraordinary income/(expenses), net 108323–37012544184
Taxes 3)(121)(164)(108)(26)12(522)(508)3
Net operating profit before exceptional items, acquisition- related costs, cumulative effect of change in accounting principle and minority interests (segment result)508519314(2)621,9141,69613
Other data:      
Increased/(decreased) credit-related valuation adjustments 2)(20)(10)(9)100122(37)1–
1) 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) credit-related valuation adjustments 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 of CHF –110 m.


Private Banking balance sheet information 
    ChangeChange
    in % fromin % from
in CHF m31.12.0330.09.0331.12.0230.09.0331.12.02
Total assets178,533183,698171,126(3)4
Due from customers32,77932,54836,1641(9)
Mortgages26,31825,69522,935215


Private Banking key information 
   12 months
 4Q20033Q20034Q200220032002
Cost/income ratio 1)62.2%55.1%68.8%59.8%63.1%
Average allocated capital in CHF m3,0933,1162)2,5152,9312,507
Pre-tax margin 1)43.9%43.5%30.9%41.1%36.3%
Fee income/operating income 63.9%66.1%67.2%65.0%67.9%
Net new assets in CHF bn4.28.40.917.919.1
Growth in assets under management1.3%2.3%(1.3%)9.9%(10.5%)
   of which net new assets 0.8%1.7%0.2%3.8%3.7%
   of which market movement and structural effects 0.5%0.6%(1.6%)6.0%(14.2%)
   of which acquisitions/(divestitures) ––0.1%–0.1%
Gross margin 3)111.5 bp124.8 bp114.6 bp121.3 bp121.5 bp
   of which asset-driven 74.4 bp78.6 bp81.1 bp78.7 bp81.8 bp
   of which transaction-driven 32.7 bp42.2 bp28.6 bp38.4 bp35.0 bp
   of which other 4.4 bp4.0 bp4.9 bp4.2 bp4.7 bp
Net margin 4)39.6 bp41.2 bp26.4 bp39.2 bp34.0 bp
      
   31.12.0330.09.0331.12.02
Assets under management in CHF bn  511.7505.1465.7
Number of employees (full-time equivalents)  11,85012,03212,967
1) 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.
2) Restated.
3) Operating income/average assets under management.
4) Net operating profit before exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and minority interests (segment result)/average assets under management.


Corporate & Retail Banking income statement 1)
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in CHF m4Q20033Q20034Q20023Q20034Q2002200320022002
Net interest income514530527(3)(2)2,0702,142(3)
Net commission and service fee income 176165146721661693(5)
Net trading income817361113330527312
Other ordinary income 14211(33)–9539144
Operating income785789735(1)73,1313,147(1)
Personnel expenses3033023070(1)1,2421,250(1)
Other operating expenses21318125918(18)755943(20)
Operating expenses5164835667(9)1,9972,193(9)
Gross operating profit269306169(12)591,13495419
Depreciation of non-current assets322530287106108(2)
Valuation adjustments, provisions and losses 2)9265784218305312(2)
Net operating profit before extraordinary items, acquisition-related costs, cumulative effect of change in accounting principle and taxes14521661(33)13872353435
Extraordinary income/(expenses), net 101–024(50)
Taxes 3)(26)(47)(12)(45)117(160)(124)29
Net operating profit before acquisition-related costs, cumulative effect of change in accounting principle and minority interests (segment result)12016950(29)14056541436
Other data:      
Increased/(decreased) credit-related valuation adjustments 2)1392494479481191190
1) 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) Increased/(decreased) credit-related valuation adjustments 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.


Corporate & Retail Banking balance sheet information 
    ChangeChange
    in % fromin % from
in CHF m31.12.0330.09.0331.12.0230.09.0331.12.02
Total assets96,25296,42594,75702
Due from customers24,39625,31828,048(4)(13)
Mortgages59,68859,46757,16504
Due to customers in savings and investment deposits28,59028,08027,08126
Due to customers, other28,03428,72827,611(2)2


Corporate & Retail Banking key information 
   12 months
 4Q20033Q20034Q200220032002
Cost/income ratio 1)69.8%64.4%81.1%67.2%73.1%
Return on average allocated capital 1)9.7%13.6%2)4.1%11.6%8.2%
Average allocated capital in CHF m4,9654,9542)4,8774,8805,036
Pre-tax margin 1)18.6%27.4%8.4%23.2%17.1%
Personnel expenses/operating income38.6%38.3%41.8%39.7%39.7%
Net interest margin210 bp215 bp217 bp212 bp215 bp
Loan growth(0.8%)(0.9%)(1.6%)(1.3%)(1.0%)
Net new assets in CHF bn(0.3)1.8(0.2)(1.4)(3.6)
    
   31.12.0330.09.0331.12.02
Deposit/loan ratio   67.3%67.0%64.2%
Assets under management in CHF bn  70.069.470.3
Number of employees (full-time equivalents)  8,4798,6909,281
Number of branches   214220223
1) Based on the segment results, which exclude certain acquisition-related costs and cumulative effect of change in accounting principle not allocated to the segment.
2) Restated.


Life & Pensions income statement 1)
            Change  Change        Change 
            in % from  in % from        in % from 
                 12 months  
in CHF m  4Q2003  3Q2003  4Q2002  3Q2003  4Q2002  2003  2002  2002 
Gross premiums written  3,996  3,312  4,218  21  (5)  17,273  19,019  (9) 
Reinsurance ceded   (18)  (33)  (14)  (45)  29  (87)  (40)  118 
Net premiums written  3,978  3,279  4,204  21  (5)  17,186  18,979  (9) 
Change in provision for unearned premiums   7  2  29  250  (76)  (1)  (4)  (75) 
Net premiums earned  3,985  3,281  4,233  21  (6)  17,185  18,975  (9) 
Death and other benefits incurred  (5,482)  (3,791)  (5,373)  45  2  (16,243)  (14,692)  11 
Change in provision for future policyholder benefits (technical)  1,240  243  1,116  410  11  (2,486)  (5,750)  (57) 
Change in provision for future policyholder benefits (separate account) 2)  (578)  (435)  80  33  –  (1,718)  1,730  – 
Dividends to policyholders incurred  (843)  (169)  738  399  –  (1,238)  1,758  – 
Policy acquisition costs (including change in DAC/PVFP)  (309)  (305)  (160)  1  93  (854)  (716)  19 
Administration costs  (257)  (263)  (409)  (2)  (37)  (1,119)  (1,463)  (24) 
Investment income general account  1,530  1,304  333  17  359  5,351  1,438  272 
Investment income separate account 2)  578  435  (80)  33  –  1,718  (1,730)  – 
Interest received and paid  (56)  (28)  (39)  100  44  (117)  (92)  27 
Interest on bonuses credited to policyholders  (37)  (32)  (41)  16  (10)  (155)  (146)  6 
Other income/(expenses), net  (64)  (90)  (24)  (29)  167  (142)  74  – 
Net operating profit/(loss) before cumulative effect of change in accounting principle and taxes  (293)  150  374  –  –  182  (614)  – 
Taxes 3)  662  (24)  (281)  –  –  541  (786)  – 
Net operating profit/(loss) before cumulative effect of change in accounting principle and minority interests (segment result)  369  126  93  193  297  723  (1,400)  – 
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 of CHF –540 m.


Life & Pensions key information 
           12 months
   4Q2003  3Q2003  4Q2002  2003  2002 
Expense ratio 1)  14.2%  17.1%  13.5%  11.4%  11.5% 
Growth in gross premiums written  (5.3%)  (27.1%)  (13.9%)  (9.2%)  9.2% 
Return on invested assets (excluding separate account business)                  
   Current income   4.4%  4.0%  3.6%  4.1%  3.9% 
   Realized gains/losses and other income/expenses   1.6%  1.0%  (2.5%)  1.1%  (2.5%) 
   Total return on invested assets 2)   6.0%  5.0%  1.2%  5.2%  1.4% 
Net new assets in CHF bn 3)  (2.0)  (0.7)  (1.3)  0.0  3.4 
Total sales in CHF m 4)  5,035  3,883  5,283  20,454  22,790 
                 
         31.12.03  30.09.03  31.12.02 
Assets under management in CHF bn 5)        112.9  112.3  110.8 
Technical provisions in CHF m        107,495  107,437  105,939 
Number of employees (full-time equivalents)        7,193  7,392  7,815 
1) Operating expenses (i.e. policy acquisition costs and administration costs)/gross premiums written.
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        Change 
            in % from  in % from        in % from 
                 12 months  
in CHF m  4Q2003  3Q2003  4Q2002  3Q2003  4Q2002  2003  2002  2002 
Gross premiums written  1,955  3,385  3,846  (42)  (49)  16,212  18,391  (12) 
Reinsurance ceded   (40)  (236)  (299)  (83)  (87)  (939)  (1,150)  (18) 
Net premiums written  1,915  3,149  3,547  (39)  (46)  15,273  17,241  (11) 
Change in provision for unearned premiums and in provision for future policy benefits (health)   779  663  485  17  61  (703)  (1,538)  (54) 
Net premiums earned  2,694  3,812  4,032  (29)  (33)  14,570  15,703  (7) 
Claims and annuities incurred, net  (1,957)  (2,918)  (3,034)  (33)  (35)  (10,646)  (11,749)  (9) 
Dividends to policyholders incurred, net  (202)  (95)  109  113  –  (419)  106  – 
Policy acquisition costs (including change in DAC/PVFP)  (415)  (582)  (647)  (29)  (36)  (2,433)  (2,529)  (4) 
Administration costs  (278)  (450)  (481)  (38)  (42)  (1,633)  (1,959)  (17) 
Underwriting result, net  (158)  (233)  (21)  (32)  –  (561)  (428)  31 
Net investment income  288  348  59  (17)  388  1,240  (10)  – 
Interest received and paid  (54)  (28)  (39)  93  38  (156)  (106)  47 
Other income/(expenses), net  (15)  929  (69)  –  (78)  809  (349)  – 
Net operating profit/(loss) before cumulative effect of change in accounting principle and taxes  61  1,016  (70)  (94)  –  1,332  (893)  – 
Taxes 2)  92  (25)  76  –  21  6  (99)  – 
Net operating profit/(loss) before cumulative effect of change in accounting principle and minority interests (segment result)  153  991  6  (85)  –  1,338  (992)  – 
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 of CHF 20 m.


Insurance key information  
           12 months
   4Q2003  3Q2003  4Q2002  2003  2002 
Combined ratio (excluding dividends to policyholders)  98.3%  103.6%  103.2%  101.0%  103.4% 
Claims ratio 1)  72.6%  76.5%  75.2%  73.1%  74.8% 
Expense ratio 2)  25.7%  27.1%  28.0%  27.9%  28.6% 
Return on invested assets                   
   Current income   3.9%  3.8%  3.9%  3.9%  4.2% 
   Realized gains/losses and other income/expenses   0.1%  0.1%  (3.4%)  (0.1%)  (4.3%) 
   Total return on invested assets 3)   3.9%  3.9%  0.5%  3.8%  (0.1%) 
                 
         31.12.03  30.09.03  31.12.02 
Assets under management in CHF bn        25.8  27.1  30.7 
Technical provisions in CHF m        22,112  22,764  28,745 
Number of employees (full-time equivalents)        13,673  13,720  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 net profit of USD 220 million (CHF 290 million) for the fourth quarter of 2003 compared with USD 224 million (CHF 308 million) for the third quarter of 2003. Operating income was generally consistent with that of the previous quarter. For the full year 2003, net profit was USD 870 million (CHF 1.2 billion), up significantly from the USD 1.2 billion (CHF 1.8 billion) net loss for 2002. This return to profitability, despite reduced volumes and activity in several core markets, principally reflects improved operating margins resulting mainly from continued cost reductions and lower credit-related valuation allowances and other charges. Credit Suisse First Boston’s assets under management totaled USD 387.3 billion (CHF 478.6 billion) as of December 31, 2003, an increase of 6% from September 30, 2003.



Credit Suisse First Boston’s net operating profit for the fourth quarter of 2003, which is net profit excluding the amortization of goodwill and acquired intangible assets, the cumulative effect of changes in accounting principles and, for the fourth quarter of 2002 exceptional items, net of tax decreased 4% to USD 344 million (CHF 455 million) from USD 358 million (CHF 491 million) in the previous quarter but increased significantly compared to the USD 27 million (CHF 40 million) reported in the fourth quarter of 2002. Full year 2003 net operating profit increased USD 1.2 billion (CHF 1.6 billion) from 2002 to USD 1.4 billion (CHF 1.9 billion), reflecting higher operating margins, a favorable credit environment and cost containment efforts, offset in part by a 7% decline in operating income.

During the fourth quarter of 2003, Credit Suisse First Boston applied mandatory changes in Swiss GAAP – most significantly for the accounting for derivatives – retroactively as of January 1, 2003. The Swiss GAAP changes resulted in the discontinuation of hedge accounting treatment for certain credit default and interest rate swaps. As a result, changes in the fair value of these swaps are reflected in operating income, including gains on credit default swaps, which offset credit losses reflected in valuation adjustments, provisions and losses. The implementation of these changes impacted both fourth quarter and full year 2003 results as follows: net profit was reduced by USD 63 million (CHF 85 million), net operating profit was reduced by USD 201 million (CHF 271 million) and operating income was reduced by USD 147 million (CHF 199 million); valuation adjustments, provisions and losses increased by USD 146 million (CHF 197 million); and taxes were reduced by USD 6 million (CHF 7 million) as detailed in the table on page 27. These changes in accounting principles also resulted in a cumulative positive effect related to prior periods of USD 236 million (CHF 318 million), or USD 138 million (CHF 186 million) net of tax.

Excluding the impact of Swiss GAAP changes, fourth quarter 2003 net profit would have been USD 283 million (CHF 375 million), a significant improvement from the net loss in the fourth quarter of 2002, and net operating profit would have increased significantly to USD 545 million (CHF 726 million) from the fourth quarter of 2002. Net profit and net operating profit in the fourth quarter of 2003 would have increased 26% and 52%, respectively, from the third quarter of 2003.

Operating income was unchanged in the fourth quarter of 2003 at USD 2.4 billion (CHF 3.2 billion) compared with the third quarter of 2003. Excluding the impact of the Swiss GAAP changes in the fourth quarter of 2003 of USD 147 million (CHF 199 million), operating income would have been USD 2.6 billion (CHF 3.4 billion), an increase of 6%, primarily reflecting strong Investment Banking results in equity capital markets. Compared with the fourth quarter of 2002, operating income increased 4% in the fourth quarter of 2003, and 10% excluding the impact of the Swiss GAAP changes, reflecting improved market conditions for the Fixed Income and Equity divisions, partially offset by declines in the CSFB Financial Services segment, primarily related to the sale of Pershing completed in May 2003, and a reduction in realized gains on the sale of private equity investments. Compared with the full year 2002 and excluding the impact of Swiss GAAP changes, operating income for 2003 decreased 5% to USD 10.9 billion (CHF 14.8 billion) primarily as a result of the sale of Pershing.

Cost containment remained a key objective throughout the year as management continued to align the size of the business to market opportunities. Operating expenses of USD 2.0 billion (CHF 2.6 billion) in the fourth quarter of 2003 increased 9% compared with the third quarter of 2003, due primarily to increased business activity and higher incentive compensation costs. Compared with the fourth quarter of 2002, fourth quarter 2003 operating expenses increased 8%, reflecting higher incentive-based compensation costs partially offset by the impact of the sale of Pershing and reductions from ongoing cost control. Full year 2003 operating expenses declined USD 928 million (CHF 3.2 billion), or 10% (22% on a Swiss franc basis), compared with 2002, with the cost/income ratio improving primarily due to the sale of Pershing and other non-core businesses and continued attention to headcount, compensation and discretionary other operating expenses including professional fees, technology and occupancy.

As disclosed previously, Credit Suisse Group now expenses stock options and Credit Suisse First Boston has introduced a three-year vesting period for stock awards in line with its long-term service and retention strategy and industry practice. As a result of this change, Credit Suisse First Boston increased the amount of compensation deferred in the form of shares and replaced performance-based plans and option awards with share awards. In 2003, Credit Suisse First Boston deferred USD 873 million of compensation in the form of shares to future periods, compared to USD 869 million in value awarded in 2002 that was deferred or otherwise not expensed (in the case of options).

Compared with the third quarter of 2003, valuation adjustments, provisions and losses for the fourth quarter of 2003 decreased USD 42 million (CHF 63 million) to USD 38 million (CHF 48 million), with a release of credit provisions related to non-impaired loans and lower litigation provisions, partially offset by a provision of USD 146 million (CHF 197 million) related to Parmalat loan exposure. Due to the discontinuation of hedge accounting treatment as a result of changes in Swiss GAAP, an offsetting gain of USD 132 million (CHF 178 million) on credit default swaps hedging the Parmalat loan exposure was recorded in Fixed Income operating income. The pre-tax loss related to Parmalat, net of hedges, was USD 14 million (CHF 19 million). Non-performing loans decreased USD 595 million (CHF 874 million) from September 30, 2003, to USD 1.0 billion (CHF 1.2 billion) at December 31, 2003, driven by higher write-offs. Valuation adjustments, provisions and losses for the fourth quarter of 2003 declined by USD 619 million (CHF 945 million) compared with the fourth quarter of 2002, with substantially lower credit provisions on impaired and non-impaired loans. Valuation adjustments, provisions and losses decreased USD 1.4 billion (CHF 2.2 billion) between 2002 and 2003 due to a significantly more favorable credit environment.

The fourth quarter 2003 result included an impairment of USD 200 million (CHF 270 million), or USD 130 million (CHF 176 million) net of tax, of acquired intangible assets related to CSFB Financial Services’ high-net-worth asset management business, as well as net extraordinary income of USD 99 million (CHF 134 million), or USD 71 million (CHF 96 million) net of tax, from the sale of a 50% interest in a Japanese online broker and USD 24 million (CHF 32 million), or USD 17 million (CHF 23 million) net of tax, from the disposal of assets. While there were no exceptional items in 2003, Credit Suisse First Boston had fourth quarter 2002 pre-tax exceptional items of USD 890 million (CHF 1.4 billion), or USD 813 million (CHF 1.3 billion) net of tax, which consisted of a loss related to the sale of Pershing, a charge for the agreement in principle with US regulators involving research analyst independence and the allocation of IPO shares to corporate executive officers, a provision for private litigation, and a charge related to a cost reduction program.

Credit Suisse First Boston’s full-year 2003 effective tax rate was 25%, which was lower than the expected full year effective tax rate of 28%, due to the positive effect of the geographic mix of taxable profits. This positive effect resulted in an effective tax rate of 15% in the fourth quarter of 2003.

As noted on page 5, the results of the Credit Suisse First Boston business unit and its segments are discussed on an operating basis. For a reconciliation of operating basis business unit results to Swiss GAAP and a discussion of the material reconciling items, the purpose of the operating basis results and the reasons why management believes they provide useful information for investors, please refer to “Reconciliation of operating results to Swiss GAAP” on pages 35-39.

Institutional Securities
Institutional Securities reported a segment profit of USD 286 million (CHF 375 million) in the fourth quarter of 2003 compared with USD 348 million (CHF 480 million) in the third quarter of 2003 and USD 78 million (CHF 112 million) in the fourth quarter of 2002. The quarter-on-quarter decline was principally a result of higher personnel expenses versus the third quarter of 2003. For the full year 2003, Institutional Securities segment profit increased USD 1.0 billion (CHF 1.3 billion) to USD 1.4 billion (CHF 1.9 billion), primarily due to lower operating expenses, principally personnel expenses, and credit provisions. Fourth quarter and full year 2003 segment results include a negative net impact from changes in Swiss GAAP of USD 201 million (CHF 271 million).

Operating income of USD 2.1 billion (CHF 2.8 billion) in the fourth quarter of 2003 was flat compared with the third quarter of 2003 and increased 13% compared with the fourth quarter of 2002. Excluding the negative impact of USD 147 million (CHF 199 million) related to the Swiss GAAP changes, operating income for the fourth quarter of 2003 would have increased 6% compared with the third quarter of 2003, primarily reflecting improved Investment Banking results, and would have increased 21% compared with the fourth quarter of 2002 due to improvements in Fixed Income and lower writedowns related to the legacy portfolio offset in part by a significant fourth quarter 2002 private equity investment gain. The operating income of the Institutional Securities segment for 2003 was comparable to that of 2002. Strong results in high yield debt and structured products and improvements in the legacy portfolio were offset by the impact of difficult equity market conditions early in the year and a decline in the private equity results of the Investment Banking division.

Fourth quarter 2003 operating expenses increased 9% compared with the third quarter of 2003, largely due to increased incentive compensation. Operating expenses in the fourth quarter of 2003 increased 18% compared with the fourth quarter of 2002 as a result of higher compensation costs related to increased operating income, partially offset by lower other operating expenses. Full year 2003 operating expenses decreased 4% to USD 7.2 billion (CHF 9.7 billion), primarily as a result of decreased headcount and other cost containment efforts.

Fourth quarter 2003 valuation adjustments, provisions and losses decreased 74% and 97% from the third quarter of 2003 and fourth quarter of 2002, respectively, primarily as a result of a release of credit-related valuation allowances and lower litigation provisions partially offset by the impact of changes in Swiss GAAP.

Fixed Income ’s operating income of USD 981 million (CHF 1.3 billion) increased 20% in the fourth quarter of 2003 compared to the third quarter of 2003. Excluding the USD 153 million (CHF 206 million) impact of Swiss GAAP changes, operating income for the fourth quarter would have been flat compared with the third quarter of 2003. Operating income in credit products and European and US interest rate products for the fourth quarter of 2003 improved due to favorable market conditions, including tighter credit spreads and lower interest rates. High yield operating income remained strong, although it declined compared with the third quarter of 2003. Compared with the fourth quarter of 2002, operating income in the fourth quarter of 2003 increased 67%, or 41% excluding the Swiss GAAP changes, with improvements across all major product lines. Fixed Income’s operating income for the full year of 2003 increased 9% compared with 2002 to USD 4.6 billion (CHF 6.2 billion) and increased 6% excluding the positive impact from Swiss GAAP changes. Full-year operating income increased as a result of a low-interest-rate environment that fueled increased demand for high yield and structured products, while 2002 results included a writedown of notes issued by affiliates of National Century Financial Enterprises, Inc.

The Equity division ’s fourth quarter 2003 operating income declined 8% to USD 623 million (CHF 820 million) compared with the third quarter of 2003. Although operating income from cash trading continued to strengthen, particularly in Europe and Latin America, this increase was more than offset by declining results from derivatives activities, principally related to options and structured products, reflecting lower levels of implied volatility relative to the third quarter of 2003. Operating income in the fourth quarter of 2003 increased 14% compared with the fourth quarter of 2002, with improvements in the European and Asian cash trading businesses and the prime services business, offset in part by decreased options and structured products results. Compared with the full year 2002, operating income for the Equity division declined 7% to USD 2.6 billion (CHF 3.5 billion) for 2003, primarily as a result of a decline in the US cash business, reflecting a decline in volume, general margin compression and a decrease in equity new issuance activity during the early part of 2003, partially offset by improvements in the convertibles business.

Investment Banking ’s fourth quarter 2003 operating income, which includes private equity, increased 25% to USD 717 million (CHF 951 million) compared with the third quarter of 2003, principally due to improved equity capital markets and fixed income derivatives businesses. Investment Banking’s operating income in the fourth quarter of 2003 decreased 23% compared with the fourth quarter of 2002 as a result of a USD 309 million (CHF 473 million) gain on the sale of an investment in Swiss Re recognized during the fourth quarter of 2002, and lower mergers and acquisition fees in the fourth quarter of 2003. Investment Banking’s 2003 full year operating income declined 21% compared with 2002 to USD 2.5 billion (CHF 3.3 billion) due to declines in both equity new issuance and merger and acquisition fees, partially offset by an increase in lending results. The 2002 full year results included gains of USD 629 million (CHF 981 million) related to sales of an investment in Swiss Re. The results from and value of active private equity investments are detailed in the table on page 31.

An operating loss of USD 208 million (CHF 284 million) was reported in the fourth quarter of 2003 in the Other division. This compared to operating income of USD 69 million (CHF 95 million) in the third quarter of 2003 and was comparable with the operating loss in the fourth quarter of 2002. Operating income in the Other division includes a negative impact of USD 300 million (CHF 405 million) related to Swiss GAAP changes. The impact of Swiss GAAP changes was offset in part by gains on sales in the legacy portfolio, with the fourth quarter 2003 operating income from the legacy portfolio totaling USD 147 million (CHF 199 million) compared with USD 73 million (CHF 99 million) in the third quarter of 2003. Operating losses of USD 282 million (CHF 420 million) were recorded in the fourth quarter of 2002 on the legacy portfolio. The Other division’s operating loss for the full year 2003 was USD 35 million (CHF 48 million) compared with a full year 2002 operating loss of USD 562 million (CHF 876 million). The improvement was primarily due to a positive performance in the legacy portfolio in 2003 versus losses resulting from writedowns in the prior year. Credit Suisse First Boston continues to reduce its net exposure of non-continuing legacy investments, including unfunded commitments on the real estate portfolio, which totaled USD 2.2 billion (CHF 2.7 billion) as of December 31, 2003, down USD 248 million (CHF 519 million) from September 30, 2003, and down USD 841 million (CHF 1.5 billion) from December 31, 2002.

CSFB Financial Services
CSFB Financial Services reported a segment profit of USD 92 million (CHF 123 million) in the fourth quarter of 2003, an increase of 171% from the third quarter of 2003 and 88% from the fourth quarter of 2002. Fourth quarter 2003 results include an extraordinary gain of USD 99 million (CHF 134 million), or USD 71 million (CHF 96 million) net of tax, on the sale of a 50% interest in a Japanese online broker and an increase in litigation provisions. Operating income in the fourth quarter of 2003 was USD 307 million (CHF 408 million), up 7% compared with the third quarter of 2003 and down 34% compared with the fourth quarter of 2002. Operating expenses for the fourth quarter of 2003 increased 9% compared with the third quarter of 2003 and decreased 32% compared with the fourth quarter of 2002. Excluding Pershing, operating income increased 19% for the fourth quarter of 2003 compared with the fourth quarter of 2002, mainly as a result of higher Credit Suisse Asset Management results, while operating expenses increased 15% for the fourth quarter of 2003 compared with the fourth quarter of 2002 as a result of increased personnel expenses. Pershing’s fourth quarter 2002 operating income and operating expenses were USD 204 million (CHF 299 million) and USD 156 million (CHF 228 million), respectively. For the full year 2003, CSFB Financial Services segment profit declined USD 26 million (CHF 84 million) or 11% compared with 2002, and operating income decreased 42%. Full year 2003 operating expenses decreased 41% compared with 2002, primarily as a result of the sale of Pershing. Excluding Pershing, operating income in 2003 was flat compared with 2002 and operating expenses increased 2%. Pershing’s net results for 2003 were USD 15 million (CHF 20 million), and operating income and operating expenses for 2002 were USD 854 million (CHF 1.3 billion) and USD 661 million (CHF 1.0 billion), respectively.

Credit Suisse Asset Management ’s operating income in the fourth quarter of 2003 improved 10% from the third quarter of 2003 and 14% from the fourth quarter of 2002 as a result of an increase in assets under management. Total assets under management as of December 31, 2003, increased 1.7% compared with September 30, 2003, to USD 318.0 billion (CHF 392.9 billion), primarily due to improved global market performance and a favorable foreign exchange impact when expressed in US dollars. For the fourth quarter of 2003, Credit Suisse Asset Management reported a USD 1.8 billion (CHF 2.4 billion) net outflow of assets. Compared with 2002, operating income increased 3% in 2003, primarily as a result of a 7.1% increase in assets under management on a US dollar basis.

Private Client Services ’ operating income for the fourth quarter of 2003 increased 4% from the third quarter of 2003 as a result of improved market conditions and trading volumes. Compared with 2002, full year 2003 operating income decreased 19%, reflecting decreases in sales staff and reduced client balances. Assets under management as of December 31, 2003, were comparable to September 30, 2003, and net new assets of USD 0.6 billion (CHF 0.8 billion) were reported for the fourth quarter of 2003.


Credit Suisse First Boston business unit income statement – operating 1)
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in USD m4Q20033Q20034Q20023Q20034Q2002200320022002
Operating income2,4202,4222,3260410,78311,559(7)
Personnel expenses1,3091,1731,04412255,5816,088(8)
Other operating expenses6486197725(16)2,5432,964(14)
Operating expenses1,9571,7921,816988,1249,052(10)
Gross operating profit463630510(27)(9)2,6592,5076
Depreciation of non-current assets122891063715408481(15)
Valuation adjustments, provisions and losses3880657(53)(94)2951,679(82)
Net operating profit/(loss) before extraordinary and exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and taxes303461(253)(34)–1,956347464
Extraordinary income/(expenses), net 1231246–(50)124262(53)
Taxes 2) 3)(48)(80)134(40)–(459)25–
Net operating profit before exceptional items, acquisition-related costs and cumulative effect of change in accounting principle378382127(1)1981,621634156
Acquisition interest(47)(40)(57)18(18)(198)(323)(39)
Amortization of retention payments(5)4(97)–(95)(158)(413)(62)
Amortization of acquired intangible assets and goodwill(352)(154)(209)12968(807)(835)(3)
Exceptional items00(890)–(100)0(890)(100)
Cumulative effect of change in accounting principle2360162–4623616246
Tax impact1032169(69)(94)176487(64)
Net profit/(loss) 4)220224(795)(2)–870(1,178)–
       
Reconciliation to net operating profit      
Net profit/(loss)220224(795)(2)–870(1,178)–
Amortization of acquired intangible assets and goodwill, net of tax2621341719653657683(4)
Exceptional items, net of tax00813–(100)0813(100)
Cumulative effect of change in accounting principle, net of tax(138)0(162)–(15)(138)(162)(15)
Net operating profit34435827(4)–1,389156–

See page 25 for footnotes.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Credit Suisse First Boston business unit income statement – operating 1)
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in CHF m4Q20033Q20034Q20023Q20034Q2002200320022002
Operating income3,1843,3523,351(5)(5)14,55718,033(19)
Personnel expenses1,7251,6271,4756177,5349,496(21)
Other operating expenses8568541,1410(25)3,4344,625(26)
Operating expenses2,5812,4812,6164(1)10,96814,121(22)
Gross operating profit603871735(31)(18)3,5893,912(8)
Depreciation of non-current assets162125155305551751(27)
Valuation adjustments, provisions and losses48111993(57)(95)3982,618(85)
Net operating profit/(loss) before extraordinary and exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and taxes393635(413)(38)–2,640543386
Extraordinary income/(expenses), net 1662383–(57)168408(59)
Taxes 2) 3)(61)(111)213(45)–(620)40–
Net operating profit before exceptional items, acquisition-related costs and cumulative effect of change in accounting principle498526183(5)1722,188991121
Acquisition interest(61)(56)(80)9(24)(267)(504)(47)
Amortization of retention payments(5)3(141)–(96)(213)(644)(67)
Amortization of acquired intangible assets and goodwill(472)(211)(308)12453(1,090)(1,303)(16)
Exceptional items00(1,389)–(100)0(1,389)(100)
Cumulative effect of change in accounting principle3180254–2531825425
Tax impact1246254(74)(95)238759(69)
Net profit/(loss) 4)290308(1,227)(6)–1,174(1,836)–
       
Reconciliation to net operating profit      
Net profit/(loss)290308(1,227)(6)–1,174(1,836)–
Amortization of acquired intangible assets and goodwill, net of tax35118325292398881,066(17)
Exceptional items, net of tax001,269–(100)01,269(100)
Cumulative effect of change in accounting principle, net of tax(186)0(254)–(27)(186)(254)(27)
Net operating profit45549140(7)–1,876245–
1) The operating basis 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 and recruitment costs and expenses related to certain redeemable preferred securities classified as minority interests are presented in the operating basis business unit results based on the Group’s segment reporting principles. For a reconciliation and a discussion of the material reconciling items, please refer to “Reconciliation of operating results to Swiss GAAP”. In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated. The impact on the results of Credit Suisse First Boston is shown on page 27.
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 of CHF 15 m (USD 10 m).
3) Excluding tax impact on acquisition-related costs, exceptional items and cumulative effect of change in accounting principle.
4) Net profit/(loss) is identical on an operating and Swiss GAAP basis.


Credit Suisse First Boston business unit key information 
   12 months
based on CHF amounts4Q20033Q20034Q200220032002
Cost/income ratio 1)86.7%77.1%95.6%80.6%88.9%
Cost/income ratio – operating 2)86.1%77.7%82.7%79.1%82.5%
Return on average allocated capital 1)11.5%11.3%(35.1%)10.6%(12.3%)
Return on average allocated capital – operating 2)16.9%16.9%1.2%15.9%1.7%
Average allocated capital in CHF m10,74311,61513,76311,82914,299
Pre-tax margin 1)12.1%12.6%(54.3%)12.0%(15.3%)
Pre-tax margin – operating 2)15.5%17.4%(7.5%)16.0%(1.1%)
Personnel expenses/operating income 1)60.4%54.0%62.7%58.5%64.2%
Personnel expenses/operating income – operating 2)54.2%48.5%44.0%51.8%52.7%
      
   31.12.0330.09.0331.12.02
Number of employees (full-time equivalents)  18,34118,19522,801
1) Based on the business unit results on a Swiss GAAP basis.
2) Based on the operating basis business unit results, which exclude certain acquisition-related costs, exceptional items and cumulative effect of change in accounting principle not allocated to the segments and reflect certain other reclassifications discussed in the “Reconciliation of operating results to Swiss GAAP”.


Impact on income statement from mandatory Swiss GAAP changes 
in USD min CHF m
 Operating AccountingOperatingOperating AccountingOperating 
4Q2003basis – oldchangesbasisbasis – oldchangesbasis
Operating income2,567(147)2,4203,383(199)3,184
   of which Institutional Securities 2,260(147)2,1132,975(199)2,776
     of which Fixed Income 8281539811,0832061,289
     of which Equity 62306238200820
     of which Investment Banking 71707179510951
     of which Other 92(300)(208)121(405)(284)
   of which CSFB Financial Services 30703074080408
Valuation adjustments, provisions and losses(108)14638(149)19748
Cumulative effect of change in accounting principles02362360318318
Taxes(32)(6)(38)(42)(7)(49)
Net profit/(loss)283(63)220375(85)290
Net operating profit/(loss)545(201)344726(271)455


Overview of business unit Credit Suisse First Boston – operating 1)
in USD min CHF m
  CSFB  CSFB 
 InstitutionalFinancialCredit SuisseInstitutionalFinancialCredit Suisse
4Q2003SecuritiesServicesFirst BostonSecuritiesServicesFirst Boston
Operating income2,1133072,4202,7764083,184
Personnel expenses1,1461631,3091,5082171,725
Other operating expenses55692648734122856
Operating expenses1,7022551,9572,2423392,581
Gross operating profit4115246353469603
Depreciation of non-current assets115712215210162
Valuation adjustments, provisions and losses211738252348
Net operating profit before extraordinary items, acquisition-related costs, cumulative effect of change in accounting principle and taxes2752830335736393
Extraordinary income/(expenses), net 249912332134166
Taxes 2)(13)(35)(48)(14)(47)(61)
Net operating profit before acquisition-related costs and cumulative effect of change in accounting principle28692378375123498
Acquisition interest  (47)  (61)
Amortization of retention payments  (5)  (5)
Amortization of acquired intangible assets and goodwill  (352)  (472)
Cumulative effect of change in accounting principle  236  318
Tax impact  10  12
Net profit 3)  220  290
     
Other data:    
Average allocated capital8,0383948,39710,28550310,743
1) The operating basis 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, 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 and recruitment costs and expenses related to certain redeemable preferred securities classified as minority interests are presented in the operating basis business unit results based on the Group’s segment reporting principles. For a reconciliation and a discussion of the material reconciling items, please refer to “Reconciliation of operating results to Swiss GAAP”. In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. The impact on the results of Credit Suisse First Boston is shown on page 27.
2) Excluding tax impact on acquisition-related costs and cumulative effect of change in accounting principle.
3) Net profit is identical on an operating and Swiss GAAP basis.


Institutional Securities income statement 1)
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in USD m4Q20033Q20034Q20023Q20034Q2002200320022002
Fixed Income98181958720674,5804,1839
Equity623675548(8)142,6052,807(7)
Investment Banking71757293625(23)2,4783,140(21)
Other(208)69(208)–0(35)(562)(94)
Operating income2,1132,1351,863(1)139,6289,5681
Personnel expenses1,1461,01681713404,9755,120(3)
Other operating expenses5565426223(11)2,2212,365(6)
Operating expenses1,7021,5581,4399187,1967,485(4)
Gross operating profit411577424(29)(3)2,4322,08317
Depreciation of non-current assets11584813742381390(2)
Valuation adjustments, provisions and losses2180664(74)(97)2691,664(84)
Net operating profit/(loss) before extraordinary and exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and taxes275413(321)(33)–1,78229–
Extraordinary income/(expenses), net 241246–(90)25262(90)
Taxes 2(13)(66)153(80)–(387)116–
Net operating profit before exceptional items, acquisition-related costs and cumulative effect of change in accounting principle (segment result)28634878(18)2671,420407249
1) 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. In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated. The impact on the results is shown on page 27.
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 of USD 29 m.


Institutional Securities income statement 1)
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in CHF m4Q20033Q20034Q20023Q20034Q2002200320022002
Fixed Income1,2891,14180713606,1836,525(5)
Equity820931787(12)43,5164,379(20)
Investment Banking9517901,39420(32)3,3464,899(32)
Other(284)95(312)–(9)(48)(876)(95)
Operating income2,7762,9572,676(6)412,99714,927(13)
Personnel expenses1,5081,4111,1457326,7157,987(16)
Other operating expenses734748919(2)(20)2,9993,690(19)
Operating expenses2,2422,1592,064499,71411,677(17)
Gross operating profit534798612(33)(13)3,2833,2501
Depreciation of non-current assets1521171173030514609(16)
Valuation adjustments, provisions and losses251111,006(77)(98)3632,595(86)
Net operating profit/(loss) before extraordinary and exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and taxes357570(511)(37)–2,40646–
Extraordinary income/(expenses), net 322383–(92)34408(92)
Taxes 2)(14)(92)240(85)–(523)182–
Net operating profit before exceptional items, acquisition-related costs and cumulative effect of change in accounting principle (segment result)375480112(22)2351,917636201
1) 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. In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated. The impact on the results is shown on page 27.
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 of CHF 42 m.


Institutional Securities balance sheet information 
in CHF m31.12.0330.09.0331.12.02
Total assets 588,783625,767573,628
Total assets in USD m476,477473,027412,623
Due from banks194,817233,811193,944
   of which securities lending and reverse
    repurchase agreements		 143,196168,498152,221
Due from customers113,823111,211114,191
   of which securities lending and reverse
    repurchase agreements		 62,25242,87656,851
Mortgages12,23414,59914,825
Securities and precious metals trading portfolios186,130179,442157,320
Due to banks292,550313,915281,510
   of which securities borrowing and repurchase
    agreements		 104,855113,590112,733
Due to customers, other111,844115,317109,980
   of which securities borrowing and repurchase
    agreements		 71,84360,54466,864


Institutional Securities key information 
   12 months
based on CHF amounts4Q20033Q20034Q200220032002
Cost/income ratio 1)86.2%77.0%81.5%78.7%82.3%
Average allocated capital in CHF m10,28511,17313,33711,41013,706
Pre-tax margin 1)14.0%19.3%(4.8%)18.8%3.0%
Personnel expenses/operating income 1)54.3%47.7%42.8%51.7%53.5%
      
   31.12.0330.09.0331.12.02
Number of employees (full-time equivalents)  15,73915,57816,018
1) 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.


Active private equity investments 
USD m CHF m
  4Q2003 3Q2003 4Q2002 4Q2003 3Q2003 4Q2002
Net gains (realized and unrealized gains and losses) 31 8 38 41 12 60
Management and performance fees 29 50 50 38 69 73
             
USD bn CHF bn
  31.12.03 30.09.03 31.12.02 31.12.03 30.09.03 31.12.02
Book value 1.0 0.9 1.0 1.2 1.2 1.3
Fair value 1.0 1.0 1.0 1.3 1.3 1.4


CSFB Financial Services income statement 1)
       Change Change     Change 
       in % from in % from     in % from 
          12 months  
in USD m4Q2003 3Q2003 4Q2002 3Q2003 4Q2002 2003 2002 2002 
Net interest income10 9 43 11 (77) 39 203 (81) 
Net commission and service fee income 264 245 407 8 (35) 976 1,650 (41) 
Net trading income33 17 19 94 74 104 107 (3) 
Other ordinary income 0 16 (6) (100) (100) 36 31 16 
Operating income307 287 463 7 (34) 1,155 1,991 (42) 
Personnel expenses163 157 227 4 (28) 606 968 (37) 
Other operating expenses92 77 150 19 (39) 322 599 (46) 
Operating expenses255 234 377 9 (32) 928 1,567 (41) 
Gross operating profit52 53 86 (2) (40) 227 424 (46) 
Depreciation of non-current assets7 5 25 40 (72) 27 91 (70) 
Valuation adjustments, provisions and losses17 0 (7) – – 26 15 73 
Net operating profit before extraordinary and exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and taxes28 48 68 (42) (59) 174 318 (45) 
Extraordinary income/(expenses), net 99 0 0 – – 99 0 – 
Taxes 2)(35) (14) (19) 150 84 (72) (91) (21) 
Net operating profit before exceptional items, acquisition-related costs and cumulative effect of change in accounting principle (segment result)92 34 49 171 88 201 227 (11) 
1) 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. In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated. The impact on the results is shown on page 27.
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 of USD –19 m.


CSFB Financial Services income statement 1)
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in CHF m4Q20033Q20034Q20023Q20034Q2002200320022002
Net interest income1413628(77)54317(83)
Net commission and service fee income 3503375994(42)1,3182,575(49)
Net trading income4424258376140166(16)
Other ordinary income 021(11)(100)(100)48480
Operating income4083956753(40)1,5603,106(50)
Personnel expenses2172163300(34)8191,509(46)
Other operating expenses12210622215(45)435935(53)
Operating expenses3393225525(39)1,2542,444(49)
Gross operating profit6973123(5)(44)306662(54)
Depreciation of non-current assets1083825(74)37142(74)
Valuation adjustments, provisions and losses230(13)––352352
Net operating profit before extraordinary and exceptional items, acquisition-related costs, cumulative effect of change in accounting principle and taxes366598(45)(63)234497(53)
Extraordinary income/(expenses), net 13400––1340–
Taxes 2)(47)(19)(27)14774(97)(142)(32)
Net operating profit before exceptional items, acquisition-related costs and cumulative effect of change in accounting principle (segment result)123467116773271355(24)
1) 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. In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated. The impact on the results is shown on page 27.
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 of CHF –27 m.


CSFB Financial Services key information 
   12 months
based on CHF amounts4Q20033Q20034Q200220032002
Cost/income ratio 1)85.5%83.5%87.4%82.8%83.3%
Average allocated capital in CHF m503495701529939
Pre-tax margin 1)41.7%16.5%14.5%23.6%16.0%
Personnel expenses/operating income 1)53.2%54.7%48.9%52.5%48.6%
Net new assets Credit Suisse Asset Management in CHF bn (discretionary) 2)(2.4)(5.5)(8.6)(14.8)(31.3)
Net new assets Private Client Services in CHF bn0.8(1.5)2.7(0.9)8.0
Growth in assets under management 2)(5.6%)(1.5%)(2.8%)(5.8%)(24.2%)
Growth in discretionary assets under management – Credit Suisse Asset Management 2)(0.5%)(1.2%)(4.6%)(0.2%)(23.5%)
   of which net new assets 2) (0.9%)(1.9%)(3.0%)(5.3%)(8.6%)
   of which market movement and structural effects 0.4%0.7%(1.6%)5.1%(14.9%)
Growth in net new assets Private Client Services1.2%(2.3%)3.9%(1.3%)8.6%
      
   31.12.0330.09.0331.12.02
Assets under management in CHF bn 2)  454.1481.2482.2
   of which Credit Suisse Asset Management 2)   392.9413.7412.8
   of which Private Client Services   61.265.167.5
Discretionary assets under management in CHF bn 2)  295.7295.9297.0
   of which Credit Suisse Asset Management 2)   278.1279.5278.7
   of which mutual funds distributed   110.0112.6106.5
   of which Private Client Services   17.616.418.3
Advisory assets under management in CHF bn 2)  158.4185.3185.2
Number of employees (full-time equivalents)  2,6022,6176,783
1) 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.
2) Credit Suisse Asset Management figures for assets under management and net new assets include assets managed on behalf of other entities within Credit Suisse Group. This differs from the presentation in the overview of Credit Suisse Group, where such assets are eliminated.


RECONCILIATION OF OPERATING RESULTS TO SWISS GAAP

Introduction
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. For a description of these reporting principles, please refer to “Operating and Financial Review – Reporting Principles” in the Group’s 2002 Annual Report. The operating basis business unit results reflect the results of the separate segments constituting the respective business units and certain acquisition-related costs that are not allocated to the segments. The Group’s consolidated results reflect the operating basis business unit results adjusted for certain reclassifications associated with the business units and consolidation adjustments in the Corporate Center in accordance with Swiss GAAP.

The tables below reconcile the operating basis business unit results to Swiss GAAP. The “Reclassifications” columns include acquisition-related costs and reclassifications related to management reporting policies as described below. Acquisition-related costs are excluded from the operating basis business unit results because management believes that this enables them and investors to better assess the results and key performance indicators of the business. The operating basis business unit results in management’s view provide a more useful indication of the financial performance of the operating business as they reflect the core businesses’ operating performance for the periods under review unaffected by the amortization of costs related to historical acquisitions.

Credit Suisse Financial Services business unit
The Credit Suisse Financial Services operating basis column reflects the results of the respective segments, excluding amortization of acquired intangible assets and goodwill, which are reflected in the Reclassifications column. The Credit Suisse Financial Services operating basis business unit results are also adjusted for credit-related valuation adjustments, resulting from the difference between the statistical credit provisions recorded by its banking segments and actual credit provisions on a Swiss GAAP basis. In addition, gains or losses related to divestitures and sales of investments within the insurance business are recorded as operating income at the insurance segments and the business unit level and reclassified to extraordinary income/expenses in the reconciliation in accordance with Swiss GAAP.

Credit Suisse First Boston business unit
The Credit Suisse First Boston operating basis column reflects the results of the respective segments, excluding acquisition interest, amortization of retention payments and amortization of acquired intangible assets and goodwill, which are reflected in the reclassifications column. The Credit Suisse First Boston operating basis business unit results also deduct brokerage, execution and clearing expenses from other operating expenses (reclassified as a reduction in operating income in the consolidated results); deduct from other operating expenses contractor and certain staff recruitment costs (reclassified as an addition to personnel expenses in the consolidated results); and add to operating income expenses related to certain redeemable preferred securities (reclassified as minority interests in the consolidated results). This presentation brings Credit Suisse First Boston in line with its US competitors in the investment banking industry and facilitates comparison to its peers, which management believes is useful for investors. Swiss GAAP does not permit brokerage, execution or clearing expenses, contractor costs and certain staff recruitment costs to be reported as part of other operating expenses. The presentation of redeemable preferred securities of Credit Suisse First Boston issued by consolidated special purpose entities as an expense reducing its operating income is intended to present more fairly the operating results from its core businesses because they reflect the operating performance for the periods under review unaffected by the funding costs related to historical acquisitions.


Credit Suisse Financial ServicesCredit Suisse First Boston  
  Re-Swiss Re-Swiss Credit
 Operatingclassifi-GAAPOperatingclassifi-GAAPCorporateSuisse
4Q2003, in CHF mbasiscationsbasisbasiscationsbasisCenter1)Group
Operating income2,801262)2,8273,184(231)3) 4) 5)2,953(59)5,721
Personnel expenses1,202 1,2021,725603) 4)1,785553,042
Other operating expenses775 775856(244)4)612(6)1,381
Operating expenses1,977 1,9772,581 2,397494,423
Gross operating profit824 850603 556(108)1,298
Depreciation of non-current assets277 277162 16282521
Amortization of acquired intangible assets and goodwill–2525–4723)472(3)494
Valuation adjustments, provisions and losses1131196)23248 482282
Profit before extraordinary items, cumulative effect of change in accounting principle and taxes434 316393 (126)(189)1
Extraordinary income/(expenses), net 109(26)2)83166 16643292
Cumulative effect of change in accounting principle–11–3183180319
Taxes60729636(61)12(49)63650
Net profit before minority interests 1,150 1,036498 309(83)1,262
Minority interests(59) (59)0(19)5)(19)(18)(96)
Net profit1,091 977498 290(101)1,166
      
Reconciliation to business unit results     
Acquisition interest  (61)61 
Amortization of retention payments  (5)5 
Amortization of acquired intangible assets and goodwill(25)25(472)472 
Cumulative effect of change in accounting principle1(1)318(318) 
Tax impact0012(12) 
Business unit result 1,067  290    
1) Corporate Center includes the parent company operations, including Group financing initiatives, centrally managed, own-use real estate, consisting mainly of bank premises within Switzerland and consolidation adjustments.
2) Reflects net gains/(losses) from sales of investments and other reclassifications within the insurance business of CHF -26 m reclassified from operating income to extraordinary income/(expenses).
3) Reflects acquisition interest of CHF 61 m allocated to operating income, amortization of retention payments of CHF 5 m allocated to personnel expenses and amortization of acquired intangible assets and goodwill of CHF 472 m.
4) Reflects brokerage, execution and clearing expenses of CHF 189 m reclassified from other operating expenses to a reduction of operating income and contractor costs of CHF 32 m and staff recruitment costs of CHF 23 m reclassified from other operating expenses to personnel expenses.
5) Reflects expenses of CHF 19 m related to certain redeemable preferred securities reclassified from operating income to minority interests.
6) Reflects an increase/(decrease) in credit-related valuation adjustments resulting from the difference between statistical and actual credit provisions of CHF 119 m.


Credit Suisse Financial ServicesCredit Suisse First Boston  
  Re-Swiss Re-Swiss Credit
 Operatingclassifi-GAAPOperatingclassifi-GAAPCorporateSuisse
3Q2003, in CHF mbasiscationsbasisbasiscationsbasisCenter1)Group
Operating income4,548(1,161)2)3,3873,352(239)3) 4) 5)3,113316,531
Personnel expenses1,385 1,3851,627543) 4)1,681593,125
Other operating expenses732 732854(260)4)594(64)1,262
Operating expenses2,117 2,1172,481 2,275(5)4,387
Gross operating profit2,431 1,270871 838362,144
Depreciation of non-current assets279 279125 12567471
Amortization of acquired intangible assets and goodwill–2525–2113)2112238
Valuation adjustments, provisions and losses90146)104111 1110215
Profit before extraordinary items and taxes2,062 862635 391(33)1,220
Extraordinary income/(expenses), net 31,1612)1,1642 221,168
Taxes(260)4(256)(111)46(65)4(317)
Net profit before minority interests 1,805 1,770526 328(27)2,071
Minority interests8 80(20)5)(20)(14)(26)
Net profit1,813 1,778526 308(41)2,045
      
Reconciliation to business unit results     
Acquisition interest  (56)56 
Amortization of retention payments  3(3) 
Amortization of acquired intangible assets and goodwill(25)25(211)211 
Tax impact1(1)46(46) 
Business unit result1,789  308    
1) Corporate Center includes the parent company operations, including Group financing initiatives, centrally managed, own-use real estate, consisting mainly of bank premises within Switzerland and consolidation adjustments.
2) Reflects net gains/(losses) from sales of investments and other reclassifications within the insurance business of CHF 1,161 m reclassified from operating income to extraordinary income/(expenses).
3) Reflects acquisition interest of CHF 56 m allocated to operating income, amortization of retention payments of CHF -3 m allocated to personnel expenses and amortization of acquired intangible assets and goodwill of CHF 211 m.
4) Reflects brokerage, execution and clearing expenses of CHF 203 m reclassified from other operating expenses to a reduction of operating income and contractor costs of CHF 40 m and staff recruitment costs of CHF 17 m reclassified from other operating expenses to personnel expenses.
5) Reflects expenses of CHF 20 m related to certain redeemable preferred securities reclassified from operating income to minority interests.
6) Reflects an increase/(decrease) in credit-related valuation adjustments resulting from the difference between statistical and actual credit provisions of CHF 14 m.


Credit Suisse Financial ServicesCredit Suisse First Boston  
  Re-Swiss Re-Swiss Credit
 Operatingclassifi-GAAPOperatingclassifi-GAAPCorporateSuisse
4Q2002, in CHF mbasiscationsbasisbasiscationsbasisCenter1)Group
Operating income3,566622)3,6283,351(269)3) 4) 5)3,082(315)6,395
Personnel expenses1,44436)1,4471,4754583) 4) 7)1,933843,464
Other operating expenses934(1)6)9331,141(283)4)858(144)1,647
Operating expenses2,378 2,3802,616 2,791(60)5,111
Gross operating profit1,188 1,248735 291(255)1,284
Depreciation of non-current assets319166)335155 155144634
Amortization of acquired intangible assets and goodwill–926)92–3083)3083403
Valuation adjustments, provisions and losses105858)1909939847)1,9772572,424
Profit/(loss) before extraordinary items, cumulative effect of change in accounting principle and taxes764 631(413) (2,149)(659)(2,177)
Extraordinary income/(expenses), net 24(62)2)(38)383(163)7)220187369
Cumulative effect of change in accounting principle–266266–2542540520
Taxes(325)35(290)213254467141318
Net profit/(loss) before minority interests 463 569183 (1,208)(331)(970)
Minority interests51 510(19)5)(19)(12)20
Net profit/(loss)514 620183 (1,227)(343)(950)
      
Reconciliation to business unit results     
Acquisition interest  (80)80 
Amortization of retention payments  (141)141 
Amortization of acquired intangible assets and goodwill(37)(37)(308)308 
Exceptional items(73)(73)(1,389)(1,389) 
Cumulative effect of change in accounting principle266(266)254(254) 
Tax impact14(14)254(254) 
Business unit result684  (1,227)    
1) Corporate Center includes the parent company operations, including Group financing initiatives, centrally managed, own-use real estate, consisting mainly of bank premises within Switzerland and consolidation adjustments.
2) Reflects net gains/(losses) from sales of investments within the insurance business of CHF -62 m reclassified from operating income to extraordinary income/(expenses).
3) Reflects acquisition interest of CHF 80 m allocated to operating income, amortization of retention payments of CHF 141 m allocated to personnel expenses and amortization of acquired intangible assets and goodwill of CHF 308 m.
4) Reflects brokerage, execution and clearing expenses of CHF 208 m reclassified from other operating expenses to a reduction of operating income and contractor costs of CHF 49 m and staff recruitment costs of CHF 26 m reclassified from other operating expenses to personnel expenses.
5) Reflects expenses of CHF 19 m related to certain redeemable preferred securities reclassified from operating income to minority interests.
6) Reflects exceptional items allocated to personnel expenses of CHF 3 m, to other operating expenses of CHF –1 m, to depreciation of non-current assets of CHF 16 m and to amortization of acquired intangible assets and goodwill of CHF 55 m.
7) Reflects exceptional items allocated to personnel expenses of CHF 242 m, to valuation adjustments, provisions and losses of CHF 984 m and to extraordinary expenses of CHF 163 m.
8) Reflects an increase/(decrease) in credit-related valuation adjustments resulting from the difference between statistical and actual credit provisions of CHF 85 m.


Credit Suisse Financial ServicesCredit Suisse First Boston  
  Re-Swiss Re-Swiss Credit  
 Operatingclassifi-GAAPOperatingclassifi-GAAPCorporateSuisse 
12 months 2003, in CHF mbasiscationsbasisbasiscationsbasisCenter1)Group 
Operating income14,395(1,077)2)13,31814,557(962)3) 4) 5)13,595(88)26,825 
Personnel expenses5,434 5,4347,5344253) 4)7,95923713,630 
Other operating expenses3,067 3,0673,434(984)4)2,450(246)5,271 
Operating expenses8,501 8,50110,968 10,409(9)18,901 
Gross operating profit5,894 4,8173,589 3,186(79)7,924 
Depreciation of non-current assets972 972551 5513641,887 
Amortization of acquired intangible assets and goodwill–102102–1,0903)1,090(5)1,187 
Valuation adjustments, provisions and losses374826)456398 3987861 
Profit before extraordinary items, cumulative effect of change in accounting principle and taxes4,548 3,2872,640 1,147(445)3,989 
Extraordinary income/(expenses), net 1271,0772)1,204168 1681001,472 
Cumulative effect of change in accounting principle–11–3183180319 
Taxes(135)22(113)(620)238(382)131(364) 
Net profit before minority interests 4,540 4,3792,188 1,251(214)5,416 
Minority interests(69) (69)0(77)5)(77)(61)(207) 
Net profit4,471 4,3102,188 1,174(275)5,209 
      
Reconciliation to business unit results     
Acquisition interest  (267)267 
Amortization of retention payments  (213)213 
Amortization of acquired intangible assets and goodwill(102)102(1,090)1,090 
Cumulative effect of change in accounting principle1(1)318(318) 
Tax impact2(2)238(238) 
Business unit result4,372  1,174    
1) Corporate Center includes the parent company operations, including Group financing initiatives, centrally managed, own-use real estate, consisting mainly of bank premises within Switzerland and consolidation adjustments.
2) Reflects net gains/(losses) from sales of investments and other reclassifications within the insurance business of CHF 1,077 m reclassified from operating income to extraordinary income/(expenses).
3) Reflects acquisition interest of CHF 267 m allocated to operating income, amortization of retention payments of CHF 213 m allocated to personnel expenses and amortization of acquired intangible assets and goodwill of CHF 1,090 m.
4) Reflects brokerage, execution and clearing expenses of CHF 772 m reclassified from other operating expenses to a reduction of operating income and contractor costs of CHF 151 m and staff recruitment costs of CHF 61 m reclassified from other operating expenses to personnel expenses.
5) Reflects expenses of CHF 77 m related to certain redeemable preferred securities reclassified from operating income to minority interests.
6) Reflects an increase/(decrease) in credit-related valuation adjustments resulting from the difference between statistical and actual credit provisions of CHF 82 m.


Credit Suisse Financial ServicesCredit Suisse First Boston  
  Re-Swiss Re-Swiss Credit  
 Operatingclassifi-GAAPOperatingclassifi-GAAPCorporateSuisse 
12 months 2002, in CHF mbasiscationsbasisbasiscationsbasisCenter1)Group
Operating income12,1521322)12,28418,033(1,313)3) 4) 5)16,720(966)28,038
Personnel expenses5,944506)5,9949,4961,2443) 4) 7)10,74017616,910
Other operating expenses3,625386)3,6634,625(1,246)4)3,379(423)6,619
Operating expenses9,569 9,65714,121 14,119(247)23,529
Gross operating profit2,583 2,6273,912 2,601(719)4,509
Depreciation of non-current assets1,006456)1,051751 7513712,173
Amortization of acquired intangible assets and goodwill–1986)198–1,3033)1,303(2)1,499
Valuation adjustments, provisions and losses3901208)5102,6189847)3,6023184,430
Profit/(loss) before extraordinary items, cumulative effect of change in accounting principle and taxes1,187 868543 (3,055)(1,406)(3,593)
Extraordinary income/(expenses), net 48(132)2)(84)408(163)7)245182343
Cumulative effect of change in accounting principle–266266–2542540520
Taxes(1,517)45(1,472)4075979977(596)
Net profit/(loss) before minority interests (282) (422)991 (1,757)(1,147)(3,326)
Minority interests151 1510(79)5)(79)(55)17
Net profit/(loss)(131) (271)991 (1,836)(1,202)(3,309)
      
Reconciliation to business unit results     
Acquisition interest  (504)504 
Amortization of retention payments  (644)644 
Amortization of acquired intangible assets and goodwill(139)139(1,303)1,303 
Exceptional items(192)192(1,389)1,389 
Cumulative effect of change in accounting principle266(266)254(254) 
Tax impact16(16)759(759) 
Business unit result(180)  (1,836)    
1) Corporate Center includes the parent company operations, including Group financing initiatives, centrally managed, own-use real estate, consisting mainly of bank premises within Switzerland and consolidation adjustments.
2) Reflects net gains/(losses) from sales of investments within the insurance business of CHF -132 m reclassified from operating income to extraordinary income/(expenses).
3) Reflects acquisition interest of CHF 504 m allocated to operating income, amortization of retention payments of CHF 644 m allocated to personnel expenses and amortization of acquired intangible assets and goodwill of CHF 1,303 m.
4) Reflects brokerage, execution and clearing expenses of CHF 888 m reclassified from other operating expenses to a reduction of operating income and contractor costs of CHF 272 m and staff recruitment costs of CHF 86 m reclassified from other operating expenses to personnel expenses.
5) Reflects expenses of CHF 79 m related to certain redeemable preferred securities reclassified from operating income to minority interests.
6) Reflects exceptional items allocated to personnel expenses of CHF 50 m, to other operating expenses of CHF 38 m, to depreciation of non-current assets of CHF 45 m and to amortization of acquired intangible assets and goodwill of CHF 59 m.
7) Reflects exceptional items allocated to personnel expenses of CHF 242 m, to valuation adjustments, provisions and losses of CHF 984 m and to extraordinary expenses of CHF 163 m.
8) Reflects an increase/(decrease) in credit-related valuation adjustments resulting from the difference between statistical and actual credit provisions of CHF 120 m.


CONSOLIDATED RESULTS | CREDIT SUISSE GROUP


Consolidated income statement 1)
    ChangeChange  Change
    in % fromin % from  in % from
     12 months 
in CHF m4Q20033Q20034Q20023Q20034Q2002200320022002
Interest and discount income3,0353,2274,119(6)(26)13,11617,630(26)
Interest and dividend income from trading portfolios2,7472,4882)2,20410259,7979,957(2)
Interest and dividend income from financial investments198181156927726733(1)
Interest expenses(4,081)(3,884)2)(4,553)5(10)(16,215)(20,284)(20)
Net interest income1,8992,0121,926(6)(1)7,4248,036(8)
Commission income from lending activities2392243137(24)9118724
Commission income from securities and investment transactions2,7812,9212,899(5)(4)10,89813,658(20)
Commission income from other services228277334(18)(32)1,0041,649(39)
Commission expenses(305)(199)(246)5324(873)(845)3
Net commission and service fee income 2,9433,2233,300(9)(11)11,94015,334(22)
Net trading income(157)72109––2,5152,25412
Premiums earned, net6,7047,1268,309(6)(19)31,89134,811(8)
Claims incurred and actuarial provisions(7,874)(7,207)(6,426)923(32,908)(28,791)14
Commission expenses, net(463)(619)(549)(25)(16)(2,295)(2,276)1
Investment income from the insurance business2,4142,1675411–8,436(432)–
Net income from the insurance business7811,4671,388(47)(44)5,1243,31255
Income from the sale of financial investments16110249058(67)4851,385(65)
Income from investments in associates158(18)88–6465(2)
Income from other non-consolidated participations53367672427(11)
Real estate income374130(10)23166194(14)
Sundry ordinary income20021986(9)1338668166
Sundry ordinary expenses 3)(163)(616)(919)(74)(82)(1,783)(3,385)(47)
Other ordinary income/(expenses), net255(243)(328)––(178)(898)(80)
Operating income5,7216,5316,395(12)(11)26,82528,038(4)
Personnel expenses3,0423,1253,464(3)(12)13,63016,910(19)
Other operating expenses1,3811,2621,6479(16)5,2716,619(20)
Operating expenses4,4234,3875,1111(13)18,90123,529(20)
Gross operating profit1,2982,1441,284(39)17,9244,50976
Depreciation of non-current assets 4)52147163411(18)1,8872,173(13)
Amortization of acquired intangible assets35084165317112593693(14)
Amortization of goodwill144154238(6)(39)594806(26)
Valuation adjustments, provisions and losses from the banking business 3)2822152,42431(88)8614,430(81)
Depreciation, valuation adjustments and losses1,2979243,46140(63)3,9358,102(51)
Profit/(loss) before extraordinary items, cumulative effect of change in accounting principle and taxes 11,220(2,177)(100)–3,989(3,593)–
Extraordinary income3501,568626(78)(44)2,047746174
Extraordinary expenses(58)(400)(257)(86)(77)(575)(403)43
Cumulative effect of change in accounting principle3190520–(39)319520(39)
Taxes 5)650(317)318–104(364)(596)(39)
Net profit/(loss) before minority interests 1,2622,071(970)(39)–5,416(3,326)–
Minority interests(96)(26)20269–(207)17–
Net profit/(loss)1,1662,045(950)(43)–5,209(3,309)–
1) In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated. The overall impact of these changes for Credit Suisse Group in 4Q2003 and for the 12 months 2003 was a decrease of CHF 189 m in net profit. For additional discussion see page 8.
2) Restated.
3) Effective in the first quarter 2003, declines in value of debt securities and loans available for sale due to deterioration in creditworthiness are reported in “Sundry ordinary expenses”. In previous years they were recorded in “Valuation adjustments, provisions and losses from the banking business”.
4) Includes amortization of Present Value of Future Profits (PVFP) from the insurance business.
5) 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 of CHF –197 m.


Consolidated balance sheet 
    ChangeChange
    in % fromin % from
in CHF m31.12.0330.09.0331.12.0230.09.0331.12.02
Assets    
Cash and other liquid assets3,0263,6182,551(16)19
Money market papers16,35517,85125,125(8)(35)
Due from banks192,833227,853195,778(15)(2)
Receivables from the insurance business9,7258,87012,29010(21)
Due from customers170,486168,935182,1431(6)
Mortgages98,21499,73294,896(2)3
Securities and precious metals trading portfolios200,057196,314173,133216
Financial investments from the banking business42,14140,46633,394426
Investments from the insurance business129,395127,707128,45011
Non-consolidated participations1,4061,5681,792(10)(22)
Tangible fixed assets6,9227,1798,152(4)(15)
Intangible assets13,46714,65418,359(8)(27)
Accrued income and prepaid expenses12,58212,32213,8822(9)
Other assets65,51267,48665,711(3)(0)
Total assets962,121994,555955,656(3)1
Subordinated assets6,7046,7435,479(1)22
Receivables due from non-consolidated participations604942728(36)(17)
     
Liabilities and shareholders' equity    
Money market papers issued27,70036,98622,178(25)25
Due to banks296,487313,363287,884(5)3
Payables from the insurance business10,9398,37610,218317
Due to customers in savings and investment deposits43,74742,79439,739210
Due to customers, other252,555256,786258,244(2)(2)
Medium-term notes (cash bonds)1,8031,9382,599(7)(31)
Bonds and mortgage-backed bonds81,88782,02181,83900
Accrued expenses and deferred income 1)17,01818,88019,641(10)(13)
Other liabilities56,25257,82756,070(3)0
Valuation adjustments and provisions 1)7,4168,8039,379(16)(21)
Technical provisions for the insurance business131,325131,908136,4710(4)
Total liabilities927,129959,682924,262(3)0
Reserve for general banking risks1,7391,7331,73900
Share capital1,1951,1951,19000
Capital reserve20,82420,72020,71011
Revaluation reserves for the insurance business8851,1861,504(25)(41)
Reserve for own shares–1,9501,950(100)(100)
Own shares, net(498)––––
Retained earnings2,5971,0754,732142(45)
Minority interests3,0412,9712,87826
Net profit/(loss)5,2094,043(3,309)29–
Total shareholders' equity34,99234,87331,394011
Total liabilities and shareholders' equity962,121994,555955,656(3)1
Subordinated liabilities18,88519,38620,932(3)(10)
Liabilities due to non-consolidated participations1,1862,0901,164(43)2
1) In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. Deferred taxes are included within “Valuation allowance and provisions”. Current taxes are included within “Accrued expenses and deferred income”. Prior periods have been reclassified to conform to the current presentation.


Off-balance sheet and fiduciary business 
in CHF m31.12.0331.12.02
Credit guarantees in form of bills of exchange and other guarantees 1)30,08227,745
Bid bonds, delivery and performance bonds, letters of indemnity, other performance-related guarantees4,8414,680
Irrevocable commitments in respect of documentary credits3,2123,242
Other contingent liabilities2,7013,437
Contingent liabilities40,83639,104
Irrevocable commitments 85,29692,950
Liabilities for calls on shares and other equity instruments4243
Confirmed credits2332
Total off-balance sheet126,197132,129
Fiduciary transactions 
Fiduciary placements with third-party institutions25,78830,726
Fiduciary loans and other fiduciary transactions5,6756,977
Securities lending transactions as commission agent 2)14,656–

At 31.12.03, market value guarantees reported as derivatives totaled CHF 216.7 bn (31.12.02: CHF 175.3 bn) (nominal value). The associated replacement value reported on-balance sheet totaled CHF 10.7 bn (31.12.02: CHF 11.5 bn).
1) Including credit guarantees for securities lent as arranger: 31.12.03: CHF 21.9 bn (31.12.02: CHF 20.7 bn).
2) In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated.


Derivative instruments 1)
       
Trading (all non hedging)Hedging
  PositiveNegative PositiveNegative
 NotionalreplacementreplacementNotionalreplacementreplacement
As of 31.12.03, in CHF bnamountvaluevalueamountvaluevalue
Interest rate products4,499.724.724.46,836.2133.5131.7
Foreign exchange products1,500.745.645.525.72.00.1
Precious metals products13.61.23.50.00.00.0
Equity/index-related products405.115.214.80.20.00.0
Other products274.14.25.90.50.00.0
Total derivative instruments6,693.290.994.16,862.6135.5131.8
       
31.12.0331.12.02
   Positive Negative PositiveNegative
 Notional  replacement replacementNotional replacementreplacement
in CHF bnamountvaluevalueamountvaluevalue
Total derivative instruments (trading and hedging) before netting13,555.8226.4225.912,570.6238.0237.6
Total derivative instruments (trading and hedging) after netting 2)–55.855.6–54.855.2
1) In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated.
2) Positive replacement values of CHF 0.5 bn (31.12.02: CHF 1.0 bn) and negative replacement value of CHF 0.3 bn (31.12.02: CHF 0.2 bn) from the insurance business deducted as included in the investments from the insurance business.


Currency translation rates  
Average rate year-to-date Closing rate used in the
used in the income statementbalance sheet as of
in CHF 4Q20033Q20034Q200231.12.0330.09.0331.12.02
1 USD 1.351.361.561.23571.32291.3902
1 EUR1.521.511.471.55901.53821.4550
1 GBP2.202.192.332.20232.20892.2357
100 JPY1.161.151.241.15561.19231.1722


Income statement of the banking and insurance business 1)
Banking business    
(incl. Corporate Center)Insurance business2)Credit Suisse Group
12 months, in CHF m200320022003200220032002
Net interest income7,4207,984––7,4248,036
Net commission and service fee income11,91415,350––11,94015,334
Net trading income2,5661,946––2,5152,254
Net income from the insurance business  3)––5,1253,6415,1243,312
Other ordinary income/(expenses), net661(296)(860)(602)(178)(898)
Operating income22,56124,9844,2653,03926,82528,038
Personnel expenses11,73514,6271,8952,28313,63016,910
Other operating expenses3,9905,1181,2851,4995,2716,619
Operating expenses15,72519,7453,1803,78218,90123,529
Gross operating profit/(loss)6,8365,2391,085(743)7,9244,509
Depreciation of non-current assets1,2371,5156526571,8872,173
Amortization of acquired intangible assets59369300593693
Amortization of goodwill 5327406266594806
Valuation adjustments, provisions and losses from the banking business8614,430––8614,430
Depreciation, valuation adjustments and losses3,2237,3787147233,9358,102
Profit/(loss) before extraordinary items, cumulative effect of change in accounting principle and taxes3,613(2,139)371(1,466)3,989(3,593)
Extraordinary income4416811,606652,047746
Extraordinary expenses(46)(206)(529)(197)(575)(403)
Cumulative effect of change in accounting principle319320–200319520
Taxes(910)289547(885)(364)(596)
Net profit/(loss) before minority interests3,417(1,055)1,995(2,283)5,416(3,326)
Minority interests(156)(151)(51)168(207)17
Net profit/(loss)3,261(1,206)1,944(2,115)5,209(3,309)
1) Income statements for the banking and insurance business are presented on a stand-alone basis.
2) Represents “Winterthur” Swiss Insurance Company.
3) Insurance business: expenses due to the handling of both claims and investments are allocated to the income from the insurance business, of which CHF 508 m (12 months 2002: CHF 615 m) are related to personnel expenses and CHF 444 m (12 months 2002: CHF 469 m) to other operating expenses.


Statement of shareholders' equity 1)
12 months
in CHF m20032002
At beginning of financial year31,39438,921
Reclassification for own shares 2)(1,019)–
Dividends paid(116)0
Dividends paid to minority interests(160)(169)
Repayment out of share capital0(2,379)
Capital increases, par value and capital surplus201,448
Cancellation of repurchased shares0(542)
Change in scope of consolidation115(167)
Purchase of own shares (cost) 2)(7,009)–
Sales of own shares (cost) 2)6,521–
Realized gains on own shares, net 2)99–
Accrual for earned share compensation 2)1,009–
Foreign currency translation impact(654)(2,626)
Change in revaluation reserves for the insurance business, net(624)814
Release of reserve for general banking risks0(580)
Minority interests in net profit/(loss)207(17)
Net profit/(loss)5,209(3,309)
At end of financial year34,99231,394
1) In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated. The overall impact of these changes, primarily accounting for own shares and derivatives, on shareholders’ equity as of December 31, 2003 was a decrease of CHF 491 m. For additional information see page 8.
2) As of January 1, 2003, own shares are no longer included in shareholders' equity. The impact on shareholders’ equity as of December 31, 2003 was a decrease of CHF 396 m.


LOANS


Due from banks 
in CHF m31.12.0331.12.02
Due from banks, gross192,844195,866
Valuation allowance(11)(88)
Total due from banks, net192,833195,778


Due from customers and mortgages 
in CHF m31.12.0331.12.02
Due from customers, gross 1)173,636187,617
Valuation allowance(3,150)(5,474)
Due from customers, net170,486182,143
Mortgages, gross 1)99,56997,037
Valuation allowance(1,355)(2,141)
Mortgages, net98,21494,896
Total due from customers and mortgages, net268,700277,039
1) Effective 1Q2003, loans held for sale are presented net of the related loan valuation allowances.


Due from customers and mortgages by sector 
in CHF m31.12.0331.12.02
Financial services40,07643,553
Real estate companies15,46816,472
Other services including technology companies10,74215,316
Manufacturing12,31813,273
Wholesale and retail trade9,51811,165
Construction3,6984,314
Transportation3,0814,149
Telecommunications1,3982,333
Health and social services1,9092,340
Hotels and restaurants2,1782,390
Agriculture and mining2,3422,317
Non-profit and international organizations203191
Commercial102,931117,813
Consumers92,84187,145
Public authorities4,5385,023
Lease financings3,2743,158
Professional securities transactions and securitized loans69,62171,515
Due from customers and mortgages, gross273,205284,654
Valuation allowance(4,505)(7,615)
Total due from customers and mortgages, net268,700277,039


Collateral of due from customers and mortgages 
 MortgageOtherWithoutTotal
in CHF mcollateralcollateralcollateral31.12.03
Due from customers5,399135,10229,985170,486
Residential properties72,241   
Business and office properties11,597   
Commercial and industrial properties11,571   
Other properties2,805   
Mortgages98,21498,214
Total collateral103,613135,10229,985268,700
As of 31.12.02100,002143,0441)33,9931)277,039
1) Restated.


Loan valuation allowance 
in CHF m31.12.0331.12.02
Due from banks1188
Due from customers3,1505,474
Mortgages1,3552,141
Total loan valuation allowance 1)4,5167,703
   of which on principal 3,7426,617
   of which on interest 7741,086
1) Effective 1Q2003, valuation allowances related to loans held for sale are netted directly with such loans, and are not presented separately in the total loan valuation allowance.


Roll forward of loan valuation allowance 
12 months
in CHF m20032002
At beginning of financial year7,7039,264
Additions1,7533,351
Releases(1,161)(735)
Net additions charged to income statement5922,616
Gross write-offs(3,433)(3,868)
Recoveries5165
Net write-offs(3,382)(3,803)
Reclassified to loans held for sale(355)–
Balances acquired/(sold)(3)0
Provisions for interest158187
Foreign currency translation impact and other(197)(561)
At end of period4,5167,703


Impaired loans 1)
in CHF m31.12.0331.12.02
With a specific allowance6,21011,714
Without a specific allowance747655
Total impaired loans, gross6,95712,369
  
Non-performing loans2,9136,355
Non-interest earning loans1,7632,325
Restructured loans280281
Potential problem loans 2)2,0013,408
Total impaired loans, gross6,95712,369
Estimated liquidation value of collateral(2,119)–3)
Impaired loans, net4,838–3)
Specific allowance for impaired loans3,8196,778
1) Effective 1Q2003, loans classified as held for sale are excluded from impaired loans.
2) Potential problem loans consist of loans where interest payments are being made but where, in the credit officer's assessment, some doubt exists as to the timing and/or certainty of the repayment of contractual principal.
3) In 4Q2003 Credit Suisse Group applied mandatory changes in Swiss Federal Banking Commission guidelines retroactively as of January 1, 2003. In line with these guidelines, prior periods have not been restated.


Securities and precious metals trading portfolios 
   
in CHF m31.12.0331.12.02
Listed on stock exchange65,23058,661
Unlisted73,74076,083
Debt instruments138,970134,744
Listed on stock exchange51,97833,208
Unlisted7,4753,935
Equity instruments59,45337,143
Precious metals1,634 1,246 
Total securities and precious metals trading portfolios200,057173,133


Investments from the insurance business 
   GrossGross 
  Amortizedunrealizedunrealized 
As of 31.12.03, in CHF mBook value costgainslossesFair value
Debt securities issued by Swiss Federal Government, cantonal or local governmental entities7,1457,14501187,027
Corporate debt securities1,1961,1960171,179
Other1,8441,8440291,815
Total debt securities – held to maturity10,18510,185016410,021
Debt securities issued by Swiss Federal Government, cantonal or local governmental entities4,2243,78244974,224
Debt securities issued by foreign governments17,05716,62960617817,057
Corporate debt securities41,48640,7441,39865641,486
Other6,7036,574172436,703
Debt securities69,47067,7292,62588469,470
Equity securities5,5015,1134991115,501
Total securities – available-for-sale74,97172,8423,12499574,971
Debt securities236––––
Equity securities138––––
Total securities – trading374––––
Mortgage loans11,054––––
Other loans4,389––––
Real estate7,215–––8,709
Short-term investments and other5,062––––
Investments from the insurance business 113,250––––
Equity securities11,818––––
Debt securities2,395––––
Short-term investments1,747––––
Real estate185––––
Investments where the investment risk is borne by the policyholder16,145––––
Investments from the insurance business 129,395––––


As of 31.12.02, in CHF m     
Debt securities issued by Swiss Federal Government, cantonal or local governmental entities10,8149,951863010,814
Debt securities issued by foreign governments27,11026,3378719827,110
Corporate debt securities29,04227,4781,71715329,042
Other9,6859,157552249,685
Debt securities76,65172,9234,00327576,651
Equity securities9,0529,1713364559,052
Total securities – available-for-sale85,70382,0944,33973085,703
Debt securities246––––
Equity securities31––––
Total securities – trading277––––
Own shares44––––
Mortgage loans10,175––––
Other loans4,305––––
Real estate7,431–––10,057
Short-term investments and other7,120––––
Investments from the insurance business 115,055––––
Equity securities9,288––––
Debt securities2,841––––
Short-term investments1,069––––
Real estate197––––
Investments where the investment risk is borne by the policyholder13,395––––
Investments from the insurance business 128,450––––


INFORMATION FOR INVESTORS


Financial calendar
  
Annual General MeetingFriday, April 30, 2004
First quarter results 2004Wednesday, May 5, 2004
Payment of par value reduction (in lieu of a dividend)Monday, July 12, 2004
Second quarter results 2004Wednesday, August 4, 2004
Third quarter results 2004Thursday, November 4, 2004


Credit Suisse Group shares  
Ticker symbols   
Stock exchange listingsBloombergReutersTelekurs
SWX Swiss Exchange/virt-xCSGN VXCSGN.VXCSGN,380
New York (ADS) 1)CSR USCSR.NCSR,065
1) 1 ADS represents 1 registered share.
     
Swiss security number1213853  
ISIN numberCH0012138530  
CUSIP number225 401 108  


Ratings 
 Moody’s Standard & Poor’s Fitch Ratings
Credit Suisse Group   
Short term–A-1F1+
Long termAa3AAA-
OutlookStableStableNegative
Credit Suisse   
Short termP-1A-1F1+
Long termAa3A+AA-
OutlookStableStableNegative
Credit Suisse First Boston   
Short termP-1A-1F1+
Long termAa3A+AA-
OutlookStableStableNegative
Winterthur   
Insurer Financial StrengthA1AAA
CreditA2AAA-
OutlookStableNegativeNegative

Enquiries
Credit Suisse Group
Investor Relations
Gerhard Beindorff, Marc Buchheister
Tel. +41 1 333 4570/+41 1 333 3169
Fax +41 1 333 2587
Credit Suisse Group
Media Relations
Karin Rhomberg Hug, Claudia Kraaz
Tel. +41 1 333 8844
Fax +41 1 333 8877

Financial Publications
Printed financial publications may be ordered from:
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Fax +41 1 332 7294
www.credit-suisse.com/results/order.html


In this year’s corporate reports, we have chosen the work of Swiss artist Daniel Grobet to represent Credit Suisse Group’s 360° approach to finance. In his hand-crafted iron sculptures, Daniel achieves a harmonious balance by carefully combining static and dynamic elements.




Credit Suisse Group
Paradeplatz 8
P.O. Box 1
8070 Zurich
Switzerland
Tel. +41 1 212 1616
Fax +41 1 333 2587
www.credit-suisse.com

5520154

English
 
   

PRESENTATION

RESULTS OVERVIEW    
       
CONSOLIDATED RESULTS Slide 5
       
CREDIT SUISSE FINANCIAL SERVICES Slide 15
       
CREDIT SUISSE FIRST BOSTON Slide 24
       
SUMMARY AND OUTLOOK Slide 34
       
       
       
ADDITIONAL INFORMATION Slide 36
       
       
       
DISCLAIMER Slide 51
       
       
       
Slide 1

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REVIEW 2003

Returned to
sound
profitability		        
    2003 net profit of CHF 5.2 bn vs net loss of CHF 3.3 bn in 2002
       
    Fourth quarter 2003 net profit of CHF 1.2 bn
       
Delivered
on key
priorities 		  Strengthen capital base
       
  Reduce costs in all segments
       
  Return Winterthur to profitability
       
  Reduce impact fom legacy assets at CSFB
       
  Refocus European Private Banking
         
Key drivers
for 2003 		Stable operating income(1)
       
  Cost reduction of CHF 4.6 bn or 20%
       
  Credit-related provisions down CHF 1.7 bn to CHF 575 m
       
  Sale of non-core businesses
       
  Investment income at Winterthur of CHF 6.6 bn vs CHF 1.4 bn in 2002
(1) excluding impact of Swiss GAAP changes and changes in German tax legislation

Slide 2

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KEY ACHIEVEMENTS 2003

Private
Banking		   Profit increased by CHF 218 m or 13% to CHF 1.9 bn
     
  Net new assets of CHF 17.9 bn for 2003 confirm recovery from
    weak second half of 2002
       
Corporate &
Retail
Banking		      
  Profit increased by CHF 151 m or 36% to CHF 565 m
     
  Cost/income ratio down 5.9 ppt to 67.2%
     
       
Winterthur   Remarkable turnaround with segment profit of CHF 2.1 bn
     
  Strong investment result
     
  Total administration costs down CHF 670 m or 20%
       
Credit
Suisse
First Boston		   Net profit of CHF 1.2 bn (USD 870 m)
     
  Strong performance in key areas
     
  Improvement in profitability indicators
     
       
Group   Tier 1 ratio increased to 11.7% from 9.0% at year-end 2002
     
 
Dividend of CHF 0.50 per share (par value reduction)
Slide 3

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RESULTS OVERVIEW
FULL YEAR 2003

  in CHF m   2003     2002  
               
  Credit Suisse Financial Services   4,310     (271 )
               
  Credit Suisse First Boston   1,174     (1,836 )
               
  Corporate Center & adjustments   (275 )   (1,202 )
 
 
  Net profit/(loss)   5,209     (3,309 )
 
 
 
 
  Net operating profit/(loss) (1)   6,004     (1,202 )
 
 
               
  Basic earnings per share (in CHF)   4.31     (2.78 )
               
  Return on equity   17.2%     (10.0% )

(1)   excluding amortization of acquired intangible assets and goodwill, exceptional items and the cumulative effect of change in accounting principle

Slide 4

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PRESENTATION

       
RESULTS OVERVIEW Slide 1
       
CONSOLIDATED RESULTS    
       
CREDIT SUISSE FINANCIAL SERVICES Slide 15
       
CREDIT SUISSE FIRST BOSTON Slide 24
       
SUMMARY AND OUTLOOK Slide 34
   
   
   
ADDITIONAL INFORMATION Slide 36
   
   
       
DISCLAIMER Slide 51
       
       
       
Slide 5

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SPECIAL ITEMS Q4/03

                            Total  
    Divesti-     Impair-     New tax     Swiss     special  
in CHF m   tures(1)     ment(2)     legislation(3)     GAAP(4)     items Q4/03  
                               
   Operating income   –     –     (711 )   (299 )   (1,010 )
                               
   Operating expenses   –     –     –     (8 )   (8 )
                               
   Amortization of acquired                              
      intangible assets and goodwill   –     (270 )   –     –     (270 )
                               
   Valuation adjustments,                              
      provisions and losses   –     –     –     (197 )   (197 )
                               
   Extraordinary result, net   272     –     –     –     272  
                               
   Cumulative effect of change                              
      in accounting principle   –     –     –     319     319  
                               
   Taxes   (72 )   94     782     (4 )   800  
                               
   Minority interests   –     –     (21 )   –     (21 )
   
 
 
 
 
   Net profit/(loss)   200     (176 )   50     (189 )   (115 )
                               
(1) DLJdirect Japan and other assets at CSFB, participation at Private Banking
(2) impairment in respect of acquired intangible assets related to CSFB Financial Services’ high-net-worth asset management business
(3) new tax legislation in Gemany for life and health insurance companies regarding losses on equity investments
(4) mandatory changes in Swiss Federal Banking Commission guidelines (Swiss GAAP), that were retroactively applied as of January 1, 2003. Significant changes relate to the accounting for own shares and derivatives.
Slide 6

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OPERATING INCOME

Revenues include the negative impact of CHF 1.0 bn from Swiss GAAP changes and changes in German tax legislation
   
   
(1) excluding impact of Swiss GAAP changes and changes in German tax legislation
Slide 7

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OPERATING EXPENSES AND DEPRECIATION

 
                         
90 % 74 % 86 %   92 % 77 %   Cost/income ratio, consolidated
                         
94 % 70 % 81 %   85 % 75 %   Cost/income ratio, banking business only
Slide 8

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PROVISIONS

Note: Totals include Corporate Center and adjustments
Slide 9

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IMPAIRED LOANS

                           
  6.0   4.9   4.1   3.3   3.2   3.0   Impaired loans as % of due
                          from banks and customers (1)
  59.5   62.3   63.8   67.1   68.0   64.9   Valuation allowance as % of
                          impaired loans
(1) due from banks and customers and mortgages (excluding securities lending and reverse repurchase agreements)
Slide 10

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BIS CAPITAL RATIOS
AS OF DECEMBER 31, 2003

              Credit Suisse  
    Credit   Credit Suisse     Group  
   in CHF m   Suisse(1)   First Boston(1)     Consolidated  
 
                 
 Book equity   8,109   19,360     34,992  
   Deduction of goodwill   (247 ) (7,217 )   (8,890 )
   Deduction of 50% of Winterthur's                
          adjusted net asset value   –   –     (2,718 )
   Other tier 1 adjustments   (500 ) (81 )   (990 )
                 
 Tier 1 capital   7,362   12,062     22,394  
                 
   Acquired intangible assets   57   1,416 (2)   1,476 (2)
   Hybrid capital   –   996     2,169  
 
 
 Risk-weighted assets   89,833   88,807     190,761  
 
 
 Tier 1 capital ratio   8.2 % 13.6 %   11.7%
 excl. acquired intangible assets   8.1 % 12.3 %   11.1%  
 
(1) consolidated banking entities Credit Suisse and Credit Suisse First Boston
(2) net of tax liability
Slide 11

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CONVERSION TO US GAAP (1/3)
BACKGROUND  
   
On January 1, 2004, Credit Suisse Group converted to US GAAP
     
Decision to convert to US GAAP was driven by:
     
  The Swiss Exchange (SWX) requirement to adopt US GAAP or IFRS(1)
     
  US GAAP and IFRS are expected to converge over time – transition to US GAAP was more cost-effective and appropriate given our activities
     
Next steps:
     
  Swiss GAAP Annual Report to be published on March 31, 2004
     
  Full year and quarterly 2003 US GAAP financial results to be published on April 27, 2004 on the Credit Suisse Group website
     
  Pre-release of key figures from the first quarter 2004 results at the Annual General Meeting on April 30, 2004
     
  Full first quarter 2004 results to be reported on May 5, 2004
     
  Filing of US GAAP Annual Report 2003 on Form 20-F with the SEC planned for late June, 2004
     
(1) International Financial Reporting Standards
Slide 12

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CONVERSION TO US GAAP (2/3)
IMPLICATIONS FOR CREDIT SUISSE GROUP  
   
Differences are primarily a result of differing accounting treatments regarding the combination of Credit Suisse Group and Winterthur
     
  Increase in goodwill and shareholders’ equity
     
  Different cost basis for investments affecting gains and losses and depreciation of real estate
     
Other differences include derivatives/hedges, amortization of goodwill, software capitalization, taxes and pension costs
     
It is important to note that the primary business drivers remain unaffected:
     
  Balance sheet business and interest margins
     
  Buying and selling securities
     
  Fees and commission
     
  Premium income
     
  Operating costs
     
More earnings volatility under US GAAP
     
First relevant US GAAP results to be published for the first quarter of 2004
   
Slide 13

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CONVERSION TO US GAAP
 
PREVIEW OF 2003 US GAAP RESULTS 
(3/3)
   
   
Slide 14

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PRESENTATION

RESULTS OVERVIEW Slide 1
       
CONSOLIDATED RESULTS Slide 5
       
CREDIT SUISSE FINANCIAL SERVICES    
       
CREDIT SUISSE FIRST BOSTON Slide 24
       
SUMMARY AND OUTLOOK Slide 34
   
   
   
   
   
ADDITIONAL INFORMATION Slide 36
   
   
   
   
   
DISCLAIMER Slide 51
Slide 15

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CREDIT SUISSE FINANCIAL SERVICES  
OVERVIEW (1/3)
   
   
Key
drivers		        
  Fourth quarter net profit of CHF 977 m vs net profit of CHF 1.8 bn in Q3/03, which included an after-tax gain of CHF 1.3 bn(1) from divestitures
 
 
       
    Strong results in the insurance segments more than offset lower
      fourth quarter banking results
     
  2003 net profit of CHF 4.3 bn vs net loss of CHF 271 m in 2002
       
    Operating expenses down significantly by CHF 1.1 bn or 11%
       
    In the insurance segments, investment income was up
      CHF 5.2 bn vs 2002
       

(1) net of related provisions

Slide 16

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CREDIT SUISSE FINANCIAL SERVICES  
OVERVIEW (2/3)
   
   
Key
drivers
banking
segments		        
  Lower operating income vs Q3/03 (commission income at Private Banking); for the full year, operating income almost stable
 
       
  Operating expenses slightly up vs Q3/03; full year operating expenses down significantly
 
     
  Full year cost/income ratio 62.4%, down 4.1 ppt vs 2002
       
  Private Banking net new assets of CHF 4.2 bn in Q4/03
(CHF 17.9 bn in 2003)
 
       
  Growth of private mortgages of CHF 6.0 bn in 2003
       
  Private Banking Q4/03 results impacted by divestiture gain and realignment costs for European activities
 
       
Slide 17

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CREDIT SUISSE FINANCIAL SERVICES  
OVERVIEW (3/3)
   
Key drivers insurance segments  
Significantly improved investment results vs 2002, up CHF 5.2 bn (lower impairments and realized losses)
   
     
  Non-life full year combined ratio of 101.0%, down 2.4 ppt vs 2002 (98.3% in Q4/03)
   
     
  Significant progress in reducing administration costs, down CHF 670 m vs 2002
   
     
  Q4/03 results benefited from tax law changes in Germany
   
Slide 18

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CREDIT SUISSE FINANCIAL SERVICES  
PRIORITIES  
   
Banking segments
   
Top-line growth supported by net new asset inflows
   
Continuous productivity improvements
   
Further reduction of cost/income ratio
   
   
Insurance segments
   
Sound premium growth in the non-life business
   
Further reduction of administration costs in both segments
   
Lower combined ratio in the Insurance segment
Slide 19

PRIVATE BANKING


Segment result
Gross margin (bp)
125
112
122
121
  
Cost/income ratio (%)
55.1
62.2
63.1
59.8
  
Net new assets (CHF bn) 8.4   4.2   19.1   17.9  
  Q3   Q4   2002   2003  
 
 
2003
  
12 months
  
Key profit & loss items
      ” vs       ” vs  
in CHF m Q4/03   Q3/03   12M/03   12M/02  
                 
Operating income 1,432   (9%
)
 5,921   (2%
)
                 
Operating expenses 822   0%   3,323   (8% )
                 
Operating income down CHF 139 m or 9% vs Q3/03 (weaker US dollar and generally lower trading volumes)
   
Other expenses up CHF 51 m vs Q3/03 in connection with IT, marketing and realignment costs
   
Realignment costs for European activities of CHF 46 m after tax in Q4/03
   
Full year costs down 8% or CHF 270 m vs 2002
   
AuM base up CHF 46 bn to CHF 512 bn in 2003
   
After-tax gain of CHF 81 m from disposal of a minority investment

 

Slide 20

CORPORATE & RETAIL BANKING

Segment result
                 
Net interest margin (bp)
215
210
215
212
  
Cost/income ratio (%)
64.4
69.8
73.1
67.2
  
Return on Equity (%)
13.6
9.7
8.2
11.6
  
 
Q3
Q4
2002
2003
  
 
 
 
2003
  
12 months
  
         
(1) valuation adjustments, provisions and losses (provisions based on expected credit losses derived from statistical model)
Key profit & loss items
      ” vs       ” vs  
in CHF m Q4/03   Q3/03   12M/03   12M/02  
                 
Operating income 785   (1% ) 3,131   (1% )
Operating expenses 516   7%   1,997   (9% )
   Provisions (1) 92   42%   305   (2% )
   
Almost stable operating income vs Q3/03 and for the full year
   
Operating expenses up CHF 33 m vs Q3/03 in connection with IT projects and marketing activities
   
Full year costs down 9% or CHF 196 m
   
Cost/income ratio down by 5.9 ppt to 67.2% for the full year
   
Increase in provisions of CHF 27 m vs Q3/03, due partly to change in consumer lending law



Slide 21

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LIFE & PENSIONS

Segment result
                   
Expense ratio (%) 17.1   14.2   11.5   11.4  
Return on invested assets (%) 5.0   6.0   1.4   5.2  
    Q3   Q4   2002   2003  
   
 
    2003   12 months  
                   
(1) death and other benefits incurred & change in provision for future policyholder benefits
   
(2)   excluding separate account business
      Key profit & loss items
        vs  
in CHF m 12M/03   12M/02  
  Gross premiums written 17,273   (9% )
  Benefits & claims (1) (18,729 ) (8% )
  Policy acquisition costs (854 ) 19%  
  Administration costs (1,119 ) (24% )
  Investment income (2) 5,351   272%  
   
   
Premiums down 3% (organic) vs 2002 reflecting profit-oriented underwriting
           
Investment income up CHF 3.9 bn vs 2002
           
Administration costs down CHF 344 m (24%) vs 2002
           
Q4 tax credit resulting mainly from tax law changes in Germany, with a positive impact on segment profit of CHF 53 m

Slide 22

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INSURANCE

Segment result
                   
Combined ratio (%) 103.6   98.3   103.4   101.0  
Return on invested assets (%) 3.9   3.9   (0.1 ) 3.8  
                   
    Q3   Q4   2002   2003  
   
 
    2003   12 months  
           
(1)  including an after-tax gain of CHF 1.3 bn from divestitures and certain provisions of CHF 383 m
      Key profit & loss items
        vs  
in CHF m 12M/03   12M/02  
  Net premiums earned 14,570   (7% )
  Claims & annuities incurred (10,646 ) (9% )
  Policy acquisition costs (2,433 ) (4% )
  Administration costs (1,633 ) (17% )
  Investment income 1,240   –  
           
Premiums up 6% (organic) vs 2002, largely driven by tariff increases
   
Investment income up CHF 1.3 bn vs 2002
   
Administration costs down CHF 326 m or 17% vs 2002 (CHF 211 m, adjusted for divestitures)
   
Combined ratio down 2.4 ppt vs 2002 to 101.0% (98.3% in Q4/03)
   
Q4 tax credit resulting mainly from tax law changes in Germany, with a positive impact on segment profit of CHF 18 m

 

Slide 23

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PRESENTATION

RESULTS OVERVIEW Slide 1
       
CONSOLIDATED RESULTS Slide 5
       
CREDIT SUISSE FINANCIAL SERVICES Slide 15
       
CREDIT SUISSE FIRST BOSTON    
       
SUMMARY AND OUTLOOK Slide 34
   
   
   
ADDITIONAL INFORMATION Slide 36
   
   
DISCLAIMER Slide 51
       
       
       
Slide 24

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CREDIT SUISSE FIRST BOSTON
KEY DRIVERS 2003

   Restored profitability with no financial surprises or reputational issues
     
  Net operating profit(1) was USD 1.4 bn (up USD 1.2 bn)
     
  Net profit of USD 870 m (vs a net loss of USD 1.2 bn)
   
Significant improvement in profitability indicators vs prior year
   
Pre-tax operating margin(2) increased to 16.0% vs negative 1.1%
 
Return on equity(2) increased to 15.9% vs 1.7%
   
Compensation changes made to advance equity culture and retention
 
Operating expenses down 10% due to cost containment and Pershing sale
   
Significantly reduced valuation adjustments and provisions to USD 295 m from
USD 1.7 bn in 2002
   
(1) excl. cumulative effect of change in accounting principle, amortization of acquired intangible assets and goodwill and, in 2002, exceptional items
(2) excl. certain acquisition-related costs, exceptional items and the cumulative effect of change in accounting principle and reflecting certain other reclassifications
Slide 25

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CREDIT SUISSE FIRST BOSTON  
PRIORITIES  
   
Focus on revenue growth
     
  Leverage franchise strengths: private equity, leveraged finance, commercial mortgage activity, emerging markets, middle market coverage
     
  Continue building: derivatives, prime brokerage and related services, proprietary trading, Europe
     
Client focus
     
  Deliver the entire Firm to clients
     
  Maintain gains in wallet share, while restoring market share positions
     
Risk - continue to increase appetite in a disciplined way
     
Expenses - maintain cost discipline
     
Employees - focus on continuing to build a one-firm equity culture and platform to attract and retain the best talent

 
Slide 26

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CREDIT SUISSE FIRST BOSTON  
FOURTH QUARTER 2003 OVERVIEW  
   
 Results 
Q4/03
vs
Q3/03 		  Net operating profit(1) of USD 344 m, net profit of USD 220 m
       
  Results excluding impact of Swiss GAAP changes
       
    Net operating profit of USD 545 m, up 52%
       
    Net profit of USD 283 m, up 26%
       
    Operating income of USD 2.6 bn, up 6%
       
  Operating expenses increased 9% to USD 2.0 bn due to higher revenues and in line with market pay trends
       
  Results reflect pre-tax impairment of USD 200 m related to acquired intangible assets and extraordinary pre-tax gains of USD 123 m from disposals
       
  Excluding impact of Swiss GAAP changes:
       
    Pre-tax operating margin(2) increased to 26.3% vs 17.4%
       
    Return on equity(2) increased to 27.0% vs 16.9%
       
   
(1) excl. cumulative effect of change in accounting principle, amortization of acquired intangible assets and goodwill and, in 2002, exceptional items
(2)
  		 excl. certain acquisition-related costs, exceptional items and the cumulative effect of change in accounting principle not allocated to the segments and reflecting certain other reclassifications
Slide 27

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CREDIT SUISSE FIRST BOSTON
OPERATING INCOME

Revenue comparison distorted by impact of Swiss GAAP changes and disposal of Pershing

 

(1) 2003 operating income from Pershing was USD 15 m
Slide 28

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CREDIT SUISSE FIRST BOSTON
OPERATING EXPENSES

(1) including restructuring costs of USD 155 m reported under exceptional items
Slide 29

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CREDIT SUISSE FIRST BOSTON    
KEY RATIOS  
   

(1) based on the operating basis business unit results, which exclude certain acquisition-related costs, exceptional items and cumulative effect of change in accounting principle not allocated to the segments and reflecting certain other reclassifications
Slide 30

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INSTITUTIONAL SECURITIES    
KEY INFORMATION (1/2)
   

(1) excluding impact from Swiss GAAP changes of USD 153 m

Slide 31

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INSTITUTIONAL SECURITIES
KEY INFORMATION
(2/2)

Slide 32

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CSFB FINANCIAL SERVICES
KEY INFORMATION

(1) including USD 204 m from Pershing
 
Assets under management & net new assets in Q4/03
 
  Total assets under management up 1%, including a negative impact of USD 23 bn from changes to AuM definition
   
  CSAM’s net new assets include a negative adjustment of USD 1.8 bn to true up YTD asset flows for a change in our AUM reporting; underlying CSAM net new assets are flat
   
  PCS reports improved net new asset inflows in of USD 0.6 bn
Slide 33

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PRESENTATION

RESULTS OVERVIEW Slide 1
 
CONSOLIDATED RESULTS Slide 5
 
CREDIT SUISSE FINANCIAL SERVICES Slide 15
 
CREDIT SUISSE FIRST BOSTON Slide 24
       
SUMMARY AND OUTLOOK    
   
   
   
   
   
ADDITIONAL INFORMATION Slide 36
   
   
   
   
   
DISCLAIMER Slide 51
       
Slide 34

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SUMMARY AND OUTLOOK

Well positioned to compete successfully in primary markets
 
Optimistic about 2004, given current levels of client activity and improving economic conditions
 
Continued progress towards achieving leading performance in all business segments
 
Focus on revenue growth
 
Consolidated financial targets:
     
  Return on Equity of 15 to 20% (across cycles)
     
  Tier 1 ratio above 10%
     
Dividend policy:
 
further strengthening capital
 
return to competitive dividend yield
 
Slide 35

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PRESENTATION

RESULTS OVERVIEW Slide 1
       
CONSOLIDATED RESULTS Slide 5
       
CREDIT SUISSE FINANCIAL SERVICES Slide 15
       
CREDIT SUISSE FIRST BOSTON Slide 24
       
SUMMARY AND OUTLOOK Slide 34
   
   
   
   
   
   
ADDITIONAL INFORMATION    
   
   
   
DISCLAIMER Slide 51
     
Slide 36

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ADDITIONAL INFORMATION
INDEX

Group  
   
- Significant financial events 2003 (Slide 38)
   
Winterthur  
   
- Investment result general account (Slide 39)
   
- Investment portfolio - asset allocation (Slide 40)
   
- Debt securities portfolio - by credit rating (Slide 41)
   
- Insurance: split by line of business & combined ratios (Slide 42)
   
- Life & Pensions: gross premiums written (Slide 43)
   
- Equity base development in 2003 (Slide 44)
   
Credit Suisse Private Banking  
   
- AuM by product and currency (Slide 45)
   
- Development of gross margin (Slide 46)
   
Credit Suisse First Boston  
   
- Operating income detail: Investment Banking (Slide 47)
   
- “Legacy” assets (Slides 48 to 49)
   
- Counterparty exposure by industry (Slide 50)
   
Slide 37

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SPECIAL ITEMS 2003

    Special   Special items in Q3/03     Total  
    items     Dives-     Additional     special  
in CHF m   in Q4/03     titures(1)     provisions(2)     items 2003  
   Operating income   (1,010 )   (134 )   (117 )   (1,261 )
                         
   Operating expenses   (8 )   –     –     (8 )
                         
   Amortization of acquired                        
      intangible assets and goodwill   (270 )   –     –     (270 )
                         
   Valuation adjustments,                        
      provisions and losses   (197 )   –     –     (197 )
                         
   Extraordinary result, net   272     1,538     (275 )   1,535  
                         
   Cumulative effect of change                        
      in accounting principle   319     –     –     319  
                         
   Taxes   800     (79 )   9     730  
                         
   Minority interests   (21 )               (21 )
   
   
   
   
 
   Net profit/(loss)   (115 )   1,325     (383 )   827  
                         
   
(1) Republic (US), Churchill (UK) and Winterthur Italy
(2) strengthening of certain provisions related to Winterthur’s current and former international business portfolio
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WINTERTHUR GROUP  
INVESTMENT RESULT GENERAL ACCOUNT  

 

 in CHF m                                
  2002   2003  
 
 
 
  Q1   Q2   Q3   Q4   Q1   Q2   Q3   Q4  
                                 
 Current income 1,236   1,435   1,203   1,222   1,255   1,394   1,359   1,367  
                                 
 Realized gains 1,346   1,389   2,353   333   1,327   821   688   1,068  
                                 
 Realized losses (647 ) (2,129 ) (1,589 ) (373 ) (633 ) (411 ) (193 ) (331 )
                                 
 Impairments (942 ) (857 ) (1,413 ) (675 ) (328 ) (52 ) (75 ) (152 )
                                 
 Other (114 ) (100 ) (135 ) (115 ) (111 ) (141 ) (128 ) (134 )
                                 
 Investment income 879   (262 ) 419   392   1,510   1,611   1,651   1,818  

 

Note: Q1 to Q3 2002 reclassified to the current presentation format, including real estate for own use, interest paid from current income and realized gains/losses
   
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WINTERTHUR GROUP
INVESTMENT PORTFOLIO – ASSET ALLOCATION  
   
Equity securities of CHF 5.7 bn (4.7%) in Q4/03
   

(1) all investments incl. real estate at market value; excluding separate account (i.e. unit-linked) business
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WINTERTHUR GROUP
DEBT SECURITIES PORTFOLIO – BY CREDIT RATING
   


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WINTERTHUR INSURANCE
SPLIT BY LINE OF BUSINESS & COMBINED RATIOS

(1) in original currencies

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LIFE & PENSIONS
GROSS PREMIUMS WRITTEN

in %  
   

(1) comprises Iberia, Benelux, cross-border

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WINTERTHUR GROUP
EQUITY BASE DEVELOPMENT IN 2003

Significant increase of CHF 1.5 billion in shareholders’ equity in 2003

 

(1) net of tax and policyholder participation
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PRIVATE BANKING
AUM BY PRODUCT & CURRENCY

 

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PRIVATE BANKING
DEVELOPMENT OF GROSS MARGIN
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CREDIT SUISSE FIRST BOSTON
OPERATING INCOME DETAIL: INVESTMENT BANKING

 

Investment Banking Division  
         
  2002   2003  
 
 
 
 in USD Mio Q1   Q2   Q3   Q4   Q1   Q2   Q3   Q4  
   Private equity 133   186   141   397   77   111   72   75  
                                 
   Debt capital markets 100   94   28   64   85   95   68   70  
                                 
   Equity capital markets 117   153   74   92   29   119   74   130  
                                 
   Advisory 344   444   280   357   296   283   291   290  
                                 
   Other 47   30   33   26   58   36   67   152  
                                 
   Total 741   907   556   936   545   644   572   717  

Note: results reflect the impact of various divisional operating income sharing arrangements

 

 
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CREDIT SUISSE FIRST BOSTON
"LEGACY" ASSETS		  
(1/2)
       
  in USD m   "Legacy" assets net exposure
  12/1999   11,925 8,964   Real estate        
             
1,975   Distressed        
             
986   Private equity (1,228 unfunded commitment)        
                       
  12/2000   8,026 4,805   Real estate        
             
1,498   Distressed        
             
1,724   Private equity (984 unfunded commitment)        
                       
  12/2001   5,357 2,925   Real estate        
             
1,107   Distressed        
             
1,325   Private equity (857 unfunded commitment)        
                       
        1,535   Real estate        
                     
  12/2002   3,031 512   Distressed        
                     
        984   Private equity (785 unfunded commitment)        
                       
        978   Real estate     Note:
                  – Unfunded commitments excluded for private equity
  09/2003   2,438 532   Distressed    
                  – Unfunded commitments included for real estate
        928   Private equity (778 unfunded commitment)    
                    – Private equity unfunded commitments include employee commitments
                     
        869   Real estate        
                     
  12/2003   2,190 502   Distressed        
                     
        819   Private equity (743 unfunded commitment)        
                       
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CREDIT SUISSE FIRST BOSTON
"LEGACY" ASSETS		  
(2/2)
 
Results related to "legacy" assets
in CSFB's income statement
in USD m Real
estate		   Distressed
portfolio		   Private
equity		   Total  
   Q4/03                
      Operating income 44   (2 ) 105   147  
                 
      Provisions 5           5  
                 
   Total 39   (2 ) 105   142  
                 
   12M/03                
                 
      Operating income 58   (11 ) 122   169  
                 
      Provisions 9           9
                 
   Total 49   (11 ) 122   160  
 
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CREDIT SUISSE FIRST BOSTON
COUNTERPARTY EXPOSURE BY INDUSTRY

Selected CSFB exposure as of December 31, 2003
  Current   Undrawn       Net  
   in USD m exposure   commitments   Reserves   exposure  
                 
Telecommunications 1,279.7   1,669.7   57.5   2,891.9  
                 
Telecommunications manufacturers 44.2   208.3   0.0   252.5  
                 
Merchant energy 831.9   296.6   153.1   975.4  
                 
Airlines 520.5   39.2   97.8   461.9  
Note: selection of industries based on investor interest                
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DISCLAIMER

  Cautionary Statement regarding forward-looking information
  This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
   
  Forward-looking statements involve inherent risks and uncertainties, and we might not be able to achieve the predictions, forecasts, projections and other outcomes we describe or imply in forward-looking statements. A number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions we express in these forward-looking statements, including those we identify in “Risk Factors” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2002 filed with the US Securities and Exchange Commission, and in other public filings and press releases.
   
  We do not intend to update these forward-looking statements except as may be required by applicable laws.
   
  Quarterly Report 2003/Q4 — Non-GAAP Financial Information
  For additional information with respect to our results for the fourth quarter and the year 2003, we refer you to our “Quarterly Report 2003/Q4”, posted on our website at www.credit-suisse.com. This presentation contains non-GAAP financial information. A reconciliation of such non-GAAP financial information to the most directly comparable measures under Swiss generally accepted accounting principles (as well other related information), is also included in our Quarterly Report 2003/Q4.
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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  CREDIT SUISSE GROUP
(Registrant)		  
       
Date February, 2004 By: /s/ David Frick  
    (Signature)*  
*Print the name and title of the signing officer under his signature   Member of the Executive Board  
    /s/ Karin Rhomberg Hug  
    Managing Director