Goldman Sachs European Financials Conference 2007

Transcription

1 Goldman Sachs European Financials Conference 2007 Lisbon June 14, 2007 Renato Fassbind Chief Financial Officer

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 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, 2006 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 first quarter report Slide 2

3 Agenda Improving Operating Performance Platform for Growth Managing Risk and Capital Slide 3

4 Improving performance Net income in CHF bn 1) (from continued operations) Return on equity in % (based on reported net income, after-tax ) Net revenues in CHF bn (based on Core Results) Q Q07 Cost / income ratio in % 1) (based on Core Results) Q Q07 1) Results for 2005 exclude charge to increase the reserve for certain private litigation of CHF 960 m and charge of CHF 630 m in relation to the change in accounting for share-based compensation results exclude credits received from insurance settlements for litigations and related costs of CHF 508 m. Slide 4

5 Narrowing pre-tax margin gap in Investment Banking Investment Banking pre-tax margin (%) 2006 vs performance 34 Gap IB 1) Peers 2) Compensation / revenues down 6.4 ppt to 50.1% Other expenses / revenues down 5.5 ppt to 23.5% ) 2005 excludes charge to increase the reserve for certain private litigation of CHF 960m; 2006 excludes credits received from insurance settlements for litigation and related costs of CHF 508m 2) LEH, MS, MER, C, JPM, UBS, DB Slide 5

6 Continued strength in Wealth Management Net new asset growth on AuM in % 6% 8% 7% 7% Pre-tax income margin % CHF bn % Q Q07 Net new assets Assets under management (AuM) Slide 6

7 Asset Management with good asset gathering and improved profitability Net new asset growth on AuM in % 0% 4% 9% 10% Pre-tax income CHF m CHF bn Q07 Net new assets Assets under management (AuM) Q 2Q 3Q 4Q 1Q07 average 2006 Slide 7

8 Agenda Improving Operating Performance Platform for Growth Managing Risk and Capital Slide 8

9 A more focused Investment Banking franchise 1/2 Expand platform to benefit from industry trends Build on strengths Leading emerging markets business across all regions Leading business in leveraged finance and financial sponsors Strong position in structured products (CMBS/RMBS) Leading electronic trading/ execution platform (AES) Close gaps Continue organic build of commodities business Ramp up marketing effort for prime brokerage services Further expand and develop derivatives franchise Slide 9

10 A more focused Investment Banking franchise 2/2 Improve efficiency and execution Segment clients & focus franchises Segmenting our clients based upon deeper understanding of their needs Tailored product offering to meet the needs of each client segment Shifting focus to higher margin businesses Cost management Achieve sustainable, longterm cost/income ratio reductions Significant value-creation opportunity Disciplined approach to compensation/revenue ratio Slide 10

11 Attractive wealth growth in developing and mature markets 2005 HNWI market size (in CHF tr) Western Europe Japan Latin America 0.6 Eastern Europe 0.3 0% to 5% 5% to 10% 2006 to 2009 HNWI market growth p.a. x 4.0 North America Size of circle denotes cumulated 2006 to 2009 HNWI market growth (in CHF tr) Approx. 66% of total growth Asia Pacific (ex Japan) % to 15% Middle East Source: BCG Global Wealth Study, Credit Suisse analysis Slide 11

12 Viewpoint on integrated bank: Delivering enhanced value proposition to the wealth management client base Revenue per client, indexed by AuM segment, 2006 Additional revenues in IB and AM (in %) ~8 ~13 ~30 Integration enhances value, especially for the UHNWI segment Revenues in WM (in %) Revenues for IB and AM from UHNWI increased by roughly 135% in 2006 WM clients with AuM of... (in CHF) 250k-1m (Affluent) 1-25m (HNWI) > 25m (UHNWI) Slide 12

13 Capital outlook Activity Capital deployment Description Organic business growth Small and mediumsized acquisitions approx. 4.0 bn approx. 3.5 bn Across all businesses, e.g. Alternative capital investments Commercial mortgage-backed securities Lending and mortgages (Private Banking) Leveraged finance Bolt-on acquisitions to support growth strategy Focus on wealth and asset management business Share repurchases Launch new three-year program worth up to CHF 8 bn Completed CHF 6 bn program (2005 to 2007) Slide 13

14 Agenda Improving Operating Performance Platform for Growth Managing Risk and Capital Slide 14

15 Credit Suisse risk architecture Governance CARMC Priorities Proportionality Risk efficiency Today's focus Shareholder viewpoint Daily execution Protect downside Disciplined implementation Front office & Risk division CARMC = Capital Allocation and Risk Management Committee Slide 15

16 Proportionality Build-out of more diverse set of risk classes and earnings streams Credit Suisse Economic Capital (position risk) CHF bn % 16% 14% 18% 12% 10% Real estate & structured products Fixed income trading Equity trading & investments International lending & counterparty Swiss lending Emerging markets Position Risk shown at 99.0% confidence level 2006 risk-type allocation based on pre-diversification position risk Slide 16

17 Economic capital coverage ratio Economic capital is used to estimate internal capital adequacy Available capital resources Total: 40.1 bn Utilised economic capital Total: 23.8bn Other risk 0.8bn Operational risk 2.6bn Coverage ratio 168% Economic adjustments 5.0bn Tier 1 capital 35.1bn Position risk 20.4bn Notes: 1. Economic adjustments mainly relate to fair value adjustments and dividend timing 2. All units in CHF 3. Position Risk shown at 99.97% confidence level As of December 2006 Slide 17

18 Risk efficiency Distribution as a structural objective Market can give early warning on changes Closer touch with customers sharper awareness Makes capital 'work harder' for shareholders Hedging Credit Suisse spent over CHF 500 m on hedging and mobility in 2006 More consistent earnings by foregoing some upside in good times Better long term value through the cycle Free-up capital and improve returns for less liquid areas Slide 18

19 Example Investment Banking: Limit sensitivity to downturn Sensitivity to severe trading events has declined to approx. 25% of pre-tax income, down from close to 70% at year-end 2003 Investment Banking pretax margin vs. trading volatility index 25% 20% (12 month rolling averages) Pretax income as % of revenues 15% Trading 10% volatility index 5% as % of revenues 0% 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 Trading volatility index (VaR/Revenues) is a scenario that assumes that 'bad day' trading days (95% 1-day VaR) go to three times their statistical likelihood in a quarter (9 'bad days', or 6 more than expected. The index ignores offset from reduced costs or compensation accruals. While unlikely, it can give a useful indication of downside trading risk under highly adverse conditions. Slide 19

20 Summary Improved Operating Performance Improved margins at Investment Banking Continued momentum in Wealth Management Realigned Asset Management Focused growth in Investment Banking Platform for Growth Expand leading Private Banking franchise Capturing integration benefits Managing Risk and Capital Proportionality Risk efficiency Limit earnings sensitivity to severe events Slide 20

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