20-F 1 a100326ar20f.htm ANNUAL REPORT Credit Suisse Group - SEC Report
As filed with the Securities and Exchange Commission on March 26, 2010

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549



Form 20-F





   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
for the fiscal year ended December 31, 2009.







Commission file number: 001-15244
Credit Suisse Group AG

(Exact name of Registrant as specified in its charter)
Canton of Zurich, Switzerland
(Jurisdiction of incorporation or organization)
Paradeplatz 8, P.O. Box 1, CH 8070 Zurich, Switzerland
(Address of principal executive offices)

Renato Fassbind
Chief Financial Officer
Paradeplatz 8, P.O. Box 1, CH 8070 Zurich, Switzerland
renato.fassbind@credit-suisse.com
Telephone: +41 44 333 1700
Fax: +41 44 333 1790
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)



Commission file number: 001-33434
Credit Suisse AG

(Exact name of Registrant as specified in its charter)
Canton of Zurich, Switzerland
(Jurisdiction of incorporation or organization)
Paradeplatz 8, CH 8070 Zurich, Switzerland
(Address of principal executive offices)

Renato Fassbind
Chief Financial Officer
Paradeplatz 8, P.O. Box 1, CH 8070 Zurich, Switzerland
renato.fassbind@credit-suisse.com
Telephone: +41 44 333 1700
Fax: +41 44 333 1790
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)



Title of each class of securities of Credit Suisse Group AG       Name of each exchange on which registered
American Depositary Shares each representing one Share             New York Stock Exchange
Shares par value CHF 0.04*                                                         New York Stock Exchange*
Title of each class of securities of Credit Suisse AG
Fixed to Floating Rate Tier 1 Capital Notes                                    New York Stock Exchange
Floating Rate Tier 1 Capital Notes                                                 New York Stock Exchange
7.9% Tier 1 Capital Notes                                                             New York Stock Exchange
Buffered Accelerated Return Equity Securities (BARES) due
   November 6, 2012 Linked to the Performance of the
   CS/RT Emerging Infrastructure Index Powered by HOLT              NYSE Amex

Accelerated Return Equity Securities (ARES) due
   November 6, 2012 Linked to the Performance of the
   CS/RT Emerging Infrastructure Index Powered by HOLT              NYSE Amex

ELEMENTS due April 10, 2023 Linked to the Credit
   Suisse Global Warming Index, Exchange Series                          NYSE Arca

Exchange Traded Notes due February 19, 2020
   Linked to the Credit Suisse Long/Short Liquid Index (Net)            NYSE Arca

Title of each class of securities of Credit Suisse (USA), Inc.
6 1/8% Notes due 2011                                                                 New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of December 31, 2009: 1,169,210,895 shares of Credit Suisse Group AG
Indicate by check mark if the Registrants are well-known seasoned issuers, as defined in Rule 405 of the Securities Act.

   Yes      No   
If this report is an annual or transition report, indicate by check mark if the Registrants are not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

   Yes      No   
Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports) and (2) have been subject to such filing requirements for the past 90 days.

   Yes      No   
Indicate by check mark whether the Registrants are large accelerated filers, accelerated filers, or non-accelerated filers. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):

   Large accelerated filers      Accelerated filers      Non-accelerated filers   
Indicate by check mark which basis of accounting the Registrants have used to prepare the financial statements included in this filing:

   U.S. GAAP      International Financial Reporting Standards   Other   
         as issued by the
         International Accounting Standards Board 

If this is an annual report, indicate by check mark whether the Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act)

   Yes      No   
* Not for trading, but only in connection with the registration of the American Depositary















Definitions
Sources
Cautionary statement regarding forward-looking information
Item 1. Identity of directors, senior management and advisers.
Item 2. Offer statistics and expected timetable.
Item 3. Key information.
Item 4. Information on the company.
Item 4A. Unresolved staff comments.
Item 5. Operating and financial review and prospects.
Item 6. Directors, senior management and employees.
Item 7. Major shareholders and related party transactions.
Item 8. Financial information.
Item 9. The offer and listing.
Item 10. Additional information.
Item 11. Quantitative and qualitative disclosures about market risk.
Item 12. Description of securities other than equity securities.
Item 13. Defaults, dividend arrearages and delinquencies.
Item 14. Material modifications to the rights of security holders and use of proceeds.
Item 15. Controls and procedures.
Item 16A. Audit committee financial expert.
Item 16B. Code of ethics.
Item 16C. Principal accountant fees and services.
Item 16D. Exemptions from the listing standards for audit committee.
Item 16E. Purchases of equity securities by the issuer and affiliated purchasers.
Item 16F. Change in registrants’ certifying accountant.
Item 16G. Corporate governance.
Item 17. Financial statements.
Item 18. Financial statements.
Item 19. Exhibits.
SIGNATURES
Annual Report 2009
Dear shareholders, clients and colleagues
Information on the company
Credit Suisse at a glance: our vision
Global reach of Credit Suisse
Review of the year’s events
Strategy
Our businesses
Organizational and regional structure
Regulation and supervision
Operating and financial review
Operating environment
Credit Suisse
Core Results
Key performance indicators
Private Banking
Wealth Management Clients
Corporate & Institutional Clients
Investment Banking
Asset Management
Corporate Center
Results overview
Assets under management
Critical accounting estimates
Treasury, Risk, Balance sheet and Off-balance sheet
Treasury management
Risk management
Balance sheet, off-balance sheet and other contractual obligations
Corporate governance
Overview
Shareholders
Board of Directors
Executive Board
Compensation
Additional information
Consolidated financial statements – Credit Suisse Group
Report of the Independent Registered Public Accounting Firm
Consolidated financial statements
Notes to the consolidated financial statements
1 Summary of significant accounting policies
2 Recently issued accounting standards
3 Business developments
4 Discontinued operations
5 Segment information
6 Net interest income
7 Commissions and fees
8 Other revenues
9 Provision for credit losses
10 Compensation and benefits
11 General and administrative expenses
12 Earnings per share
13 Securities borrowed, lent and subject to repurchase agreements
14 Trading assets and liabilities
15 Investment securities
16 Other investments
17 Loans
18 Premises and equipment
19 Goodwill and other intangible assets
20 Life settlement contracts
21 Other assets and other liabilities
22 Deposits
23 Long-term debt
24 Accumulated other comprehensive income
25 Tax
26 Employee share-based compensation and other compensation benefits
27 Related parties
28 Pension and other post-retirement benefits
29 Derivatives and hedging activities
30 Guarantees and commitments
31 Transfers of financial assets and variable interest entities
32 Financial instruments
33 Assets pledged or assigned
34 Capital adequacy
35 Assets under management
36 Litigation
37 Significant subsidiaries and equity method investments
38 Supplementary subsidiary guarantee information
39 Credit Suisse Group Parent company
40 Significant valuation and income recognition differences between US GAAP and Swiss GAAP (true and fair view)
41 Risk assessment
Controls and procedures
Report of the Independent Registered Public Accounting Firm
Parent company financial statements– Credit Suisse Group
Report of the Statutory Auditor on the Financial Statements
Parent company financial statements
Notes to the financial statements
1 Accounting principles
2 Contingent liabilities
3 Compensation to members of the Board of Directors and the Executive Board
4 Liabilities due to own pension plans and Credit Suisse Group bonds held by pension plans
5 Bonds issued
6 Principal participations
7 Own shares held by the company and by group companies
8 Significant shareholders
9 Share capital, conditional and authorized capital of Credit Suisse Group
10 Risk assessment
Proposed appropriation of retained earnings
Confirmation to the Board of Directors relating to the Conditional Capital Increase
Consolidatedfinancial statements – Credit Suisse (Bank)
Report of the Independent Registered Public Accounting Firm
Consolidated financial statements
Notes to the consolidated financial statements
1 Summary of significant accounting policies
2 Recently issued accounting standards
3 Business developments
4 Discontinued operations
5 Segment information
6 Net interest income
7 Commissions and fees
8 Other revenues
9 Provision for credit losses
10 Compensation and benefits
11 General and administrative expenses
12 Securities borrowed, lent and subject to repurchase agreements
13 Trading assets and liabilities
14 Investment securities
15 Other investments
16 Loans
17 Premises and equipment
18 Goodwill and other intangible assets
19 Life settlement contracts
20 Other assets and other liabilities
21 Deposits
22 Long-term debt
23 Accumulated other comprehensive income
24 Tax
25 Employee share-based compensation and other compensation benefits
26 Related parties
27 Pension and other post-retirement benefits
28 Derivatives and hedging activities
29 Guarantees and commitments
30 Transfers of financial assets and variable interest entities
31 Financial instruments
32 Assets pledged or assigned
33 Capital adequacy
34 Litigation
35 Significant subsidiaries and equity method investments
36 Significant valuation and income recognition differences between US GAAP and Swiss GAAP (true and fair view)
37 Risk assessment
Controls and procedures
Report of the Independent Registered Public Accounting Firm
Parent company financial statements – Credit Suisse (Bank)
Report of the Statutory Auditor on the Financial Statements
Financial review
Parent company financial statements
Notes to the financial statements
1 Description of business activities
2 Accounting and valuation policies
3 Additional information on the parent company statements of income
4 Pledged assets and assets under reservation of ownership
5 Securities borrowing and securities lending, repurchase and reverse repurchase agreements
6 Liabilities due to own pension plans
7 Valuation adjustments and provisions
8 Composition of share and participation capital and authorized capital
9 Major shareholders and groups of shareholders
10 Shareholder’s equity
11 Amounts receivable from and payables to affiliated companies and loans to members of the Bank parent company’s governing bodies
12 Significant transactions with related parties
13 Fire insurance value of tangible fixed assets
14 Liabilities for future payments in connection with operating leases
15 Fiduciary transactions
16 Number of employees
17 Foreign currency translation rates
18 Outsourcing of services
19 Risk assessment
Proposed appropriation of retained earnings
Additional information
Statistical information
Legal proceedings
Risk factors
Other information
Foreign currency translation rates
Investor information
Investor information
List of abbreviations
Glossary





Definitions

For the purposes of this Form 20-F and the attached Annual Report 2009, unless the context otherwise requires, the terms “Credit Suisse Group,” “Credit Suisse,” “the Group,” “we,” “us” and “our” mean Credit Suisse Group AG and its consolidated subsidiaries and the term “the Bank” means Credit Suisse AG, the Swiss bank subsidiary of the Group, and its consolidated subsidiaries.

The business of the Bank is substantially similar to the Group and, except where noted or the context otherwise requires, information relating to the Group is also relevant to the Bank.

Abbreviations and selected >>terms are explained in the List of abbreviations and the Glossary in the back of this report.




Sources

Throughout this Form 20-F and the attached Annual Report 2009, we describe the position and ranking of our various businesses in certain industry and geographic markets. The sources for such descriptions come from a variety of conventional publications generally accepted as relevant business indicators by members of the financial services industry. These sources include: Standard & Poor’s, Thomson Financial, Dealogic, the Loan Pricing Corporation, Institutional Investor, Lipper, Moody’s Investors Service and Fitch Ratings.




Cautionary statement regarding forward-looking information

For Credit Suisse and the Bank, please see Cautionary statement regarding forward-looking information on page 491 of the attached Annual Report 2009.


Part I




Item 1. Identity of directors, senior management and advisers.

Not required because this Form 20-F is filed as an annual report.




Item 2. Offer statistics and expected timetable.

Not required because this Form 20-F is filed as an annual report.




Item 3. Key information.


A – Selected financial data.

For Credit Suisse and the Bank, please see IX – Additional information – Statistical information – Group on page 446 of the attached Annual Report 2009. For the Bank, please see IX – Additional information – Statistical information – Bank on page 447 of the attached Annual Report 2009.


B – Capitalization and indebtedness.

Not required because this Form 20-F is filed as an annual report.


C – Reasons for the offer and use of proceeds.

Not required because this Form 20-F is filed as an annual report.


D – Risk factors.

For Credit Suisse and the Bank, please see IX – Additional information – Risk factors on pages 469 to 475 of the attached Annual Report 2009.




Item 4. Information on the company.


A – History and development of the company.

For Credit Suisse and the Bank, please see I – Information on the company – Credit Suisse at a glance on pages 12 to 13, – Global reach of Credit Suisse on pages 14 to 15 and – Review of the year’s events on pages 16 to 17, and IV – Corporate governance – Overview – Company on page 143 of the attached Annual Report 2009. In addition, for Credit Suisse, please see Note 3 – Business developments in V – Consolidated financial statements – Credit Suisse Group on page 222 of the attached Annual Report 2009 and, for the Bank, please see Note 3 – Business developments in VII – Consolidated financial statements – Credit Suisse (Bank) on page 361 of the attached Annual Report 2009.


B – Business overview.

For Credit Suisse and the Bank, please see I – Information on the company on pages 12 to 41 of the attached Annual Report 2009. In addition, for Credit Suisse, please see Note 5 – Segment information in V – Consolidated financial statements – Credit Suisse Group on pages 224 to 226 of the attached Annual Report 2009 and, for the Bank, please see Note 5 – Segment information in VII – Consolidated financial statements – Credit Suisse (Bank) on pages 362 to 363 of the attached Annual Report 2009.


C – Organizational structure.

For Credit Suisse and the Bank, please see I – Information on the company – Organizational and regional structure on pages 34 to 35 and II – Operating and financial review – Credit Suisse – Differences between Group and Bank on page 50 of the attached Annual Report 2009. For a list of Credit Suisse’s significant subsidiaries, please see Note 37 – Significant subsidiaries and equity method investments in V – Consolidated financial statements – Credit Suisse Group on pages 311 to 313 of the attached Annual Report 2009 and, for a list of the Bank’s significant subsidiaries, please see Note 35 – Significant subsidiaries and equity method investments in VII – Consolidated financial statements – Credit Suisse (Bank) on pages 424 to 426 of the attached Annual Report 2009.


D – Property, plant and equipment.

For Credit Suisse and the Bank, please see IX – Additional information – Other information – Property and equipment on pages 480 to 481 of the attached Annual Report 2009.


Information Required by Industry Guide 3.

For Credit Suisse and the Bank, please see IX – Additional information – Statistical information on pages 446 to 463 of the attached Annual Report 2009. In addition, for both Credit Suisse and the Bank, please see III – Treasury, Risk, Balance sheet and Off-balance sheet – Risk management – Credit risk – Loans –Impaired loans and – Provision for credit losses on pages 130 to 132 of the attached Annual Report 2009.




Item 4A. Unresolved staff comments.

None.




Item 5. Operating and financial review and prospects.


A – Operating results.

For Credit Suisse and the Bank, please see II – Operating and financial review on pages 44 to 98 of the attached Annual Report 2009. In addition, for both Credit Suisse and the Bank, please see III – Treasury, Risk, Balance sheet and Off-balance sheet – Treasury management – Foreign exchange exposure and interest rate management on page 116 of the attached Annual Report 2009.


B – Liquidity and capital resources.

For Credit Suisse and the Bank, please see III – Treasury, Risk, Balance sheet and Off-balance sheet – Treasury management on pages 100 to 116 of the attached Annual Report 2009. In addition, for Credit Suisse, please see Note 23 – Long-term debt in V – Consolidated financial statements – Credit Suisse Group on pages 240 to 241 and Note 34 – Capital adequacy in V – Consolidated financial statements – Credit Suisse Group on page 308 of the attached Annual Report 2009 and, for the Bank, please see Note 22 – Long-term debt in VII – Consolidated financial statements – Credit Suisse (Bank) on page 378 and Note 33 – Capital adequacy in VII – Consolidated financial statements – Credit Suisse (Bank) on page 423 of the attached Annual Report 2009.


C – Research and development, patents and licenses, etc.

Not applicable.


D – Trend information.

For Credit Suisse and the Bank, please see Item 5.A of this Form 20-F.


E – Off-balance sheet arrangements.

For Credit Suisse and the Bank, please see III – Treasury, Risk, Balance sheet and Off-balance sheet – Balance sheet, off-balance sheet and other contractual obligations on pages 137 to 140 of the attached Annual Report 2009. In addition, for Credit Suisse, please see Note 29 – Derivatives and hedging activities, Note 30 – Guarantees and commitments and Note 31 – Transfers of financial assets and variable interest entities in V – Consolidated financial statements – Credit Suisse Group on pages 266 to 291 of the attached Annual Report 2009 and, for the Bank, please see Note 28 – Derivatives and hedging activities, Note 29 – Guarantees and commitments and Note 30 – Transfers of financial assets and variable interest entities in VII – Consolidated financial statements – Credit Suisse (Bank) on pages 398 to 412 of the attached Annual Report 2009.


F – Tabular disclosure of contractual obligations.

For Credit Suisse and the Bank, please see III – Treasury, Risk, Balance sheet and Off-balance sheet – Balance sheet, off-balance sheet and other contractual obligations – Contractual obligations and other commercial commitments on page 140 of the attached Annual Report 2009.




Item 6. Directors, senior management and employees.


A – Directors and senior management.

For Credit Suisse and the Bank, please see IV – Corporate governance – Board of Directors – Members of the Board and the Committees on pages 153 to 160, – Honorary Chairman of Credit Suisse Group on page 160, and – Executive Board on pages 161 to 166 of the attached Annual Report 2009.


B – Compensation.

For Credit Suisse and the Bank, please see IV – Corporate governance – Compensation on pages 167 to 191 of the attached Annual Report 2009. In addition, for Credit Suisse, please see Note 10 – Compensation and benefits in V – Consolidated financial statements – Credit Suisse Group on page 227, Note 28 – Pension and other post-retirement benefits in V – Consolidated financial statements – Credit Suisse Group on pages 256 to 266, and Note 3 – Compensation to members of the Board of Directors and the Executive Board in VI – Parent company financial statements – Credit Suisse Group on pages 333 to 342 of the attached Annual Report 2009 and, for the Bank, please see Note 10 – Compensation and benefits in VII – Consolidated financial statements – Credit Suisse (Bank) on page 365 and Note 27 – Pension and other post-retirement benefits in VII – Consolidated financial statements – Credit Suisse (Bank) on pages 389 to 398 of the attached Annual Report 2009.


C – Board practices.

For Credit Suisse and the Bank, please see IV – Corporate governance – Board of Directors and – Executive Board on pages 149 to 166 of the attached Annual Report 2009.


D – Employees.

For Credit Suisse and the Bank, please see IV – Corporate governance – Overview – Company – Employees on pages 143 to 144 and II – Operating and financial review – Results overview on pages 88 to 89 of the attached Annual Report 2009.


E – Share ownership.

For Credit Suisse and the Bank, please see IV – Corporate governance – Compensation – Overview, – Compensation design and structure – Variable compensation instruments on pages 170 to 174 and – Board and Executive Board compensation on pages 182 to 191 of the attached Annual Report 2009. In addition, for Credit Suisse, please see Note 26, Employee share-based compensation and other compensation benefits in V – Consolidated financial statements – Credit Suisse Group on pages 248 to 254, and Note 3 – Compensation to members of the Board of Directors and the Executive Board in VI – Parent company financial statements – Credit Suisse Group on pages 333 to 342 of the attached Annual Report 2009. For the Bank, please see Note 25 – Employee share-based compensation and other compensation benefits in VII – Consolidated financial statements – Credit Suisse (Bank) on pages 384 to 387 of the attached Annual Report 2009.




Item 7. Major shareholders and related party transactions.


A – Major shareholders.

For Credit Suisse, please see IV – Corporate governance – Shareholders on pages 145 to 148 of the attached Annual Report 2009. In addition, for Credit Suisse, please see Note 7 – Own shares held by the company and by group companies in VI – Parent company financial statements – Credit Suisse Group on page 343 of the attached Annual Report 2009. Credit Suisse’s major shareholders do not have different voting rights. The Bank has 43,996,652 shares outstanding and is a wholly-owned subsidiary of Credit Suisse.


B – Related party transactions.

For Credit Suisse and the Bank, please see IV – Corporate governance – Compensation –Board and Executive Board compensation on pages 182 to 191 of the attached Annual Report 2009. In addition, for Credit Suisse, please see Note 27 – Related parties in V – Consolidated financial statements – Credit Suisse Group on pages 255 to 256 of the attached Annual Report 2009 and, for the Bank, please see Note 26 – Related parties in VII – Consolidated financial statements – Credit Suisse (Bank) on pages 387 to 389 of the attached Annual Report 2009.


C – Interests of experts and counsel.

Not applicable because this Form 20-F is filed as an annual report.




Item 8. Financial information.


A – Consolidated statements and other financial information.

Please see Item 18 of this Form 20-F.

For a description of Credit Suisse’s and the Bank’s legal or arbitration proceedings, please see IX – Additional information – Legal proceedings on pages 464 to 468 of the attached Annual Report 2009. In addition, for Credit Suisse, please see Note 36 – Litigation in V – Consolidated financial statements – Credit Suisse Group on page 310 of the attached Annual Report 2009 and, for the Bank, please see Note 34 – Litigation in VII – Consolidated financial statements – Credit Suisse (Bank) on page 423 of the attached Annual Report 2009.

For a description of Credit Suisse’s policy on dividend distributions, please see III – Treasury, Risk, Balance sheet and Off-balance sheet – Treasury management – Capital Management – Dividends and dividend policy on pages 112 to 113 of the attached Annual Report 2009.


B – Significant changes.

None.




Item 9. The offer and listing.


A – Offer and listing details, C – Markets.

For information regarding the price history of Credit Suisse Group shares and the stock exchanges and other regulated markets on which they are listed or traded, please see IX – Additional information – Other information – Listing details on pages 479 to 480 of the attached Annual Report 2009. Shares of the Bank are not listed.


B – Plan of distribution, D – Selling shareholders, E – Dilution, F – Expenses of the issue.

Not required because this Form 20-F is filed as an annual report.




Item 10. Additional information.


A – Share capital.

Not required because this Form 20-F is filed as an annual report.


B – Memorandum and Articles of Association.

For Credit Suisse, please see IV – Corporate governance – Overview, – Shareholders and – Board of Directors on pages 145 to 160 and – Additional information – Changes of control and defense measures on page 192 and – Liquidation on page 194 of the attached Annual Report 2009. In addition, for Credit Suisse, please see IX – Additional information – Other information – Exchange controls and – American Depositary Shares on page 476 of the attached Annual Report 2009. Shares of the Bank are not listed.


C – Material contracts.

Neither Credit Suisse nor the Bank has any contract that would constitute a material contract for the two years immediately preceding this Form 20-F.


D – Exchange controls.

For Credit Suisse and the Bank, please see IX – Additional information – Other information – Exchange controls on page 476 of the attached Annual Report 2009.


E – Taxation.

For Credit Suisse, please see IX – Additional information – Other information – Taxation on pages 476 to 479 of the attached Annual Report 2009. The Bank does not have any public shareholders.


F – Dividends and paying agents.

Not required because this Form 20-F is filed as an annual report.


G – Statement by experts.

Not required because this Form 20-F is filed as an annual report.


H – Documents on display.

Credit Suisse and the Bank file periodic reports and other information with the SEC. You may read and copy any document that Credit Suisse or the Bank files with the SEC on the SEC’s website, www.sec.gov, or at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 (in the US) or at +1 202 942 8088 (outside the US) for further information on the operation of its public reference room. You may also inspect Credit Suisse’s and the Bank’s SEC reports and other information at the New York Stock Exchange, 11 Wall Street, New York, NY 10005.

The information Credit Suisse or the Bank files with the SEC may also be found on the Credit Suisse website at www.credit-suisse.com. In addition, our website also contains corporate governance policies and other documents of Credit Suisse and the Bank. Information contained on our website is not incorporated by reference into this Form 20-F.


I – Subsidiary information.

Not applicable.




Item 11. Quantitative and qualitative disclosures about market risk.

For Credit Suisse and the Bank, please see III – Treasury, Risk, Balance sheet and Off-balance sheet – Risk management on pages 117 to 136 of the attached Annual Report 2009.




Item 12. Description of securities other than equity securities.


A – Debt Securities, B – Warrants and Rights, C – Other Securities.

Not required because this Form 20-F is filed as an annual report.


D – American Depositary Shares.

For Credit Suisse, please see IV – Corporate governance – Additional information – American Depositary Share fees on pages 193 to 194 of the attached Annual Report 2009. Shares of the Bank are not listed.


Part II




Item 13. Defaults, dividend arrearages and delinquencies.

None.




Item 14. Material modifications to the rights of security holders and use of proceeds.



None.




Item 15. Controls and procedures.

For Credit Suisse’s management report and the related report from the Group’s independent auditors, please see Controls and procedures and Report of the Independent Registered Public Accounting Firm in V – Consolidated financial statements – Credit Suisse Group on pages 325 to 326 of the attached Annual Report 2009. For the Bank’s management report and the related report from the Bank’s independent auditors, please see Controls and procedures and Report of the Independent Registered Public Accounting Firm in VII – Consolidated financial statements – Credit Suisse (Bank) on pages 427 to 428 of the attached Annual Report 2009.




Item 16A. Audit committee financial expert.

For Credit Suisse and the Bank, please see IV – Corporate governance – Board of Directors – Board committees – Audit Committee on page 152 of the attached Annual Report 2009.




Item 16B. Code of ethics.

For Credit Suisse and the Bank, please see IV – Corporate governance – Overview – Corporate governance framework on pages 142 to 143 of the attached Annual Report 2009.




Item 16C. Principal accountant fees and services.

For Credit Suisse and the Bank, please see IV – Corporate governance – Additional Information – Internal and external auditors on pages 192 to 193 of the attached Annual Report 2009.




Item 16D. Exemptions from the listing standards for audit committee.

None.




Item 16E. Purchases of equity securities by the issuer and affiliated purchasers.

For Credit Suisse, please see III – Treasury, Risk, Balance sheet and Off-balance sheet – Treasury management – Capital management – Share repurchase activities on pages 112 of the attached Annual Report 2009. The Bank does not have any class of equity securities registered pursuant to Section 12 of the Exchange Act.




Item 16F. Change in registrants’ certifying accountant.

None.






Item 16G. Corporate governance.

For Credit Suisse, please see IV – Corporate governance–Overview–Complying with rules and regulations on page 142 of the attached Annual Report 2009. Shares of the Bank are not listed.


Part III




Item 17. Financial statements.

Not applicable.




Item 18. Financial statements.

Credit Suisse’s consolidated financial statements, together with the notes thereto and the Report of the Independent Registered Public Accounting Firm thereon, are set forth on pages 199 to 326 of the attached Annual Report 2009 and incorporated by reference herein. The Bank’s consolidated financial statements, together with the notes thereto (and any notes or portions thereof in the consolidated financial statements of Credit Suisse Group referred to therein) and the Report of the Independent Registered Public Accounting Firm thereon, are set forth on pages 351 to 428 of the attached Annual Report 2009 and incorporated by reference herein.




Item 19. Exhibits.

1.1 Articles of association (Statuten) of Credit Suisse Group AG as of February 2, 2010.

1.2 Articles of association (Statuten) of Credit Suisse AG (Bank) as of November 9, 2009.

1.3 Organizational Guidelines and Regulations of Credit Suisse Group AG and Credit Suisse AG (OGR) as of April 23, 2009.

7.1 Computations of ratios of earnings to fixed charges of Credit Suisse Group and of the Bank are set forth under IX – Additional Information – Statistical information – Ratio of earnings to fixed charges – Group and – Ratio of earnings to fixed charges – Bank on page 463 of the attached Annual Report 2009 and incorporated by reference herein.

8.1 Significant subsidiaries of Credit Suisse are set forth in Note 37 – Significant subsidiaries and equity method investments in V – Consolidated financial statements – Credit Suisse Group on pages 311 to 313, and significant subsidiaries of the Bank are set forth in Note 35 – Significant subsidiaries and equity method investments in VII – Consolidated financial statements – Credit Suisse (Bank) on pages 424 to 426 in the attached Annual Report 2009 and incorporated by reference herein.

9.1 Consent of KPMG AG, Zurich with respect to Credit Suisse Group AG consolidated financial statements.

9.2 Consent of KPMG AG, Zurich with respect to the Credit Suisse (Bank) consolidated financial statements.

12.1 Rule 13a-14(a) certification of the Chief Executive Officer of Credit Suisse Group AG and Credit Suisse (Bank), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

12.2 Rule 13a-14(a) certification of the Chief Financial Officer of Credit Suisse Group AG and Credit Suisse (Bank), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

13.1 Certifications pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Credit Suisse Group AG and Credit Suisse (Bank).

101.1 Interactive Data Files (XBRL-Related Documents)




SIGNATURES



Each of the registrants hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.







                           CREDIT SUISSE GROUP AG

                           (Registrant)

                           Date: March 26, 2010



/s/ Brady W. Dougan                           /s/ Renato Fassbind

Name: Brady W. Dougan                      Name: Renato Fassbind

Title: Chief Executive Officer                 Title: Chief Financial Officer 







                           CREDIT SUISSE AG

                           (Registrant)

                           Date: March 26, 2010



/s/ Brady W. Dougan                           /s/ Renato Fassbind

Name: Brady W. Dougan                      Name: Renato Fassbind

Title: Chief Executive Officer                 Title: Chief Financial Officer 








Annual Report 2009
















Financial highlights
 in / end of% change
20092008200709 / 0808 / 07
Net income (CHF million)  
Net income/(loss) attributable to shareholders 6,724(8,218)7,760
   of which from continuing operations 6,555(7,687)7,754
Earnings per share (CHF)  
Basic earnings/(loss) per share from continuing operations 5.14(7.51)7.06
Basic earnings/(loss) per share 5.28(8.01)7.07
Diluted earnings/(loss) per share from continuing operations 5.01(7.51)6.77
Diluted earnings/(loss) per share 5.14(8.01)6.78
Return on equity (%)  
Return on equity attributable to shareholders 18.3(21.1)18.0
Core Results (CHF million)  
Net revenues 33,61711,86234,539183(66)
Provision for credit losses 506813240(38)239
Total operating expenses 24,52823,21225,1596(8)
Income/(loss) from continuing operations before taxes 8,583(12,163)9,140
Core Results statement of operations metrics (%)  
Cost/income ratio 73.0195.772.8
Pre-tax income margin 25.5(102.5)26.5
Effective tax rate 21.437.813.7
Net income margin 120.0(69.3)22.5
Assets under management and net new assets (CHF billion)  
Assets under management from continuing operations 1,229.01,106.11,462.811.1(24.4)
Net new assets 44.2(3.0)43.2
Balance sheet statistics (CHF million)  
Total assets 1,031,4271,170,3501,360,680(12)(14)
Net loans 237,180235,797240,5341(2)
Total shareholders' equity 37,51732,30243,19916(25)
Tangible shareholders' equity 227,92222,54931,87324(29)
Book value per share outstanding (CHF)  
Total book value per share 32.0927.7542.3316(34)
Shares outstanding (million)  
Common shares issued 1,185.41,184.61,162.402
Treasury shares (16.2)(20.7)(141.8)(22)(85)
Shares outstanding 1,169.21,163.91,020.6014
Market capitalization  
Market capitalization (CHF million) 60,69133,76276,02480(56)
Market capitalization (USD million) 58,27333,47867,09374(50)
BIS statistics  
Risk-weighted assets (CHF million) 221,609257,467323,6403(14)(20)
Tier 1 ratio (%) 16.313.310.03
Total capital ratio (%) 20.617.912.93
Dividend per share (CHF)  
Dividend per share 2.0040.102.50
Number of employees (full-time equivalents)  
Number of employees 47,60047,80048,1000(1)
1    Based on amounts attributable to shareholders.      2    Tangible shareholders' equity is calculated by deducting goodwill and other intangible assets from total shareholders' equity attributable to shareholders.      3    Under Basel I we reported risk-weighted assets of CHF 312,068 million, a tier 1 ratio of 11.1% and a total capital ratio of 14.5% as of the end of 2007.      4    Proposal of the Board of Directors to the Annual General Meeting on April 30, 2010.

























Credit Suisse supports entrepreneurship. As a strategic partner to corporations and institutions worldwide, we offer comprehensive services, individually tailored financial solutions and cross-border capabilities. The cover of this report shows eight successful Swiss entrepreneurs, who have come to appreciate Credit Suisse as a competent financing partner. Their individual portraits can be found in our Business Review 2009.







Dear shareholders, clients and colleagues

Credit Suisse delivered a strong performance in 2009 thanks to our client-focused, capital-efficient strategy and our business model that enables us to generate less volatile earnings. We reported net income of CHF 6.7 billion, a return on equity of 18.3% and net new assets of over CHF 44 billion for the year under review. At the same time, we gained significant market share in various businesses and maintained our industry-leading capital position with a tier 1 ratio of 16.3% as of the end of 2009. The Board of Directors will propose a cash dividend of CHF 2.00 per share for 2009 to the Annual General Meeting on April 30, 2010.


Execution of our strategy in 2009

Credit Suisse took further steps to address the new challenges and opportunities created by the changing market environment during 2009. In Private Banking, we continued to invest in the expansion of our international private banking platform, which provides us with the necessary geographic reach and resources to meet the increasing client demand for local access to global services. The fact that we generated CHF 41.6 billion of net new assets across all regions in 2009 confirms the merits of this strategy of continuing to invest internationally. In our Swiss home market, we realigned our client coverage with a special focus on affluent and high-net-worth clients, while further developing our offering for large Swiss corporates and SMEs. Our role as an important and committed lender is underscored by the fact that we maintained our volume of lending in Switzerland at CHF 136.7 billion in 2009.

In Investment Banking, we continued to reposition the business in line with the changed competitive environment. As part of our efforts to build a more client-focused and capital-efficient investment bank, we significantly reduced risk capital usage and volatility, while increasing our focus on client and flow-based businesses, ranging from cash equities, electronic trading and prime services to global rates and foreign exchange, high grade debt and our strategic advisory business. We were able to maintain or gain market share across most products and regions during the year.

In Asset Management, we concentrated our resources on alternative investment strategies, asset allocation and the traditional businesses in Switzerland. We made tangible progress in our efforts to streamline our business portfolio, including the completion of the sale of our non-core traditional investment strategies business in Europe (excluding Switzerland), the US and Asia Pacific. In line with our integrated business model, we are increasingly coordinating and leveraging our Asset Management activities with Private Banking and Investment Banking and are benefiting from the focus on client needs and targeted solutions.


2009 financial performance

Credit Suisse generated net income attributable to shareholders of CHF 6,724 million in 2009, compared to a net loss of CHF 8,218 million in 2008. Core net revenues were CHF33,617 million, compared to CHF 11,862 million in 2008. Collaboration revenues from the integrated bank totaled CHF 5.2 billion in 2009, in line with the prior year.

Private Banking achieved a strong performance in 2009 in a market that is undergoing significant structural change. Pre-tax income totaled CHF 3,651 million, a decrease of 5% compared to 2008. Net revenues were CHF 11,662 million, a decline of 10% from the prior year. The Wealth Management Clients business reported pretax income of CHF 2,898 million, up 16% compared to the previous year. Net revenues were down 8% to CHF 9,871 million compared to 2008, reflecting a 7.5% decline in average assets under management and a shift to lower margin investments, including within managed investment products, as well as continued cautious investor behavior. The Swiss Corporate & Institutional Clients posted pre-tax income of CHF 753 million, a decline of 44% compared to 2008, mainly driven by fair value losses of CHF118 million on the Clock Finance transaction in 2009, compared to fair value gains of CHF 110 million in 2008.

In Investment Banking, we delivered record pre-tax income of CHF 6,845 million, compared to a pre-tax loss of CHF13,792 million in 2008. Net revenues also reached a record level at CHF 20,537 million, as we made substantial progress in the repositioning of our business and succeeded in growing our market share across various businesses and geographies. Our pleasing results also reflect our ability to capitalize on the recovery in the global financial markets.

In Asset Management, pre-tax income improved significantly to CHF 35 million in 2009 compared to a pretax loss of CHF 1,185 million in 2008. Net revenues almost tripled to CHF 1,842 million compared to 2008, primarily reflecting gains from securities purchased from our money market funds compared to losses in 2008, lower investment-related losses and higher revenues from equity participations and joint ventures.


Strategic priorities for 2010

The financial crisis precipitated fundamental changes in the financial services industry, which have profoundly affected the expectations and goals of clients, the type of financial institutions they trust and their choice of a longterm financial partner. We believe that Credit Suisse’s capital position and the strength of our business, as well as our ability to deliver our entire expertise to clients through an integrated global service offering, are creating compelling opportunities in this new competitive landscape. Building on the momentum we have established in 2009, we will strive to focus even more on addressing the needs and aspirations of our clients. We know that a skilled workforce is key to maintaining high levels of client satisfaction, which is why we will systematically continue to attract, develop and retain talented people while remaining sensitive to the ongoing public debate about compensation. Our strong capital position has helped maintain the trust of clients. Consequently, we will continue to manage capital and liquidity conservatively and we will also strive for top-quartile efficiency levels, while being careful not to compromise standards or growth.


Participating in the effort to improve the strength of the financial system

As a globally active bank, one of our key objectives has been to help restore public trust in the financial sector and enhance the stability of the financial system. As part of our commitment to supporting this process, we helped our clients to invest in growth and to successfully manage difficult restructuring and liquidity situations throughout the year. We also engaged in an open and constructive dialog with politicians and regulators to promote a coordinated global approach to banking supervision in an effort to build the more robust financial system essential to economic growth.

Compensation was an issue that came under intense scrutiny in 2009. At Credit Suisse, we recognize the need for our industry to change the way people are rewarded and incentivized. We have been using deferred, share-based compensation instruments for many years and, in 2009, became the first financial institution to align our compensation model to G-20 best practice guidelines. The new compensation structure we implemented reaffirms our commitment to offering our people fair, balanced and performance-oriented compensation. In line with this approach, the members of the Executive Board at December 31, 2009, received no variable cash compensation for 2009 and all variable compensation they received for 2009 was in the form of deferred awards and subject to performance criteria, which may result in future negative adjustments. Of the total variable compensation awarded across Credit Suisse for 2009, 40% took the form of deferred awards and was subject to performance criteria, which may result in future negative adjustments. Of the variable compensation awarded to managing directors for 2009, almost 60% was in the form of deferred awards and was subject to performance criteria, which may result in future negative adjustments. In Investment Banking, our compensation to revenue ratio for the full year was at the historically low level of 42%. Overall, we endeavored to strike the right balance between paying our employees competitively, doing what is right for our shareholders and responding appropriately to regulatory initiatives as well as political and public concerns. We will continue to take a responsible approach to compensation going forward.

Credit Suisse is committed to observing the highest standards of integrity and regulatory compliance in all aspects of its work. In the fourth quarter of 2009, we reached a settlement with the US authorities relating to an investigation into US dollar payments and other practices involving parties that are subject to US economic sanctions. We take this issue extremely seriously. We have enhanced our procedures and are taking action internally to highlight the fact that such incidents will not be tolerated. We are confident that we have a sound control framework that will enable us to remain a trusted financial partner to our clients.


Our responsibilities towards society

In addition to our priority of operating profitably and successfully in even the most challenging market environments, we are also acutely aware of our responsibilities that go beyond banking, particularly our commitments to our employees, society and the environment. For example, as one of Switzerland’s largest employers and providers of training, we believe that we have a duty to help strengthen the country’s position as a center of knowledge and industry and to promote entrepreneurship. In 2009, we therefore announced a number of long-term initiatives, including the creation of a further 150 apprenticeships in Switzerland as well as the investment of CHF 30 million over the next five years in training programs that help young people to find an apprenticeship and enter the job market. In addition, in conjunction with the Swiss Venture Club, we will provide up to CHF 100 million of risk capital to small and medium-sized enterprises and young entrepreneurs, primarily to promote the creation of jobs in Switzerland. Together with the Swiss IT and Communication Technology umbrella association, Credit Suisse also plans to invest up to CHF 10 million to help fund professional training in the IT sector as part of a program to create over 1,000 new IT apprenticeships in Switzerland by 2015. We believe that these efforts will ultimately help to enhance economic and social stability in Switzerland and are thus in the interests of our shareholders.

Our commitment to acting as a good corporate citizen is also reflected by our activities in other countries around the globe. For example, we have helped to improve access to schooling for children and young people worldwide through our Education Initiative, while our Disaster Relief Fund continued to provide emergency relief to the victims of major catastrophes, including the recent earthquake in Haiti. In view of the scale of the humanitarian disaster, Credit Suisse immediately made a USD 1 million donation to help the people of Haiti, which was divided between the American and Swiss Red Cross societies. We also launched a global employee fundraising campaign and our staff collectively made a substantial donation of over USD 1.25 million. The Credit Suisse Foundation pledged to contribute twice the amount donated by employees – meaning that a total of USD 4.75 million has been committed to this vital cause. Together with our partners from the Red Cross, we are continuing to evaluate relief needs and to explore ways to provide further effective support to the people of Haiti.


Changes to Board of Directors and Executive Board

Tobias Guldimann, Chief Risk Officer of Credit Suisse Group and a member of the Executive Board, assumed sole responsibility for risk management on the Executive Board with effect from June 1, 2009. At that time, D. Wilson Ervin, Chief Risk Officer of Credit Suisse, stepped down from the Executive Board and assumed a role as a Senior Adviser, reporting to Brady W. Dougan.

In June 2009, Karl Landert, Chief Information Officer of Credit Suisse, was appointed to the Executive Board.

In December 2009, Credit Suisse announced that Hans-Ulrich Doerig will remain Chairman of the Board of Directors until the Annual General Meeting in April 2011, when he will be succeeded by Vice-Chairman Urs Rohner.

In January 2010, Pamela Thomas-Graham joined Credit Suisse and was appointed to the newly created role of Chief Talent, Branding and Communications Officer. She is a member of the Executive Board and has global responsibility for the areas of Human Resources, Corporate Communications, Corporate Branding and Advertising.

The Board of Directors proposes the following members be re-elected to the Board: Noreen Doyle, Aziz D. Syriani, David Syz and Peter F. Weibel and proposes the following additions to the Board: Jassim Bin Hamad J.J. Al Thani, Chairman of the Board of Directors of Qatar Islamic Bank, and Robert H. Benmosche, President and CEO of American International Group (AIG), subject to their election by the shareholders. Changes in AIG’s business have made it possible for Mr. Benmosche to rejoin the Board, having previously stepped down in August 2009. Ernst Tanner has decided to step down from the Board as of the date of the AGM, and we thank him for his valuable contribution.


Positioned for success in the new environment

Credit Suisse’s strong performance in 2009 confirms the effectiveness of our distinctive, client-focused and capital-efficient business model, which is driving strong financial, client and employee momentum. Thanks to our forward-looking approach, we have come through the recent period of unprecedented industry change in a strong position and believe that we are well equipped to succeed in the new operating environment.



Yours sincerely









Hans-Ulrich Doerig     Brady W. Dougan

Chairman of the         Chief Executive Officer

Board of Directors



March 2010








Brady W.Dougan, Chief Executive Officer (left), Hans-Ulrich Doerig, Chairman of the Board of Directors. In the background is a portrait of Alfred Escher, who founded Credit Suisse in 1856.






For purposes of this report, unless the context otherwise requires, the terms “Credit Suisse Group”, “Credit Suisse”, “the Group”, “we”, “us” and “our” mean Credit Suisse Group AG and its consolidated subsidiaries. The business of Credit Suisse AG, the Swiss bank subsidiary of the Group, is substantially similar to the Group, and we use these terms to refer to both when the subject is the same or substantially similar. We use the term “the Bank” when we are only referring to Credit Suisse AG, the Swiss bank subsidiary of the Group, and its consolidated subsidiaries.



Abbreviations and selected >>terms are explained in the List of abbreviations and the Glossary in the back of this report.



In various tables, use of “-” indicates not meaningful or not applicable.











For information on how the bank assumes its responsibilities when conducting its business activities, including its commitments toward the environment and various stakeholders within society, refer to the Corporate Citizenship Report 2009. For information about our business activities and a summary of our financial performance during the year, please refer to the Business Review 2009.








Information on the company

Credit Suisse at a glance: our vision

Strategy

Our businesses

Organizational and regional structure

Regulation and supervision













Credit Suisse at a glance: our vision


Credit Suisse’s aspiration is to become one of the world’s most admired banks. We believe our ability to serve clients globally with solutions, tailored to their individual needs is a strong competitive advantage. To deliver customized products, comprehensive solutions and advisory services, we combine our strengths in Private Banking, Investment Banking and Asset Management and operate as an integrated bank. Our three divisions are supported by our global Shared Services functions, designed to ensure effective business support, and appropriate control and supervision of business activities.

To present a single face to clients, we run a regional structure comprising four regions: Switzerland, Europe, Middle East and Africa, Americas and Asia Pacific. With our local presence we ensure responsiveness to client needs and market trends, while fostering cross-divisional collaboration.

During the recent market disruption, our integrated business model proved to be both resilient and flexible, enabling us to respond to market developments quickly. This flexibility allowed us to stay focused on the most attractive markets and client segments, providing a solid platform for profitable growth.

Building on the momentum we have established, we focus on the implementation of our client-focused and capital-efficient integrated bank strategy. We aim to gain further market share and to strengthen our geographic footprint, while leveraging our programs for operational excellence and efficiency.


Divisions


Private Banking

Private Banking offers comprehensive advice and a wide range of financial solutions to private, corporate and institutional clients. The Private Banking division comprises the Wealth Management Clients and Corporate & Institutional Clients businesses. In Wealth Management Clients we serve ultra-high-net-worth and high-net-worth individuals around the globe and private clients in Switzerland. Our Corporate & Institutional Clients business serves the needs of corporations and institutional clients, mainly in Switzerland.




Investment Banking

Investment Banking provides a broad range of financial products and services, including global securities sales, trading and execution, prime brokerage and capital raising services, corporate advisory and comprehensive investment research, with a focus on businesses that are client-driven, flow-based and capital-efficient. Clients include corporations, governments, institutional investors, including hedge funds, and private individuals around the world. Credit Suisse delivers its investment banking capabilities via regional and local teams based in major global financial centers. Strongly anchored in Credit Suisse’s integrated model, Investment Banking works closely with the Private Banking and Asset Management divisions to provide clients with customized financial solutions.




Asset Management

Asset Management offers a wide range of investment products and solutions across asset classes, for all investment styles. The division manages global and regional portfolios, separate accounts, mutual funds and other investment vehicles for governments, institutions, corporations and individuals worldwide. Asset Management focuses on becoming a global leader in multi-asset class solutions as well as in alternative investments. To deliver the bank’s best investment performance, Asset Management operates as a global integrated network in close collaboration with the Private Banking and Investment Banking divisions.




Shared Services

Shared Services provides centralized corporate services and business support for the bank’s three divisions: Private Banking, Investment Banking and Asset Management. Its services cover areas as diverse as finance, legal and compliance, risk management, information technology, corporate communications, corporate development and human resources. Shared Services acts as an independent and centralized control function.


Regions


Switzerland

Our home market is Switzerland, where we are a leading bank for individual, corporate and institutional clients. Relationship managers at 36 branches look after small and medium-sized companies. We also have 266 branches for wealth management clients, and contact centers in the German, French and Italian-speaking areas.




Europe, Middle East and Africa

The Europe, Middle East and Africa region is a diverse mix of developed and emerging markets with 78 offices in 25 countries. In addition to our long-standing presence in Europe, including France, Germany, Italy, Spain and the UK, we also have a strong presence in key growth markets including Poland, Russia, Turkey and the Middle East. In 2009, we announced our plans to open an office in Sweden and further expanded our presence in Qatar, Saudi Arabia and South Africa.




Americas

The Americas region comprises our operations in the US, Canada, the Caribbean and Latin America. Our three divisions – Private Banking, Investment Banking and Asset Management – are strongly represented across the region. With offices in 51 cities spanning 15 countries, our clients have local access to our global expertise in their home markets. In 2009, we enhanced our Investment Banking and Private Banking platforms in Mexico. In Brazil, we strengthened our market-leading position to provide full cross-divisional services and leveraged our partnership with Hedging-Griffo.




Asia Pacific

The Asia Pacific region comprises 25 offices in 13 markets. Singapore is home to Credit Suisse’s largest Private Banking operations outside Switzerland. The region is also our fastest-growing Private Banking market globally, employing 360 relationship managers. In Investment Banking, we have a strong presence in the region’s largest markets, such as Australia and China, complemented by long-standing leadership in several Southeast Asian markets. In 2009, we opened a bank branch office in Taipei, began operations in our non-bank financial company in India and opened our fifth Center of Excellence in Mumbai. Credit Suisse Founder Securities, our Chinese domestic capital markets joint venture, also commenced operations.









Global reach of Credit Suisse

We are established in all financial centers. With operations in more than 50 countries we are able to deliver our integrated business model to our clients across all regions.

Private Banking offers all-in-one solutions to our onshore and offshore clients. To better serve them, we have established a globally consistent advisory process including comprehensive products and services. Investment Banking has a global platform of services delivered through regional hubs, while Asset Management operates as a globally integrated network. 

This worldwide reach enables us to generate a geographically balanced stream of revenues and net new assets. In addition, it allows us to capture growth opportunities wherever they are. 

In 2009, we continued to strengthen our global footprint, with private banking operations launched in Tokyo, Warsaw and Mexico City. A new bank branch was opened in Taipei, and in Qatar we started to provide both investment banking and asset management services. To ensure a best-in-class global infrastructure, we have set up Centers of Excellence, which provide support services around the world. We opened a fifth Center of Excellence in Mumbai during the course of 2009.

Regional headquarters
Credit Suisse AG
Paradeplatz 8
8070 Zurich
Switzerland
Tel. +41 44 212 16 16
Fax +41 44 332 25 87
Credit Suisse
Eleven Madison Avenue
New York, NY 10010-3629
United States
Tel. +1 212 325 2000
Fax +1 212 325 6665
Credit Suisse
One Cabot Square
London E14 4QJ
United Kingdom
Tel. +44 20 78 88 8888
Fax +44 20 78 88 1600
Credit Suisse
Three Exchange Square
8 Connaught Place, Central
Hong Kong
Tel. +852 21 01 6000
Fax +852 21 01 7990








Review of the year’s events


January
Well capitalized We entered the year as one of the world’s best capitalized banks with a tier 1 ratio of 13.3%. This ratio strengthened to 16.3% as of the end of 2009.
Mergers and acquisitions We ranked first in Latin American mergers and acquisitions, with a market share of 27%.
IMF The International Monetary Fund (IMF) projected that the global economy would post its lowest growth rate since World War II, as the economies of the world’s richest nations contracted.
Low rates Global benchmark interest rates were kept low throughout the year, with the Fed’s target rate held near zero.
Chinese lending Chinese credit growth accelerated, buoyed by a stimulus package launched by its government at the end of 2008.

February
Risk positions cut As part of the accelerated implementation of our strategic plan, we continued to reduce our risk positions. By the end of the first quarter, our risk-weighted assets were down 33% compared with the first quarter of 2008.
US measures The US government approved a USD 787 billion fiscal stimulus package, including tax cuts and spending on infrastructure.
Troubled assets The US Treasury unveiled plans to use private and public funds to buy back troubled real estate-related assets from banks for up to USD 1 trillion.
Stress tests The US Treasury conducted stress tests on the country’s largest banks, assuming further economic deterioration.

March
Taiwan We launched trading operations in Taiwan, expanding our existing brokerage services in the country.
Mexico We launched private banking operations in Mexico, adding to existing investment banking activities.
Award We were named Best Private Banking Services Overall in Singapore by Euromoney.
Stock markets The Dow Jones Industrial Average index and the Swiss Market Index reached a low for the year. The two indices then recovered and rose 19% and 18%, respectively, in 2009.
Assistance in tax matters The Swiss government agreed to an exchange of information in cases of justified suspicion of tax evasion or fraud, to comply with OECD standards.
US dollar began to depreciate against major currencies amid deficit concerns.

April
Chairman change Vice-Chairman Hans-Ulrich Doerig was appointed Chairman after Walter B. Kielholz stepped down. Chief Operating Officer and General Counsel, Urs Rohner, became Vice-Chairman.
G-20 Leaders called for increased fairness and transparency in the global tax systems. The group of central bank governors subsequently agreed on a set of comprehensive measures to strengthen banks.
Write-downs The IMF estimated that actual and potential global write-downs on assets held by financial institutions would reach USD 4 trillion over 2007–2010, out of which two thirds would affect banks. In October, this estimate was cut to USD 3.4 trillion.

May
Japan We launched private banking operations in Japan, allowing us to offer a full suite of our integrated financial services to our Japanese clients.
Award We were named Best Bank in Switzerland and Best Investment Bank by Euromoney.
Global unemployment The International Labour Organization forecast that global unemployment would affect 239 million people in 2009, corresponding to an unemployment rate of 7.4%.
Bank capital rules The EU adopted tougher bank capital rules in an attempt to restore confidence in the financial markets. Banks will be required to retain at least 5% of the total value of their securitized exposures as of the end of 2010.

June
Karl Landert Our Chief Information Officer was appointed to our Executive Board.
Middle East We rolled out investment banking and asset management services in Qatar, adding to our existing private banking services.
Algorithmic trading We launched our algorithmic trading platform Advanced Execution Services in India. Further launches followed in Dubai, Israel, Abu Dhabi and Indonesia.
World Bank The international body forecast that global growth would drop by a record 2.9% during the year.
Bank bailouts The Bank for International Settlements estimated that the amount of resources committed to bank bailouts in 11 industrialized countries between September 2008 and June 2009 reached EUR 5 trillion.
US problem banks The number of banks on the Federal Deposit Insurance Corporation’s problem list rose to a 15-year high.

July
Asset Management We completed the sale of parts of our traditional asset management business to Aberdeen Asset Management in return for a 23.9% stake.
Credit default swaps Banks agreed to clear credit default swaps centrally within the EU to reinforce financial stability by reducing the inherent counterparty risks in this market.
Short selling The US Securities and Exchange Commission (SEC) announced measures addressing short selling abuses.
Chinese industry Chinese manufacturing indices continued to rise, spurred by domestic demand.

August
Affluent clients in Switzerland Building on the wide range of products and services available in Switzerland and our dense Swiss-wide branch network, we launched a program to improve the coverage of affluent private clients – those with assets ranging between CHF 250,000 and CHF 1 million. These clients will now be served from 180 locations throughout the country.
IPO activity Global initial public offerings (IPOs) rose to the highest level since the second quarter of 2008. Nearly two- thirds of the total IPO value was for Chinese companies.

September
India A fifth Center of Excellence (CoE) was opened in Mumbai to provide support to our front office in Investment Banking. Our five CoEs now deploy more than 8,000 positions, a figure set to reach 10,000 by 2011.
Private Banking investor day We reiterated our strategy for Private Banking, building on its leading business model and its scalable wealth management platform.
Economic pick-up Data confirmed that the US, EU and Switzerland emerged from a year-long recession.
Compensation The Financial Stability Board issued international standards for sound compensation practices.

October
Compensation structure We announced a new G-20 compliant compensation structure, reaffirming our commitment to a fair, balanced and performance-oriented compensation policy.
Poland We launched private banking operations in Warsaw, adding to existing asset management and investment banking operations.
US unemployment The US unemployment rate jumped to a 26-year high as jobs continued to be cut in the construction, manufacturing and retail sectors.
Oil prices rose steadily during the year, with the Brent crude oil futures reaching a year high at USD 82 per barrel.
Greece A credit agency cut Greece’s debt rating following a sharp deterioration of the country’s public finances. Other credit agencies followed suit in December.

November
New global ambassador We announced a long-term partnership agreement with Roger Federer, who will act as our global ambassador. We will make a significant annual contribution to his foundation that helps disadvantaged children, with a particular focus on Africa. Separately, we launched a new global advertising campaign, reflecting our integrated approach and commitment to help our clients thrive.
Dubai A state-owned conglomerate in Dubai asked to delay the repayments of its debts by at least 6 months. The potential default rattled the financial markets.
Low inflationary pressure US and euro zone inflation moved back into positive territory during the month, though well below historical averages.
Global mergers Global merger and acquisition activity reached a high for the year, reaching USD 305 billion, as confidence returned to the markets.

December
Training We announ-ced 150 new apprenticeships, bringing the total number of training positions available in Switzerland to 1,200. We will also invest CHF 30 million in training programs.
Succession planning Reflecting our efforts to ensure continuity at the Board of Directors, we announced that Vice-Chairman Urs Rohner will become Chairman in April 2011 when Hans-Ulrich Doerig retires.
Gold The price of gold reached a record USD 1,227.5 per ounce amid the low interest rate environment and the weak dollar.
Japan The Japanese government unveiled a USD 81 billion stimulus package. The country’s central bank will also inject more than USD 100 billion into the financial markets.
Stock markets Global stocks posted their best performance since 2003. The Dow Jones EURO STOXX Banks index rose 46%, while Credit Suisse’s shares rallied 80%.


Performance of Credit Suisse’s share price versus the Dow Jones EURO STOXX Banks index







Strategy


Industry trends and competition

While the banking industry is expected to continue to benefit from globalization, individual wealth creation and international capital flows, it is undergoing unprecedented regulatory change. After extraordinary emergency intervention by governments and central banks to rescue financial institutions and to stabilize markets during the financial crisis of 2008, regulators, governments and industry representatives focused in 2009 on ways to improve capital markets and financial services. Since November 2008, the leaders of the >>G-20 countries met three times, laying the foundation for reforms. They established the Financial Stability Board (FSB) to develop and implement strong regulatory, supervisory and other policies for financial stability. During 2009, the FSB issued various reports and established principles for cross-border cooperation on crisis management and sound practices to align compensation with prudent risk taking and long-term, sustainable performance. After calls by the G-20 for increased fairness and transparency in the global tax system, OECD standards reached broader acceptance.

In July 2009, the Basel Committee on Banking Supervision (BCBS) issued measures to strengthen trading book capital and to enhance the >>Basel II framework. In addition, in December 2009, the BCBS launched consultative proposals to strengthen the resilience of the banking sector. The proposals cover the following key areas: raising the quality, consistency and transparency of the capital base; strengthening the risk coverage of the capital framework; introducing a leverage ratio as a supplementary measure; introducing a series of measures to promote capital buffers; introducing a global minimum liquidity standard and addressing systemic risk. The BCBS will conduct an impact assessment to agree final rules by the end of 2010. Phase-in measures and grandfathering arrangements are expected to ensure a transition that does not impede the recovery of the real economy.

New regulation and the end of government and central bank emergency support are expected to shape bank industry trends over the foreseeable future. While detailed rules and implementation standards in most jurisdictions remain open, we expect regulatory compliance costs, including costs of additional capital and liquidity, to increase. In this period of uncertainty, we believe well-capitalized financial institutions with strong earnings power are better positioned to adjust to a changing industry landscape and increasing competitive pressure. As regulated banks generally move towards less risky business models with more liquid and transparent products, they are expected to face pressure to reach critical size, become more efficient and focus their activities. We expect clients to remain selective and risk conscious when choosing counterparties, and market demand might be increasingly bifurcated, with increased demand for more standardized products and for more customized, innovative solutions for sophisticated clients.


Group priorities

Our aspiration is to become one of the world’s most admired banks. We believe our ability to serve clients globally with an integrated service offering is a strong competitive advantage. Early in the financial crisis we took decisive action to reduce our risk exposures and to become more capital-efficient. As a result, we reduced risk-weighted assets by 32% since the end of 2007 and exited most proprietary trading businesses. By continuing to strengthen our capital and liquidity position we ensured the trust of our clients. With our client-focused and capital-efficient integrated bank strategy we delivered sound net income attributable to shareholders of CHF 6,724 million for 2009 and an industry-leading return on equity of 18.3%. As our strategy is consistent with both emerging client needs and regulatory trends, we feel well positioned to succeed in a changing operating environment. Building on the momentum we have established, we aim for further gains in market share while strengthening our geographic footprint and collaboration within the integrated business model. We expect to leverage our programs for operational excellence and efficiency. To achieve our goals, we are focused on the following priorities.


Client focus

We put our clients’ needs first. We aspire to be a consistent, reliable, flexible and long-term partner focused on clients with complex and multi-product needs, such as >>ultra-high-net-worth individuals, large and mid-sized companies, entrepreneurs, institutional clients and hedge funds. By listening attentively to their needs and offering them superior solutions, we empower them to make better financial decisions. Against the backdrop of significant changes within our industry, we implemented plans across the organization to ensure that we consistently help our clients realize their goals and thrive. We continue to strengthen the coverage of our key clients by dedicated teams of senior executives who can deliver our integrated business model. On the back of a strong capital position and high levels of client satisfaction and brand recognition, we achieved significant gains in market share. Our strong client momentum is well recognized. We were awarded “Best Private Banking Services Overall” by Euromoney, “Bank of the Year” by International Financing Review and “Top 3 Megabank” by Fortune magazine’s “Most Admired Companies” survey.


Employees

We continue to undertake efforts to attract, develop and retain top talent in order to deliver an outstanding integrated value proposition to our clients. Our candidates go through a rigorous interview process, where we not only look for technical and intellectual proficiency, but for people who can thrive in and contribute to our culture. Credit Suisse is above the external benchmark for employee engagement in the financial services industry. We systematically review our talent and identify the right developmental opportunities based on individual and organizational needs. We increasingly promote cross-divisional and cross-regional development, as well as lateral recruiting and mobility. Valuing different perspectives, creating an inclusive environment and showing cross-cultural sensitivity are key to Credit Suisse’s workplace culture. We have expanded our organizational understanding beyond traditional diversity and inclusion to leverage our differences to fully engage the workforce. Through our own business school, we train our leaders, specialists and client advisors in a wide range of subjects to ensure that knowledge and competence of our employees supports the needs of our clients and our strategy. We take a prudent and constructive approach to compensation, designed to reflect the performance of individuals and the firm and closely align the interests of employees with those of shareholders.


Collaboration

We help our clients thrive by delivering the best of our products and services seamlessly across our organization and regardless of divisional boundaries. In order to drive, measure and manage collaboration between our divisions, we have established a dedicated governance structure within the office of the CEO. In 2009, we recorded collaboration revenues of CHF 5.2 billion, with a target of CHF 10 billion annually by 2012. Since the inception of our collaboration program in 2006, we have built a strong track record of delivering customized value propositions. We believe this is a significant differentiator for Credit Suisse. We have observed increasing momentum in collaboration initiatives, including tailored solutions for wealthy private clients by Investment Banking, a new suite of managed investment products developed by Asset Management for Private Banking and strengthened client management coordination by our new alternative investments distribution team in Asset Management with the securities distribution team in Investment Banking. Benefiting from our programs for cross-divisional management development and lateral recruiting, we believe collaboration revenues including cross-selling and client referrals to be a resilient generator of both revenues and assets.


Capital and risk management

While the prudent taking of risk in line with our strategic priorities is fundamental to our business as a leading global bank, we maintain a conservative framework to manage liquidity and capital. Throughout the financial crisis we were a supplier of overnight funding to central banks, and we did not receive any emergency support provided by governments and central banks. As a result of the successful implementation of our client-focused and capital-efficient strategy, we further reduced our risk-weighted assets by 14% during 2009 to CHF 221.6 billion, contributing to the improvement of our Tier 1 ratio of 300 basis points to 16.3%. With further balance sheet reductions we achieved a leverage ratio of 4.2%, already complying with the Swiss minimum requirements to be implemented by 2013. We continue to deploy capital in a disciplined manner based on our economic capital framework, assessing our aggregated risk taking in relation to our client needs and our financial resources.


Efficiency

We continue to strive for top-quartile efficiency levels, while being careful not to compromise on growth or reputation. For our core activities we target a cost/income ratio of 65%. Efficiency measures implemented with strong involvement of senior management have generated cost savings while helping to build an efficiency culture. During 2009 we opened a fifth Center of Excellence (CoE) in Mumbai, with an initial focus on supporting Investment Banking. The new CoE will complement our four existing CoEs in Pune, Raleigh Durham, Singapore and Wroclaw. Since the CoE initiative was established in 2006, more than 8,000 roles have been deployed, improving productivity. We continue to focus on our Operational Excellence program, which has strengthened our culture of continuous improvement and client focus.

To track our progress and benchmark our performance, we have defined a set of key performance indicators for growth, efficiency and performance, and risk and capital to be achieved across market cycles. For a more detailed description of our businesses and our performance in 2009 against the defined targets, refer to II Operating and financial review Key performance indicators.


Corporate citizenship and Code of Conduct

At Credit Suisse, we firmly believe that corporate citizenship plays a crucial role in our long-term success as a business. We therefore strive to incorporate our approach to corporate citizenship into every aspect of our work. This approach is founded on a broad understanding of our responsibilities in banking, society and the environment, as well as on our role as an employer and on our dialogue with our stakeholders.

Our Code of Conduct, which sets out globally binding principles for our business operations, strengthens the responsibility of all employees and creates a framework where every individual is familiar with our corporate responsibilities. The core values include integrity, confidentiality and respect, as well as a commitment to sustainability.

To ensure that we supply the full breadth of information required by our stakeholders, we publish a Corporate Citizenship Report and additional information which can be found at www.credit-suisse.com/citizenship.




Our businesses


Private Banking


Business profile

In Private Banking we offer comprehensive advice to private, corporate and institutional clients and a broad range of financial solutions. Private Banking comprises the Wealth Management Clients and Corporate & Institutional Clients businesses, with total assets under management of CHF 914.9 billion. In Wealth Management Clients, we serve over two million clients, including >>ultra-high-net-worth and >>high-net-worth individuals around the globe and private clients in Switzerland. Our Corporate & Institutional Clients business serves the needs of over 100,000 corporations and institutions, mainly in Switzerland.

Within Wealth Management Clients, we operate one of the largest wealth management businesses globally. We offer clients a distinct value proposition combining a global reach with a structured advisory process and access to a broad range of sophisticated products and services. We deliver innovative and integrated solutions in close collaboration with Investment Banking and Asset Management. As of the end of 2009, we had CHF 802.8 billion of assets under management. Our global network comprises more than 380 locations in 47 countries. Wealth Management Clients has more than 4,000 relationship managers and 25 >>booking centers, reflecting our multi-shore strategy.

Within Corporate & Institutional Clients, we provide premium advice and solutions within a broad range of banking services, including lending, trade finance, cash management, corporate finance, global custody and asset and liability management. Clients include small and medium-sized enterprises, global corporations, banks, Swiss pension funds and insurance companies. As of the end of 2009, the business volume of our Corporate & Institutional Clients business totaled CHF 220.3 billion, with CHF 170.0 billion of client assets and CHF 50.3 billion of net loans. While large corporations are covered out of four locations, we serve small and medium-sized enterprises through relationship managers based in 36 branches throughout Switzerland.

Key data - Private Banking
 in / end of
200920082007
Key data  
Net revenues (CHF million) 11,66212,90713,522
Income before taxes (CHF million) 3,6513,8505,486
Assets under management (CHF billion) 914.9788.9995.4
Number of employees 24,30024,40023,200


Strategy

Trends and competition
Despite the impact of the financial crisis, the long-term growth prospects of the wealth management sector remain intact. Yearly industry growth rates measured by assets under management are projected at around 8% over the next three years. We expect more mature markets to experience lower growth rates, but starting from a larger asset base, with more than two thirds of global wealth located in the US, Japan and Western Europe. In these markets we see opportunities arising from the generational transfers of wealth and from further wealth accumulation, particularly by entrepreneurs, who increasingly seek solutions not only to manage their personal wealth but to develop their business over market cycles. We expect emerging markets, particularly in Asia, to continue to experience relatively strong growth driven by entrepreneurial wealth creation and relatively strong economic development.

While operating in an attractive growth market, wealth managers were impacted by the market disruption and the recession in many markets in the last two years. A large number of wealthy clients reconsidered their banking relationships and transferred assets to stable, reliable institutions with a strong capital position. Longer term, we expect clients to look increasingly for a broad and deep service offering, with smaller wealth managers facing challenges with regard to necessary size and scope. In addition, we expect increasing regulatory requirements relating to investment advice, client information and documentation to increase the cost and complexity of business processes and compliance frameworks. Increasing scrutiny by authorities on cross-border banking activities and legal compliance is expected to impact client behavior and operating models over time. We expect offshore banking in certain markets to have lower net new assets and increasing compliance costs, but that offshore banking will remain attractive in many markets, reflecting client focus on political stability, superior products and services and jurisdictional diversification. As a result of both the short-term impacts from the financial crisis and the longer-term industry trends, we expect consolidation of the wealth management industry to continue.

The Swiss market for Corporate & Institutional Clients continues to offer growth prospects in line with general economic development. Swiss corporates have faced the challenges from the economic downturn relatively well due to solid business models and conservative financing. A growing number of Swiss corporates have to deal with succession planning, a trend which increasingly creates business opportunities in this market, particularly for banks that can offer a tailored combination of private and investment banking services. In the Swiss institutional clients business, we expect further business growth, including advising on portfolio restructuring.

Key initiatives
Our aspiration is to become one of the most admired banks for Wealth Management Clients globally and for Corporate & Institutional Clients in Switzerland. We want to be an industry leader in terms of client satisfaction, employee engagement, profitability and growth. With our consistent strategy and our strong capital position, we are well positioned to succeed in a changing market environment.


We continue to invest in international growth by hiring and developing experienced relationship managers, upgrading our platforms and establishing a domestic presence in select markets. Depending on their needs, we offer clients onshore and offshore services in compliance with laws, rules and regulations. Our continued investment in our compliance framework positions us well to respond to evolving regulation in the markets in which we operate.

In Switzerland, our home market, we aim to gain market share in the Wealth Management Clients business: in the private client business, by increasing client focus and proximity as well as by continuously optimizing our branch network; and in the Swiss >>high-net-worth individuals business, by offering value propositions that leverage the full spectrum of our cross-divisional capabilities. The targeted growth segments in the Swiss corporate and institutional business include large corporates, institutional investors, financial institutions with transaction banking needs and small and medium-sized enterprises (SME) with an international focus. Regular surveys confirm a high degree of client satisfaction, reflected in significant net new asset inflows.

To further improve client centricity, we focus on our advisory approach and on segment-specific client solutions, for example, for >>ultra-high-net-worth clients or entrepreneurs. We invested nearly CHF 400 million in our award-winning advisory process in the last ten years, and enhanced our segment-specific client solutions.

Close collaboration with Investment Banking enables us to offer customized and innovative solutions to our clients, especially to ultra-high-net-worth individuals and corporates. In cooperation with Asset Management, we offer a range of client-focused discretionary mandates and access to hedge funds and private equity solutions.

As employees are the most critical success factor in delivering our value proposition, we systematically develop our pool of talent through training and certification programs. We strive to be an employer of choice, and as part of our growth strategy we continue to invest in our relationship managers as a driver of net new assets.

We drive efficiency and productivity, building on our programs for operational excellence, efficiency management and CoE.

Achievements
Key achievements and measures of our progress in 2009 include:

International growth: In 2009, we generated CHF 41.6 billion of net new assets across regions, with CHF 11.8 billion in Switzerland, CHF 10.3 billion from Europe, Middle East and Africa (EMEA), CHF 8.0 billion from the Americas and CHF 11.5 billion from Asia Pacific. As part of our international growth strategy, we launched domestic wealth management businesses in Japan, Mexico and Poland.

Market share gains in Switzerland: Building on the infrastructure and wide range of products and services available in Switzerland, we realigned our coverage with a special focus on >>affluent and high-net-worth clients. Going forward, affluent clients will be served in our entire branch network, more than doubling the locations for this key segment. In the Swiss corporate business, we played a key role for large Swiss corporates and SMEs, successfully leading complex refinancing and restructuring transactions through customized corporate finance services.

Client centricity: We developed and implemented a specific value proposition and focused coverage model for ultra-high-net-worth clients, with dedicated client organizations in all regions. As part of our continued efforts to improve the advisory process and to better serve clients, we launched a series of sophisticated advisory tools, including the Stock Navigator, the Bond Navigator and the Credit Suisse Risk Analyzer.

Integrating the banking businesses: In 2009, we generated revenues from 394 integrated solutions transactions in cooperation with Investment Banking and Asset Management. Together with Asset Management, we launched a new suite of discretionary mandates to better address client needs and respond to the market environment.

Best people: International hiring and appointments reflect our continued investment in international growth. In 2009, we hired 370 relationship managers and increased the share of senior hires among them to 62%. The net decrease of 100 relationship managers compared to the end of 2008 reflected a talent upgrade of our relationship managers, mainly in EMEA and Asia Pacific, while the number of relationship managers was stable in Switzerland and slightly higher in the Americas.

Productivity and financial performance: We maintained a gross margin in Wealth Management Clients of 131 basis points on our average assets under management, fully leveraging the integrated business model with positive contributions from client centric product innovation and increasing wallet share. Through targeted cost management programs, we achieved cost reductions of over CHF 300 million and a cost/income ratio of 67.1% in 2009.

Awards
We received numerous industry awards, including:

“Best Private Banking Services Overall” for Global, Western Europe, Switzerland, Guernsey, Indonesia, Russia and Singapore by Euromoney in its Private Banking Survey 2010;

“Best Wealth Management House” for 2009 by Euromoney in its “Awards for Excellence”;

“Best Bank in Switzerland in 2009” by Global Finance in its World’s Best Developed Market Bank Awards;

“Summa cum laude” in Germany and Switzerland by Handelsblatt’s Elite Report;

“Best Private Bank in Asia and Singapore” by The Asset magazine in its annual “Triple A Awards for Investors and Wealth Managers”;

“Outstanding Private Bank for UHNW Clients” at the 19th Private Banker International Wealth Summit in Singapore;

“Best Private Bank in the Middle East” by emeafinance; and

Ranked first on Fuchsbriefe’s “all-time best” list of wealth management companies in German speaking countries.


Products and services

Wealth Management Clients
In Wealth Management Clients, our service offering is based on the global Structured Advisory Process, client segment specific value propositions and comprehensive investment services:

Structured Advisory Process: We analyze our clients’ personal financial situation and prepare investment strategies based on an individual risk profile of liquid and illiquid assets and present and future liabilities. Based on this profile, we recommend specific investments in accordance with the investment guidelines of the Credit Suisse Investment Committee. The implementation and monitoring of the client portfolio is carried out by the relationship manager.

Client segment specific value propositions: We offer a range of wealth management solutions tailored to specific client segments. The global market segments we serve are ultra-high-net-worth and high-net-worth clients, and, in Switzerland, private clients. For entrepreneurs, we offer solutions targeted at specific needs within private and corporate wealth management, including succession planning, tax advisory, financial planning and investment banking services. Our entrepreneur clients benefit from the advice of Credit Suisse’s experienced corporate finance advisors, immediate access to a network of international investors, the preparation and coordination of financial transactions to maximize company value. A specialized team, Solutions Partners, offers holistic and tailor-made business and private financial solutions for our ultra-high-net-worth clients.

Comprehensive investment services: We offer a comprehensive range of investment advice and discretionary asset management services based on the analysis and recommendations of our global research team. Investment advice covers a range of services from portfolio consulting to advising on individual investments. We continuously strive to offer clients effective portfolio and risk management solutions, including managed investment products. These are products actively managed and structured by our specialists, providing private investors with access to asset classes that otherwise would not be available to them. For clients with more complex requirements, we provide investment portfolio structuring and the implementation of individual strategies, including a wide range of structured products and alternative investments. Discretionary asset management services are available to clients who wish to delegate the responsibility for investment decisions to Credit Suisse. In close collaboration with Investment Banking and Asset Management, we also provide innovative alternative investments with limited correlation to equities and bonds, such as hedge funds, private equity, commodities and real estate.

We also offer a broad range of financing products, such as construction loans, fixed and variable rate mortgages, consumer and car loans, different types of leasing arrangements and various credit cards provided by Swisscard, a joint venture between Credit Suisse and American Express. Additionally, we provide flexible financial solutions for every stage of a private client’s life, including private accounts, payment transactions, foreign exchange services, pension products and life insurance. The range of savings products available to private clients includes savings accounts, savings plan funds and insurance. Our core banking product Bonviva combines accounts and credit cards, simplifying day-to-day banking with a fixed package price.

Corporate & Institutional Clients
In our Corporate & Institutional Clients business, we supply a comprehensive range of financial solutions including cash management and payment transactions, all forms of traditional and structured lending, capital goods and real estate leasing, investment solutions and specialized services such as corporate finance, trade finance, ship financing, global custody and asset and liability management. Large corporate clients can benefit from tailor-made financial solutions and advice. In addition, we offer specialized products and services, such as multi-currency foreign exchange trading and various straight-through-processing solutions, such as brokerage and execution services.


Investment Banking


Business profile

Investment Banking provides a broad range of financial products and services, with a focus on businesses that are client-driven, >>flow-based and capital-efficient. Our suite of products and services includes global securities sales, trading and execution, prime brokerage and capital raising and advisory services, as well as comprehensive investment research. Our clients include corporations, governments and institutions around the world. We deliver our global investment banking capabilities via regional and local teams based in all major developed and emerging market centers. Our integrated business model enables us to gain a deeper and cross-business understanding of our clients and deliver creative, high-value, customized solutions based on expertise from across Credit Suisse.

Key data - Investment Banking
 in / end of
200920082007
Key data  
Net revenues (CHF million) 20,537(1,971)18,584
Income/(loss) before taxes (CHF million) 6,845(13,792)3,496
Number of employees 19,40019,60020,500


Strategy

Trends and competition
The global financial crisis has fundamentally changed the competitive landscape in the investment banking industry with substantial opportunities for firms with strong capital positions and manageable risk exposures. Credit Suisse was well positioned to take advantage of this environment in 2009 and to gain market share in many key businesses. We also benefited from improved pricing and margins resulting from the decline in competition. While bid-offer spreads became more normalized in the second half of the year compared to very high levels in the first half of 2009, we believe that given the structural changes in the industry, margins will remain above pre-crisis levels in the medium term. We continued to invest in expanding our platforms in >>flow-based products to maintain or increase market share, and we benefited from our reputation as a stable counterparty throughout the financial crisis and from our clients’ preference for less complex, more liquid financial products. In addition to our strong trading businesses, Credit Suisse benefited from market share gains in our capital markets and advisory businesses as well as higher industry issuance volumes compared with the extremely low levels in 2008. We expect that our market share gains, combined with an increase in trading, underwriting and advisory volumes, will contribute to a sustainable revenue base and potential for growth, even as the regulatory environment will provide challenges.

The systemic weaknesses exposed by the global financial crisis and the proposed regulatory changes will have a strong impact on investment banks. Proposed changes to the >>Basel II framework may lead to additional anti-cyclical provisioning and incremental capital charges to capture default risk on trading book assets. In addition, legislation being considered in the US and Europe will likely promote centralized clearing of standardized >>derivatives, lead to increased migration of over-the-counter (OTC) derivatives to exchanges and improve post-trade transparency for OTC derivatives. While both the parameters of the various regulatory proposals and their overall impact are uncertain, we expect increased capital requirements and regulation of derivatives to result in lower risk taking and increased transparency, potentially adversely impacting spreads. However, we view the proposed regulations as largely strengthening Credit Suisse’s competitive position, given our industry-leading capital ratios, our limited market share in OTC and complex derivatives and our emphasis on flow-based products. We believe that we will continue to be strongly differentiated from our peers by the stability of our platform, the momentum of our integrated franchise and our flexibility.

Key initiatives
In 2009, we executed our strategy to become a more client-focused and capital-efficient investment bank. We:

reduced risk capital usage;

reduced volatility and improved capital efficiency;

increased emphasis on client and >>flow-based businesses, such as cash equities, electronic trading, prime services, global rates and foreign exchange, high grade debt, US residential mortgage-backed securities (>>RMBS) secondary trading and our strategic advisory business;

repositioned certain other businesses by reducing risk and volatility, including quantitative and liquid equity trading strategies, secondary convertible trading, emerging markets, US leveraged finance and corporate lending; and

reduced risk limits for complex and structured products, including substantially reducing or exiting certain businesses such as highly structured derivatives, illiquid principal trading, residential and commercial mortgage origination, >>collateralized debt obligations, leveraged finance trading, RMBS outside the US and power and emissions trading.

Key measures of our progress include:

Risk-weighted assets declined 14% since the end of 2008, to USD 140 billion. We continued to reallocate capital from exit businesses to support growth in the client-focused businesses. As of the end of 2009, risk-weighted assets in ongoing businesses were USD 123 billion and in exit businesses were USD 17 million compared to risk-weighted assets of USD 128 billion in ongoing business and USD 35 billion in exit businesses as of the end of 2008.

Average one-day 99% >>value-at-risk declined 33% during 2009 to CHF 118 million.

In 2009, we reduced our exposure to dislocated assets to minimal levels.

Headcount was reduced by 200 from the end of 2008, although headcount increased in the second half of 2009, primarily due to an increase in IT professionals, reflecting our investment in infrastructure in client-focused businesses.

We believe that we have a significant opportunity to extend market share gains across our businesses as we build our distribution platform and enhance our electronic capabilities for clients. We are also further developing our emerging markets position and refining our strategy in the advisory and underwriting businesses in order to capitalize on market opportunities. Key initiatives to drive the franchise forward include:

significant IT investment to support capital-efficient businesses, including foreign exchange, >>Advanced Execution Services (AES®), prime services and flow and >>derivatives trading;

consolidate and extend market share gains in our cash equities business by improving primary rankings and capitalizing on new issue activity;

pursue targeted growth plans in our prime services business, including in listed derivatives, fund administration, prime brokerage and a variety of financing products such as exchange-traded funds (ETF), index/sector/single stock swaps and custom baskets;

focus on growing client flows and expanding distribution coverage across our fixed income businesses, including a significant expansion of our sales force;

broaden client footprint in our global foreign exchange business by building our electronic platform in foreign exchange (eFX) and infrastructure;

continue to pursue a capital-efficient approach to leveraged finance and investment grade capital market transactions;

capitalize on high-growth potential in targeted regions by building on our leading franchises in Brazil, Russia, Indonesia and the Middle East, our strong position in China and our growing business in India. We intend to expand flow sales business across credit, rates and foreign exchange and drive client connectivity across regions and in collaboration with Private Banking; and

capitalize on a global rebound in mergers and acquisitions (M&A) activity, continued recovery in initial public offering (IPO) issuance volumes and sizeable high yield refinancing opportunity.

Significant transactions and achievements
We expanded our ability to serve certain geographic and product markets:

We commenced investment banking operations in Qatar to complement our private banking services. The expansion of our business in Qatar further strengthens our strong local presence in the Middle East, with offices in Abu Dhabi, Beirut, Cairo, Doha, Dubai, Manama and Riyadh.

We launched AES® in India. Our clients can now employ a comprehensive range of algorithmic trading strategies for Indian equities, enabling them to trade more efficiently and achieve best execution.

We executed a number of significant transactions in 2009, reflecting the breadth and diversity of our investment banking franchise:

Debt capital markets: We arranged key financings for a diverse set of clients, including Rabobank Group (Dutch financial services provider), Weather Investments SpA (Italian telecommunications company), Reynolds Packaging Group (US consumer products manufacturer) and Liberty Global, Inc. (US cable operator).

Equity capital markets: We executed IPOs for China Resources Cement Holding Ltd. (Chinese cement and concrete producer), Maxis Berhad (Malaysian mobile communications provider) and Banco Santander Brasil (Brazilian bank), a rights issue for Rio Tinto Group (Anglo-Australian mining and exploration company) and a block trade of Barclays Plc (UK bank) stock for The International Petroleum Investment Company of Abu Dhabi.

Mergers and acquisitions: We advised on a number of key transactions that were announced during the year, including the acquisition by BlackRock Inc. (US investment management company) of Barclays Global Investors from Barclays Plc (UK bank), the sale by Merck & Co., Inc. (US pharmaceutical company) of its 50% interest in Merial Ltd. (UK animal health company) to Sanofi-Aventis SA (French pharmaceutical company), the acquisition by Sinopec International Petroleum Exploration and Production Company (Chinese oil and gas producer) of Addax Petroleum Corp. (Canadian oil and gas company) and the acquisition of Sun Microsystems, Inc. (US computer processing hardware company) by Oracle Corp. (US software company).

Market share momentum:

Moved up to number two overall in prime brokerage in Europe and number one for new hedge fund launches in the latest benchmark prime brokerage survey by EuroHedge. Based on the survey data, Credit Suisse Prime Services has a 15% market share in the region as measured by assets.

Ranked number one pan-European brokerage firm for equity trading based on commissions paid in the recently released Thomson Reuters Extel Survey.

AES® was again ranked number one in algorithmic trading by Greenwich Associates, continuing to maintain its industry-leading position. AES® gained further ground in the past year, increasing its lead in 2009 over the second best firm.

Overall foreign exchange trading market share ranking moved up five places to enter the top ten and overall market share doubled in Euromoney’s “FX Poll 2009”. Credit Suisse’s foreign exchange e-trading market share moved up to number six from number nineteen, reflecting the success of our suite of e-commerce tools. Other notable rankings included number one in “Most Improved” in Asia, “Serving accounts of USD 10 billion to USD 25 billion” and “Serving Real Money accounts.”

Ranked number one by Tradeweb in RMBS pass-through trading, with 19% market share for 2009.

Ranked number two in the “Top 3 Dealer” category with all credit investors for leveraged loans and number two in high yield credit and distressed debt, in a recent survey of credit investors in the US conducted by Greenwich Associates.

Ranked number two by Dealogic in investment banking revenues for Europe and Asia Pacific (excluding Japan) for 2009.

Ranked number one in terms of market share in US cash products in a recent survey conducted by a leading market share analysis provider.

Ranked number one in Greenwich Associates’ annual European Convertibles survey for the fifth consecutive year.

Awards
We received numerous industry awards in 2009:

“Best Investment Bank for 2009” by Euromoney. We were also recognized globally as the “Best Emerging Markets M&A House” and received a number of regional awards in Latin America, EMEA and Asia Pacific, which underscore the depth of our global footprint. Euromoney cited our early and aggressive risk reduction and our accelerated strategy to focus on key client businesses as important differentiators;

“Emerging Market Bond House” and “Swiss Franc Bond House” by International Financing Review, as well as “Best Investment-Grade Corporate Bond” and “Best US Dollar Bond” for our work on an IBM offering, “Emerging EMEA Bond” for our work on a KazMunayGaz offering and “Emerging Asia Bond” for our work on a Republic of Indonesia offering;

“Best Overall Trading Group”, “Best Par Desk” and “Best Distressed Desk” by Credit Investment News in its 12th annual buy side survey. We were also awarded “Best Sales Force” and ranked number one in all four subcategories in both par and distressed loans, the first time in the survey’s 12-year history that a firm swept the number one rankings for both desks;

“Best Innovation of the Year” for our partner asset facility compensation model by The Banker. We were also awarded “Best Investment Bank from Western Europe”, “Most Innovative in Bonds” and “Most Innovative in Asset and Liability Management”;

“2009 US Structurer of the Year”, “Equity Derivatives House of the Year” and “Hedge Fund House of the Year” by Structured Products;

“Best Algorithms” and “Best Smart Order Routing” by AsianInvestor in its 2009 Service Provider Awards for trading and execution. These awards highlight our AES® product, which provides a suite of fully automated trading strategies, tools and analytics that help our institutional and hedge fund clients worldwide reduce market impact, improve performance and add consistency to their trading process.

Prime Services ranked number one in Global Custodian’s benchmark annual Prime Brokerage survey. We earned a record 102 of 160 “Best in Class” awards, sweeping all service areas in North America, Europe and Non-Japan Asia.



Products and services

Our comprehensive portfolio of products and services is aimed at the needs of the most sophisticated clients, and we increasingly use integrated platforms to ensure efficiency and transparency. Our activities are organized around two broad functional areas: investment banking and global securities. In investment banking, we work in industry, product and country groups. The industry groups include energy, financial institutions, financial sponsors, industrial and services, healthcare, media and telecom, real estate and technology. The product groups include M&A and financing products. In global securities, we engage in a broad range of activities across fixed income, currencies, commodities, derivatives and cash equities markets, including sales, structuring, trading, financing, prime brokerage, syndication and origination, with a focus on client-based and >>flow-based businesses, in line with growing client demand for less complex and more liquid products and structures.

Investment banking
Equity and debt underwriting
Equity capital markets originates, syndicates and underwrites equity in IPOs, common and convertible stock issues, acquisition financing and other equity issues. Debt capital markets originates, syndicates and underwrites corporate and sovereign debt.

Advisory services
Advisory services advises clients on all aspects of M&A, corporate sales and restructurings, divestitures and takeover defense strategies. The fund-linked products group is responsible for the structuring, risk management and distribution of structured mutual fund and alternative investment products and develops innovative products to meet the needs of its clients through specially tailored solutions.

Global securities
Credit Suisse provides access to a wide range of debt and equity securities, derivative products and financing opportunities across the capital spectrum to corporate, sovereign and institutional clients. Global securities is structured into the following areas:

Fixed income
Rates: Interest rate products makes markets in the government bond and associated OTC derivative swap markets of developed economies, and its products include government bonds, bond options, interest rate swaps and options and structured interest rate derivatives. Foreign exchange provides market making and positioning in products such as spot and options for currencies in developed markets, dedicated research and strategy and structured advisory services. Listed derivatives provide innovative derivative product support, drawing on global execution capabilities, electronic trading systems and sophisticated analytics.

Credit: Credit products offers a full range of fixed income products and instruments to clients, ranging from standard debt issues and credit research to fund-linked products, derivatives instruments and structured products that address specific client needs. Credit derivatives trades and structures credit derivatives on investment grade and high yield credits. We are a leading dealer in both flow business, which trades single-name >>credit default swaps on individual credits, credit-linked notes and index swaps and structured products, providing credit hedging solutions to clients. Investment grade trades domestic corporate and sovereign debt, non-convertible preferred stock and short-term securities such as floating rate notes and >>commercial paper. Leveraged finance provides capital raising and advisory services and core leveraged credit products such as bank loans, bridge loans and high yield debt for non-investment grade corporate and financial sponsor-backed companies.

Structured products trades, securitizes, syndicates, underwrites and provides research for all forms of securities that are based on underlying pools of assets, including RMBS and asset-backed securities (ABS). The underwriting business handles securitizations for clients in most industry sectors.

Emerging markets offers a full range of fixed income products and instruments, including sovereign and corporate securities, local currency derivative instruments and tailored emerging market investment products.

Commodities focuses on oil, petroleum and metals trading through an alliance with Glencore International AG, one of the world’s largest suppliers of a wide range of commodities and raw materials to industrial consumers.

Life finance provides >>high-net-worth individuals and small to medium-sized businesses with financing and risk management solutions associated with purchasing and retaining a life insurance policy.

Global structuring develops and delivers sophisticated financing products and provides financial advisory services for corporate and institutional clients, and develops sophisticated products for investor clients. In addition to identifying opportunities across asset classes, it provides a robust platform for the creation of sophisticated asset-side solutions.

Equity
Equity sales uses research, offerings and other products and services to meet the needs of clients including mutual funds, investment advisors, banks, pension funds, hedge funds, insurance companies and other global financial institutions.

Sales trading links sales and position trading teams. Sales traders are responsible for managing the order flow between our client and the marketplace and provide clients with research, trading ideas and capital commitments and identify trends in the marketplace in order to obtain the best and most effective execution.

Trading executes client and proprietary orders and makes markets in listed and OTC cash securities, exchange-traded funds and programs, providing liquidity to the market through both capital commitments and risk management.

Equity derivatives provides a full range of equity-related products, investment options and financing solutions, as well as sophisticated hedging and risk management expertise and comprehensive execution capabilities to financial institutions, hedge funds, asset managers and corporations.

Convertibles trading involves both secondary trading and market making and the trading of credit default and asset swaps and distributing market information and research.

Prime services provides a wide range of services to hedge funds and institutional clients, including prime brokerage, start-up services, capital introductions, securities lending, synthetics and innovative financing solutions.

AES® is a sophisticated suite of algorithmic trading strategies, tools and analytics operated by Credit Suisse to facilitate global equity trading. By employing algorithms to execute client orders and limit volatility, AES® helps institutions and hedge funds reduce market impact. AES® is a recognized leader in its field and provides access to exchanges in more than 35 countries worldwide via more than 45 leading trading platforms.

Arbitrage trading
Our arbitrage trading business focuses on quantitative and liquid trading strategies in the major global equity and fixed income markets.

Other
Other products and activities include lending, private equity investments that are not managed by Asset Management, certain real estate investments and the distressed asset portfolios. Lending includes senior bank debt in the form of syndicated loans and commitments to extend credit to investment grade and non-investment grade borrowers.

Research and HOLT
Credit Suisse’s equity and fixed income businesses are supported by the research and HOLT functions.

Equity research uses in-depth analytical frameworks, proprietary methodologies and data sources to analyze approximately 2,500 companies worldwide and provides macroeconomic insights into this constantly changing environment.

HOLT offers one of the fastest and most advanced corporate performance, valuation and strategic analysis frameworks, tracking more than 20,000 companies in over 64 countries.


Asset Management


Business profile

Asset Management offers investment solutions and services globally to a wide range of clients, including institutions, governments, foundations and endowments, corporations and individuals. We provide access to a wide range of investment classes across alternative investment, asset allocation and traditional investment strategies. Our investment professionals focus on delivering best-in-class products and holistic client solutions with strong investment performance. We had CHF 416.0 billion of assets under management as of the end of 2009.

In alternative investment strategies, we are an industry leading manager, with CHF 157.9 billion of assets under management as of the end of 2009. Alternative investment strategies include private equity, real estate, credit strategies and liquid strategies.

Traditional investment strategies, with assets under management of CHF 240.8 billion, include multi-asset class solutions and other traditional investment strategies, primarily in Switzerland and Brazil, where we have industry leading franchises, and through strategic collaborations. In multi-asset class solutions, we provide tailored asset allocation solutions to clients around the world and have CHF 170.2 billion of assets under management. In other traditional investment strategies, with assets under management as of the end of 2009 of CHF 70.6 billion, we provide access to fixed income, equity and institutional pension advisory investments, directly and through our strategic collaborations.

As part of the client-focused integrated business model, we are increasingly coordinating and leveraging our activities with Private Banking and Investment Banking. We benefit from their focus on client needs and targeted solutions. Through collaboration with both internal and external partners, we aspire to deliver best-in-class solutions to our clients. Discretionary mandates are managed with an open architecture approach, allowing us to tap into the investment capabilities of the best asset managers globally. We pursue partnerships with leading investment managers globally, and our strategic alliances and joint ventures provide us with access to key products, markets and distribution channels.

We have made direct investments as well as investments in partnerships that make private equity and related investments in various portfolio companies and funds. We offer our employees opportunities to invest side by side with our clients in certain investments.

Key data - Asset Management
 in / end of
200920082007
Key data  
Net revenues (CHF million) 1,8426322,390
Income/(loss) before taxes (CHF million) 35(1,185)350
Assets under management (CHF billion) 416.0411.5599.4
Number of employees 3,1003,1003,700


Strategy

Trends and competition
The effects of the global financial crisis continued to affect the asset management industry in 2009. Investors began to reposition their portfolios, seeking more liquid transparent products and more robust risk management. Fundraising varied considerably across asset classes, as investors coped with the impact of the market downturn and asset allocation distortion. In alternative investments, illiquid fundraising was generally challenging, particularly in private equity. The opportunity in real estate varied significantly by country, with developed market opportunities more focused on distressed strategies. Investor demand for credit exposure was steady in 2009. The hedge fund industry experienced significant redemptions in the first half of the year, but stabilized in the second half. Within the traditional products sector, investor risk appetite began to return in the second half of the year, with outflows in cash and money market funds, primarily into fixed income products. Emerging markets products gathered significant momentum over the year, and demand for passive vehicles like ETFs and index products increased in 2009.

Transparency and risk management emerged as major themes after the events of 2008. Investors became more aware of counterparty risk and moved towards simpler, more regulated structures. Institutional investors increasingly demanded more transparency and a greater understanding of underlying risk. Reinforcing this trend were increased regulatory scrutiny, with proposed changes to regulatory and compliance requirements for investment advisers, managers, placement agents and private funds, and proposed changes to the tax treatment of carried interest. In addition, industry margins compressed as assets under management declined and performance fees remained depressed. The industry experienced significant consolidation throughout the year, particularly in hedge funds, and some integrated financial institutions divested non-core asset management businesses.

Key initiatives
In 2009, we continued to implement our strategy focused on alternative investment strategies, asset allocation and the traditional businesses in Switzerland. We focused on:

delivering world class investment capabilities to our clients through our internal investment capabilities or selectively in partnership with leading external investment managers;

deepening our institutional and high-net-worth client relationships;

providing holistic solutions to our clients through our broad product platform, asset allocation capabilities and risk management expertise;

collaborating with Private Banking and Investment Banking;

increasing the proportion of third-party capital in our alternative investments funds; and

reducing risk and driving efficiency.

Key examples of our progress include:

completing the sale of part of our traditional investment strategies business in Europe (excluding Switzerland), the US and Asia Pacific to Aberdeen for a 23.9% stake;

continuing to leverage our partnership with Hedging-Griffo, a leading hedge fund manager in Brazil;

investing in our global distribution capabilities, including building our investment strategies solutions team;

redesigning our suite of asset allocation mandates in partnership with Private Banking to better address client needs and respond to the evolving market environment;

in partnership with Investment Banking, launching ETFs focusing on our Swiss and European clients;

driving efficiency and productivity by consolidating locations;

winding down our exposures to securities purchased from our money market funds; and

returning to profitability and positive net new assets.

We expect this strategy to continue to increase net new assets and assets under management and improve our profitability. Key initiatives we will focus on going forward include:

providing clients with customized advice and solutions;

building our liquid product range in hedge funds and hedge funds of funds;

expanding our real estate product offering as opportunities emerge;

launching new private equity funds, particularly in secondary and funds of funds;

expanding our traditional fixed income and equities capabilities in Switzerland;

seeking to strengthen our relationship with Private Banking through further collaboration and the distribution of Asset Management products and services to Private Banking; and

continuing to improve operating efficiency by streamlining our business support operations.

Mandates
In liquid strategies, our quantitative strategies group won new mandates in 2009, raising CHF 4.4 billion mainly from German and Italian clients, expanding the traditional index business outside of Switzerland.

In liquid strategies, commodities business attracted CHF 2.3 billion of net new assets. We manage the second largest indexed commodities mutual fund in the US.

We launched CS Global Macro Replication Index, the second in a planned suite of alternative index replication strategies, which joins the existing Long/Short Equity Replication Index in offering exposure to two of the largest and most popular sectors in the hedge fund industry.

We announced the expansion of our existing Swiss ETF range, known as Credit Suisse Xmtch, with the launch of 17 new funds on a variety of global equity and bond indices. We have assets under management of nearly CHF 10 billion.

We won a CHF 500 million private equity fund of funds mandate from a large Asian pension plan and two credit strategies mandates totaling CHF 300 million from US pension funds.

We had net new assets of CHF 3.8 billion in connection with the acquisition of Jelmoli AG by Swiss Prime Site AG, a Swiss real estate company for which we are the investment adviser and administrator.

ICBC Credit Suisse Asset Management Ltd, our joint venture in China, successfully launched its first ETF in China, which tracks the Shanghai Stock Exchange central state-owned enterprises 50 Index, raising CHF 0.7 billion from domestic investors despite the challenging market conditions.

We obtained approval from China’s State Administration of Foreign Exchange for an investment quota of USD 200 million under the country’s Qualified Foreign Institutional Investor program. This approval, together with the qualified financial intermediary accreditation granted by the China Securities Regulatory Commission in October 2008, enabled us to launch asset management products investing in Renminbi-denominated securities.

Global Infrastructure Partners (GIP), our asset management joint venture with General Electric, and El Paso Corporation (El Paso) entered into a joint venture to construct, own and operate a natural gas pipeline that will transport gas from the Rocky Mountain supply region to US west coast markets. Upon expected completion of construction in 2011, each of GIP and El Paso will own 50% of the equity.

Asset Management Finance LLC, in which we own a majority stake, made investments in the fourth quarter totaling CHF 200 million in four firms that specialize in wealth management and alternative asset management.


Products and services

Asset Management offers institutional and individual clients a range of products, such as alternative and traditional products, through our and third-party distribution channels. We also offer investment strategies through joint ventures with external managers across various regions and asset classes to enhance results for shareholders, while bringing credibility, strong track records and knowledge to Credit Suisse in new or strategic areas. Credit Suisse offers a range of Brazil-focused strategies through joint ventures in emerging markets with significant growth potential through a range of products including fixed income, equities and hedge fund solutions.

Alternative investment strategies
We are a market leader in alternative investments, with a range of products including private equity, real estate, credit strategies and liquid strategies including single-manager hedge fund strategies, multi-manager hedge funds and index strategies.

We offer a broad array of private equity funds to meet client needs. We have the ability to tailor fund strategies to meet specific private equity needs of our clients through our customized investment fund group. Our mezzanine funds use subordinated debt along with equity to invest in private companies, while our secondary funds capitalize on preferences for early liquidity in existing private equity investments. We also provide investment vehicles in infrastructure, commodities and emerging markets.

In real estate, we provide an array of investment offerings depending on the liquidity, risk and return preferences of our clients. Our real estate core business aims to provide investors with stable and attractive cash flows, applying active portfolio management to reduce volatility.

Our credit strategies business focuses on the volatility of credit risk premiums of various debt instruments, capitalizing on economic fluctuations that impact premiums. Our performing credit strategies group specializes in the management of leveraged financial assets such as loans, high yield bonds and structured products. Our two event-driven distressed funds seek to generate absolute returns through coordinated long and short investments across the capital structure.

In liquid strategies, we offer access to key investment strategies via single-manager hedge funds, fund of hedge funds, alternative beta products, ETFs and other indexed products. Our single-manager hedge fund platform provides access to leading in-house hedge fund managers and through partnerships with best-in-class partners. We also provide actively managed hedge funds of funds across several strategies, including event-driven, emerging markets, convertible arbitrage, fixed income arbitrage, global macro, managed futures, volatility arbitrage and long/short investing. In addition, we offer highly liquid, systematic market exposure to equity, fixed income, real estate, commodity, volatility and hedge fund markets. Liquid strategies also includes one of Europe’s leading ETF brands as well as the Credit Suisse Hedge Fund Index, one of the world’s leading hedge fund indices.

Traditional investment strategies
In the area of multi-asset class solutions, we provide clients around the world with innovative solutions and comprehensive management across asset classes to optimize client portfolios, with services that range from funds to fully customized solutions. Stressing investment principles such as risk management and asset allocation, we take an active, disciplined approach to investing. We develop and implement custom investment allocation strategies across asset classes for both private and institutional clients. These solutions can combine traditional investment, such as cash, bonds and equities, with alternative investments.

Other traditional investment strategies include a suite of fixed income and equity funds that are managed primarily in Switzerland. These strategies provide our clients access to an array of global and regional investment strategies and sophisticated investment processes, efficiency, flexibility, liquidity and transparency.




Organizational and regional structure


Organizational structure

We operate in three global divisions and reporting segments – Private Banking, Investment Banking and Asset Management. Consistent with our client-focused integrated bank strategy, we coordinate activities in four regions: Switzerland, EMEA, Americas and Asia Pacific. In addition, Shared Services provides centralized corporate services and business support, as well as effective and independent controls procedures in the following areas:

The CFO area includes Financial Accounting, Group Controlling, Product Control, Tax, Treasury, Group Insurance, New Business, Investor Relations, Strategic Process Change, Corporate Real Estate & Services, Supply Management, Operational Excellence, Centers of Excellence (CoE), Bank Efficiency Management, Shared Services Non-IT Efficiency Management and Security Services.

The General Counsel area provides legal and compliance support to the business and other areas of Shared Services to protect the reputation of Credit Suisse by providing employees with the tools and expertise to comply with applicable internal policies and external laws, rules and regulations.

The CRO area comprises strategic risk management, credit risk management, risk measurement and management, and operational risk oversight, which cooperate closely to maintain a strict risk control environment and to help ensure that our risk capital is deployed wisely.

The CIO area leverages technology across the business to facilitate execution and product delivery and innovative systems and platforms to meet the needs of our businesses and Shared Services. This area is organized around functional and regional departments.

Other functions providing corporate services include Corporate Communications, Human Resources, One Bank Collaboration, Corporate Development and Public Policy. Corporate Communications provides support in media relations, crisis management, executive communications, branding and corporate sponsorship. Human Resources strives to attract, retain and develop staff, while also creating a stimulating working environment. One Bank Collaboration measures and controls collaboration revenues. Corporate Development analyzes merger and acquisition opportunities and proposes strategic planning initiatives, while Public Policy promotes and protects the interests of Credit Suisse and its reputation.

The CEOs of the divisions and regions report directly to the Group CEO, and, together with the CFO, CIO, CRO, and General Counsel, they formed the Executive Board of Credit Suisse in 2009. In January 2010, we created the new role of Chief Talent, Branding and Communications Officer at the Executive Board level, responsible for human resources, corporate communications, corporate branding and advertising.

Our structure is designed to promote cross-divisional collaboration while leveraging resources and synergies within our four regions. The regions perform a number of essential functions to coordinate and support the global operations of the three divisions. On a strategic level, they are responsible for corporate development and the establishment of regional business plans, projects and initiatives. They also have an oversight role in monitoring financial performance. Each region is responsible for the regulatory relationships within its boundaries, as well as for regulatory risk management and the resolution of significant issues in the region as a whole or its constituent countries. Other responsibilities include client and people leadership and the coordination of the delivery of Shared Services and business support in the region.


Market regions


Switzerland

Switzerland, our home market, represents a broad business portfolio. We employ more than 20,900 people in Switzerland. In Wealth Management Clients, we offer expert advice and a comprehensive range of financial products and services tailored to different client groups, including >>ultra-high-net-worth and private clients. We strive for accelerated organic growth with regard to our private clients segment. Focus areas include client acquisition and retention, supported by marketing efforts to communicate our increased client focus and the continued optimization of our branch network. We leverage the full spectrum of our cross-divisional capabilities with the aim to offer unique value propositions such as tailored and comprehensive servicing of entrepreneurs, who increasingly seek solutions not only for their private wealth, but also for their business matters. With regard to Swiss corporate and institutional clients, we aim to continue our growth track by building superior targeted value propositions, covering the full range of client needs through intensive collaboration throughout the integrated Group. Targeted growth segments include international small and medium-sized enterprises, institutional investors and financial institutions with transaction banking needs.


EMEA

The EMEA region encompasses 8,800 employees in 78 offices in 25 countries. Our regional headquarters is in the UK, but we have an onshore presence in every major EMEA country. The EMEA region encompasses European countries, including France, Germany, Italy, Spain and the UK to key growth markets, including Poland, Russia, Turkey and the Middle East. We implement our client-focused integrated strategy at the country level, serving corporate, government, institutional and private clients. To leverage our cross-divisional capabilities, we foster collaboration among employees across divisions to deliver innovative and tailored solutions to our clients. We continue to strengthen our footprint across the region by expanding our geographic coverage.


Americas

Americas comprises our operations in the US, Canada, the Caribbean and Latin America with approximately 11,500 employees. In the US, our emphasis is on our core client-focused and >>flow-based businesses in Investment Banking, and on building on the market share gains we have achieved in a capital-efficient manner. In Private Banking, we see considerable potential to leverage our cross-divisional capabilities, as we further develop our onshore wealth management platform in the US, Brazil and Mexico. Active growth of alternative investment products will help to bolster our Asset Management business. In Canada, we continue to expand our fast-growing securities businesses and leverage our banking advisory strength. In Latin America, we are focused on using our leading market position in Brazil to provide clients with a full range of cross-divisional services.


Asia Pacific

Credit Suisse is present in 13 Asia Pacific markets, giving it one of the broadest footprints among international banks in the region. With 6,400 employees we aim to substantially increase our presence in major markets, including Australia, China, India and Japan, broaden the scope of our offerings in countries where we have built a competitive advantage and invest in emerging franchises. Private Banking has its principal centers in Singapore and Hong Kong, opening recently in key onshore wealth markets such as Australia, Indonesia, Japan and China, leveraging our Investment Banking and Asset Management activities to deliver integrated solutions to clients. The Investment Banking division continues to expand in major markets, and we are one of the dominant players in Southeast Asia. We expanded our onshore presence in China with the launch of a securities joint venture, we established a bank branch in Taiwan, and in India we acquired a non-bank financial company. Asset Management in Asia Pacific operates as an integrated business in close collaboration with the Private Banking and Investment Banking division to deliver the best investment performance with a focus on alternative investments and multi-asset class solutions.




Regulation and supervision


Overview

Our operations are regulated by authorities in each of the jurisdictions in which we have offices, branches and subsidiaries. Central banks and other bank regulators, financial services agencies, securities agencies and exchanges and self-regulatory organizations are among the regulatory authorities that oversee our banking, investment banking and asset management businesses. The supervisory and regulatory regimes of the countries in which we operate will determine to some degree our ability to expand into new markets, the services and products that we will be able to offer in those markets and how we structure specific operations.

There is coordination among our primary regulators in Switzerland, the US and the UK. The principal regulatory structures that apply to our operations are discussed below.

In response to the extremely challenging financial and credit market conditions that began in the second half of 2007, regulators, including our primary regulators, have focused on reforming the regulatory framework for financial services firms. We expect regulation of the financial services industry to increase, and some of the more significant regulatory proposals are noted below. For information on risks that may arise from an increase in regulation, refer to IX – Additional information – Risk factors.


Proposed regulations

Governments and regulatory authorities around the world have responded to the financial crisis by proposing numerous possible reforms of the regulatory framework for financial services firms such as the Group. In particular, a number of reforms have been proposed by supranational organizations and in Switzerland, the US, the EU and the UK that could potentially have a material effect on our business. Although we expect regulatory-related costs and capital requirements for all major financial services firms (including the Group) to increase, we cannot predict the likely impact of proposed regulations on our businesses or results.

In December 2009, the BCBS published consultative proposals, aimed at strengthening capital, liquidity and the resilience of the banking sector, which are expected to be finalized by the end of 2010.

A major focus of the current proposals is the limitation of systemic risk in the financial sector, including addressing the issue of institutions that are considered “too big to fail.” In Switzerland, a working group, including the Swiss National Bank (SNB), Swiss Financial Market Supervisory Authority (FINMA) and industry experts, has been charged with proposing regulation to address this issue. The US administration recently proposed that bank holding companies be prohibited from owning, investing or sponsoring hedge funds or private equity funds and from engaging in proprietary trading unrelated to a customer or intermediation function. The administration has also proposed a 0.15% tax on covered liabilities (other than deposits and tier 1 capital) of financial institutions with over USD 50 billion in assets in order to recoup funds paid out under the troubled asset relief program. Other significant reform proposals in this area include efforts before the US Congress to limit activities deemed to pose a systemic risk or to force systemically significant institutions to shrink, to change agency authority over banks and other systemically significant institutions and to impose bright line debt-to-equity ratio limits; and by the European Commission to amend bank capital requirements and to create frameworks for additional cross-border supervision of the financial sector and crisis management. Efforts at creating a new insolvency regime for systemically significant institutions are also underway in both the US and EU.

Regulators have continued to focus on compensation in the financial services industry. In Switzerland, FINMA has promulgated standards for the design and implementation of compensation plans and related disclosure effective January 1, 2010. Many other jurisdictions are also considering regulations that could potentially impact our compensation policies and practices. In the UK, reforms are anticipated as a result of the Financial Services Bill currently before Parliament, which proposes to give the UK Financial Services Authority (FSA) broader powers to reform executive compensation in regulated entities, and the Walker Review, an independent set of detailed recommendations commissioned in the UK proposing further reforms for executive pay and compensation in banks and financial institutions. In the EU, the European Commission is currently consulting on proposals to amend the Capital Requirements Directive with respect to executive compensation. There are also proposals before the US Congress to mandate more stringent regulations for certain financial institutions with compensation practices deemed to pose systemic risk.

Other current reform efforts that could potentially have a material effect on our businesses include proposals: in Switzerland to impose on large banks, including the Group, additional liquidity requirements in 2010 and to implement further measures for deposit protection; before the US Congress and regulators to more expansively regulate >>derivatives activities, hedge funds and major swap participants, to impose a fiduciary duty on broker-dealers, to expand the extra-territorial reach of the US securities laws and to impose additional short selling restrictions; by the European Commission to increase transparency and reduce risk in the derivatives market and to increase regulation for non-retail fund managers; and by Parliament in the UK through the Financial Services Bill (which includes certain recommendations made in the Walker Review) to provide the FSA with a statutory basis upon which to restrict short selling and to change certain corporate governance structures for regulated and listed entities.


Switzerland

Although Credit Suisse Group is not a bank according to the Swiss Federal Law on Banks and Savings Banks of November 8, 1934, as amended (Bank Law), and its Implementing Ordinance of May 17, 1972, as amended (Implementing Ordinance), the Group is required, pursuant to the provisions on consolidated supervision of financial groups and conglomerates of the Bank Law, to comply with certain requirements for banks, including with respect to capital adequacy, solvency and risk concentration on a consolidated basis and reporting obligations. Effective January 1, 2009, the Swiss Federal Banking Commission was merged into FINMA. Our banks in Switzerland are regulated by FINMA on a legal entity basis and, if applicable, on a consolidated basis.

Our banks in Switzerland operate under banking licenses granted by FINMA pursuant to the Bank Law and the Implementing Ordinance. In addition, certain of these banks hold securities dealer licenses granted by FINMA pursuant to the Swiss Federal Act of Stock Exchanges and Securities Trading (SESTA).

FINMA is the highest bank supervisory authority in Switzerland and is independent from the SNB. Under the Bank Law, FINMA is responsible for the supervision of the Swiss banking system. The SNB is responsible for implementing the government’s monetary policy relating to banks and securities dealers and for ensuring the stability of the financial system.

Our banks in Switzerland are subject to close and continuous prudential supervision and direct audits by FINMA. Under the Bank Law, our banks are subject to inspection and supervision by an independent auditing firm recognized by FINMA, which is appointed by the bank’s board of directors and required to perform annual audits of the bank’s financial statements and to assess whether the bank is in compliance with laws and regulations, including the Bank Law, the Implementing Ordinance and FINMA regulations.

Under the Bank Law, a bank must maintain an adequate ratio between its capital resources and its total risk-weighted assets. This requirement applies to the Group on a consolidated basis. For purposes of complying with Swiss capital requirements, bank regulatory capital is divided into tier 1 and tier 2 capital.

Our regulatory capital is calculated on the basis of US GAAP, with certain adjustments required by, or agreed with, FINMA. The Group is required by FINMA to maintain a minimum regulatory capital ratio, set by the Bank for International Settlements (BIS) and Swiss capital adequacy regulations, of 8% measured on a consolidated basis, calculated by dividing total eligible capital, adjusted for certain deductions, by aggregate risk-weighted assets.

We became subject to the requirements of the >>Basel II capital adequacy standards on January 1, 2008, subject to a “Swiss finish” under the Capital Adequacy Ordinance. In November 2008, we agreed to a decree issued by FINMA requiring that we comply with new capital adequacy ratios, in lieu of the “Swiss finish”, and leverage capital requirements by the year 2013. The new capital adequacy target will be in a range between 50% and 100% above the Pillar I requirements under Basel II. In addition, the decree includes leverage capital requirements that require us to maintain by 2013 a ratio of core eligible capital to total assets (on a non-risk-weighted basis) of 3% at the Group and Bank consolidated level and 4% at the Bank legal entity level. Total assets are adjusted for purposes of calculating the leverage ratio, and adjustments relate to assets from Swiss lending activities and assets excluded in determining regulatory core capital. These requirements, which will be phased in, are intended to be counter-cyclical, with the expected capital adequacy target level 100% above the Pillar I requirements, and a leverage ratio above the minimum 3% or 4%, during good times. For further information on our capital, refer to III – Treasury, Risk, Balance sheet and Off-balance sheet – Capital management.

Banks are required to maintain a specified liquidity ratio under Swiss law. According to FINMA, the Group is required to maintain adequate levels of liquidity on a consolidated basis and is not required to comply with the detailed calculations for banks.

Under Swiss banking law, banks and securities dealers are required to manage risk concentration within specific limits. Aggregated credit exposure to any single counterparty or a group of related counterparties must bear an adequate relationship to the bank’s eligible capital, taking into account counterparty risks and risk mitigation instruments.

Under the Bank Law and SESTA, Swiss banks and securities dealers are obligated to keep confidential the existence and all aspects of their relationships with customers. These customer confidentiality laws do not, however, provide protection with respect to criminal offenses such as insider trading, money laundering, terrorist financing activities or tax fraud or prevent the disclosure of information to courts and administrative authorities.

Our securities dealer activities in Switzerland are conducted primarily through the Bank and are subject to regulation under SESTA, which regulates all aspects of the securities dealer business in Switzerland, including regulatory capital, risk concentration, sales and trading practices, record-keeping requirements and procedures and periodic reporting procedures. Securities dealers are supervised by FINMA.

Our asset management activities in Switzerland, which include the establishment and administration of mutual funds registered for public distribution, are conducted under the supervision of FINMA.

Effective January 1, 2010, compensation design and its implementation and disclosure must comply with standards promulgated by FINMA under its Circular on Remuneration Schemes.


US

Our banking operations are subject to extensive federal and state regulation and supervision in the US. Our direct US offices are composed of a New York branch (New York Branch), a Florida international administrative office and a representative office in California. Each of these offices is licensed with, and subject to examination and regulation by, the state banking authority in the state in which it is located.

The New York Branch is licensed by the Superintendent of Banks of the State of New York (Superintendent), examined by the New York State Banking Department, and subject to laws and regulations applicable to a foreign bank operating a New York branch. Under the New York Banking Law, the New York Branch must maintain eligible assets with banks in the state of New York. The amount of eligible assets required, which is expressed as a percentage of third-party liabilities, would increase if the New York Branch is no longer designated well rated by the Superintendent.

The New York Banking Law authorizes the Superintendent to take possession of the business and property of the New York Branch under circumstances generally including violations of law, unsafe or unsound practices or insolvency. In liquidating or dealing with the New York Branch’s business after taking possession, the Superintendent would only accept for payment the claims of creditors (unaffiliated with us) that arose out of transactions with the branch. After the claims of those creditors were paid out of the business and property of the Bank in New York, the Superintendent would turn over the remaining assets, if any, to us or our liquidator or receiver.

Under New York Banking Law, the New York Branch is generally subject to the single borrower lending limits expressed as a percentage of the worldwide capital of the Bank.

Our operations are also subject to reporting and examination requirements under US federal banking laws. Our US non-banking operations are subject to examination by the Board of Governors of the Federal Reserve Bank (FRB) in its capacity as our US umbrella supervisor. The New York Branch is also subject to examination by the FRB. The New York Branch is subject to Fed requirements on deposits and restrictions on the payment of interest on demand deposits. Because the New York Branch does not engage in retail deposit taking, it is not a member of, and its deposits are not insured by, the US Federal Deposit Insurance Corporation.

US federal banking laws provide that a state-licensed branch (such as the New York Branch) or agency of a foreign bank may not, as a general matter, engage as principal in any type of activity that is not permissible for a federally licensed branch or agency of a foreign bank unless the FRB has determined that such activity is consistent with sound banking practice. US federal banking laws also subject a state branch or agency to single borrower lending limits based on the capital of the entire foreign bank.

The FRB may terminate the activities of a US branch or agency of a foreign bank if it finds that the foreign bank: (i) is not subject to comprehensive supervision in its home country; or (ii) has violated the law or engaged in an unsafe or unsound banking practice in the US.

A major focus of US policy and regulation relating to financial institutions has been to combat money laundering and terrorist financing. These laws and regulations impose obligations to maintain appropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist financing, verify the identity of customers and comply with economic sanctions. Any failure to maintain and implement adequate programs to combat money laundering and terrorist financing, and violations of such economic sanctions, laws and regulations, could have serious legal and reputational consequences. We take our obligations to prevent money laundering and terrorist financing in the US and globally very seriously, while appropriately respecting and protecting the confidentiality of clients. We have policies, procedures and training intended to ensure that our employees comply with “know your customer” regulations and understand when a client relationship or business should be evaluated as higher risk for us.

On March 23, 2000, Credit Suisse Group and the Bank became financial holding companies for purposes of US federal banking law and, as a result, may engage in a substantially broader range of non-banking activities in the US, including insurance, securities, private equity and other financial activities. Credit Suisse Group is still required to obtain the prior approval of the FRB (and potentially other US banking regulators) before acquiring, directly or indirectly, the ownership or control of more than 5% of any class of voting shares of any US bank, bank holding company or many other US depositary institutions and their holding companies, and the New York Branch is also restricted from engaging in certain tying arrangements involving products and services. If Credit Suisse Group or the Bank ceases to be well-capitalized or well-managed under applicable FRB rules, or otherwise fails to meet any of the requirements for financial holding company status, it may be required to discontinue certain financial activities or terminate its New York Branch. Credit Suisse Group’s ability to undertake acquisitions permitted by financial holding companies could also be adversely affected.

Our US-based broker-dealers are subject to extensive regulation by US regulatory authorities. The Securities and Exchange Commission (SEC) is the federal agency primarily responsible for the regulation of broker-dealers, investment advisers and investment companies, while the Commodity Futures Trading Commission (CFTC) is the federal agency primarily responsible for the regulation of futures commission merchants, commodity pool operators and commodity trading advisors. In addition, the Department of the Treasury has the authority to promulgate rules relating to US Treasury and government agency securities, the Municipal Securities Rulemaking Board (MSRB) has the authority to promulgate rules relating to municipal securities, and the MSRB also promulgates regulations applicable to certain securities credit transactions. In addition, broker-dealers are subject to regulation by securities industry self-regulatory organizations, including the Financial Industry Regulation Authority (FINRA) (formed in July 2007 by the merger of the former National Association of Securities Dealers, Inc. and the member regulation, enforcement and arbitration functions of the New York Stock Exchange), and by state securities authorities. For futures activities, broker-dealers are subject to futures industry self-regulatory organizations such as the National Futures Association.

Our US broker-dealers are registered with the SEC and in all 50 states, the District of Columbia, Puerto Rico and the US Virgin Islands, and our US futures commission merchants and commodity trading advisors are registered with the CFTC. Our US registered entities are subject to extensive regulatory requirements that apply to all aspects of their securities and futures activities, including: capital requirements; the use and safekeeping of customer funds and securities; the suitability of customer investments; record-keeping and reporting requirements; employee-related matters; limitations on extensions of credit in securities transactions; prevention and detection of money laundering and terrorist financing; procedures relating to research analyst independence; procedures for the clearance and settlement of trades; and communications with the public.

Our US broker-dealers are also subject to the SEC’s net capital rule, which requires broker-dealers to maintain a specified level of minimum net capital in relatively liquid form. Compliance with the net capital rule could limit operations that require intensive use of capital, such as underwriting and trading activities and the financing of customer account balances and also could restrict our ability to withdraw capital from our broker-dealers. Our US broker-dealers are also subject to the net capital requirements of FINRA and, in some cases, other self-regulatory organizations.

Certain of our US broker-dealers are also registered as futures commission merchants and subject to the capital and other requirements of the CFTC.

Our securities and asset management businesses include legal entities registered and regulated as investment advisers by the SEC. The SEC-registered mutual funds that we advise are subject to the Investment Company Act of 1940. For pension fund customers, we are subject to the Employee Retirement Income Security Act of 1974 and similar state statutes. We are subject to the Commodity Exchange Act for investment vehicles we advise that are commodity pools.


EU

Since it was announced in 1999, the EU’s Financial Services Action Plan has given rise to numerous measures (both directives and regulations) aimed at increasing integration and harmonization in the European market for financial services. While regulations have immediate and direct effect in member states, directives must be implemented through national legislation. As a result, the terms of implementation of directives are not always consistent from country to country.

The Capital Requirements Directive, implemented in various EU countries including the UK, applies the >>Basel II capital framework for banking groups operating in the EU.

On November 1, 2007, the national implementing legislation for the Markets in Financial Instruments Directive (MiFID) became effective in various EU countries. MiFID establishes high-level organizational and business conduct standards that apply to all investment firms. These include new standards for managing conflicts of interest, best execution, customer classification and suitability requirements for customers. MiFID sets standards for regulated markets (i.e., exchanges) and multilateral trading facilities and sets out pre-trade and post-trade price transparency requirements for equity trading. MiFID also sets standards for the disclosure of fees and other payments received from or paid to third parties in relation to investment advice and services and regulates investment services relating to commodity derivatives. In relation to these and other investment services and activities, MiFID provides a “passport” for investment firms, enabling them to conduct cross-border activities and establish branches throughout Europe on the basis of authorization from their home state regulator.


UK

The UK FSA is the principal statutory regulator of financial services activity in the UK, deriving its powers from the Financial Services and Markets Act 2000 (FSMA). The FSA regulates banking, insurance, investment business and the activities of mortgage intermediaries. The FSA generally adopts a risk-based approach, supervising all aspects of a firm’s business, including capital resources, systems and controls and management structures, the conduct of its business, anti-money laundering and staff training. The FSA has wide investigatory and enforcement powers, including the power to require information and documents from financial services businesses, appoint investigators, apply to the court for injunctions or restitution orders, prosecute criminal offenses, impose financial penalties, issue public statements or censures and vary, cancel or withdraw authorizations it has granted.

As a member state of the EU, the UK is required to implement EU directives into national law. The regulatory regime for banks operating in the UK conforms to required EU standards including compliance with capital adequacy standards, customer protection requirements, conduct of business rules and anti-money laundering rules. These standards, requirements and rules are similarly implemented, under the same directives, throughout the other member states of the EU in which we operate and are broadly comparable in scope and purpose to the regulatory capital and customer protection requirements imposed under US law.

The London branch of Credit Suisse (London Branch), Credit Suisse International and Credit Suisse (UK) Limited are authorized to take deposits. We also have a number of entities authorized to conduct investment business and asset management activities. In deciding whether to grant authorization, the FSA must first determine whether a firm satisfies the threshold conditions for authorization, including the requirement for the firm to be fit and proper. In addition to regulation by the FSA, certain wholesale money markets activities are subject to the Non-Investment Products Code, a voluntary Code of Conduct published by the Bank of England which FSA-regulated firms are expected to follow when conducting wholesale money market business.

On November 1, 2007, MiFID became effective in the UK and applies to our authorized entities in the UK. The London Branch will be required to continue to comply principally with Swiss home country regulation. However, as a response to the global financial crisis, the FSA made changes to its prudential supervision rules in its Handbook of Rules and Guidance, applying a principle of “self-sufficiency”, that a UK branch of European Economic Area (EEA) and non-EEA financial institutions would no longer be permitted to rely on capital held by other members of its group. The FSA, from December 1, 2009, has required UK branches of EEA and non-EEA financial institutions to maintain adequate liquidity resources, both as to quantity and quality of capital reserves. The London Branch is required to ensure that its liquidity resources are under the day-to-day supervision of the London Branch senior management, held in a custodian account in the name of the London Branch, unencumbered and attributed to the London Branch balance sheet. In addition, the FSA requires Credit Suisse International and Credit Suisse (UK) Limited to maintain a minimum capital ratio and to monitor and report large exposures in accordance with the rules implementing the Capital Requirements Directive.

Our London broker-dealer subsidiaries and asset management companies are authorized under the FSMA and are subject to regulation by the FSA. In deciding whether to authorize an investment firm in the UK, the FSA will consider threshold conditions for suitability, including the general requirement for a firm to be fit and proper. The FSA is responsible for regulating most aspects of an investment firm’s business, including its regulatory capital, sales and trading practices, use and safekeeping of customer funds and securities, record-keeping, margin practices and procedures, registration standards for individuals carrying on certain functions, anti-money laundering systems and periodic reporting and settlement procedures.

On January 1, 2010, the FSA’s code of practice on remuneration policies became effective, requiring large banks, building societies and broker-dealers to have in place remuneration policies that are consistent with effective risk management. It also includes eight principles covering areas of governance, performance measurement and composition of remuneration, to help firms understand how the FSA will assess compliance.


Operating and financial review

Operating environment

Credit Suisse

Core Results

Key performance indicators

Private Banking

Investment Banking

Asset Management

Corporate Center

Results overview

Assets under management

Critical accounting estimates



Operating environment

In the first half of 2009, the global recession deepened. With interest rates at historic lows and additional support measures by central banks and governments, global economic indicators improved in the second half of the year. The banking sector benefited from the stabilization of markets, however uncertainty relating to economic development in 2010 and the future regulation of banks remained.



Economic environment

At the beginning of 2009, global industrial production and trade contracted at a rapid pace. Central banks across the globe cut interest rates sharply, some close to zero. The European Central Bank (ECB) joined the Bank of England (BoE) and the US Federal Reserve (Fed) in introducing programs to purchase securities to support prices and financial institutions. Global economic key indicators improved significantly in the second half of the year. While improvement was initially seen only in some emerging markets, especially China, developed economies began to show a meaningful recovery from depressed levels.

Inflation fell sharply until the middle of the year and became negative in some developed countries, reflecting the sharp drop in energy prices compared to the middle of 2008, but rebounded toward year end. Divergence in economic performance was increasingly reflected in differing monetary policy responses. Central banks in commodity-driven economies, such as Norway and Australia, that had only experienced rather mild recessions, began to raise interest rates. Central banks in some emerging markets, which had to maintain high interest rates or even raise them during the crisis in order to prevent a sharp depreciation of their currencies, continued to lower benchmark rates. The Fed left interest rates unchanged in 2009, while the BOE and ECB lowered interest rates in the first half of the year.

Government bond yields, which had fallen to multi-decade lows at the beginning of the year, rose sharply for longer tenors until mid-year when markets began to reflect higher interest rate and inflation expectations, which had fallen to extreme lows. Concerns about high government debt levels increased. Various governments’ credit ratings were downgraded, and the yield differential between German and other euro area government bonds widened sharply, reaching a peak in the first quarter. These concerns reappeared towards the end of the year when a government-owned investment company in Dubai asked creditors for a standstill agreement to extend the maturities of all debt repayments until May 2010, and the Greek sovereign rating was downgraded twice within a two month period.

The US dollar continued to appreciate from 2008 into early 2009 as deleveraging in financial markets continued. Volatility peaked in the first quarter of 2009, and financial market conditions began to normalize during the second quarter. Amid signs that expansionary monetary and fiscal policy could support future growth, risk appetite in currency markets increased. The US dollar depreciated, reflecting the very low level of US interest rates, while Asian currencies linked to global growth prospects and commodity currencies like the Australian dollar started to appreciate. The euro strengthened toward the end of 2009 from the lows reached in March, reflecting the weak US dollar and central bank purchases for diversification purposes. In December, the US dollar began to strengthen due to better than expected macroeconomic data and the scaling back of short US dollar positions as the year end approached.

2009 was characterized by a significant outperformance of emerging market stocks (refer to the charts “Equity markets”). Equity markets were very weak in the first quarter of 2009, and at the beginning of March developed markets showed losses of more than 20% and emerging market stocks had declined about 10% compared to the beginning of the year. March marked the low for the year, and it was the starting point of a very strong recovery. The year closed with a positive return of more than 20% for developed markets and about 60% for emerging market stocks.

Until the beginning of March, commodity prices continued their downward trend, as most commodity markets suffered from oversupply and rising inventories. However, towards mid-2009 the first signs of stabilization in commodity demand emerged, and prices began to rebound. The stabilization in global leading indicators, Chinese strategic buying and the general increase in risk appetite led to a quick upward movement in commodity prices. In particular, base metal prices benefited from a strategic stockpiling program that the Chinese government pursued, with some metals recording price gains of more than 100% during 2009. Moreover, commodity prices reflected buying activity in the >>derivatives markets as market participants started to cover short positions. Oil prices, for example, surged from a low of USD 34 per barrel to over USD 70 per barrel during the second quarter of 2009. The improvement in global oil demand, particularly from non-Organization for Economic Co-operation and Development (OECD) countries, supported prices well above USD 60 per barrel for the rest of the year. Precious metals prices benefited from the depreciation in the US dollar, falling real interest rates that spurred strong investment demand and central bank purchases. Agricultural prices traded mostly higher during the year, as global demand for soft commodities remained robust. Overall, major commodity price indices recorded solid gains.

















Sector environment

Banking sector stocks experienced weakness in the first quarter, with its trough at the beginning of March. From the March lows, bank stocks outperformed the world index and ended the year with a return of more than 20% (refer to the charts “Equity markets”). The rally in the banking sector was driven by a steeper yield curve and clear signs of improvement in credit markets.

Driven by activity in investment-grade debt capital markets, investment banks around the globe experienced a stronger than expected start in the first quarter as companies sought to secure financing. Ongoing elevated volatility helped the rates and foreign exchange businesses. However, the reduced activity of hedge funds and mutual funds continued to impact trading volumes across the globe.

The global investment banking fee pool was unchanged compared to 2008. Equity capital markets led the global fee pool in 2009, with a share of 40%, followed by debt capital markets with 31%, mergers and acquisitions (M&A) with 22% and loan activity with 8%. Equity market volumes were considerably lower compared to 2008 in most European stock markets and some US markets. Global bond market volumes decreased 10% compared to 2008, with the most significant drop in corporate debt volumes.

Equity underwriting activity was very weak in the first quarter, which recorded the lowest volumes since 2003. However, there was a resurgence in activity later in the year, with record follow-on issuances and rebounding initial public offerings (IPOs), resulting in a 66% increase in global equity underwriting fees from 2008. Global debt underwriting fees were up 36% compared to 2008. European debt underwriting fees were up 40% compared to 2008. M&A activity was sluggish during 2009, as companies remained cautious, affected by continued uncertainty regarding the economy, and difficulty obtaining financing. Announced global M&A volumes were down 27% compared to 2008. In Europe, announced M&A volumes were down 45% compared to 2008. Completed global M&A volumes were down 37% compared to 2008. In Europe, completed M&A volumes decreased 42% compared to 2008. Global investment grade syndicated lending recorded the lowest annual volume since 2002, with volumes down 36% compared to 2008.

At the beginning of the year, the US Treasury administered stress tests and injected capital into a number of banks in the US. In addition, the US Treasury announced a Public-Private Investment Program to induce private investors to purchase troubled assets from banks and increased the Term Asset-Backed Securities Loan Facility in order to help stimulate both new issuances and the removal of assets from bank balance sheets. Regulatory capital ratios improved in the second quarter as a result of earnings and capital raising activities. However, the credit cycle continued its negative trend, with rising non-performing loans in retail banking and slightly higher corporate credit defaults. In the second half of the year, several large banks in the US repaid Troubled Asset Relief Program money received from the government, regaining greater flexibility.

For the financial services industry, regulatory focus on compensation practices, the level and quality of capital, liquidity, increased transparency, leverage and systemic risk dominated the agenda throughout the year. Ahead of the >>G-20 Summit in April 2009, Austria, Liechtenstein, Luxembourg, Singapore, and Switzerland, among others, announced their intention to adopt OECD standards on administrative assistance in taxation matters. Under the OECD protocols, sufficient evidence and reasonable suspicion of a tax offense can result in an exchange of banking information between governments. Several countries introduced tax amnesties, and the issue of tax compliance continued to weigh on the wealth management industry. Toward the end of the year, the sector was impacted by intensifying discussions by governments regarding taxation of variable compensation. For more information, refer to Core Results – Regulatory proposals.

Market volumes (growth in % year on year)
2009GlobalEurope
Equity trading volume 1(23)(34)
Fixed income trading volume 2(10)3
Announced mergers and acquisitions 3(27)(45)
Completed mergers and acquisitions 3(37)(42)
Equity underwriting 36668
Debt underwriting 33640
Syndicated lending - investment-grade 3(36)
1    London Stock Exchange, Borsa Italiana, Deutsche Börse, BME and Euronext. Global also includes New York Stock Exchange and NASDAQ      2    Deutsche Börse and Federal Reserve Bank of New York      3    Dealogic




Credit Suisse

In 2009, we recorded net income attributable to shareholders of CHF 6,724 million. Diluted earnings per share were CHF 5.14. Return on equity attributable to shareholders was 18.3%. We continued to reduce risk and further strengthened our capital position with a BIS tier 1 ratio of 16.3%.


Results
 in% change
20092008200709 / 0808 / 07
Statements of operations (CHF million)  
Net interest income 6,8918,5368,442(19)1
Commissions and fees 13,75014,81218,929(7)(22)
Trading revenues 12,151(9,880)6,146
Other revenues 502(4,200)5,804
Net revenues 33,2949,26839,321259(76)
Provision for credit losses 506813240(38)239
Compensation and benefits 15,01313,25416,09813(18)
General and administrative expenses 7,7017,8096,833(1)14
Commission expenses 1,9972,2942,410(13)(5)
Total other operating expenses 9,69810,1039,243(4)9
Total operating expenses 24,71123,35725,3416(8)
Income/(loss) from continuing operations before taxes 8,077(14,902)13,740
Income tax expense/(benefit) 1,835(4,596)1,248
Income/(loss) from continuing operations 6,242(10,306)12,492
Income/(loss) from discontinued operations 169(531)6
Net income/(loss) 6,411(10,837)12,498
Less net income/(loss) attributable to noncontrolling interests (313)(2,619)4,738(88)
Net income/(loss) attributable to shareholders 6,724(8,218)7,760
   of which from continuing operations 6,555(7,687)7,754
   of which from discontinued operations 169(531)6
Earnings per share (CHF)  
Basic earnings/(loss) per share from continuing operations 5.14(7.51)7.06
Basic earnings/(loss) per share 5.28(8.01)7.07
Diluted earnings/(loss) per share from continuing operations 5.01(7.51)6.77
Diluted earnings/(loss) per share 5.14(8.01)6.78
Return on equity (%)  
Return on equity attributable to shareholders 18.3(21.1)18.0
Return on tangible equity attributable to shareholders 125.1(29.3)24.5
Number of employees (full-time equivalents)  
Number of employees 47,60047,80048,1000(1)
1    Based on tangible shareholders' equity attributable to shareholders, which is calculated by deducting goodwill and other intangible assets from total shareholders' equity attributable to shareholders. Management believes that the return on tangible shareholders' equity attributable to shareholders is meaningful as it allows consistent measurement of the performance of businesses without regard to whether the businesses were acquired.

Credit Suisse and Core Results 
 Core ResultsNoncontrolling interests without SEICredit Suisse
in200920082007200920082007200920082007
Statements of operations (CHF million)  
Net revenues 33,61711,86234,539(323)(2,594)4,78233,2949,26839,321
Provision for credit losses 506813240000506813240
Compensation and benefits 14,92713,17915,982867511615,01313,25416,098
General and administrative expenses 7,6047,7396,7679770667,7017,8096,833
Commission expenses 1,9972,2942,4100001,9972,2942,410
Total other operating expenses 9,60110,0339,1779770669,69810,1039,243
Total operating expenses 24,52823,21225,15918314518224,71123,35725,341
Income/(loss) from continuing operations before taxes    8,583 (12,163) 9,140 (506) (2,739) 4,600 8,077 (14,902) 13,740
Income tax expense/(benefit) 1,835(4,596)1,2480001,835(4,596)1,248
Income/(loss) from continuing operations 6,748(7,567)7,892(506)(2,739)4,6006,242(10,306)12,492
Income/(loss) from discontinued operations 169(531)6000169(531)6
Net income/(loss) 6,917(8,098)7,898(506)(2,739)4,6006,411(10,837)12,498
Less net income/(loss) attributable to noncontrolling interests    193 120 138 (506) (2,739) 4,600 (313) (2,619) 4,738
Net income/(loss) attributable to shareholders 6,724(8,218)7,7600006,724(8,218)7,760
Statement of operations metrics (%)  
Cost/income ratio 73.0195.772.874.2252.064.4
Pre-tax income margin 25.5(102.5)26.524.3(160.8)34.9
Effective tax rate 21.437.813.722.730.89.1
Net income margin 120.0(69.3)22.520.2(88.7)19.7
1    Based on amounts attributable to shareholders.






Differences between Group and Bank

Except where noted, the business of the Bank is substantially the same as the business of Credit Suisse Group, and substantially all of the Bank’s operations are conducted through the Private Banking, Investment Banking and Asset Management segments. These segment results are included in Core Results. Certain other assets, liabilities and results of operations are managed as part of the activities of the three segments, however, since they are legally owned by the Group, they are not included in the Bank’s consolidated financial statements. In 2009, these related principally to the activities of Clariden Leu, Neue Aargauer Bank and BANK-now, which are managed as part of Private Banking, and hedging activities relating to share-based compensation awards. Core Results also includes certain Group corporate center activities that are not applicable to the Bank.

These operations and activities vary from period to period and give rise to differences between the Bank’s consolidated assets, liabilities, revenues and expenses, including pensions and taxes, and those of the Group. For further information on the Bank refer to Note 38 – Supplementary subsidiary guarantee information in V – Consolidated financial statements – Credit Suisse Group and VII – Consolidated financial statements – Credit Suisse (Bank).

Differences between Group and Bank businesses
EntityPrincipal business activity
Clariden Leu Banking and securities
Neue Aargauer Bank Banking (in the Swiss canton of Aargau)
BANK-now Private credit and car leasing (in Switzerland)
Financing vehicles of the Group   Special purpose vehicles for various funding activities of the Group, including for purposes of raising consolidated capital

Comparison of consolidated statements of operations
 GroupBank
in200920082007200920082007
Statements of operations (CHF million)  
Net revenues 33,2949,26839,32131,9937,30536,890
Total operating expenses 24,71123,35725,34124,17622,34724,498
Income/(loss) from continuing operations before taxes 8,077(14,902)13,7407,357(15,839)12,165
Income tax expense/(benefit) 1,835(4,596)1,2481,794(4,922)844
Income/(loss) from continuing operations 6,242(10,306)12,4925,563(10,917)11,321
Income/(loss) from discontinued operations 169(531)6169(531)6
Net income/(loss) 6,411(10,837)12,4985,732(11,448)11,327
Less net income/(loss) attributable to noncontrolling interests (313)(2,619)4,738(697)(3,379)5,013
Net income/(loss) attributable to shareholders 6,724(8,218)7,7606,429(8,069)6,314

Comparison of consolidated balance sheets
 GroupBank
end of2009200820092008
Balance sheet statistics (CHF million)  
Total assets 1,031,4271,170,3501,010,4821,151,669
Total liabilities 983,0991,123,129964,7311,105,520

Capitalization
 GroupBank
end of2009200820092008
Capitalization (CHF million)  
Due to banks 36,21458,18350,08174,948
Customer deposits 286,694296,986258,697267,010
Central bank funds purchased, securities sold under repurchase agreements and securities lending transactions    191,687 243,370 191,587 243,970
Long-term debt 159,365150,714156,676148,550
Other liabilities 309,139373,876307,690371,042
Total liabilities 983,0991,123,129964,7311,105,520
Total equity 48,32847,22145,75146,149
Total capitalization 1,031,4271,170,3501,010,4821,151,669

Capital adequacy
 GroupBank
end of2009200820092008
Capital (CHF million)  
Tier 1 capital 36,20734,20834,69534,192
   of which hybrid instruments 12,19812,14011,61711,897
Total eligible capital 45,72846,09046,32047,839
Capital ratios (%)  
Tier 1 ratio 16.313.316.513.9
Total capital ratio 20.617.922.019.5

Dividends of the Bank to the Group
end of20092008
Per share issued (CHF)  
Dividend 168.190.23
Net income/(loss) 8.58(50.90)
Registered shares of CHF 100.00 nominal value each. As of December 31, 2009 and 2008, total share capital consisted of 43,996,652 registered shares.
1    In 2007, 2006 and 2005, dividends per share issued were CHF 59.10, CHF 0.23 and CHF 56.14, respectively.




Core Results

For 2009, net income attributable to shareholders was CHF 6,724 million. Private Banking attracted CHF 41.6 billion of net new assets, with strong inflows in both the international and Swiss businesses, despite the challenging operating environment. Investment Banking had record income before taxes and record net revenues, reflecting the successful implementation of our client-focused, capital-efficient strategy and an increase in our market share across various businesses and geographies. Asset Management had improved operating performance and benefited from gains on securities purchased from our money market funds and the sale of part of our traditional investment strategies business to Aberdeen Asset Management, but results were impacted by investment-related losses.


Results
 in% change
20092008200709 / 0808 / 07
Statements of operations (CHF million)  
Net interest income 6,7638,4098,303(20)1
Commissions and fees 13,70214,75518,960(7)(22)
Trading revenues 12,127(9,853)6,146
Other revenues 1,025(1,449)1,130
Net revenues 33,61711,86234,539183(66)
Provision for credit losses 506813240(38)239
Compensation and benefits 14,92713,17915,98213(18)
General and administrative expenses 7,6047,7396,767(2)14
Commission expenses 1,9972,2942,410(13)(5)
Total other operating expenses 9,60110,0339,177(4)9
Total operating expenses 24,52823,21225,1596(8)
Income/(loss) from continuing operations before taxes 8,583(12,163)9,140
Income tax expense/(benefit) 1,835(4,596)1,248
Income/(loss) from continuing operations 6,748(7,567)7,892
Income/(loss) from discontinued operations 169(531)6
Net income/(loss) 6,917(8,098)7,898
Less net income/(loss) attributable to noncontrolling interests 19312013861(13)
Net income/(loss) attributable to shareholders 6,724(8,218)7,760
   of which from continuing operations 6,555(7,687)7,754
   of which from discontinued operations 169(531)6
Statement of operations metrics (%)  
Cost/income ratio 73.0195.772.8
Pre-tax income margin 25.5(102.5)26.5
Effective tax rate 21.437.813.7
Net income margin 120.0(69.3)22.5
Number of employees (full-time equivalents)  
Number of employees 47,60047,80048,1000(1)
1    Based on amounts attributable to shareholders.

Core Results include the results of our three segments, the Corporate Center and discontinued operations. Core Results exclude revenues and expenses in respect of noncontrolling interests in which we do not have SEI. The Corporate Center includes parent company operations such as Group financing, expenses for projects sponsored by the Group and certain expenses and revenues that have not been allocated to the segments. In addition, the Corporate Center includes consolidation and elimination adjustments required to eliminate intercompany revenues and expenses.

Our Core Results are impacted by changes in credit spreads for Credit Suisse debt carried at fair value. In the second quarter of 2009, we entered into a transaction designed to reduce the volatility of these changes. In the transaction (the >>FVOD transaction) we made loans, which we carry at fair value, to Alpine Securitization Corp. (Alpine), a multi-seller >>commercial paper (CP) conduit administered by Credit Suisse. The Group does not have any ownership interest in Alpine. The FVOD transaction was designed to offset a significant portion of the volatility in credit spread movements on Credit Suisse vanilla debt. Following the FVOD transaction, the aggregate gains on this Credit Suisse debt as of the end of the first quarter 2009 will be reversed and charged to the segments on a straight-line amortization basis, and the difference between this amortization and the net impact on valuation adjustments on this Credit Suisse debt from changes in credit spreads will be included in the Corporate Center. For information on the impact of accounting changes on the FVOD transaction effective first quarter of 2010, refer to – Accounting changes adopted in first quarter 2010.

In managing the business, revenues are evaluated in the aggregate, including an assessment of trading gains and losses and the related interest income and expense from financing and hedging positions. For this reason, individual revenue categories may not be indicative of performance.

Certain reclassifications have been made to prior periods to conform to the current presentation.


Results overview


2009 versus 2008

In 2009, we recorded net income attributable to shareholders of CHF 6,724 million, compared to a net loss attributable to shareholders of CHF 8,218 million in 2008. Net revenues were CHF 33,617 million compared to CHF 11,862 million in 2008. Total operating expenses were CHF 24,528 million, up CHF 1,316 million, or 6%. Our 2009 results included fair value losses of CHF 4,458 million on Credit Suisse vanilla debt, mostly offset by gains of CHF 3,708 million from the FVOD transaction. CHF 423 million of the net fair value losses were charged to the segments (primarily Investment Banking) and CHF 327 million of net fair value losses were included in the Corporate Center.

In Private Banking, we realigned our client coverage into Wealth Management Clients and Corporate & Institutional Clients. Swiss private client coverage is now part of Wealth Management Clients, which covers all individual clients, including affluent, high-net-worth and ultra-high-net-worth clients. Corporate & Institutional Clients provides banking services to corporates and institutions in Switzerland.

In Private Banking, net revenues were CHF 11,662 million, a decline of 10% from 2008. Recurring revenues, representing 77% of net revenues, declined 11%, mainly reflecting a decrease in recurring commissions and fees. Lower recurring commissions and fees reflected a 6.4% decrease in average assets under management and a shift into lower margin investments, also within managed investment products, resulting from cautious investor behavior, offset in part by strong performance fees from Hedging-Griffo. Net interest income decreased 3% due to lower margins on slightly lower average loan volumes, mostly offset by higher margins on higher average deposit volumes. Transaction-based revenues were down 6%, reflecting fair value losses from the Clock Finance transaction of CHF 118 million in 2009, compared to fair value gains of CHF 110 million in 2008. Excluding the impact of the Clock Finance transaction in 2009 and 2008, respectively, transaction based revenues increased 2%, as significantly higher integrated solutions revenues were mostly offset by lower product issuing fees, foreign exchange income from client transactions and brokerage fees.

In Investment Banking, net revenues increased to a record CHF 20,537 million from negative CHF 1,971 million in 2008. Our key client businesses generated revenues of CHF 18.2 billion, reflecting solid contributions from global rates and foreign exchange, cash equities, US >>residential mortgage-backed securities (RMBS) secondary trading, prime services, flow and corporate derivatives and high grade trading. Our repositioned businesses had revenues of CHF 5.4 billion for the year, driven by our US leveraged finance, emerging markets trading, corporate lending, trading strategies and convertibles businesses. We had losses of CHF 2.7 billion in our exit businesses, primarily driven by valuation reductions in >>commercial mortgage-backed securities (CMBS). Approximately CHF 1.3 billion of revenues in the first quarter from our ongoing businesses were due to more normalized market conditions. Debt underwriting revenues increased significantly, primarily due to strong results in leveraged finance, which reflected a significant increase in industry-wide high yield issuance, as 2009 was the second highest year on record for high yield issuance, and fee revenues in 2009 compared to fee losses of CHF 200 million in 2008. Equity underwriting revenues increased, driven by a significant increase in industry-wide equity issuance volumes and an increase in market share across most product categories and regions. Advisory and other fees decreased due to significantly lower levels of global completed M&A activity and a decline in completed M&A market share. Fixed income trading revenues increased significantly, primarily due to revenues, including valuation gains, in our combined structured products and US leveraged finance businesses compared to net valuation reductions in 2008, mostly in exit businesses. We had significant valuation reductions in CMBS as we reduced our risk exposures, compared to substantially higher valuation reductions in 2008. We also had revenues in our corporate lending and emerging markets businesses compared to losses in 2008. In addition, we had strong revenues in 2009 in many of our client and >>flow-based businesses, including our US RMBS secondary trading and global rates and foreign exchange businesses, and revenues in our commodities business compared to losses in 2008, mostly in exit businesses. Our results reflected significant market share gains in many of our fixed income businesses. Equity trading revenues increased significantly, primarily due to revenues in certain businesses compared to significant losses in the second half of 2008 in the convertibles business, illiquid trading strategies and equity derivatives. We substantially reduced our trading positions relating to illiquid equity trading strategies. We had higher revenues from our fund-linked products and prime services businesses. Results in our cash equities business continued to be strong. Our results also included net fair value losses on Credit Suisse debt of CHF 397 million in 2009 (including CHF 365 million of gains in the first quarter and CHF 762 million of charges reflecting the straight-line amortization following the FVOD transaction), compared to fair value gains of CHF 4,654 million in 2008, and higher allocated funding costs.

In Asset Management, net revenues almost tripled to CHF 1,842 million compared to 2008, primarily reflecting gains from securities purchased from our money market funds compared to losses in 2008 and lower investment-related losses. Net revenues before securities purchased from our money market funds and investment-related gains/(losses) were CHF 2,098 million, primarily due to the higher revenues from equity participations and joint ventures, partially offset by lower asset management and placement fees. Asset management fees were down, primarily reflecting significantly lower fees in multi-asset class solutions, reflecting the decline in average assets under management and lower margins. Asset management fees in alternative investment strategies were stable. Placement fees were down significantly, reflecting the difficult fundraising environment in 2009. Performance fees and carried interest were up, mainly in liquid strategies relating to management of the partner asset facility (PAF), partially offset by lower performance fees and carried interest primarily in private equity. Equity participations and joint venture revenues were up, primarily reflecting aggregate gains of CHF 286 million from the sale of part of our traditional investment strategies business to Aberdeen and the sale of two joint ventures.

Corporate Center loss from continuing operations before taxes of CHF 1,948 million primarily reflected litigation provisions of CHF 705 million relating to the US economic sanctions matter and >>auction rate securities (ARS), the negative difference between the straight-line amortization and the net impact on valuation adjustments on Credit Suisse debt from changes in credit spreads of CHF 327 million, the elimination of the CHF 228 million Aberdeen gain in discontinued operations that was reported in Asset Management and CHF 100 million for captive insurance settlements for non-credit-related provisions in Wealth Management Clients.

Provision for credit losses was CHF 506 million in 2009, with CHF 326 million in Investment Banking and CHF 180 million in Private Banking.

Total operating expenses increased 6% compared to 2008, reflecting higher compensation and benefits, partially offset by lower commission expenses and a slight decrease in general and administrative expenses. The increase in compensation and benefits was due to higher performance-related compensation, reflecting improved risk-adjusted profitability in Investment Banking and the deferral of compensation under the cash retention award (CRA) program in 2008, of which CHF 822 million was expensed in 2009. 2008 included CHF 596 million of severance and other compensation expenses associated with the accelerated implementation of our strategy. Compensation and benefits included CHF 629 million of compensation expense relating to the PAF, of which CHF 383 million were gains reflected in trading revenues that were reclassified in Corporate Center, as the PAF gains and offsetting compensation expense were included in Investment Banking trading revenues. General and administrative expenses were slightly lower, reflecting decreases in most expense categories, primarily professional fees, travel and entertainment and goodwill and intangible assets impairments, mostly offset by higher non-credit related provisions, information technology (IT) and occupancy expenses.

The Core Results effective tax rate was 21.4% in 2009, compared to 37.8% in 2008. The effective tax rate primarily reflected foreign exchange translation gains of CHF 460 million relating to deferred tax assets on tax loss carry forwards recorded in UK entities, net release of CHF 156 million of tax contingency accruals following the favorable resolution of certain tax matters, together with the geographical mix of results. The foreign exchange movements arose due to tax loss carry-forwards denominated in British pounds, which differs from the functional currency of the reporting entities. UK tax law was enacted during 2009 which had the effect of removing these foreign exchange movements going forward. Net deferred tax assets decreased CHF 951 million, or 9.7%, to CHF 8,819 million as of the end of 2009, including foreign exchange translation impacts. For further information, refer to Note 25 – Tax in V – Consolidated financial statements – Credit Suisse Group.

Assets under management from continuing operations were CHF 1,229.0 billion as of the end of 2009, an increase of CHF 122.9 billion, or 11.1%, compared to the end of 2008. We had net new assets of CHF 41.6 billion in Private Banking and CHF 0.4 billion in Asset Management.


2008 versus 2007

In 2008, we recorded a net loss of CHF 8,218 million, compared to net income attributable to shareholders of CHF 7,760 million in 2007. The net loss included a loss from discontinued operations of CHF 531 million relating to our agreement to sell part of our traditional investment strategies business in Asset Management. Net revenues were CHF 11,862 million in 2008, down 66%, compared to 2007.

Private Banking delivered good net new assets and solid net revenues. The Private Banking results were impacted by net non-credit-related provisions of CHF 766 million relating to ARS and a CHF 190 million charge relating to the close-out of a client’s account.

In Investment Banking, net revenues were negative, reflecting the intensified market disruption. The results were also negatively impacted by a severe widening of credit spreads resulting in sharp declines in fair value levels of credit instruments across most markets and an increase in the divergence between the cash and synthetic markets. The results also reflected higher credit-related exposures to certain trading counterparties. Our combined leveraged finance and structured products businesses had net valuation reductions of CHF 10,923 million in 2008 compared to CHF 3,187 million in 2007. Other areas adversely impacted by the extreme market disruption included structured fixed income derivatives, leveraged finance trading, emerging markets trading, long/short and event and risk arbitrage equity trading strategies, equity derivatives and convertibles, all of which recorded significant losses. However, Investment Banking reported good results in client-driven businesses, including flow-based rate and US and European high grade products, cash equities and prime services.

Asset Management results reflected investment-related losses of CHF 656 million compared to gains of CHF 621 million in 2007. The results also include losses on securities purchased from our money market funds of CHF 687 million, compared to losses of CHF 920 million in 2007.

Our results benefited from fair value gains of CHF 4,988 million from widening credit spreads on Credit Suisse debt. We continued to manage down our exposures to assets most significantly impacted by the dislocation in the mortgage and credit markets and to securities purchased from our money market funds. Provision for credit losses increased from CHF 240 million to CHF 813 million.

Total operating expenses decreased compared to 2007, with significantly higher general and administrative expenses, more than offset by lower performance-related compensation. The increase in general and administrative expenses primarily reflected costs of CHF 833 million related to the accelerated implementation of our strategic plan, recorded in the Corporate Center, the net provisions relating to ARS and the charge relating to the close-out of a client’s account in Wealth Management Clients.

In 2008, we recorded an income tax benefit due to the impact of the geographical mix of results in 2008 and the recognition of a tax benefit for the current period losses.

Core Results reporting by division
 in% change
20092008200709 / 0808 / 07
Net revenues (CHF million)  
   Wealth Management Clients 9,87110,69711,640(8)(8)
   Corporate & Institutional Clients 1,7912,2101,882(19)17
Private Banking 11,66212,90713,522(10)(5)
Investment Banking 20,537(1,971)18,584
Asset Management 1,8426322,390191(74)
Corporate Center (424)29443
Net revenues 33,61711,86234,539183(66)
Provision for credit losses (CHF million)  
   Wealth Management Clients 3314120(77)
   Corporate & Institutional Clients 147(8)(79)(90)
Private Banking 180133(59)35
Investment Banking 326679301(52)126
Corporate Center 01(2)(100)
Provision for credit losses 506813240(38)239
Total operating expenses (CHF million)  
   Wealth Management Clients 6,9408,0477,219(14)11
   Corporate & Institutional Clients 89187787620
Private Banking 7,8318,9248,095(12)10
Investment Banking 13,36611,14214,78720(25)
Asset Management 1,8071,8172,040(1)(11)
Corporate Center 1,5241,32923715461
Total operating expenses 24,52823,21225,1596(8)
Income/(loss) from continuing operations before taxes (CHF million)  
   Wealth Management Clients 2,8982,5094,40116(43)
   Corporate & Institutional Clients 7531,3411,085(44)24
Private Banking 3,6513,8505,486(5)(30)
Investment Banking 6,845(13,792)3,496
Asset Management 35(1,185)350
Corporate Center (1,948)(1,036)(192)88440
Income/(loss) from continuing operations before taxes 8,583(12,163)9,140

Core Results reporting by region
 in% change
20092008200709 / 0808 / 07
Net revenues (CHF million)  
Switzerland 8,80010,09610,396(13)(3)
EMEA 9,00913810,822(99)
Americas 12,7946609,408(93)
Asia Pacific 3,4386743,870410(83)
Corporate Center (424)29443
Net revenues 33,61711,86234,539183(66)
Income before taxes (CHF million)  
Switzerland 3,2954,4264,746(26)(7)
EMEA 2,146(6,642)3,092
Americas 4,262(6,923)127
Asia Pacific 828(1,988)1,367
Corporate Center (1,948)(1,036)(192)88440
Income/(loss) from continuing operations before taxes 8,583(12,163)9,140
A significant portion of our business requires inter-regional coordination in order to facilitate the needs of our clients. The methodology for allocating our results by region is dependent on management judgment. For Private Banking, results are allocated based on the management reporting structure of our relationship managers and the region where the transaction is recorded. For Investment Banking, trading results are allocated based on where the risk is primarily managed and fee-based results are allocated where the client is domiciled. For Asset Management, results are allocated based on the location of the investment advisors and sales teams.


Capital trends

Our consolidated Bank for International Settlements (BIS) tier 1 ratio under Basel II was strong at 16.3% as of the end of 2009, compared to 13.3% as of the end of 2008. The increase reflected decreased risk-weighted assets and increased tier 1 capital.

Our Board of Directors will propose a cash dividend of CHF 2.00 per share for 2009 at the Annual General Meeting (AGM) on April 30, 2010. The proposal is subject to approval by shareholders at the AGM.

For further information on capital trends, refer to III – Treasury, Risk, Balance sheet and Off-balance sheet – Treasury management.


Risk trends

In 2009, our overall >>position risk, measured on the basis of our economic capital model, decreased 5% compared to 2008. Excluding the US dollar translation impact, position risk decreased 3%, primarily due to lower emerging markets exposures and reduced real estate & structured assets exposures, primarily in the CMBS exit businesses, mostly offset by increased position risks in fixed income trading and private banking corporate & retail lending. The average value-at-risk (VaR) decreased 33% to CHF 120 million in 2009, compared to CHF 178 million in 2008, reflecting our continued risk reduction, partially offset by additional market volatility included in the historical data set and a change in VaR methodology. For further information on risk trends, refer to III – Treasury, Risk, Balance sheet and Off-balance sheet – Risk management.


Management and Board of Directors changes

Tobias Guldimann, Chief Risk Officer of Credit Suisse Group and a member of the Executive Board, assumed sole responsibility for risk management on the Executive Board with effect from June 1, 2009. At that time, D. Wilson Ervin, Chief Risk Officer of Credit Suisse, stepped down from the Executive Board and assumed a role as a Senior Adviser, reporting to Brady W. Dougan.

In June 2009, Karl Landert, Chief Information Officer of Credit Suisse, was appointed to the Executive Board.

In December 2009, we announced that Hans-Ulrich Doerig will remain Chairman of the Board of Directors until the AGM in April 2011 when he will be succeeded by Vice-Chairman Urs Rohner.

In January 2010, we announced that Pamela Thomas-Graham joined Credit Suisse in the newly created role of Chief Talent, Branding and Communications Officer. She is a member of the Executive Board and has global responsibility for human resources, corporate communications, corporate branding and advertising.

As of the AGM on April 24, 2009, Thomas W. Bechtler stepped down as member of the Board of Directors. Andreas Koopmann, former CEO of Bobst Group S.A., Urs Rohner, former COO and General Counsel of Credit Suisse Group, and John Tiner, CEO of the UK firm Resolution Group and former CEO of the UK Financial Services Authority (FSA), were elected as new members of the Board of Directors. On August 10, 2009, we announced that Robert H. Benmosche stepped down as a member of the Board of Directors with immediate effect, as a result of his appointment as President and CEO of American International Group (AIG). The Board of Directors proposes the following members be re-elected to the Board of Directors: Noreen Doyle, Aziz D. Syriani, David Syz and Peter F. Weibel and proposes the following additions to the Board of Directors: Jassim Bin Hamad J.J. Al Thani, Chairman of the Board of Directors of Qatar Islamic Bank, and Robert H. Benmosche, subject to their election by the shareholders. Changes in AIG’s business have made it possible for Mr. Benmosche to rejoin the Board of Directors. Ernst Tanner has decided to step down from the Board of Directors as of the date of the AGM.


Regulatory proposals

Government leaders and regulators continued to focus on reform of the financial services industry, including capital, leverage and liquidity requirements, changes in compensation practices and systemic risk. G-20 leaders pledged to increase regulation and improve coordination of oversight of banks and financial institutions. In December 2009, the Basel Committee on Banking Supervision published consultative proposals, aimed at strengthening capital, liquidity and the resilience of the banking sector, which are expected to be finalized at the end of 2010 and implemented over time. The US Congress and regulators continued working to restructure the regulatory framework for financial services in the US. The US administration and other governments proposed the imposition of taxes and other levies on financial institutions, including on certain compensation and liabilities. The US administration also proposed prohibiting certain activities, including investing in private equity and hedge funds and proprietary trading unrelated to serving clients, and limiting the size, of certain depositary financial institutions. Any final regulations or legislation could result in additional costs or limit or restrict the way we conduct our business, although uncertainty remains about the impact of regulatory reform. We believe the regulatory response must be closely coordinated on an international basis to provide a level playing field and must be carefully balanced to ensure a strong financial sector and global economy. We believe we are well positioned for regulatory reform, as we have reduced risk and maintained strong capital, funding and liquidity. We made changes to the structure of compensation for 2009 consistent with the G-20 guidelines for best compensation practices and took steps to address the proposed levy on variable compensation in the UK.

For more information, see I – Information on the company – Regulation and supervision.


Compensation and benefits

Compensation and benefits for a given year reflect the strength and breadth of the business results and staffing levels and include fixed components, such as salaries, benefits and the amortization of share-based and other deferred compensation from prior-year awards, and a variable component. The variable component reflects the performance-based compensation for the current year. The portion of the performance-based compensation for the current year deferred through share-based and other awards is expensed in future periods and is subject to vesting and other conditions.


Changes to our compensation structure

Our 2009 compensation reflected changes to the structure of compensation for managing directors and directors. The new structure is already substantially compliant with G-20 and the Swiss Financial Market Supervisory Authority (FINMA) guidelines for best compensation practices. The changes are designed to ensure adequate consideration of risk in compensation decisions and further align the interests of our employees with the longterm success of the Group. The changes also link the delivery of compensation with the Group’s future financial performance, both on the basis of share price and return on equity (ROE), and ensure a continued focus on a strong control culture.

The new features of our compensation design for managing directors and directors are:

increased fixed compensation (salary) beginning in 2010 to ensure a more appropriate balance between fixed and variable compensation;

an increase in the proportion of variable compensation that is deferred; and

the introduction of two new instruments for deferred variable compensation, the Adjustable Performance Plan (APP) award and the Scaled Incentive Share Unit (SISU). The APP is a cash-based plan with three-year vesting and positive and negative adjustments linked to future business area profit or loss and the Group ROE (in the case of employees in revenue generating divisions) and the Group ROE (in the case of Shared Services and certain other employees). SISUs are share-based instruments with four-year vesting and are linked to the long-term development of the Group’s share price and average ROE. Deferred variable compensation for 2009 for managing directors and directors was awarded 50% in APP awards and 50% in SISUs.

These new award structures will also be used for senior management, including all members of the Executive Board. We have introduced additional requirements for Group share ownership for members of the Executive Board and divisional and regional management committees.

Determination of the overall amount of variable compensation awarded for 2009 was made on the basis of our operating results after considering risk and the cost of capital, the assessment of performance by senior management and the overall economic and competitive environment. All variable compensation awarded for 2009 was approved by the Board of Directors. All variable compensation awarded for 2009 to members of the Executive Board at December 31, 2009 was deferred. In response to the UK levy on variable compensation exceeding GBP 25,000, we reduced the aggregate amount of variable compensation for 2009 by 5%, and significantly reduced the amount of variable compensation for 2009 of managing directors in the UK. These measures will absorb the majority of the levy’s expected cost. Expenses in 2009 do not include an accrual related to this UK levy on variable compensation as it is not yet enacted law, a requirement under accounting principles generally accepted in the US (US GAAP) for recognition.


Sale of part of traditional investment strategies business in Asset Management

In 2009 the Group sold part of its traditional investment strategies business in Asset Management to Aberdeen Asset Management for 240 million shares in Aberdeen, a 23.9% interest. The gain on disposal of CHF 261 million in 2009 represents gains from the deconsolidation of subsidiaries and primarily includes valuation gains of CHF 228 million on the Aberdeen shares received and the effect of a decrease in net assets transferred to Aberdeen.


Allocations and funding


Revenue sharing and cost allocation

Responsibility for each product is allocated to a segment, which records all related revenues and expenses. Revenue-sharing and service level agreements govern the compensation received by one segment for generating revenue or providing services on behalf of another. These agreements are negotiated periodically by the relevant segments on a product-by-product basis.

The aim of revenue-sharing and service level agreements is to reflect the pricing structure of unrelated third-party transactions.

Corporate services and business support in finance, operations, including human resources, legal and compliance, risk management and IT are provided by the Shared Services area. Shared Services costs are allocated to the segments and Corporate Center based on their requirements and other relevant measures.


Funding

We centrally manage our funding activities. New securities for funding and capital purposes are issued primarily by the Bank. The Bank lends funds to our operating subsidiaries and affiliates on both a senior and subordinated basis, as needed, the latter typically to meet capital requirements, or as desired by management to capitalize on opportunities. Capital is distributed to the segments considering factors such as regulatory capital requirements, utilized economic capital and the historic and future potential return on capital.

Transfer pricing, using market rates, is used to record net revenues and expense in each of the segments for this capital and funding. Our funds transfer pricing system is designed to allocate to our businesses funding costs in a way that incentivizes their efficient use of funding. Our funds transfer pricing system is an essential tool that allocates to the businesses the short-term and long-term costs of funding their balance sheet and the costs associated with funding liquidity and balance sheet items, such as goodwill, which are beyond the control of individual businesses. This is of greater importance in a stressed capital markets environment where raising funds is more challenging and expensive. Under this system, our businesses are also credited to the extent they provide long-term stable funding.


Accounting changes adopted in first quarter 2010

The adoption of new accounting principles under US GAAP on January 1, 2010 governing when an entity should be consolidated resulted in an increase in assets of CHF 15 billion to the opening first quarter 2010 consolidated balance sheet and a reduction of approximately CHF 2 billion in opening first quarter 2010 retained earnings. The reduction in retained earnings was related to the consolidation of Alpine and represents Alpine’s cumulative losses from the FVOD transaction of CHF 3.7 billion before tax. Alpine’s losses do not affect tier 1 capital as these fair value losses on Credit Suisse debt are excluded from the determination of regulatory capital. The consolidation of Alpine and other entities under these new rules did not have an impact on tier 1 capital or risk-weighted assets because of the securitization framework used under Basel II, which differs from US GAAP.

After the consolidation of Alpine, the remaining net gains on Credit Suisse debt of CHF 1.5 billion will continue to be charged to the segments on a straight-line amortization basis. Any difference between this amortization and the valuation adjustments on this Credit Suisse debt from changes in credit spreads will continue to be included in Corporate Center.

We expect a majority of these additional assets and liabilities in our opening first quarter 2010 consolidated balance sheet to be level 3 assets and liabilities, however we do not have additional economic risk in these increased assets and liabilities as any future reductions in assets would be offset by corresponding reductions in liabilities.

These changes do not affect our 2009 financial statements.


Fair valuations

Fair value can be a relevant measurement for financial instruments when it aligns the accounting for these instruments with how we manage our business. The levels of the fair value hierarchy as defined by the relevant accounting guidance are not a measurement of economic risk, but rather an indication of the observability of prices or valuation inputs. For further information, refer to Note 1 – Summary of significant accounting policies and Note 32 – Financial instruments in V – Consolidated financial statements – Credit Suisse Group.

The fair value of the majority of the Group’s financial instruments is based on quoted prices in active markets (level 1) or observable inputs (level 2). These instruments include government and agency securities, certain CP, most investment grade corporate debt, certain high yield debt securities, exchange-traded and certain >>over-the-counter (OTC) derivative instruments and most listed equity securities.

In addition, the Group holds financial instruments for which no prices are available and which have little or no observable inputs (level 3). For these instruments, the determination of fair value requires subjective assessment and varying degrees of judgment depending on liquidity, concentration, pricing assumptions and the risks affecting the specific instrument. In such circumstances, valuation is determined based on management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). These instruments include certain high yield debt securities, distressed debt securities, certain OTC derivatives, certain >>collateralized debt obligations (CDO), certain asset-backed and mortgage-backed securities, non-traded equity securities, private equity and other long-term investments.

As of the end of 2009, 57% and 42% of our total assets and total liabilities attributable to shareholders, respectively, were measured at fair value. As of the end of 2009, 5% of total assets attributable to shareholders were classified as level 3 assets attributable to shareholders compared to 7% as of the end of 2008. As of the end of 2009, 9% of total assets attributable to shareholders measured at fair value were recorded as level 3 assets attributable to shareholders compared to 14% as of the end of 2008.

As of the end of 2009, our net level 3 assets attributable to shareholders were CHF 52.7 billion and those attributable to noncontrolling interests arising from private equity activities were CHF 7.0 billion.

While the majority of our level 3 assets are recorded in Investment Banking, some are recorded in Asset Management, specifically certain private equity investments. Total assets recorded as level 3 declined during 2009, primarily in private equity, reflecting the deconsolidation of certain entities under US GAAP, in loans and credit products, equity derivatives, equity-linked securities and non-agency RMBS exposures, reflecting transfers to level 2, and in loans and credit products and CDO and CMBS exit positions, reflecting asset disposals. Transfers to level 2 continued during 2009 as observability in credit markets increased.

Models were used to value many level 2 and level 3 products. Models are developed internally and are reviewed by functions independent of the front office to ensure they are appropriate for current market conditions. The models require subjective assessment and varying degrees of judgment depending on liquidity, concentration, pricing assumptions and risks affecting the specific instrument. The models consider observable and unobservable parameters in calculating the value of these products, including certain indices relating to these products, which were volatile during 2009. Consideration of these indices has become more significant in our valuation techniques during periods of lower market activity.

For a description of our valuation techniques, refer to Note 32 – Financial instruments in V – Consolidated financial statements – Credit Suisse Group.

For all transfers to level 3 or out of level 3, we determine and disclose as level 3 events any gains or losses through the last day of the reporting period, even if the transfer occurred prior to the last day of the reporting period. We believe this provides greater transparency over the financial impact of our level 3 assets and liabilities. We believe that the range of any valuation uncertainty, in the aggregate, would not be material to our financial condition.


Personnel

Headcount at the end of 2009 was 47,600, down 200 from the end of 2008, and down 500 from the end of 2007. For additional information on personnel, refer to IV – Corporate governance.




Key performance indicators

To benchmark our achievements, we have defined a set of KPIs for which we have targets to be achieved over a three to five year period across market cycles.



Growth

We target integrated bank collaboration revenues in excess of CHF 10 billion annually by 2012. For 2009, integrated bank collaboration revenues were CHF 5.2 billion.

For net new assets, we target a growth rate above 6%. In 2009, we recorded a net new asset growth rate of 4.0%.


Efficiency and performance

For total shareholder return, we target superior share price appreciation plus dividends compared to our peer group. For 2009, total shareholder return was 80.1%. The 2009 average total shareholder return of our peer group was 35.2%.

For return on equity attributable to shareholders, we target an annual rate of return of above 18%. The return on equity attributable to shareholders was 18.3% in 2009.

We target a Core Results cost/income ratio of 65%. Our Core Results cost/income ratio was 73.0% for 2009.


Risk and capital

For the BIS tier 1 ratio, we target a minimum ratio of 12.5%. The BIS tier 1 ratio was 16.3% as of the end of 2009.

in / end of200920082007
Growth  
Collaboration revenues (CHF billion) 5.25.25.9
Net new asset growth (%) 4.0(0.2)3.1
Efficiency and performance (%)  
Total shareholder return 180.1(56.1)(17.8)
Return on equity attributable to shareholders 18.3(21.1)18.0
Core Results cost/income ratio 73.0195.773.1
Risk and capital (%)  
BIS tier 1 ratio 16.313.310.02
1    The total return of an investor is measured by the capital gain/(loss) plus dividends received.      2    Under Basel I we reported a tier 1 ratio of 11.1% as of the end of 2007.




Private Banking

In 2009, we reported sound net revenues of CHF 11,662 million, income before taxes of CHF 3,651 million and a strong and stable gross margin of 131 basis points in Wealth Management Clients despite the challenging operating environment. We attracted net new assets of CHF 41.6 billion, with strong inflows in both the international and Swiss businesses.


Results
 in / end of% change
20092008200709 / 0808 / 07
Statements of operations (CHF million)  
Net revenues 11,66212,90713,522(10)(5)
Provision for credit losses 180133(59)35
Compensation and benefits 4,6514,2604,5299(6)
General and administrative expenses 2,58013,91922,670(34)47
Commission expenses 600745896(19)(17)
Total other operating expenses 3,1804,6643,566(32)31
Total operating expenses 7,8318,9248,095(12)10
Income before taxes 3,6513,8505,486(5)(30)
   of which Wealth Management Clients 2,8982,5094,40116(43)
   of which Corporate & Institutional Clients 7531,3411,085(44)24
Statement of operations metrics (%)  
Cost/income ratio 67.169.159.9
Pre-tax income margin 31.329.840.6
Utilized economic capital and return  
Average utilized economic capital (CHF million) 6,9066,7786,49424
Pre-tax return on average utilized economic capital (%) 353.357.385.1
Number of employees (full-time equivalents)  
Number of employees 24,30024,40023,20005
1    Includes CHF 100 million of captive insurance settlement proceeds in Wealth Management Clients.      2    Includes net provisions relating to ARS of CHF 766 million and a charge of CHF 190 million relating to the close-out of a client's account in Wealth Management Clients.      3    Calculated using a return excluding interest costs for allocated goodwill.

Results (continued)
 in / end of% change
20092008200709 / 0808 / 07
Net revenues (CHF million)  
Net interest income 5,0005,1574,788(3)8
Total non-interest income 6,6627,7508,734(14)(11)
Net revenues 11,66212,90713,522(10)(5)
Net revenue detail (CHF million)  
Recurring 8,98010,04110,051(11)0
Transaction-based 2,6822,8663,471(6)(17)
Net revenues 11,66212,90713,522(10)(5)
Provision for credit losses (CHF million)  
New provisions 4192881754565
Releases of provisions (239)(155)(234)54(34)
Provision for credit losses 180133(59)35
Balance sheet statistics (CHF million)  
Net loans 175,245174,880175,50600
   of which Wealth Management Clients 1124,907123,772128,1531(3)
   of which Corporate & Institutional Clients 50,33851,10847,353(2)8
Deposits 257,650246,787242,05242
   of which Wealth Management Clients 1210,718203,675197,31433
   of which Corporate & Institutional Clients 46,93243,11244,7389(4)
Number of relationship managers  
Switzerland 1,9801,9801,94002
EMEA 1,1901,2501,140(5)10
Americas 550540440223
Asia Pacific 360410340(12)21
Wealth Management Clients 4,0804,1803,860(2)8
Corporate & Institutional Clients (Switzerland) 49049046007
Number of relationship managers 4,5704,6704,320(2)8
1    Wealth Management Clients covers individual clients, including affluent, high-net-worth and ultra-high-net-worth clients.


Business environment

The contraction of the global economy which started at the end of 2008 extended into 2009, with key economic data indicating a global recession. The declines in gross domestic product (GDP) reflected diminishing investments and private expenditure, only partially mitigated by increased government expenditures. Unemployment rates increased, in particular in the US. In response, stimulus measures were implemented by central banks in order to stabilize the global economy and reduce uncertainty. The Fed, the BoE, the ECB and the Swiss National Bank (SNB) eased monetary conditions, including interest rate cuts, purchases of securities and expansion of asset purchase facilities, in order to fight recession and stimulate the economy. Switzerland was also affected by the global economic downturn, reflected in increasing unemployment rates and corporate insolvencies. Towards the end of 2009, a recovery of the global economy began, driven by economic stimulus, companies rebuilding inventories and increased public and private spending.

As of the end of the year, the euro was stable and the US dollar had weakened against the Swiss franc.

Financial markets improved after the first quarter of 2009. The risk appetite among investors increased slightly from the very low levels at the end of 2008 and the beginning of 2009. Equity markets had strong gains, while volatility significantly decreased. However, clients remained cautious during 2009 with regard to more sophisticated investment products and generally remained risk averse.

The private banking industry continued to be faced with challenging trends during 2009 and new wealth creation was limited. Competition for client deposits intensified, especially from government guaranteed banks. In addition, net new asset generation was impacted by tax amnesties, particularly in Italy, measures designed to encourage the repatriation of investments held abroad. Regulatory uncertainty in connection with tax matters, including enforcement action in the US, and banking secrecy in the conduct of cross-border wealth management continued to weigh on the industry.

In the beginning of 2009, the Swiss government, among others including Austria, Liechtenstein, Luxembourg and Singapore, decided to adopt Art. 26 of the OECD standards on administrative assistance in tax matters.

For further information, refer to – Operating environment.


Results overview

During 2009, we realigned our client coverage into Wealth Management Clients and Corporate & Institutional Clients. Swiss private client coverage is now part of Wealth Management Clients, which covers all individual clients, including affluent, high-net-worth and ultra-high-net-worth clients. Corporate & Institutional Clients provides banking services to corporates and institutions in Switzerland. In 2009, we changed the allocation of the term spread credit on stable deposit funding and the term spread charge on loans. Reclassifications have been made to prior periods to conform to the current presentation.

For 2009, we reported income before taxes of CHF 3,651 million, down 5% compared to 2008. Net revenues of CHF 11,662 million declined 10% from 2008. Recurring revenues, representing 77% of net revenues, declined 11%, mainly reflecting a decrease in recurring commissions and fees. Lower recurring commissions and fees reflected a 6.4% decline in average assets under management and a shift into lower margin investments, also within managed investment products, resulting from cautious investor behavior, offset in part by strong performance fees from Hedging-Griffo. Net interest income decreased 3% due to lower margins on slightly lower average loan volumes, mostly offset by higher margins on higher average deposit volumes. Transaction-based revenues were down 6%, reflecting fair value losses from the Clock Finance transaction of CHF 118 million in 2009, compared to fair value gains of CHF 110 million in 2008. Excluding the impact of the Clock Finance transaction in 2009 and 2008, respectively, transaction based revenues increased 2%, as significantly higher integrated solutions revenues were mostly offset by lower product issuing fees, foreign exchange income from client transactions and, to a lesser extent, brokerage fees.

We recorded moderate net provisions for credit losses of CHF 180 million, substantially relating to our corporate and institutional loan portfolio, with net provisions of CHF 147 million in Corporate & Institutional Clients and net provisions of CHF 33 million in Wealth Management Clients.

Total operating expenses were CHF 7,831 million, down 12% compared to 2008. 2008 had significant non-credit-related provisions, including CHF 766 million of net provisions related to ARS and a charge of CHF 190 million relating to the close-out of a client’s account. General and administrative expenses across other expense categories declined, reflecting our cost containment efforts. Compensation and benefits increased 9%, mainly as performance-related compensation was lower in 2008, due to the deferral of compensation under the CRA program in 2008 and the impact of the amortization of deferred compensation from the CRA program and other prior-year awards in 2009.

Assets under management as of the end of 2009 were CHF 914.9 billion, up 16.0% compared to 2008. This increase reflected the impact from positive market movements and strong net new assets, offset in part by adverse foreign exchange-related movements, mainly due to the weakening of the US dollar against the Swiss franc. Net new assets of CHF 41.6 billion benefited from good inflows in all regions. We generated CHF 29.8 billion of net new assets in our international businesses and CHF 11.8 billion in our Swiss business. A tax amnesty in Italy caused net client outflows of CHF 5.6 billion in the fourth quarter of 2009, negatively impacting net new assets in Europe, Middle East and Africa (EMEA) and Switzerland.

For 2008, we reported income before taxes of CHF 3,850 million, down 30% compared to 2007. In spite of the market conditions, we achieved solid net revenues of CHF 12,907 million, down 5%. Transaction-based revenues declined 17%, mainly driven by lower commissions and fees, affected by a substantial decrease in client activity. Recurring revenues were stable, as the decrease in asset-based commissions and fees was offset by higher net interest income. Lower asset-based commissions and fees mainly reflected a 7.3% decrease in average assets under management and the shift into lower margin investments. Net interest income increased 8%, driven by higher revenues on loans and deposits.

Provision for credit losses resulted in net provisions of CHF 133 million, primarily on loans collateralized by securities in Wealth Management Clients, compared to net releases of CHF 59 million in 2007.

Total operating expenses were CHF 8,924 million, up 10%, compared to 2007, mainly driven by CHF 766 million of net provisions relating to ARS in the second half of 2008 and a charge of CHF 190 million relating to the close-out of a client’s account. This impact was partially offset by a 6% decrease in compensation and benefits and a 17% decrease in commission expenses.

Assets under management - Private Banking
 in / end of% change
20092008200709 / 0808 / 07
Assets under management by region (CHF billion)  
Switzerland 328.2301.3392.28.9(23.2)
EMEA 277.3243.2312.414.0(22.2)
Americas 129.6103.2123.725.6(16.6)
Asia Pacific 67.746.565.545.6(29.0)
Wealth Management Clients 802.8694.2893.815.6(22.3)
Corporate & Institutional Clients (Switzerland) 112.194.7101.618.4(6.8)
Assets under management 914.9788.9995.416.0(20.7)
Assets under management by currency (CHF billion)  
USD 298.2264.8343.512.6(22.9)
EUR 248.4212.1257.617.1(17.7)
CHF 269.9229.7269.917.5(14.9)
Other 98.482.3124.419.6(33.8)
Assets under management 914.9788.9995.416.0(20.7)
Net new assets by region (CHF billion)  
Switzerland 5.52.59.3120.0(73.1)
EMEA 10.316.426.8(37.2)(38.8)
Americas 8.016.87.3(52.4)130.1
Asia Pacific 11.58.29.340.2(11.8)
Wealth Management Clients 35.343.952.7(19.6)(16.7)
Corporate & Institutional Clients (Switzerland) 6.37.00.8(10.0)
Net new assets 41.650.953.5(18.3)(4.9)
Growth in assets under management (CHF billion)  
Net new assets 35.343.952.7
Other effects 73.3(243.5)1.5
   of which market movements 83.3(183.8)
   of which currency (4.1)(54.5)
   of which other (5.9)(5.2)
Wealth Management Clients 108.6(199.6)54.2
Corporate & Institutional Clients (Switzerland) 17.4(6.9)0.9
Growth in assets under management 126.0(206.5)55.1
Growth in assets under management (%)  
Net new assets 5.35.15.7
   of which Wealth Management Clients 5.14.96.3
   of which Corporate & Institutional Clients (Switzerland) 6.76.90.8
Other effects 10.7(25.9)0.2
Growth in assets under management 16.0(20.8)5.9


Performance indicators


Pre-tax income margin (KPI)

Our target over market cycles is a pre-tax income margin above 40%. In 2009, the pre-tax income margin was 31.3% compared to 29.8% in 2008 and 40.6% in 2007.






Net new asset growth rate for Wealth Management Clients (KPI)

Our target over market cycles is a growth rate over 6%. In 2009, which included net client outflows of CHF 5.6 billion related to a tax amnesty in Italy, our net new asset growth rate was 5.1%. In 2008, which was affected by significant deleveraging in the fourth quarter, net new asset growth was 4.9%.






Results detail

The following provides a comparison of our 2009 results versus 2008 and 2008 versus 2007.


Net revenues

Recurring revenues arise from net interest income, recurring commissions and fees, including performance-based fees, related to assets under management and custody assets, as well as fees for general banking products and services. Net interest income includes a term spread credit on stable deposit funding and a term spread charge on loans. Transaction-based revenues arise primarily from brokerage and product issuing fees, foreign exchange income from client transactions and other transaction-based income.

2009 vs 2008: Down 10% from CHF 12,907 million to CHF 11,662 million
The decrease reflected an 11% decline in recurring revenues and a 6% decrease in transaction-based revenues. Lower recurring revenues were mainly driven by a 19% decline in recurring commissions and fees. Lower recurring commissions and fees primarily reflected a 6.4% decline in average assets under management and a shift into lower margin investments, also within managed investment products, resulting from cautious investor behavior, offset in part by strong performance fees from Hedging-Griffo. Net interest income declined 3% due to lower margins on slightly lower average loan volumes, mostly offset by higher margins on higher average deposit volumes. Transaction-based revenues were down 6%, primarily reflecting fair value losses from the Clock Finance transaction of CHF 118 million in 2009 compared to fair value gains of CHF 110 million in 2008. Excluding the impact of the Clock Finance transaction, transaction based revenues increased 2%, as significantly higher integrated solutions revenues and gains on ARS positions and the sale of real estate were mostly offset by lower product issuing fees, foreign exchange income from client transactions and, to a lesser extent, brokerage fees.

2008 vs 2007: Down 5% from CHF 13,522 million to CHF 12,907 million
The decrease was driven by 17% lower transaction-based revenues, mainly brokerage and product issuing fees, affected by a substantial decrease in client activity. This was partially offset by fair value gains of CHF 110 million in 2008 on the Clock Finance portfolio compared to fair value losses of CHF 18 million in 2007. Recurring revenues were stable, as the 8% increase in net interest income, driven by higher margins on slightly higher average loan and deposit volumes, was offset by lower recurring commissions and fees. The decline in recurring commissions and fees was primarily from managed investment products and a 7.3% decrease in average assets under management.


Provision for credit losses

2009 vs 2008: Up 35% from CHF 133 million to CHF 180 million
Provision for credit losses reflected net provisions of CHF 147 million in Corporate & Institutional Clients and net provisions of CHF 33 million in Wealth Management Clients. A substantial part of the new provisions of CHF 419 million and releases of CHF 239 million were related to the Corporate & Institutional Clients loan portfolio. While the credit environment deteriorated in 2009, our corporate and institutional loan portfolio has sound quality, relatively low concentrations and is mainly collateralized by mortgages and securities. The Wealth Management Clients loan portfolio is substantially comprised of residential mortgages in Switzerland and loans collateralized by securities.

2008 vs 2007: Up from CHF (59) million to CHF 133 million
Provision for credit losses reflected net provisions of CHF 141 million in Wealth Management Clients and net releases of CHF 8 million in Corporate & Institutional Clients. A substantial part of the new provisions of CHF 288 million were on Wealth Management Clients loans collateralized by securities relating to the forced deleveraging of client positions in highly volatile equity markets in the fourth quarter. A majority of the releases of CHF 155 million were related to the Corporate & Institutional Clients loan portfolio.


Operating expenses

Compensation and benefits
2009 vs 2008: Up 9% from CHF 4,260 million to CHF 4,651 million
The increase was due to lower performance-related compensation in 2008, due to the deferral of compensation under the CRA program in 2008 and the impact of the amortization of deferred compensation from the CRA program and other prior-year awards in 2009.

2008 vs 2007: Down 6% from CHF 4,529 million to CHF 4,260 million
The decrease was due to lower performance-related compensation, reflecting the lower results and the deferral of compensation under the CRA program, offset in part by higher salaries and related benefits due to the growth in headcount, including relationship managers.

General and administrative expenses
2009 vs 2008: Down 34% from CHF 3,919 million to CHF 2,580 million
The decrease mainly reflected lower non-credit-related provisions, as 2008 included CHF 766 million of net provisions related to ARS, a charge of CHF 190 million from the close-out of a client’s account and other non-credit-related provisions, including for the buy-back of certain clients’ Lehman Brothers structured notes. 2009 included CHF 35 million of additional non-credit-related provisions for the buy-back of Lehman Brothers structured notes and CHF 100 million of recoveries on non-credit-related provisions from captive insurance settlement proceeds. Other general and administrative expenses declined, reflecting our cost containment efforts.

2008 vs 2007: Up 47% from CHF 2,670 million to CHF 3,919 million
The increase was driven by the net provisions relating to ARS, the charge relating to the close-out of a client’s account and other non-credit-related provisions. Other general and administrative expenses reflected higher infrastructure costs related to our international expansion.


Personnel

Headcount at the end of 2009 was 24,300, compared to 24,400 at the end of 2008 and 23,200 at the end of 2007. The net decrease of 100 relationship managers in Wealth Management Clients in 2009 reflected a talent upgrade of our relationship managers, mainly in EMEA and Asia Pacific, while the number of relationship managers was stable in Switzerland and slightly higher in the Americas. The increase of 320 relationship managers in Wealth Management Clients from 2007 to 2008 reflected the strengthening of our front-office teams, primarily in EMEA, the Americas and Asia Pacific.


Wealth Management Clients


Net revenues

Recurring
2009 vs 2008: Down 11% from CHF 8,234 million to CHF 7,310 million
The decrease was driven by lower recurring commissions and fees, reflecting a 7.5% decline in average assets under management and a shift to lower margin investments, also within managed investment products, resulting from the ongoing cautious investor behavior, offset in part by strong performance fees from Hedging-Griffo. Net interest income was stable, as the impact from lower margins on lower average loan volumes was offset by higher margins on higher average deposit volumes.

2008 vs 2007: Down 3% from CHF 8,447 million to CHF 8,234 million
The decrease was driven by lower commissions and fees, mainly from managed investment products, as average assets under management declined 8.0%. The decline in commissions and fees was partly offset by higher net interest income, driven by higher margins on slightly higher average loan volumes and higher margins on slightly higher average deposit volumes.

Transaction-based
2009 vs 2008: Up 4% from CHF 2,463 million to CHF 2,561 million
The increase was mainly driven by higher integrated solutions revenues from transactions originated and jointly executed with Investment Banking and gains on ARS positions and the sale of real estate, partially offset by lower product issuing fees, foreign exchange income from client transactions and, to a lesser extent, brokerage fees.

2008 vs 2007: Down 23% from CHF 3,193 million to CHF 2,463 million
The decrease was mainly driven by lower brokerage and product issuing fees and foreign exchange income from client transactions, reflecting low client activity.


Gross Margin

Our gross margin was strong at 131 basis points in 2009, stable compared to 2008 and 2007. Compared to 2008, the recurring margin decreased four basis points in 2009, as recurring revenues declined 11% while average assets under management decreased 7.5%. The transaction-based margin increased four basis points, as transaction-based revenues increased 4%, mainly from higher integrated solutions revenues.

Results - Wealth Management Clients
 in / end of% change
20092008200709 / 0808 / 07
Statements of operations (CHF million)  
Net revenues 9,87110,69711,640(8)(8)
Provision for credit losses 3314120(77)
Total operating expenses 6,9408,0477,219(14)11
Income before taxes 2,8982,5094,40116(43)
Statement of operations metrics (%)  
Cost/income ratio 70.375.262.0
Pre-tax income margin 29.423.537.8
Net revenue detail (CHF million)  
Net interest income 3,7063,7543,593(1)4
Total non-interest income 6,1656,9438,047(11)(14)
Net revenues 9,87110,69711,640(8)(8)
Net revenue detail (CHF million)  
Recurring 7,3108,2348,447(11)(3)
Transaction-based 2,5612,4633,1934(23)
Net revenues 9,87110,69711,640(8)(8)
Gross margin on assets under management (bp)  
Recurring 9710195
Transaction-based 343036
Gross margin 131131131


Corporate & Institutional Clients


Net revenues

Net interest income
2009 vs 2008: Down 8% from CHF 1,403 million to CHF 1,294 million
The decrease was primarily due to lower margins on higher average loan volumes. Net interest income on deposits was stable, reflecting lower margins on slightly lower average volumes.

2008 vs 2007: Up 17% from CHF 1,195 million to CHF 1,403 million
The increase was mainly driven by significantly higher margins on slightly higher average loan and deposit volumes.

Total non-interest income
2009 vs 2008: Down 38% from CHF 807 million to CHF 497 million
The decrease was mainly driven by fair value losses of CHF 118 million on the Clock Finance transaction in 2009, compared to fair value gains of CHF 110 million in 2008. Excluding the fair value gains and losses on the Clock Finance transaction, non-interest income decreased 12%, mainly driven by lower foreign exchange income from client transactions and small declines in certain asset-based and other transaction-based commissions and fees, partially offset by increased integrated solutions revenues.

2008 vs 2007: Up 17% from CHF 687 million to CHF 807 million
The increase was mainly driven by fair value gains of CHF 110 million on the Clock Finance transaction in 2008, compared to fair value losses of CHF 18 million in 2007. Excluding the fair value gains and losses on the Clock Finance transaction, non-interest income was stable, reflecting stable transaction-based revenues and asset-based commissions and fees.


Return on business volume

Return on business volume measures revenues over average business volume, which is comprised of client assets and net loans.

Return on business volume in 2009 of 86 basis points was 18 basis points below 2008, mainly reflecting fair value losses on the Clock Finance transaction. Excluding the fair value gains/(losses) on the Clock Finance transaction, return on business volume was 91 basis points in 2009 compared to 99 basis points in 2008, reflecting the lower net interest income and higher client assets.

Results - Corporate & Institutional Clients
 in / end of% change
20092008200709 / 0808 / 07
Statements of operations (CHF million)  
Net revenues 1,7912,2101,882(19)17
Provision for credit losses 147(8)(79)(90)
Total operating expenses 89187787620
Income before taxes 7531,3411,085(44)24
Statement of operations metrics (%)  
Cost/income ratio 49.739.746.5
Pre-tax income margin 42.060.757.7
Net revenue detail (CHF million)  
Net interest income 1,2941,4031,195(8)17
Total non-interest income 497807687(38)17
Net revenues 1,7912,2101,882(19)17
Net revenue detail (CHF million)  
Recurring 1,6701,8071,604(8)13
Transaction-based 121403278(70)45
Net revenues 1,7912,2101,882(19)17
Return on business volume (bp)  1
Return on business volume 8610488
Business volume (CHF billion)  
Client assets 170.0148.2172.115(14)
   of which assets under management 112.194.7101.618(7)
   of which commercial assets 51.149.359.14(17)
   of which custody assets 6.84.211.462(63)
Net loans 50.351.147.4(2)8
Business volume 220.3199.3219.511(9)
1    Net revenues divided by average business volume.




Investment Banking

During 2009, Investment Banking reported record income before taxes of CHF 6,845 million. Record net revenues of CHF 20,537 million was driven by strong results in our key client businesses including global rates and foreign exchange, cash equities, US RMBS secondary trading and prime services and improved performance in many of our repositioned businesses. These results reflected the successful implementation of our client-focused, capital-efficient strategy throughout 2009.


Results
 in / end of% change