Morgan Stanley Financial Services Conference
Paul Calello, CEO, Investment Bank
London
March 31, 2009
Slide 2
Cautionary statement
Cautionary statement regarding forward-looking and non-GAAP 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, 2008 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.
This presentation contains non-GAAP financial information. Information needed to reconcile such non-GAAP financial information to the most directly comparable measures under GAAP can be found in Credit Suisse Group's fourth quarter report 2008.
Slide 3
Credit Suisse overview
Repositioning the Investment Bank
Financial implications
Slide 4
Well positioned going into 2009
Strong client momentum
Validated integrated bank model
Exceptional capital strength
Clear and consistent strategy
Aggressive risk reduction
Continue to be differentiated from our competitors
Slide 5
Accelerated implementation of strategic plan
Positions Credit Suisse strongly with reduced risk,lower costs and strong capital to enable us to weather the continuing market
challenges, capture opportunities, and prosper when markets improve
Continue to focus Asset Management business and align it with the bank�s other businesses
Accelerated repositioning of the Investment Banking businessportfolio with a reduction in risk, volatility and costs
Continued commitment to integrated business model;growth of Private Banking globally and Swiss businesses
Slide 6
1) Excluding ARS settlements of CHF 310 in 3Q08 and CHF 456 m in 4Q08 and the charge of CHF 190 m related to an account close-out in 4Q08
Private Banking pre-tax incomeCHF bn
2007 20082005 20062004
5,486
3,8503,966
4,596
3,717
4,8061)
Resilient Private Banking performance and solid net inflows
Net new assets in 2008
Rolling four-quarter NNA growth on AuM in %6.0 5.9 6.2 5.0 5.0
CHF bn
1Q08 2Q08
13.5
3Q08 4Q08
15.4
11.342.2
14.2
8.4
16.6
2008
2.0
3.0
EMEA APAC Americas Switzerland
Slide 7
Asset Management with strong growth in high-margin alternative investments
Assets under managementCHF bn
Asset Management division
412
146
! Sold traditional long-only business outside Switzerland in line with strategy to focus on high margin and scalable business
! Alternative investment with strong inflows
! Money market lift-out portfolio further reduced by 44% to CHF 0.6 bn in 4Q08
Alternative investment strategies
(57.7)
(17.1)127
139
Multi-assetclass solutions
Other traditional investments
(63.3)
+11.5
Includes outflows of CHF (40.1) bn inmoney market and pension advisory assets
Net new assets 2008CHF bn
Slide 8
Capital strength as competitive advantage
32.229.4 30.8 32.2
34.2
1Q08 2Q08 3Q08
Tier 1 capital and tier 1 capital ratio
Tier 1capital
13.3%
9.8% 10.2%Tier 1
capital ratio
(CHF bn and %)
! Industry-leading capital ratio
! Strongly positioned to continue building client franchises
! 16% reduction in risk-weighted assets during 4Q08, primarily in Investment Banking
! Raised CHF 11.2 bn of capital in 4Q08, while minimizing dilution (share count today below January 2006 level)
! 2008 dividend proposal of CHF 0.10
4Q08
10.4%
4Q07
10.0%
Slide 9
Balance sheet reduced by 16% in 4Q08 while maintaining strong funding structure
1,170 1,170
Assets4Q08
Capital & liabilities4Q08
Reverse 299repo
Trading 367assets
Loans 227
Other 187
Repo 273
Trading liab.154
Short-term1)100Long-term 151debt
Deposits 266
Capital 226& Other
117%coverage
Asset and liabilities by category (period-end in CHF bn)
1,394
! Total assets in 4Q08 reduced by CHF 224 bn, or 16%, whereof CHF 59 bn due to FX movements
! Trading assets reduced 22% in 4Q08 and 35% in 2008
! Increased market spreads only affect a small part of funding base(CHF 13 bn of long-term debt matures in 2009)
! Stable and low cost deposit base a key funding advantage
Assets3Q08
Reverse 379repo
Trading 468assets
Loans 239
Other 261
Change in %Cash 47
Cash 1) 90
(28)%
(5)%
(22)%
(21)%
+91%
1) Includes due from/to banks
Slide 10
Credit Suisse overview
Repositioning the Investment Bank
Financial implications
Slide 11
! Allocate resources towards client and flow-based businesses
! Reduce/exit businesses that are highly volatile or capital intensive
! Continue to grow cross-bank collaboration
Implementing our strategy
Priorities Key objectives
Streamline expense base
! Reduce headcount
! Ongoing expense management
Re-align business portfolio
Reduce risk! Sustained and consistent reduction in dislocated assets
! Significant reduction in riskier, more volatile trading positions
Slide 12
Sustained and consistent risk exposure reduction
Dislocated asset balances in Investment Bank
3Q07 4Q07
(88)%
1Q08 2Q08 3Q08 4Q08
1) Excluding US prime, US Alt-A and European/Asian residential mortgage exposures of CHF 3.2 bn
CHF bn
99
12
4
36
59 2731
43
67
0.9
1.9 1)
236 230214
193
163
135
Investment Bank RWAs (period-end in USD bn)
2007 1Q08 2Q08 3Q08 2009E4Q08
(31)%
(16)%
Leveraged finance
Subprime residential mortgages and CDO
Commercial mortgages
8.8
Slide 13
! Allocate resources towards client and flow-based businesses
! Reduce/exit businesses that are highly volatile or capital intensive
! Continue to grow cross-bank collaboration
Implementing our strategy
Priorities Key objectives
Re-align business portfolio
Reduce risk! Sustained and consistent reduction in dislocated assets
! Significant reduction in riskier, more volatile trading positions
Streamline expense base
! Reduce headcount
! Ongoing expense management
Slide 14
Re-aligning the Investment Bank Key client businesses Repositioned businesses Exit businesses
! Emerging Markets - maintain leading business but with more limited risk/credit provision
! US Leveraged Finance -maintain leading business but focus on smaller/quicker to market deals
! Cash Equities
! Electronic Trading
! Prime Services
! Equity Derivatives - focus on flow and corporate trades
! Equity trading - focus on quantitative and liquid strategies
! Convertibles - focus on client flow
! Highly structured derivatives
! Illiquid principal trading
Eq
uit
ies
Fix
ed
In
co
me
Ad
vis
ory
! Global Rates
! FX
! High Grade Credit / DCM
! US RMBS secondary trading
! Commodities trading (joint venture)
! Strategic advisory (M&A) and capital markets origination
! Mortgage origination
! CDO
! Non-US Lev fin trading
! Non-US RMBS
! Highly structured derivatives
! Power & Emission trading
! Corporate Lending - improved alignment of lending with business and ability to hedge
! Origination of slow to market, capital-intensive financing transactions
Develop existing strong market positions
Maintain competitive advantage but reduce risk and volatility
Release capital and resources; reduce volatility
Slide 15
! Low volatility of revenue
! High margins
! Stable client-focused platform
! Top-3 client research rankings and differentiated content
! Top-3 execution platform
! Low cost provider, with global scale and diversified client base
! Estimated global commission pool: $27 bn
! CS market share: 10.6% (up from 9.1% for 2007)
! Strong momentum: Seven consecutive quarters of market share gains
! Top 3 market share globally
! Disruption experienced by competitors presents unique opportunity to gain 10-15% incremental market share
! Improving primary rankings and new issue activity provides significant upside
Cash Equities
Market Opportunity
CS Competitive Strengths
Growth Strategy and Focus! Consolidate and extend market share gains
! Deliver focused client service driven by account segmentation and integrated across the firm
! Continue to drive cost efficiencies across platform
! Maintain high pre-tax margins (> 30% at low end of cycle) and a strong return on capital
2Q 1Q 2Q4Q3Q1Q 3Q
2007 2008
4Q
Cash Equities revenuesCHF bn
3.6
4.9
Slide 16
Electronic Trading
! Top ranked in portfolio trading, algorithmic trading and transition management
! Credit Suisse's CrossFinder is the #2 registered ATS in the U.S. � roughly 170 million shares/day crossed in 4Q08
! Strengths in technology and operationally intense scale businesses
! Significant investment required to develop the platform constitutes an important barrier to entry
Market Opportunity
! Increasing number of financial products moving to electronic trading platforms
! Fewer competitors
! Alternative pools of liquidity developing overseas
! Continue investing in core business � technology, people, client relationships, etc.
! Lead the development of electronic markets through active industry participation and investment
! Extend AES to other asset classes, initially FX, options, futures
CS Competitive Strengths
Growth Strategy and Focus
Electronic Trading revenuesCHF bn
2Q 1Q 2Q4Q3Q1Q 3Q
2007 2008
4Q
1.3
1.0
Slide 17
2001 2004 2005200320022000 2006 20082007
491
1,868
1,407
Prime Services
CHF bn
Prime Services revenues! Conservative standards, integrated solutions, select
client base and sound risk portfolio
! Viewed as a strong counterparty given strength of funding and liquidity
! Substantially increased market share in 2008, while top competitors� market share has declined
! Higher pricing power with fewer viable competitors
Market opportunity
CS competitive strengths
! Focus remains stronger than ever on improving return on assets through re-pricing and upgrading client base
! Continue to take the most selective approach in the market versus the "mass market" taken by competitors
! Responsible and prudent management of balance sheet with strong ROA
Growth strategy and focusHedge Fund Industry AUM (in USD trillions)*
2Q 1Q 2Q4Q3Q1Q 3Q
2007 2008
4Q
1.91.5
* Source: Hedge Fund Research
Slide 18
Equity Flow Derivatives Flow Derivatives revenuesCHF mn
Market opportunity
CS competitive strengths
Growth strategy and focus
! Revenue momentum: growth of 97%
! Market-share momentum: 2008 ranking 3rd in Europe and 4th in US (Greenwich Associates Survey), up from 8th and 6th
! Unparalleled network of relationships from cash equities and private banking franchises
! Growing share of hedge fund flow in parallel with growth of prime brokerage platform
! Round out global footprint by strengthening APAC platform
! Consolidate gains in Europe and US: limited incremental investment required
! Continue to lever AES brand into options electronic execution and market-making
! Trend towards flow / exchange-listed products away from complex / OTC products! More liquid risk, reduced processing costs
! Increased usage of flow derivatives by institutional clients
! Significant dislocation at main competitors, resulting in wider spreads
! Increased demand for hedging in volatile markets
2007 2008
2Q 1Q 2Q4Q3Q1Q 3Q 4Q
446
226
Slide 19
Flow-based Rates and FX
Flow-based Rates/FX revenues
! Continue to expand client footprint both Rates and FX
! Ongoing investment in FX electronic platforms; focus on client execution � agency model
! Largely client based franchise, with marginal risk taking to facilitate intermediation role
CHF bn
2Q 1Q 2Q4Q3Q1Q 3Q
2007 2008
4Q
Market opportunity
CS competitive strengths
Growth strategy and focus
! Seen as a counterparty of choice (perceived financial strength), especially in derivatives but increasingly in cash as well
! Solid management team, integrated sales and trading model
! Strong risk management during turbulent markets
! Market leading research and electronic solutions (e.g. Merlin, FX AES)
! Continued strong market liquidity after record volumes in 2008 (e.g. Jan'09 FX volumes = avg monthly '08)
− Increased client demand for hedging against volatility
− Historically wide bid/offers
− Increased role for intermediators as government issuance expected to grow rapidly in 2009
! Strong macro risk environment
4.1
2.3
Slide 20
US RMBS
US RMBS Revenues
Market Opportunity
CS Competitive Strengths
Growth Strategy and Focus
! Clear #1 franchise - #1 ranked by Orion client survey and #1 RMBS TradeWeb
! Strong, deep and proven sales and trading team
! Nimble trading posture with limited, well-marked positions
! Long-standing customer relationships
! Historic competitor dislocation; attractive security valuations
! Tremendous need for risk transfer and intermediation
! Robust government-guaranteed RMBS issuance/trading
! Distressed private label markets with wide bid-offer
! Potential for disruptions due to government interventions
! Maintain leadership franchise, pursuing bid-offer and client-focused business model
! Opportunistic risk taking approach in dislocated markets
CHF bn
2Q 1Q 2Q4Q3Q1Q 3Q
2007 2008
4Q1)1)
(1) Q308 and Q408 results exclude credit provisions related to the deterioration in credit of a counterparty to a legacy structured finance transaction.
1.3
0.2
Slide 21
Equities: Repositioned businesses
0
25
50
75
100
Equity convertibles (market value at period-end, indexed)
Equity trading strategies (gross book at period-end, indexed)
! Sell-down of convertibles trading book now mostly complete
!Convertibles business is now primarily focused on client flow
! Sell-down of equity principal trading and risk arbitrage positions now mostly complete
! Focus is now on quantitative and liquid strategies
4Q07 2Q08 3Q08 4Q08
(70)%
0
25
50
75
100
4Q07 2Q08 3Q08 4Q08
(73)%
Convertibles
Equity trading strategies
Slide 22
0
25
50
75
100
Fixed Income: Repositioned businesses
Emerging market bonds (Indexed, net market value)
Leveraged finance (CHF bn)
! Emerging market bond positions down 74% in 2008
!Maintain leading business but with morelimited risk/credit provision
! Funded and unfunded commitment exposure cut to minimal levels
!Maintain leading business but focus on smaller/quicker to market deals
4Q07 3Q08 4Q08
(74)%
3Q07 4Q07
59
35 (98)%
21
1Q08
14
2Q08 3Q08
11.90.9
4Q08
Unfunded
Funded
Emerging markets
US leveraged finance
Slide 23
Cross-bank collaboration effort remains critical
Collaboration revenuesCHF bn ! IB�s collaboration revenues with the Private
Bank and Asset Management have been resilient despite market conditions, totaling CHF 2.4 bn in 2008 vs. CHF 2.7 bn in 2007
! Continued cross-selling efforts remain critical, including tailored products (the Solution Partners JV) and new client introduction
! IB-related revenues are expected to continue to contribute approximately half of Credit Suisse�s collaboration target of CHF 10 bn
2006 2007 2008
Total4.9
IB - PB1.6
IB - AM0.3
Total5.9
IB - PB2.2
IB - AM0.5
Total5.2
IB - PB2.0
IB - AM0.4
Slide 24
! Allocate resources towards client and flow-based businesses
! Reduce/exit businesses that are highly volatile or capital intensive
! Continue to grow cross-bank collaboration
Implementing our strategy
Priorities Key objectives
Re-align business portfolio
Reduce risk! Sustained and consistent reduction in dislocated assets
! Significant reduction in riskier, more volatile trading positions
Streamline expense base
! Reduce headcount
! Ongoing expense management
Slide 25
Reducing headcount and non-compensation expenses
Source: McLagan
(1) 2008 benchmark data not yet available
In USD thousands
Credit Suisse and benchmark non-comp per head (McLagan)
Benchmark non-comp per head
Credit Suisse non-comp per head
108
117
118 118
118
112
111
105
110
115
120
(1)
-8%
2005 2006 2007 2008
Investment Banking headcount (period-end)
17,300
18,70019,700
17,500
20,60021,300
2005 2006 4Q08 2009E2007 3Q08
! Outperformed peers in both absolute and relative terms with CS non-comp/head declining by 8% since 2005
! Resulting non-comp spend is among the lowest in the industry
! Committed to meeting 2009 year-end target of 17,500
! Headcount reduction of 1,600 in 4Q08 with further reductions scheduled for 2009 consistent with December announcement
Slide 26
Investment Bank cost savings target
! Total expected 2009 cost savings of CHF 1.3 bn of Credit Suisse total CHF 2 bn compared to 9M08 annualized
! 82% of savings from direct costs and 18% from shared services allocations
IB direct compensation
(0.7)
IB directnon-comp
Shared services
Total cost savings
Cost savings planned from re-alignment programCHF bn
(0.4)
(0.2) (1.3)
Slide 27
Credit Suisse overview
Repositioning the Investment Bank
Financial implications
Slide 28
FY 08 pro forma results
17.7
(11.1)
2.1
CHF bn
(4.5)
13.2
5.5
10.9
1.3 (0.2)
1.1
7.2
4.9
EquityFixed Income
Strategic Advisory (M&A) and Capital Markets Origination
Key client businesses
Repositioned businesses
Operating costs and credit provisions
Pre-tax Income
2008 pro forma revenues
(3.7)
(1)
1) Includes fair value gain on own debt of CHF 3.6 bn.
(0.6)
Slide 29
2.5
4.1
2.10.7
Improved returns over the cycle with lower volatility
13.2
17.014.9
11.8
Investment Banking revenue (CHF bn)
2005 2006 2007 2008
Investment Banking pre-tax income(1) (CHF bn)
! Repositioned IB has robust revenues and earnings and at much lower volatility
! Margins and returns should be higher through the cycle, avoiding the losses suffered in 2008
! Significantly lower risk capital in IB, with more balanced capital allocation across the Group
! Model intended to be capital generative, with tight capital and risk usage across all businesses
Pro forma risk-weighted assets (USD bn)
99 129 161 135
Pro forma
2005 2006 2007 2008
Pro forma
(1) Excludes litigation charge of CHF 960m in 2005 and net insurance settlement credits of CHF 508m in 2006 and CHF 208m in 2008.
Slide 30
Strongly positioned for the new environment
Capital strength and liquidity
! Counterparty of choice ! Greater flexibility and consistency, with no government ownership
CS Group strengths� ...and the Opportunity for IB
Aggressive risk reduction ! Accelerates execution of IB strategy! Allows us to rebalance capital across CS Group
Integrated bank model! Stable approach, validated by stressed market environment! Unique collaboration opportunity
Repositioned IB platform ! First mover advantage as demand turns to less complex products! Profitable through cycle with lower volatility, risk and cost
Client-focused, capital-efficient strategy
Slide 31