Financial highlights
	in / end of			% change		in / end of		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Net income (CHF million)
Net income attributable to shareholders	683	768	609	(11)	12	2,590	4,257	(39)
of which from continuing operations	683	768	609	(11)	12	2,590	4,276	(39)
Earnings per share (CHF)
Basic earnings per share from continuing operations	0.54	0.48	0.48	13	13	1.96	3.33	(41)
Basic earnings per share	0.54	0.48	0.48	13	13	1.96	3.31	(41)
Diluted earnings per share from continuing operations	0.53	0.48	0.48	10	10	1.95	3.31	(41)
Diluted earnings per share	0.53	0.48	0.48	10	10	1.95	3.29	(41)
Return on equity (%)
Return on equity attributable to shareholders (annualized)	8.7	9.7	7.0	–	–	10.7	15.9	–
Core Results (CHF million)  1
Net revenues	6,817	6,326	6,284	8	8	20,956	23,665	(11)
Provision for credit losses	84	13	(26)	–	–	90	(56)	–
Total operating expenses	5,697	5,227	5,557	9	3	17,119	18,228	(6)
Income from continuing operations before taxes	1,036	1,086	753	(5)	38	3,747	5,493	(32)
Core Results statement of operations metrics (%)  1
Cost/income ratio	83.6	82.6	88.4	–	–	81.7	77.0	–
Pre-tax income margin	15.2	17.2	12.0	–	–	17.9	23.2	–
Effective tax rate	32.0	25.0	15.5	–	–	28.5	20.8	–
Net income margin 2	10.0	12.1	9.7	–	–	12.4	18.0	–
Assets under management and net new assets (CHF billion)
Assets under management	1,196.8	1,233.3	1,251.2	(3.0)	(4.3)	1,196.8	1,251.2	(4.3)
Net new assets	7.1	14.3	14.6	(50.3)	(51.4)	40.5	55.1	(26.5)
Balance sheet statistics (CHF million)
Total assets	1,061,521	976,923	1,067,388	9	(1)	1,061,521	1,067,388	(1)
Net loans	226,447	220,030	222,660	3	2	226,447	222,660	2
Total shareholders' equity	33,519	31,216	34,088	7	(2)	33,519	34,088	(2)
Tangible shareholders' equity 3	24,889	23,027	24,874	8	–	24,889	24,874	0
Book value per share outstanding (CHF)
Total book value per share	27.86	26.03	28.78	7	(3)	27.86	28.78	(3)
Shares outstanding (million)
Common shares issued	1,203.0	1,202.2	1,186.1	0	1	1,203.0	1,186.1	1
Treasury shares	0.0	(3.1)	(1.8)	100	100	0.0	(1.8)	100
Shares outstanding	1,203.0	1,199.1	1,184.3	0	2	1,203.0	1,184.3	2
Market capitalization
Market capitalization (CHF million)	28,872	39,312	49,818	(27)	(42)	28,872	49,818	(42)
Market capitalization (USD million)	31,567	46,910	50,483	(33)	(37)	31,567	50,483	(37)
BIS statistics
Risk-weighted assets (CHF million)	210,138	203,741	227,683	3	(8)	210,138	227,683	(8)
Tier 1 ratio (%)	17.7	18.2	16.7	–	–	17.7	16.7	–
Total capital ratio (%)	23.5	23.6	21.9	–	–	23.5	21.9	–
Number of employees (full-time equivalents)
Number of employees	50,700	50,700	50,500	0	0	50,700	50,500	0
1    For further information on Core Results, refer to I – Credit Suisse results – Credit Suisse – Credit Suisse reporting structure and Core Results.   2    Based on amounts attributable to shareholders.   3    Tangible shareholders' equity, a non-GAAP financial measure, is calculated by deducting goodwill and other intangible assets from total shareholders' equity.

Brady W. Dougan, Chief Executive Officer (left) and Urs Rohner, Chairman of the Board of Directors.

Dear shareholders

In 3Q11, we reported net income attributable to shareholders of CHF 683 million. Our Core Results include pre-tax income of CHF 1,036 million and net revenues of CHF 6,817 million. Underlying* pre-tax income for 3Q11 was CHF 519 million and underlying* net income attributable to shareholders was CHF 441 million, excluding fair value gains on own debt, litigation provisions for the US and the German tax matters, and expenses in connection with cost efficiency initiatives.

In an environment with a high degree of uncertainty, low levels of client activity across businesses and extreme market volatility our performance was below our expectations but we nevertheless achieved an underlying* return on equity attributable to shareholders of 11.8% for the first nine months of 2011. In 3Q11, we recorded strong net new assets of CHF 7.1 billion despite the difficult conditions.

Performance of our businesses

Private Banking achieved a solid performance considering the challenging market conditions, generating underlying* pre-tax income of CHF 661 million and net revenues of CHF 2,610 million, reflecting continuing low levels of client activity, a low interest rate environment and the adverse impact from market movements. Private Banking recorded net new assets of CHF 7.4 billion, including CHF 6.6 billion in Wealth Management Clients, with strong inflows in our ultra-high-net-worth individual client and emerging market segments. Our Corporate & Institutional Clients business maintained a strong performance with pre-tax income of CHF 217 million and pre-tax income margin of 47% in 3Q11.

Our Investment Banking results were disappointing due to the effects of the very volatile market environment, with a pre-tax loss of CHF 190 million and net revenues of CHF 2,494 million, including significant gains from debit valuation adjustments relating to certain structured note liabilities of CHF 538 million. Equity and fixed income sales and trading results reflected the challenging market conditions, and underwriting and advisory performed in line with lower industry-wide capital issuance levels and subdued M&A activity.

Asset Management had positive net new assets of CHF 0.2 billion and pre-tax income of CHF 92 million. An increase in fee-based revenues of 11% versus 3Q10 was more than offset by a significant decrease in investment-related gains, resulting in overall lower revenues of CHF 471 million.

Reinforcing our integrated client-focused, capital-efficient strategy

Since 2008, Credit Suisse has proactively pursued an integrated client-focused, capital-efficient strategy. Coupled with our conservative funding position, this strategy, has served us well during a period of unprecedented market volatility and industry change, allowing us to generate an average return on equity of 14.9% since the beginning of 2009.

We are convinced that being a first mover in adapting to a new regulatory and market environment is a distinct advantage for Credit Suisse. We will reinforce the bank’s client-focused, capital-efficient strategy with decisive actions to leverage client revenue and cost synergies across our three divisions and to intensify investment in growth businesses. In Investment Banking we will accelerate our previously announced plans and reduce risk-weighted assets in fixed income under Basel III by half by 2014, resulting in a reduction of fixed income’s share in the Group’s risk-weighted assets from approximately 55% to 39%. In Private Banking we are committed to ensuring best-in-class profitability and will implement a series of growth, productivity and efficiency measures to build on our strong onshore and offshore footprint. Across our businesses, we will allocate resources to faster growing and large markets, especially Brazil, Southeast Asia, Greater China and Russia. This is expected to increase the revenues that we generate from these markets from 15% in 2010 to 25% by 2014. Efficiency measures will reduce the overall cost run rate by CHF 2 billion through 2012 and 2013. The measures announced are designed to maintain the strong momentum of our client franchise built over the last years and achieve best-in-class returns.

Outlook

We believe subdued economic growth and the low interest rate environment and increased regulation that we are seeing may persist for an extended period. We may well continue to see low levels of client activity and a volatile trading environment. With our client-focused and capital-efficient strategy combined with industry leading capital strength and liquidity we are well equipped for the current markets and we remain convinced that our strategy will provide us with substantial opportunity for growth and stronger performance as economic and market conditions improve.

Yours sincerely

Urs Rohner             Brady W. Dougan

November 2011

* Underlying results are non-GAAP financial measures. Underlying pre-tax income and underlying net income for the Group in 3Q11 exclude fair value gains on own debt and stand-alone derivatives of CHF 1,286 million (CHF 879 million after tax), litigation provisions for the US and the German tax matters of CHF 478 million (CHF 428 million after tax) and expenses in connection with cost efficiency initiatives of CHF 291 million (CHF 209 million after tax). Underlying return on equity for the Group in 9M11 excludes fair value gains on own debt and stand-alone derivatives of CHF 710 million (CHF 439 million after tax), litigation provisions of CHF 478 million for the US and the German tax matters (CHF 428 million after tax) and expenses in connection with cost efficiency initiatives of CHF 433 million (CHF 303 million after tax). Underlying pre-tax income for Private Banking in 3Q11 excludes litigation provisions for the US and the German tax matters of CHF 478 million.

Credit Suisse at a glance
Credit Suisse results
Operating environment
Credit Suisse
Core Results
Key performance indicators
Results by division
Private Banking
Wealth Management Clients
Corporate & Institutional Clients
Investment Banking
Asset Management
Overview of results and assets under management
Results
Assets under management
Treasury, risk, balance sheet and off-balance sheet
Treasury management
Risk management
Balance sheet and off-balance sheet
Condensed consolidated financial statements – unaudited
Report of Independent Registered Public Accounting Firm
Condensed consolidated financial statements – unaudited
Notes to the condensed consolidated financial statements – unaudited
Note 1 Summary of significant accounting policies
Note 2 Recently issued accounting standards
Note 3 Business developments
Note 4 Discontinued operations
Note 5 Segment information
Note 6 Net interest income
Note 7 Commissions and fees
Note 8 Trading revenues
Note 9 Other revenues
Note 10 Provision for credit losses
Note 11 Compensation and benefits
Note 12 General and administrative expenses
Note 13 Earnings per share
Note 14 Trading assets and liabilities
Note 15 Investment securities
Note 16 Loans, allowance for loan losses and credit quality
Note 17 Other assets and other liabilities
Note 18 Long-term debt
Note 19 Accumulated other comprehensive income
Note 20 Tax
Note 21 Employee deferred compensation
Note 22 Pension and other post-retirement benefits
Note 23 Derivatives and hedging activities
Note 24 Guarantees and commitments
Note 25 Transfers of financial assets and variable interest entities
Note 26 Financial instruments
Note 27 Assets pledged or assigned
Note 28 Subsidiary guarantee information
Note 29 Litigation
Investor information
Investor information
List of abbreviations
Financial calendar and information sources

For purposes of this report, unless the context otherwise requires, the terms “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.

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

Credit Suisse at a glance

Credit Suisse

As one of the world’s leading financial services providers, we are committed to delivering our combined financial experience and expertise to corporate, institutional and government clients and to high-net-worth individuals worldwide, as well as to private clients in Switzerland. Founded in 1856, we have a truly global reach today, with operations in over 50 countries and 50,700 employees from approximately 100 different nations. This worldwide reach enables us to generate a geographically balanced stream of revenues and net new assets and allows us to capture growth opportunities wherever they are. We serve our diverse clients through our three divisions, which cooperate closely to provide holistic financial solutions based on innovative products and specially tailored advice.

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.

Credit Suisse results

Operating environment

Credit Suisse

Core Results

Key performance indicators

Operating environment

Economic challenges persisted in 3Q11 as concerns increased surrounding European sovereign debt and a global economic slowdown. Major central banks kept interest rates low and indicated that rates will remain at low levels for a longer time horizon. Equity markets ended the quarter significantly lower. In September, the Swiss National Bank announced a floor for the exchange rate between the euro and the Swiss franc.

Economic environment

3Q11 saw a renewed weakening of global economic indicators, leading to increased concerns that the US and European economies may enter a recession. These concerns were supported by the downward revision of US gross domestic product figures, showing that the US economy barely grew in the first half of 2011. The US Federal Reserve reacted to the weaker economic outlook by announcing it would keep short-term interest rates at low levels through mid-2013 and by changing the composition of its holdings of US treasury securities from short maturities to longer maturities, a move intended to lower longer-term interest rates. After raising rates again in July, the European Central Bank (ECB) signaled in September that it does not intend to raise them further in the coming months, and speculation increased about a potential rate cut.

Meanwhile, concerns on the indebtedness of certain developed countries increased further. The ratings agency, Standard & Poor’s, downgraded the US long-term debt rating to AA+. Several European countries also had their credit ratings downgraded. Italian and Spanish government bond spreads reached new highs, while German bond yields fell to record lows. In response, the ECB resumed the purchase of European government bonds in early August. European leaders agreed to a new bailout package for Greece, contingent upon Greece reducing its budget gap, however, doubts intensified throughout the quarter concerning Greece’s ability to meet those requirements and secure further aid to avoid default. As a result, yields on Greek government bonds rose sharply. Parliamentary approvals in the EU for additional powers for the European Financial Stability Facility, including provisions for bank recapitalizations and the ability to buy sovereign bonds, were not yet finalized at the end of September. In addition, there was speculation that the facility may be leveraged, potentially via loans from the ECB, to increase its effectiveness.

In the emerging markets, monetary policy actions were more diverse. Brazil’s central bank lowered its benchmark rate by 50 basis points in August, while India’s central bank raised rates by 25 basis points in September in response to inflationary pressures. China tightened monetary policy further by requiring banks to hold reserves against margin deposits. Generally, global inflation remained elevated in 3Q11, reflecting higher energy and food prices.

3Q11 equity markets ended significantly lower. Both developed and emerging markets corrected sharply, especially in early August (refer to the charts “Equity markets”) when the market began to price in a much lower global growth outlook and a higher probability of recession. Market volatility, as indicated by the Chicago Board of Options Exchange Market Volatility Index (VIX), increased over the quarter to the highest levels this year. Swiss equities declined over 10% in 3Q11.

In fixed income markets, long-dated benchmark bonds continued to outperform, reflecting an increase in risk aversion. Fears of a recession in the US and continued concerns about the European debt crisis, combined with central bank monetary easing, pushed government benchmark yields to new lows (refer to the charts “Yield curves”). This environment particularly benefited long-dated US treasuries (10+ years), which recorded total returns above 20% for the quarter. In contrast, lower-rated credits and financial issuers underperformed, with high yield, subordinated bank and, to a lesser extent, emerging market bonds, posting negative total returns in 3Q11. Credit spreads significantly widened in 3Q11 for sovereign debt in some European countries (refer to the charts “Credit spreads”).

In Switzerland, economic growth remained robust, but there were increasing worries that the strong Swiss franc may dampen activity going forward. The Swiss franc strengthened sharply against the euro and other major currencies in July and August, including to the effect of safe haven inflows driven by international developments. In September, the Swiss National Bank (SNB) announced a floor for the exchange rate of the euro to the Swiss franc of CHF 1.20, sparking a sharp correction in the value of the Swiss franc. The SNB underscored its determination to defend this floor, and its view that the Swiss franc was overvalued. The Japanese yen was the strongest currency among the G-10.

Commodity prices had a volatile quarter and overall finished more then 10% down for 3Q11. After a positive start to the quarter, prices turned sharply lower in August due to growing concerns about the slowdown of the global economy. Cyclical commodities such as industrial metals and oil showed the weakest returns with losses of 23% and 18%, respectively, over the quarter. Gold, however, ended the quarter 8% higher after having reached over USD 1,900 per ounce at the beginning of September 2011 given global uncertainties.

Sector environment

The banking sector significantly underperformed the negative broader market over the quarter (refer to the charts “Equity markets”). Banks were particularly affected by the issues impacting equity markets, including the worsened global growth outlook and the European sovereign debt crisis. The sector’s underperformance also reflected solvency and funding uncertainties as well as continued regulatory uncertainty, including, for example, proposals to ring fence certain bank activities, requirements for higher equity capital ratios and the imposition of financial transaction taxes. European bank stocks lost more than 25% in 3Q11. Much of the downside resulted from discussions regarding the need for a recapitalization of banks in Europe.

Funding markets became more challenging. Concerns about banks’ exposure to European sovereign debt led to increased stress in the interbank market, and interbank interest rates moved higher. In particular, the dependency of the Portuguese, Irish and Greek banks on ECB lending support increased further. In a coordinated action, major central banks announced measures to provide three-month US dollar loans to European banks through year-end in order to provide dollar liquidity and ease funding pressures. Cost pressures remained high, with many institutions implementing cost cutting initiatives.

The wealth management sector was affected by the widespread negative market sentiment and movements in 3Q11, leading to subdued client activity and pressure on assets under management. The strengthening Swiss franc through the early part of the quarter continued to have a negative effect on the results and average assets under management at Swiss institutions. The Swiss real estate market saw sustained strong demand, supported by continued low interest rates, with the SNB once again reiterating concerns regarding the risk of the market overheating in certain areas of the country.

In the investment banking sector, global completed mergers and acquisitions (M&A) volumes declined 29% relative to 2Q11 and announced M&A volumes moderated as well. Equity underwriting volumes decreased, driven by reduced follow-on and initial public offering (IPO) activity as transaction execution became very challenging in light of the market environment. Debt underwriting volumes, both high yield and investment grade, declined significantly from 2Q11, despite continued low interest rates. Global exchange volumes improved across both cash equity and fixed income products, benefiting from spikes in market volatility. During the quarter, subprime ABX and CMBX real estate indices reached new lows, down 6% and 26% on average from 2Q11, respectively.

In the asset management sector, the Dow Jones Credit Suisse Hedge Fund Index posted negative performance of 4.8% in 3Q11. Event-driven, long/short equity and emerging markets funds saw the largest declines, with offsetting gains in dedicated short bias, global macro and managed futures strategies. The hedge fund industry saw an estimated USD 25 billion of inflows year-to-date. The pace of private equity fundraising declined in the third quarter. In conventional US mutual funds, there were net redemptions, most significantly from equity funds, driven by investors’ lower risk appetite and concerns of a global economic slowdown.

Market volumes (growth in %)
	Global			Europe
end of 3Q11	QoQ	YoY		QoQ	YoY
Equity trading volume 1	9	22		6	27
Announced mergers and acquisitions 2	(16)	(17)		(34)	(24)
Completed mergers and acquisitions 2	(29)	(6)		(23)	19
Equity underwriting 2	(57)	(45)		(80)	(28)
Debt underwriting 2	(42)	(43)		(56)	(51)
Syndicated lending - investment grade 2	(8)	48	3	–	–
1    London Stock Exchange, Borsa Italiana, Deutsche Börse, BME and Euronext. Global also includes New York Stock Exchange and NASDAQ.   2    Dealogic   3    9M11 vs 9M10

Credit Suisse

In 3Q11, we recorded net income attributable to shareholders of CHF 683 million. Diluted earnings per share were CHF 0.53. Return on equity attributable to shareholders was 8.7%. Our capital position remained strong with a BIS tier 1 ratio of 17.7%.

Results
	in / end of			% change		in / end of		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Statements of operations (CHF million)
Net revenues	6,689	6,892	6,566	(3)	2	21,737	24,118	(10)
Provision for credit losses	84	13	(26)	–	–	90	(56)	–
Compensation and benefits	3,067	3,096	3,355	(1)	(9)	10,192	11,228	(9)
General and administrative expenses	2,209	1,652	1,752	34	26	5,493	5,488	0
Commission expenses	485	491	484	(1)	0	1,512	1,573	(4)
Total other operating expenses	2,694	2,143	2,236	26	20	7,005	7,061	(1)
Total operating expenses	5,761	5,239	5,591	10	3	17,197	18,289	(6)
Income from continuing operations before taxes	844	1,640	1,001	(49)	(16)	4,450	5,885	(24)
Income tax expense	332	271	117	23	184	1,068	1,143	(7)
Income from continuing operations	512	1,369	884	(63)	(42)	3,382	4,742	(29)
Income/(loss) from discontinued operations	0	0	0	–	–	0	(19)	100
Net income	512	1,369	884	(63)	(42)	3,382	4,723	(28)
Net income/(loss) attributable to noncontrolling interests	(171)	601	275	–	–	792	466	70
Net income attributable to shareholders	683	768	609	(11)	12	2,590	4,257	(39)
of which from continuing operations	683	768	609	(11)	12	2,590	4,276	(39)
of which from discontinued operations	0	0	0	–	–	0	(19)	100
Earnings per share (CHF)
Basic earnings per share from continuing operations	0.54	0.48	0.48	13	13	1.96	3.33	(41)
Basic earnings per share	0.54	0.48	0.48	13	13	1.96	3.31	(41)
Diluted earnings per share from continuing operations	0.53	0.48	0.48	10	10	1.95	3.31	(41)
Diluted earnings per share	0.53	0.48	0.48	10	10	1.95	3.29	(41)
Return on equity (%)
Return on equity attributable to shareholders (annualized)	8.7	9.7	7.0	–	–	10.7	15.9	–
Return on tangible equity attributable to shareholders (annualized) 1	11.8	13.1	9.7	–	–	14.4	21.9	–
Number of employees (full-time equivalents)
Number of employees	50,700	50,700	50,500	0	0	50,700	50,500	0
1    Based on tangible shareholders' equity, a non-GAAP financial measure, which is calculated by deducting goodwill and other intangible assets from total shareholders' equity. Management believes that the return on tangible 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 Results			Noncontrolling interests without SEI			Credit Suisse
in	3Q11	2Q11	3Q10	3Q11	2Q11	3Q10	3Q11	2Q11	3Q10
Statements of operations (CHF million)
Net revenues	6,817	6,326	6,284	(128)	566	282	6,689	6,892	6,566
Provision for credit losses	84	13	(26)	0	0	0	84	13	(26)
Compensation and benefits	3,010	3,093	3,327	57	3	28	3,067	3,096	3,355
General and administrative expenses	2,202	1,643	1,746	7	9	6	2,209	1,652	1,752
Commission expenses	485	491	484	0	0	0	485	491	484
Total other operating expenses	2,687	2,134	2,230	7	9	6	2,694	2,143	2,236
Total operating expenses	5,697	5,227	5,557	64	12	34	5,761	5,239	5,591
Income/(loss) from continuing operations before taxes	1,036	1,086	753	(192)	554	248	844	1,640	1,001
Income tax expense	332	271	117	0	0	0	332	271	117
Net income/(loss)	704	815	636	(192)	554	248	512	1,369	884
Net income/(loss) attributable to noncontrolling interests	21	47	27	(192)	554	248	(171)	601	275
Net income attributable to shareholders	683	768	609	–	–	–	683	768	609
Statement of operations metrics (%)
Cost/income ratio	83.6	82.6	88.4	–	–	–	86.1	76.0	85.2
Pre-tax income margin	15.2	17.2	12.0	–	–	–	12.6	23.8	15.2
Effective tax rate	32.0	25.0	15.5	–	–	–	39.3	16.5	11.7
Net income margin 1	10.0	12.1	9.7	–	–	–	10.2	11.1	9.3
1    Based on amounts attributable to shareholders.

Core Results

In 3Q11, we recorded net income attributable to shareholders of CHF 683 million. Results reflected the impacts from a challenging operating environment, including fair value gains of CHF 1.3 billion on our own vanilla debt, CHF 478 million of litigation provisions in Private Banking and CHF 291 million of costs associated with our efficiency initiatives. Compared to 3Q10, our results were significantly impacted by the adverse foreign exchange translation impact. Net new assets were CHF 7.1 billion, with continued strong inflows in our ultra-high-net-worth individual client and emerging market segments.

Core Results
	in / end of			% change		in / end of		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Statements of operations (CHF million)
Net interest income	1,634	1,378	1,699	19	(4)	4,744	4,804	(1)
Commissions and fees	3,071	3,469	3,271	(11)	(6)	10,219	10,295	(1)
Trading revenues	1,826	1,127	938	62	95	4,957	8,020	(38)
Other revenues	286	352	376	(19)	(24)	1,036	546	90
Net revenues	6,817	6,326	6,284	8	8	20,956	23,665	(11)
Provision for credit losses	84	13	(26)	–	–	90	(56)	–
Compensation and benefits	3,010	3,093	3,327	(3)	(10)	10,128	11,200	(10)
General and administrative expenses	2,202	1,643	1,746	34	26	5,479	5,455	0
Commission expenses	485	491	484	(1)	0	1,512	1,573	(4)
Total other operating expenses	2,687	2,134	2,230	26	20	6,991	7,028	(1)
Total operating expenses	5,697	5,227	5,557	9	3	17,119	18,228	(6)
Income from continuing operations before taxes	1,036	1,086	753	(5)	38	3,747	5,493	(32)
Income tax expense	332	271	117	23	184	1,068	1,143	(7)
Income from continuing operations	704	815	636	(14)	11	2,679	4,350	(38)
Income/(loss) from discontinued operations	0	0	0	–	–	0	(19)	100
Net income	704	815	636	(14)	11	2,679	4,331	(38)
Net income attributable to noncontrolling interests	21	47	27	(55)	(22)	89	74	20
Net income attributable to shareholders	683	768	609	(11)	12	2,590	4,257	(39)
of which from continuing operations	683	768	609	(11)	12	2,590	4,276	(39)
of which from discontinued operations	0	0	0	–	–	0	(19)	100
Statement of operations metrics (%)
Cost/income ratio	83.6	82.6	88.4	–	–	81.7	77.0	–
Pre-tax income margin	15.2	17.2	12.0	–	–	17.9	23.2	–
Effective tax rate	32.0	25.0	15.5	–	–	28.5	20.8	–
Net income margin 1	10.0	12.1	9.7	–	–	12.4	18.0	–
Number of employees (full-time equivalents)
Number of employees	50,700	50,700	50,500	0	0	50,700	50,500	0
1    Based on amounts attributable to shareholders.

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.

Impact from movements in spreads

Our Core Results revenues are impacted by changes in credit spreads on Credit Suisse vanilla debt carried at fair value. For segment reporting purposes, the cumulative fair value gains of CHF 1.5 billion on Credit Suisse vanilla debt as of the opening 1Q10 balance sheet are charged to the segments on a straight-line amortization basis, and the difference between this amortization and the fair valuation on this Credit Suisse debt from changes in credit spreads is included in the Corporate Center. For further information, refer to II – Operating and financial review – Core Results – Accounting changes adopted in the first quarter 2010 in the Credit Suisse Annual Report 2010. Our Core Results are also impacted by fair valuation gains/(losses) on stand-alone derivatives relating to certain of our funding liabilities. These fair valuation gains/(losses) on the stand-alone derivatives are recorded in the Corporate Center, reflect the volatility of cross-currency swaps and yield curve volatility and, over the life of the derivatives, will result in no net gains/(losses). Regulatory capital excludes cumulative fair value gains/(losses) related to own vanilla debt and structured notes, net of tax. For further information, refer to IV – Treasury, risk, balance sheet and off-balance sheet – Treasury management.

in	3Q11	2Q11	3Q10	9M11	9M10
(CHF million)
Net income/(loss) attributable to shareholders, excluding impact from movements in spreads	(196)	741	1,036	2,151	3,893
Fair value gains/(losses) on own vanilla debt	1,277	54	(456)	1,022	505
of which in Corporate Center	1,327	106	(395)	1,179	696
of which allocated to Investment Banking	(47)	(48)	(57)	(147)	(178)
of which allocated to other divisions	(3)	(4)	(4)	(10)	(13)
Fair value gains/(losses) on stand-alone derivatives	9	(13)	(133)	(312)	23
Tax expense/(benefit)	407	14	(162)	271	164
Net income attributable to shareholders	683	768	609	2,590	4,257

Results overview

In 3Q11, we recorded net income attributable to shareholders of CHF 683 million, up 12% compared to 3Q10. Net revenues were CHF 6,817 million, up 8%, and total operating expenses were CHF 5,697 million, up 3% compared to 3Q10. Revenues were adversely impacted and expenses were favorably impacted by the strengthening of the Swiss franc against all major currencies. Compared to 3Q10, the adverse impact on net revenues and income before taxes was CHF 948 million and CHF 277 million, respectively. Our 3Q11 results included fair value gains of CHF 1,277 million on our own vanilla debt, CHF 9 million of fair value gains on stand-alone derivatives relating to certain of our funding liabilities and CHF 538 million of debit valuation adjustment (DVA) gains relating to certain structured note liabilities.

In Private Banking, net revenues of CHF 2,610 million were down 8% compared to 3Q10. In an ongoing low interest rate environment, net interest income decreased 10%, with lower deposit margins on lower average volumes and stable loan margins on slightly higher average volumes. The decline in deposit volumes included the impact from the weakening of the US dollar and the euro against the Swiss franc and lower volumes related to securities lending and borrowing activities. Recurring commissions and fees decreased 10% across all categories, mainly due to the adverse foreign exchange translation impact, including the impact on average assets under management. Transaction-based revenues were stable, with higher foreign exchange income from client transactions and revenues from integrated solutions offset by lower brokerage and product issuing fees, and slight fair value gains on the Clock Finance transaction compared to fair value losses in 3Q10. Overall, assets under management continued to reflect a risk-averse asset mix, with investments in less complex, lower-margin products, also within managed investment products, and a significant portion of assets in cash and money market products.

Core Results reporting by division
	in			% change		in		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Net revenues (CHF million)
Wealth Management Clients	2,148	2,330	2,385	(8)	(10)	6,911	7,365	(6)
Corporate & Institutional Clients	462	467	441	(1)	5	1,392	1,352	3
Private Banking	2,610	2,797	2,826	(7)	(8)	8,303	8,717	(5)
Investment Banking	2,494	2,822	3,421	(12)	(27)	10,245	12,736	(20)
Asset Management	471	629	582	(25)	(19)	1,691	1,715	(1)
Corporate Center	1,242	78	(545)	–	–	717	497	44
Net revenues	6,817	6,326	6,284	8	8	20,956	23,665	(11)
Provision for credit losses (CHF million)
Wealth Management Clients	20	8	8	150	150	40	56	(29)
Corporate & Institutional Clients	5	(10)	(16)	–	–	(5)	(42)	(88)
Private Banking	25	(2)	(8)	–	–	35	14	150
Investment Banking	59	15	(18)	293	–	55	(70)	–
Provision for credit losses	84	13	(26)	–	–	90	(56)	–
Total operating expenses (CHF million)
Wealth Management Clients	2,162	1,727	1,765	25	22	5,687	5,387	6
Corporate & Institutional Clients	240	229	233	5	3	700	714	(2)
Private Banking	2,402	1,956	1,998	23	20	6,387	6,101	5
Investment Banking	2,625	2,576	3,044	2	(14)	8,806	9,833	(10)
Asset Management	379	427	447	(11)	(15)	1,225	1,392	(12)
Corporate Center	291	268	68	9	328	701	902	(22)
Total operating expenses	5,697	5,227	5,557	9	3	17,119	18,228	(6)
Income/(loss) from continuing operations before taxes (CHF million)
Wealth Management Clients	(34)	595	612	–	–	1,184	1,922	(38)
Corporate & Institutional Clients	217	248	224	(13)	(3)	697	680	2
Private Banking	183	843	836	(78)	(78)	1,881	2,602	(28)
Investment Banking	(190)	231	395	–	–	1,384	2,973	(53)
Asset Management	92	202	135	(54)	(32)	466	323	44
Corporate Center	951	(190)	(613)	–	–	16	(405)	–
Income from continuing operations before taxes	1,036	1,086	753	(5)	38	3,747	5,493	(32)

Core Results reporting by region
	in			% change		in		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Net revenues (CHF million)
Switzerland	1,989	2,126	2,006	(6)	(1)	6,265	6,386	(2)
EMEA	1,725	1,611	1,446	7	19	5,299	5,638	(6)
Americas	1,211	1,861	2,610	(35)	(54)	6,511	8,870	(27)
Asia Pacific	650	650	767	0	(15)	2,164	2,274	(5)
Corporate Center	1,242	78	(545)	–	–	717	497	44
Net revenues	6,817	6,326	6,284	8	8	20,956	23,665	(11)
Income/(loss) from continuing operations before taxes (CHF million)
Switzerland	627	761	682	(18)	(8)	2,096	2,260	(7)
EMEA	99	85	(113)	16	–	493	636	(22)
Americas	(668)	381	660	–	–	918	2,724	(66)
Asia Pacific	27	49	137	(45)	(80)	224	278	(19)
Corporate Center	951	(190)	(613)	–	–	16	(405)	–
Income from continuing operations before taxes	1,036	1,086	753	(5)	38	3,747	5,493	(32)
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.

In Investment Banking, net revenues of CHF 2,494 million were down 27% from 3Q10. Fixed income sales and trading results were significantly lower than 3Q10, reflecting challenging market-making conditions across most businesses. Results in our credit business were significantly impacted by reduced client trading volumes, market illiquidity, and widening credit spreads, resulting in losses on inventory positions held for our client trading business. We took substantial risk reduction measures in our credit businesses to mitigate potential losses. Securitized products results remained weak as further declines in bond prices led to continued low client activity and additional valuation reductions on client flow inventory positions. Fixed income sales and trading business results in 3Q11 mainly consisted of revenues from global rates, emerging markets, foreign exchange, commodities and securitized products. Results also included DVA gains of CHF 266 million relating to certain structured note liabilities and a loss of CHF 83 million related to changes in overnight index swaps (OIS) interest rate yield curves used to determine the fair value of certain collateralized derivatives. Equity sales and trading results were down, affected by the volatile market environment. Revenues, which included DVA gains of CHF 272 million relating to certain structured note liabilities, increased from 3Q10. Equity sales and trading business results mainly consisted of revenues from prime services, cash equities, derivatives and equities arbitrage trading. Underwriting and advisory results declined from 3Q10, but were in line with industry-wide issuance levels and M&A activity. We had lower debt underwriting revenues, driven by reduced industry-wide issuance levels, particularly in investment grade and high yield, and lower equity underwriting revenues from IPOs and follow-on offerings despite market share gains.

In Asset Management, net revenues of CHF 471 million were down 19% from 3Q10. Net revenues before investment-related gains/(losses) were CHF 488 million, up 16% compared to 3Q10, reflecting improved results in alternative investments. Fee-based revenues increased 11% compared to 3Q10. Asset management fees of CHF 311 million were down 9%, reflecting the foreign exchange translation impact and the spin-off and sale of non-core businesses in 3Q10, partially offset by higher fees from index strategies and emerging markets strategies. Average assets under management decreased 3.2% compared to 3Q10, reflecting adverse foreign exchange-related movements and negative market performance. Placement, transaction and other fees were 68% higher, primarily reflecting higher private equity placement fees and a loss in 3Q10 on an investment held by Asset Management Finance (AMF). Performance fees and carried interest were up 115%, benefiting from higher carried interest on realized private equity gains, primarily from the sale of a portfolio company in the healthcare sector. Equity participations income increased 56%, reflecting higher income from our investments in single manager hedge funds and diversified strategies. Investment-related losses were CHF 17 million compared to gains of CHF 160 million in 3Q10. 3Q11 included unrealized losses in private equity investments in the technology, energy and industrial sectors, partially offset by the realized gains in the healthcare sector. Equity participations gains were CHF 15 million, reflecting a partial sale of our ownership interest in Aberdeen Asset Management (Aberdeen).

For further information on Private Banking, Investment Banking and Asset Management, refer to II – Results by division.

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. Corporate Center income before taxes was CHF 951 million, including CHF 291 million, primarily severance and other compensation expenses relating to Group-wide cost efficiency initiatives and net fair value gains on our long-term vanilla debt consisting of CHF 1,327 million of gains on own vanilla debt and CHF 9 million of gains on stand-alone derivatives. The fair value gains on own debt reflected the widening of credit spreads across all currencies, including senior and subordinated debt. Revenues and compensation and benefits also included reclassifications relating to the Partner Asset Facility (PAF), as PAF gains of CHF 82 million and offsetting compensation expense were included in Investment Banking trading revenues. In 3Q10, Corporate Center losses before taxes were CHF 613 million, primarily reflecting fair value losses on own vanilla debt of CHF 395 million and CHF 133 million on stand-alone derivatives.

Provision for credit losses were net provisions of CHF 84 million in 3Q11, with net provisions of CHF 59 million and CHF 25 million in Investment Banking and Private Banking, respectively.

Total operating expenses of CHF 5,697 million were up 3% compared to 3Q10, reflecting 26% higher general and administrative expenses, partially offset by 10% lower compensation and benefits. Operating expenses in 3Q11 were favorably impacted by the foreign exchange translation impact compared to 3Q10. The decrease in compensation and benefits was mainly due to lower deferred compensation expense from prior year awards and the favorable foreign exchange translation impact, partially offset by severance and other compensation expense of CHF 235 million in Corporate Center relating to Group-wide cost efficiency initiatives. The increase in general and administrative expenses primarily reflected higher litigation provisions, the UK bank levy of CHF 90 million, recognized in Investment Banking, and IT expenses, partially offset by lower professional fees and the favorable foreign exchange translation impact. We recorded net litigation provisions in 3Q11 of CHF 519 million, including CHF 183 million (EUR 150 million) in connection with the resolution of the German tax matter with the Public Prosecutor’s Office in Dusseldorf, Germany, regarding the proceedings against Credit Suisse employees (the German tax matter) and CHF 295 million in connection with the US tax matter in Private Banking. For information on the US tax matter, refer to Note 29 – Litigation in V – Condensed consolidated financial statements – unaudited in the 2Q11 Financial Report. 3Q10 included litigation charges of CHF 112 million.

The Core Results effective tax rate was 32.0% in 3Q11, compared to 25.0% in 2Q11. The 3Q11 effective tax rate was mainly impacted by the geographical mix of results, a CHF 139 million tax charge related to a write-down of deferred tax assets following the enactment of UK legislation to reduce the rate of corporation tax from 27% to 25%, an increase in valuation allowances against deferred tax assets mainly in the UK of CHF 62 million and an increase of net deferred tax balances of CHF 127 million following a re-measurement of deferred tax liabilities in Switzerland. Overall, net deferred tax assets increased CHF 301 million to CHF 7,702 million as of the end of 3Q11. For further information, refer to Note 20 – Tax in V – Condensed consolidated financial statements – unaudited.

Assets under management were CHF 1,196.8 billion, down CHF 36.5 billion, or 3.0%, compared to the end of 2Q11, mainly reflecting adverse market performance, partly offset by positive foreign exchange-related movements and net new assets of CHF 7.1 billion. Compared to the end of 3Q10, assets under management were down CHF 54.4 billion, or 4.3%, as adverse foreign exchange-related movements and adverse market performance were partly offset by net new assets in both Private Banking and Asset Management.

Evolution of our strategy

In light of increasing regulatory and capital requirements and continued challenging market and economic conditions, we are adapting our client-focused, capital-efficient strategy to optimize our use of capital and improve our cost structure in order to deliver attractive returns for our shareholders.

In Private Banking, we remain committed to a long-term international growth strategy, focusing on onshore, faster growing and large markets and the ultra-high-net-worth individual (UHNWI) client segment as key growth areas and continuing to build on our strong position in the Swiss market while enhancing our efficiency. We will rationalize our operating model for Western European markets and serve smaller markets opportunistically. With these combined measures, we are targeting incremental pre-tax income of CHF 800 million excluding market induced growth by 2014.

In Investment Banking, we will redeploy capital in order to invest and grow businesses and significantly reduce risk-weighted assets (RWAs) and our cost base. We will invest and grow in businesses where we have competitive advantages and synergies with Private Banking and Asset Management, including foreign exchange, electronic trading, emerging markets, prime services and equity capital markets. We will target a 50% reduction in RWAs in our fixed income business from 55% of Group RWAs to 39% by the end of 2014. We will significantly reduce our cost base, including through improved client coverage efficiency and reduced country, industry and product coverage overlaps.

In Asset Management, we will expand the range of alternative products in collaboration with Private Banking and Investment Banking, grow our fee-based revenues and drive further cost reductions through platform optimization and outsourcing.

We will allocate additional resources across our businesses to fast growing markets, especially Brazil, Southeast Asia, Greater China and Russia, to increase the revenue contribution from 15% of revenues in 2010 to 25% by 2014.

As part of our evolving strategy, we will implement additional cost efficiency measures to adjust our cost base. In 2Q11, we began implementing a number of cost efficiency initiatives, which we now expect to achieve CHF 1.2 billion (up from the CHF 1.0 billion estimate) in cost savings, with most of the savings in Investment Banking, and resulting reductions in the annualized first half 2011 expense run rate during 2012. This program includes reductions of approximately 4% of total headcount across the Group and will involve implementation costs in 2011 of CHF 550 million (up from an estimated range of CHF 400 million to CHF 450 million). Of these costs, we recognized CHF 291 million in 3Q11 and CHF 142 million in 2Q11 in the Corporate Center, mostly severance and other compensation expense. Given these implementation costs, we expect limited net costs savings in 2011 and realization of the benefits of the cost efficiency initiative during 2012. In addition to these measures, we are targeting an additional CHF 0.8 billion of cost savings by the end of 2013. We expect these additional cost savings to involve headcount reductions of approximately 3% across the Group and maximizing deployment opportunities by rationalizing our existing business footprint, a more fully integrated bank operating model and continued centralization of our infrastructure and streamlining of operational and support functions (including a new European business operating model and additional European and Swiss platform efficiencies). We do not expect the CHF 2 billion of cost efficiency initiatives to have an adverse impact on the execution of our capital-efficient, client-focused strategy as we allocate resources to growth businesses.

For more information on the refinement of our Investment Banking strategy, refer to II – Results by division – Investment Banking, and for more information on the reduction of RWAs, refer to III – Treasury, risk, balance sheet and off-balance sheet – Treasury management – Capital management.

Regulatory proposals and developments

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. For information regarding the “Too Big to Fail” legislation recently approved by the Swiss Parliament, the liquidity principles agreed with the Swiss Financial Market Supervisory Authority (FINMA), the liquidity and capital standards under the Basel Committee on Banking Supervision (BCBS) Basel III framework, and the revisions to the Basel II market risk framework (Basel II.5), refer to IV – Treasury, risk, balance sheet and off-balance sheet – Treasury management – Regulatory capital developments and proposals, and for information on other regulatory proposals and developments, refer to I – Information on the company – Regulation and supervision in the Credit Suisse Annual Report 2010.

In September 2011, the Swiss Bank Law was amended to streamline the procedure by which troubled banks are restructured, providing FINMA with increased regulatory authority to expedite restructurings, including the power to require a bank to complete a debt-for-stock swap in order to avoid insolvency.

In October 2011, US regulators issued proposed regulations on the “Volcker Rule”, which will limit the ability of banking entities to sponsor or invest in private equity or hedge funds or to engage in certain types of proprietary trading. We are assessing how the proposed regulations would affect our businesses if implemented as proposed.

In October 2011, the Federal Reserve Board announced the approval of a final rule to implement the resolution plan requirement in the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rule requires bank holding companies with assets of USD 50 billion or more and certain designated non-bank financial firms to submit annually to the Board and the Federal Deposit Insurance Corporation resolution plans describing the strategy for rapid and orderly resolution in bankruptcy during times of financial distress.

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 discretionary variable component. The variable component reflects the performance-based variable 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.

Our shareholders’ equity reflects the effect of share-based compensation. Share-based compensation expense (which is generally based on fair value at the time of grant) reduces equity, however, the recognition of the obligation to deliver the shares increases equity by a corresponding amount. Equity is generally unaffected by the granting and vesting of share-based awards, including through the issuance of shares from approved conditional capital. If Credit Suisse purchases shares from the market to meet its obligation to employees, these purchased treasury shares reduce equity by the amount of the purchase price. Shareholders’ equity also includes, as additional paid-in capital, the excess tax benefits/charges that arise at settlement of share-based awards. For further information, refer to the Consolidated statements of changes in equity – unaudited and Note 21 – Employee deferred compensation in V – Condensed consolidated financial statements – unaudited and Note 26 – Tax – Tax benefits associated with share-based compensation in V – Consolidated Financial Statements – Credit Suisse Group in the Credit Suisse Annual Report 2010.

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 expenses 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.

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 26 – Financial instruments in V – Condensed consolidated financial statements – unaudited.

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 commercial paper (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 (CDOs), certain asset-backed and mortgage-backed securities, certain loans, certain loans held-for-sale, non-traded equity securities, private equity and other long-term investments.

Models were used to value these 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. Consideration of these indices is more significant in periods of lower market activity.

As of the end of 3Q11, 53% and 41% of our total assets and total liabilities, respectively, were measured at fair value.

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 at fair value recorded as level 3 increased by CHF 3.8 billion during 3Q11, primarily reflecting increases in loans held-for-sale and trading assets. The increase in loans held-for-sale primarily reflected transfers to level 3 and the foreign exchange translation impact, partially offset by realized and unrealized losses. The increase in trading assets primarily reflected the foreign exchange translation impact and realized and unrealized gains, partially offset by net settlements.

Our level 3 assets, excluding assets attributable to noncontrolling interests and assets of consolidated variable interest entities (VIEs) that are not risk-weighted assets under Basel II, were CHF 38.4 billion, compared to CHF 34.6 billion as of the end of 2Q11. As of the end of 3Q11, these assets comprised 4% of total assets and 7% of total assets measured at fair value, both adjusted on the same basis, unchanged from 2Q11.

We believe that the range of any valuation uncertainty, in the aggregate, would not be material to our financial condition, however, it may be material to our operating results for any particular period, depending, in part, upon the operating results for such period.

Personnel

Headcount at the end of 3Q11 was 50,700, unchanged from 2Q11 and up 200 from 3Q10. This reflected reductions in headcount in connection with our cost efficiency initiatives, primarily in Private Banking and Investment Banking, offset by seasonal graduate and apprentice recruitment and increases due to regulatory requirements.

Number of employees by division
	end of				% change
	3Q11	1	2Q11	3Q10	QoQ	YoY
Number of employees by division (full-time equivalents)
Private Banking	25,500		25,700	25,500	(1)	0
Investment Banking	21,500		21,300	21,200	1	1
Asset Management	2,800		2,800	2,900	0	(3)
Corporate Center	900		900	900	0	0
Number of employees	50,700		50,700	50,500	0	0
1    Excludes 1,150 employees in connection with the cost efficiency initiatives.

Key performance indicators

Our key performance indicators (KPIs) are targets to be achieved over a three to five year period across market cycles. As such, year-to-date results may be more meaningful than individual quarterly results. Our KPIs are assessed annually as part of our normal planning process.

Growth

We target collaboration revenues of 18% to 20% of net revenues. Collaboration revenues were 15.1% of net revenues for 3Q11.

For net new assets, we target a growth rate above 6%. In 3Q11, we recorded an annualized net new asset growth rate of 2.3% and a rolling four-quarter average growth rate of 4.3%.

Efficiency and performance

For total shareholder return, we target superior share price appreciation plus dividends compared to our peer group. Our 3Q11 total shareholder return was (26.6)%. The 3Q11 average total shareholder return of our peer group was (36.2)%.

For return on equity, we target an annualized return on equity above 15%. The annualized return on equity was 8.7% in 3Q11.

We target a pre-tax income margin above 28%. Our pre-tax income margin was 15.2% for 3Q11.

Capital

For the Bank for International Settlements (BIS) tier 1 ratio, our capital targets are compliance with the Swiss “Too Big to Fail” and Basel III capital standards. The BIS tier 1 ratio was 17.7% and the core tier 1 ratio under Basel II.5 was 10.0% as of the end of 3Q11. For further information, refer to IV – Treasury, risk, balance sheet and off-balance sheet – Treasury management – Capital management.

in / end of	Target	3Q11	9M11	2010	2009	2008
Growth (%)
Collaboration revenues	18 - 20% of net revenues	15.1	15.6	14.4	15.5	43.8
Net new asset growth (annualized)	Above 6%	2.3	4.3	5.6	4.0	(0.2)
Efficiency and performance (%)
Total shareholder return (Credit Suisse) 1	Superior return vs. peer group	(26.6)	(34.1)	(23.3)	80.1	(56.1)
Total shareholder return of peer group 1, 2	–	(36.2)	(36.9)	(1.7)	36.6	(55.5)
Return on equity attributable to shareholders (annualized)	Above 15%	8.7	10.7	14.4	18.3	(21.1)
Core Results pre-tax income margin	Pre-tax income margin above 28%	15.2	17.9	22.2	25.5	(102.5)
Capital (%)
BIS tier 1 ratio (Basel II)	Compliance with Swiss "Too Big to Fail" and Basel III	17.7	17.7	17.2	16.3	13.3
1    Source: Bloomberg. Total shareholder return is calculated as equal to the appreciation or depreciation of a particular share, plus any dividends, over a given period, expressed as a percentage of the share's value at the beginning of the period.   2    The peer group for this comparison comprises Bank of America, Barclays, BNP Paribas, Citigroup, Deutsche Bank, HSBC, JPMorgan Chase, Société Générale and UBS. The total shareholder return of this peer group is calculated as a simple, unweighted average of the return reported by Bloomberg for each of the members of the peer group.

Results by division

Private Banking

Investment Banking

Asset Management

Private Banking

In 3Q11, we reported net revenues of CHF 2,610 million and income before taxes of CHF 183 million in a challenging operating environment, including litigation provisions of CHF 478 million in Wealth Management Clients. We attracted net new assets of CHF 7.4 billion, with strong inflows in our ultra-high-net-worth individual client and emerging market segments.

Results
	in / end of			% change		in / end of		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Statements of operations (CHF million)
Net revenues	2,610	2,797	2,826	(7)	(8)	8,303	8,717	(5)
Provision for credit losses	25	(2)	(8)	–	–	35	14	150
Compensation and benefits	1,115	1,135	1,139	(2)	(2)	3,474	3,536	(2)
General and administrative expenses	1,134	664	715	71	59	2,419	2,081	16
Commission expenses	153	157	144	(3)	6	494	484	2
Total other operating expenses	1,287	821	859	57	50	2,913	2,565	14
Total operating expenses	2,402	1,956	1,998	23	20	6,387	6,101	5
Income before taxes	183	843	836	(78)	(78)	1,881	2,602	(28)
of which Wealth Management Clients	(34)	595	612	–	–	1,184	1,922	(38)
of which Corporate & Institutional Clients	217	248	224	(13)	(3)	697	680	2
Statement of operations metrics (%)
Cost/income ratio	92.0	69.9	70.7	–	–	76.9	70.0	–
Pre-tax income margin	7.0	30.1	29.6	–	–	22.7	29.8	–
Utilized economic capital and return
Average utilized economic capital (CHF million)	6,959	6,894	6,974	1	0	6,835	6,617	3
Pre-tax return on average utilized economic capital (%) 1	11.0	49.3	48.4	–	–	37.1	52.9	–
Number of employees (full-time equivalents)
Number of employees	25,500	25,700	25,500	(1)	0	25,500	25,500	0
1    Calculated using a return excluding interest costs for allocated goodwill.

Results (continued)
	in / end of			% change		in / end of		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Net revenue detail (CHF million)
Net interest income	1,098	1,151	1,217	(5)	(10)	3,425	3,707	(8)
Recurring commissions and fees	905	1,005	1,001	(10)	(10)	2,917	3,085	(5)
Transaction-based	607	641	608	(5)	0	1,961	1,925	2
Net revenues	2,610	2,797	2,826	(7)	(8)	8,303	8,717	(5)
Provision for credit losses (CHF million)
New provisions	54	55	47	(2)	15	150	212	(29)
Releases of provisions	(29)	(57)	(55)	(49)	(47)	(115)	(198)	(42)
Provision for credit losses	25	(2)	(8)	–	–	35	14	150
Balance sheet statistics (CHF million)
Net loans	192,177	186,691	183,015	3	5	192,177	183,015	5
of which Wealth Management Clients 1	138,175	134,160	132,744	3	4	138,175	132,744	4
of which Corporate & Institutional Clients	54,002	52,531	50,271	3	7	54,002	50,271	7
Deposits	255,630	244,146	258,135	5	(1)	255,630	258,135	(1)
of which Wealth Management Clients 1	201,179	193,729	207,078	4	(3)	201,179	207,078	(3)
of which Corporate & Institutional Clients	54,451	50,417	51,057	8	7	54,451	51,057	7
Number of relationship managers
Switzerland	1,970	2,040	2,010	(3)	(2)	1,970	2,010	(2)
EMEA	1,210	1,240	1,260	(2)	(4)	1,210	1,260	(4)
Americas	570	560	560	2	2	570	560	2
Asia Pacific	370	370	360	0	3	370	360	3
Wealth Management Clients	4,120	4,210	4,190	(2)	(2)	4,120	4,190	(2)
Corporate & Institutional Clients (Switzerland)	500	500	490	0	2	500	490	2
Number of relationship managers	4,620	4,710	4,680	(2)	(1)	4,620	4,680	(1)
1    Wealth Management Clients covers individual clients, including affluent, high-net-worth and ultra-high-net-worth individual clients.

Results overview

Income before taxes of CHF 183 million decreased 78% compared to 3Q10, primarily reflecting litigation provisions of CHF 478 million. Net revenues of CHF 2,610 million were down 8% compared to 3Q10. In an ongoing low interest rate environment, net interest income decreased 10%, with lower deposit margins on lower average volumes and stable loan margins on slightly higher average volumes. The decline in deposit volumes included the impact from the weakening of the US dollar and the euro against the Swiss franc and lower volumes related to securities lending and borrowing activities. Recurring commissions and fees decreased 10% across all categories, mainly due to the adverse foreign exchange translation impact, including the impact on average assets under management. Transaction-based revenues were stable, with higher foreign exchange income from client transactions and revenues from integrated solutions offset by lower brokerage and product issuing fees, and slight fair value gains on the Clock Finance transaction compared to fair value losses in 3Q10. Overall, assets under management continued to reflect a risk-averse asset mix, with investments in less complex, lower-margin products, also within managed investment products, and a significant portion of assets in cash and money market products.

Compared to 3Q10, results in Private Banking were impacted by the significant weakening of the average exchange rate of the US dollar and the euro against the Swiss franc, adversely impacting revenues and assets under management and favorably impacting expenses, primarily in Wealth Management Clients. The adverse impact on net revenues and income before taxes in Private Banking was CHF 252 million and CHF 133 million, respectively. In Wealth Management Clients, the negative impact on net revenues and income before taxes was CHF 223 million and CHF 105 million, respectively. For further information on foreign currency translation rates, refer to VI – Investor information.

We recorded net provisions for credit losses of CHF 25 million in Private Banking, with net provisions of CHF 20 million in Wealth Management Clients and CHF 5 million in Corporate & Institutional Clients.

Total operating expenses of CHF 2,402 million were 20% higher compared to 3Q10, reflecting CHF 478 million of litigation provisions, of which CHF 183 million (EUR 150 million) was in connection with the German tax matter and CHF 295 million was in connection with the US tax matter. 3Q10 included CHF 44 million of provisions related to auction rate securities (ARS). Excluding these litigation provisions, total operating expenses decreased slightly due to the favorable foreign exchange translation impact.

Compared to 2Q11, income before taxes was 78% lower. Net revenues decreased 7%. Net interest income was 5% lower, reflecting lower deposit margins on slightly lower average volumes and slightly higher loan margins on stable average volumes. Recurring commissions and fees decreased 10%, mainly reflecting the decrease in average assets under management, resulting from the downturn in equity markets and the semi-annual performance fees from Hedging-Griffo in 2Q11. Transaction-based revenues decreased 5%, mainly reflecting the gains from the sale of real estate of CHF 72 million in 2Q11 and lower brokerage and product issuing fees, partially offset by higher foreign exchange income from client transactions and higher revenues from integrated solutions. Total operating expenses increased 23%, driven by the litigation provisions. Excluding these litigation provisions, total operating expenses decreased slightly.

Assets under management as of the end of 3Q11 were CHF 891.4 billion, 3.0% lower than the end of 2Q11. Net new assets of CHF 7.4 billion and positive foreign exchange-related movements were more than offset by adverse market movements, primarily from the downturn in equity markets. Wealth Management Clients contributed net new assets of CHF 6.6 billion driven by inflows from our international businesses, partially offset by outflows in Switzerland, as broad net inflows were more than offset by outflows of low margin assets by a small number of clients. Contributions from emerging markets and the UHNWI client segment were strong. Corporate & Institutional Clients acquired net new assets of CHF 0.8 billion. Compared to the end of 3Q10, assets under management were down 4.7%, as strong net new assets were more than offset by adverse foreign exchange-related movements and negative market movements. Average assets under management of Wealth Management Clients decreased 7.0% against 3Q10 and 7.5% against 2Q11. Compared to 3Q10, strong net new assets, particularly from the UHNWI client segment, were more than offset by adverse foreign exchange-related movements and adverse equity market movements. Compared to 2Q11, positive foreign exchange-related movements, primarily related to the appreciation of the US dollar against the Swiss franc, and net new assets were more than offset by adverse market movements, mainly in equity markets.

In light of increasing regulatory and capital requirements and continued challenging market and economic conditions, we are evolving our strategy. For further information, refer to I – Credit Suisse results – Core Results – Evolution of our strategy.

Assets under management - Private Banking
	in / end of				% change		in / end of		% change
	3Q11	2Q11		3Q10	QoQ	YoY	9M11	9M10	YoY
Assets under management by region (CHF billion)
Switzerland	301.9	315.0		327.4	(4.2)	(7.8)	301.9	327.4	(7.8)
EMEA	252.7	261.8		271.7	(3.5)	(7.0)	252.7	271.7	(7.0)
Americas	129.9	132.1		135.8	(1.7)	(4.3)	129.9	135.8	(4.3)
Asia Pacific	77.6	78.1		78.2	(0.6)	(0.8)	77.6	78.2	(0.8)
Wealth Management Clients	762.1	787.0		813.1	(3.2)	(6.3)	762.1	813.1	(6.3)
Corporate & Institutional Clients (Switzerland)	129.3	132.1		122.0	(2.1)	6.0	129.3	122.0	6.0
Assets under management	891.4	919.1		935.1	(3.0)	(4.7)	891.4	935.1	(4.7)
Average assets under management (CHF billion)
Average assets under management	882.1	942.0		929.3	(6.4)	(5.1)	925.0	939.6	(1.6)
Assets under management by currency (CHF billion)
USD	282.4	281.8		304.3	0.2	(7.2)	282.4	304.3	(7.2)
EUR	199.9	214.3		229.0	(6.7)	(12.7)	199.9	229.0	(12.7)
CHF	287.3	297.0		285.1	(3.3)	0.8	287.3	285.1	0.8
Other	121.8	126.0		116.7	(3.3)	4.4	121.8	116.7	4.4
Assets under management	891.4	919.1		935.1	(3.0)	(4.7)	891.4	935.1	(4.7)
Net new assets by region (CHF billion)
Switzerland	(0.4)	4.1		1.2	–	–	8.4	7.3	15.1
EMEA	2.7	2.9		4.3	(6.9)	(37.2)	9.6	12.3	(22.0)
Americas	1.3	2.0		3.1	(35.0)	(58.1)	6.3	6.7	(6.0)
Asia Pacific	3.0	2.5		3.8	20.0	(21.1)	9.5	10.9	(12.8)
Wealth Management Clients	6.6	11.5		12.4	(42.6)	(46.8)	33.8	37.2	(9.1)
Corporate & Institutional Clients (Switzerland)	0.8	0.0		0.2	–	300.0	3.1	7.8	(60.3)
Net new assets	7.4	11.5		12.6	(35.7)	(41.3)	36.9	45.0	(18.0)
Growth in assets under management (CHF billion)
Net new assets	6.6	11.5		12.4	–	–	33.8	37.2	–
Other effects	(31.5)	(54.1)		(4.6)	–	–	(79.7)	(26.9)	–
of which market movements	(52.7)	(7.2)		26.9	–	–	(52.5)	19.4	–
of which currency	21.3	(41.8)		(30.6)	–	–	(20.4)	(42.2)	–
of which other	(0.1)	(5.1)	1	(0.9)	–	–	(6.8)	(4.1)	–
Wealth Management Clients	(24.9)	(42.6)		7.8	–	–	(45.9)	10.3	–
Corporate & Institutional Clients	(2.8)	3.8	1	1.7	–	–	4.4	9.9	–
Growth in assets under management	(27.7)	(38.8)		9.5	–	–	(41.5)	20.2	–
Growth in assets under management (annualized) (%)
Net new assets	3.2	4.8		5.4	–	–	5.3	6.6	–
of which Wealth Management Clients	3.4	5.5		6.2	–	–	5.6	6.2	–
of which Corporate & Institutional Clients	2.4	0.0		0.7	–	–	3.3	9.3	–
Other effects	(15.3)	(21.0)		(1.3)	–	–	(11.2)	(3.6)	–
Growth in assets under management	(12.1)	(16.2)		4.1	–	–	(5.9)	3.0	–
Growth in assets under management (rolling four-quarter average) (%)
Net new assets	5.0	5.6		5.7	–	–	–	–	–
of which Wealth Management Clients	5.2	5.9		5.4	–	–	–	–	–
of which Corporate & Institutional Clients	3.8	3.3		8.1	–	–	–	–	–
Other effects	(9.7)	(6.3)		(2.0)	–	–	–	–	–
Growth in assets under management (rolling four-quarter average)	(4.7)	(0.7)		3.7	–	–	–	–	–
1    Primarily reflects the transfer of assets under management from Wealth Management Clients to Corporate & Institutional Clients.

Performance indicators

Pre-tax income margin (KPI)

Our target over market cycles is a pre-tax income margin above 35%. In 3Q11, the pre-tax income margin was 7.0%, down 22.6 percentage points from 3Q10 and down 23.1 percentage points from 2Q11. Excluding the litigation provisions of CHF 478 million, our pre-tax income margin was 25.3%.

Net new asset growth for Wealth Management Clients (KPI)

Our target over market cycles is a growth rate over 6%. Our annualized quarterly growth rate was 3.4% in 3Q11. The rolling four-quarter average growth rate was 5.2%.

Initiatives and achievements

In 3Q11, we continued our long-term strategy of organic growth and strengthened our client focus:

– We were awarded “Best Private Bank” in Southeast Asia, Singapore and Indonesia by The Asset in its Triple A Investment Awards. Additionally, we were named “Best Private Bank in Hong Kong” by Capital’s “Merits of Achievement in Banking and Finance”.

– In New York, we hosted our first Global Philanthropy Campus in partnership with New York University’s Center for Philanthropy and Fundraising. The program allows UHNWI clients to engage and cooperate in philanthropic endeavors.

– We strengthened our cooperation with Zurich Financial Services to offer clients a broader range of annuity plans.

Results detail

The following provides a comparison of our 3Q11 results versus 3Q10 (YoY) and versus 2Q11 (QoQ).

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.

YoY: Down 8% from CHF 2,826 million to CHF 2,610 million

Net interest income decreased 10%, with lower deposit margins on lower average volumes and stable loan margins on slightly higher average volumes. The decline in deposit volumes included the weakening of the US dollar and the euro against the Swiss franc and lower volumes related to securities lending and borrowing activities. Recurring commissions and fees declined 10%, with lower revenues across all categories, mainly reflecting the adverse foreign exchange translation impact, including the impact on average assets under management. Transaction-based revenues were stable, reflecting higher foreign exchange income from client transactions and revenues from integrated solutions offset by lower brokerage and product issuing fees, particularly from bonds. Transaction-based revenues included fair value gains on the Clock Finance transactions of CHF 6 million compared to fair value losses of CHF 21 million in 3Q10.

QoQ: Down 7% from CHF 2,797 million to CHF 2,610 million

Net interest income declined 5%, reflecting lower deposit margins on slightly lower average volumes and slightly higher loan margins on stable average volumes. Recurring commissions and fees declined 10%, mainly reflecting the adverse impact from the downturn of equity markets on average assets under management and semi-annual performance fees from Hedging-Griffo in 2Q11. Transaction-based revenues decreased 5%, mainly due to gains from the sale of real estate of CHF 72 million in 2Q11 and lower brokerage and product issuing fees in 3Q11, particularly from structured products, equities and mutual funds. These decreases were partially offset by higher foreign exchange income from client transactions, reflecting market volatility, and higher revenues from integrated solutions.

Provision for credit losses

YoY: Up from CHF (8) million to CHF 25 million

New provisions of CHF 54 million and releases of CHF 29 million resulted in net provisions for credit losses of CHF 25 million. Wealth Management Clients recorded net new provisions of CHF 20 million and Corporate & Institutional Clients recorded net new provisions of CHF 5 million. Releases were mostly recognized in Corporate & Institutional Clients, while new provisions were mostly recognized in Wealth Management Clients. The Wealth Management Clients loan portfolio is substantially comprised of residential mortgages in Switzerland and loans collateralized by securities. Our corporate and institutional loan portfolio has sound quality, relatively low concentrations and is mainly secured by mortgages, securities and other financial collaterals.

QoQ: Up from CHF (2) million to CHF 25 million

Provision for credit losses reflected lower releases.

Operating expenses

Compensation and benefits

YoY: Down 2% from CHF 1,139 million to CHF 1,115 million

The decline reflected the favorable foreign exchange translation impact. Excluding this impact, compensation and benefits increased slightly, reflecting IT investments, including from regulatory requirements.

QoQ: Down 2% from CHF 1,135 million to CHF 1,115 million

The decline mainly reflected a slight decrease in deferred compensation from prior year share-based and other awards.

General and administrative expenses

YoY: Up 59% from CHF 715 million to CHF 1,134 million

The increase mainly reflected the litigation provisions of CHF 478 million, of which CHF 183 million (EUR 150 million) was in connection with the German tax matter and CHF 295 million was in connection with the US tax matter. 3Q10 included CHF 44 million of provisions related to ARS. Excluding these litigation provisions and the favorable foreign exchange translation impact, general and administrative expenses increased slightly, reflecting IT investments, including from regulatory requirements.

QoQ: Up 71% from CHF 664 million to CHF 1,134 million

The increase mainly reflected the litigation provisions. Excluding these litigation provisions, general and administrative expenses were stable.

Personnel

Headcount at the end of 3Q11 was 25,500, down 200 from 2Q11 and unchanged from 3Q10. The decrease from 2Q11 mainly reflected reductions in connection with our cost efficiency initiative, partially offset by investments in our growth markets, advisory and solutions capabilities and multi-shore business model, including IT investments, particularly from regulatory requirements. We also gave over 100 apprentices the opportunity to remain with us after finishing their apprenticeships. Further, we increased our pool of graduates and interns. The number of relationship managers in Wealth Management Clients decreased by 90 from 2Q11 and by 70 compared to 3Q10, mainly due to reductions in connection with our cost efficiency initiative.

Wealth Management Clients

Net revenues

Net interest income

YoY: Down 13% from CHF 929 million to CHF 809 million

The decrease reflected lower deposit margins on lower average volumes and slightly lower loan margins on slightly higher average volumes. The decline in deposit volumes included the adverse foreign exchange translation impact and lower volumes related to securities lending and borrowing activities.

QoQ: Down 5% from CHF 855 million to CHF 809 million

The decrease reflected slightly lower deposit margins on slightly lower average volumes and stable loan margins on stable average volumes.

Recurring commissions and fees

YoY: Down 8% from CHF 891 million to CHF 816 million

The decrease in recurring commissions and fees mainly reflected the adverse foreign exchange translation impact, including the impact on average assets under management, with lower revenues across all categories, mainly investment product management fees and discretionary mandate management fees.

QoQ: Down 9% from CHF 899 million to CHF 816 million

The decline mainly reflected the adverse impact of the downturn in equity markets on average assets under management, mainly resulting in lower investment product management fees and investment account and service fees. 2Q11 included semi-annual performance fees from Hedging-Griffo.

Transaction-based

YoY: Down 7% from CHF 565 million to CHF 523 million

The decline was driven by lower brokerage and product issuing fees, primarily from bonds. The decline was partially offset by higher foreign exchange income from client transactions, reflecting market volatility, and higher revenues from integrated solutions.

QoQ: Down 9% from CHF 576 million to CHF 523 million

The decrease mainly reflected the gains from the sale of real estate of CHF 72 million in 2Q11 and lower brokerage and product issuing fees in 3Q11, particularly from structured products, equities and mutual funds. These decreases were partially offset by higher foreign exchange income from client transactions and higher revenues from integrated solutions.

Gross margin

Our gross margin was 114 basis points in 3Q11, four basis points lower than in 3Q10. The net interest income margin decreased three basis points, reflecting 13% lower net interest income and 7.0% lower average assets under management. The recurring commissions and fees margin and transaction-based margin were stable, as the decline in revenues was in line with the decline in average assets under management.

Compared to 2Q11, gross margin decreased one basis point, reflecting the 8% decline in net revenues and the 7.5% decline in average assets under management. Excluding the gain of CHF 72 million from the sale of real estate in 2Q11, the gross margin increased three basis points and the transaction-based margin increased four basis points.

Results - Wealth Management Clients
	in / end of			% change		in / end of		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Statements of operations (CHF million)
Net revenues	2,148	2,330	2,385	(8)	(10)	6,911	7,365	(6)
Provision for credit losses	20	8	8	150	150	40	56	(29)
Total operating expenses	2,162	1,727	1,765	25	22	5,687	5,387	6
Income/(loss) before taxes	(34)	595	612	–	–	1,184	1,922	(38)
Statement of operations metrics (%)
Cost/income ratio	100.7	74.1	74.0	–	–	82.3	73.1	–
Pre-tax income margin	(1.6)	25.5	25.7	–	–	17.1	26.1	–
Net revenue detail (CHF million)
Net interest income	809	855	929	(5)	(13)	2,544	2,824	(10)
Recurring commissions and fees	816	899	891	(9)	(8)	2,619	2,770	(5)
Transaction-based	523	576	565	(9)	(7)	1,748	1,771	(1)
Net revenues	2,148	2,330	2,385	(8)	(10)	6,911	7,365	(6)
Average assets under management (CHF billion)
Average assets under management	752.1	813.0	808.6	(7.5)	(7.0)	796.4	819.7	(2.8)
Gross margin (annualized) (bp)  1
Net interest income	43	42	46	–	–	43	46	–
Recurring commissions and fees	43	45	44	–	–	44	45	–
Transaction-based	28	28	28	–	–	29	29	–
Gross margin	114	115	118	–	–	116	120	–
1    Net revenues divided by average assets under management.

Corporate & Institutional Clients

Net revenues

Net interest income

YoY: Stable at CHF 289 million

Net interest income reflected stable margins on slightly higher average loan and deposit volumes.

QoQ: Down 2% from CHF 296 million to CHF 289 million

The slight decrease reflected lower deposit margins on higher average volumes and slightly higher loan margins on stable average volumes.

Recurring commission and fees

YoY: Down 19% from CHF 110 million to CHF 89 million

The decline was driven by lower investment account and services fees.

QoQ: Down 16% from CHF 106 million to CHF 89 million

The decrease mainly reflected lower investment account and services fees.

Transaction-based

YoY: Up 95% from CHF 43 million to CHF 84 million

The increase primarily reflected fair value gains on the Clock Finance transaction of CHF 6 million in 3Q11 compared to losses of CHF 21 million in 3Q10, higher revenues from integrated solutions and higher foreign exchange income from client transactions. Excluding the fair value gains and losses on the Clock Finance transaction, transaction-based revenues increased 22%.

QoQ: Up 29% from CHF 65 million to CHF 84 million

The increase mainly reflected fair value gains on the Clock Finance transaction of CHF 6 million in 3Q11 compared to losses of CHF 4 million in 2Q11 and higher foreign exchange income from client transactions.

Return on business volume

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

Return on business volume of 77 basis points was one basis point higher than 3Q10 and one basis point lower than 2Q11. The increase from 3Q10 reflected 5% higher net revenues and 3.8% higher average business volume, mainly from higher assets under management.

Excluding the fair value gains and losses on the Clock Finance transaction, return on business volume was 76 basis points in 3Q11, 79 basis points in 2Q11 and 80 basis points in 3Q10.

Results - Corporate & Institutional Clients
	in / end of			% change		in / end of		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Statements of operations (CHF million)
Net revenues	462	467	441	(1)	5	1,392	1,352	3
Provision for credit losses	5	(10)	(16)	–	–	(5)	(42)	(88)
Total operating expenses	240	229	233	5	3	700	714	(2)
Income before taxes	217	248	224	(13)	(3)	697	680	2
Statement of operations metrics (%)
Cost/income ratio	51.9	49.0	52.8	–	–	50.3	52.8	–
Pre-tax income margin	47.0	53.1	50.8	–	–	50.1	50.3	–
Net revenue detail (CHF million)
Net interest income	289	296	288	(2)	0	881	883	0
Recurring commissions and fees	89	106	110	(16)	(19)	298	315	(5)
Transaction-based	84	65	43	29	95	213	154	38
Net revenues	462	467	441	(1)	5	1,392	1,352	3
Average business volume (CHF billion)
Average business volume	240.2	239.4	231.4	0.3	3.8	238.5	230.8	3.3
Business volume (CHF billion)
Client assets	188.6	191.3	181.2	(1.4)	4.1	188.6	181.2	4.1
of which assets under management	129.3	132.1	122.0	(2.1)	6.0	129.3	122.0	6.0
of which commercial assets	52.0	51.0	52.5	2.0	(1.0)	52.0	52.5	(1.0)
of which custody assets	7.3	8.2	6.7	(11.0)	9.0	7.3	6.7	9.0
Net loans	54.0	52.5	50.3	2.9	7.4	54.0	50.3	7.4
Business volume	242.6	243.8	231.5	(0.5)	4.8	242.6	231.5	4.8
Return on business volume (annualized) (bp)  1
Return on business volume	77	78	76	–	–	78	78	–
1    Net revenues divided by average business volume.

Investment Banking

In 3Q11, we reported a loss before taxes of CHF 190 million and net revenues of CHF 2,494 million. Net revenues were impacted by the volatile market environment driven by increased European sovereign debt concerns and indications of a global economic slowdown. As a result, our businesses reflected difficult trading conditions.

Results
	in / end of			% change		in / end of		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Statements of operations (CHF million)
Net revenues	2,494	2,822	3,421	(12)	(27)	10,245	12,736	(20)
Provision for credit losses	59	15	(18)	293	–	55	(70)	–
Compensation and benefits	1,449	1,446	1,872	0	(23)	5,303	6,210	(15)
General and administrative expenses	896	830	877	8	2	2,613	2,672	(2)
Commission expenses	280	300	295	(7)	(5)	890	951	(6)
Total other operating expenses	1,176	1,130	1,172	4	0	3,503	3,623	(3)
Total operating expenses	2,625	2,576	3,044	2	(14)	8,806	9,833	(10)
Income/(loss) before taxes	(190)	231	395	–	–	1,384	2,973	(53)
Statement of operations metrics (%)
Cost/income ratio	105.3	91.3	89.0	–	–	86.0	77.2	–
Pre-tax income margin	(7.6)	8.2	11.5	–	–	13.5	23.3	–
Utilized economic capital and return
Average utilized economic capital (CHF million)	19,698	19,967	21,416	(1)	(8)	19,683	21,150	(7)
Pre-tax return on average utilized economic capital (%) 1	(3.3)	5.1	8.0	–	–	9.9	19.4	–
Number of employees (full-time equivalents)
Number of employees	21,500	21,300	21,200	1	1	21,500	21,200	1
1    Calculated using a return excluding interest costs for allocated goodwill.

Results (continued)
	in / end of			% change		in / end of		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Net revenue detail (CHF million)
Debt underwriting	312	399	509	(22)	(39)	1,212	1,421	(15)
Equity underwriting	113	294	169	(62)	(33)	608	604	1
Total underwriting	425	693	678	(39)	(37)	1,820	2,025	(10)
Advisory and other fees	181	272	212	(33)	(15)	681	740	(8)
Total underwriting and advisory	606	965	890	(37)	(32)	2,501	2,765	(10)
Fixed income sales and trading	762	595	1,458	28	(48)	3,850	5,558	(31)
Equity sales and trading	1,182	1,269	1,080	(7)	9	3,980	4,497	(11)
Total sales and trading	1,944	1,864	2,538	4	(23)	7,830	10,055	(22)
Other	(56)	(7)	(7)	–	–	(86)	(84)	2
Net revenues	2,494	2,822	3,421	(12)	(27)	10,245	12,736	(20)
Average one-day, 98% risk management Value-at-Risk (CHF million)  1
Interest rate & credit spread	69	66	99	5	(30)	72	95	(24)
Foreign exchange	10	13	21	(23)	(52)	12	17	(29)
Commodity	7	12	19	(42)	(63)	12	19	(37)
Equity	20	28	29	(29)	(31)	24	26	(8)
Diversification benefit	(30)	(48)	(58)	(38)	(48)	(45)	(60)	(25)
Average one-day, 98% risk management Value-at-Risk	76	71	110	7	(31)	75	97	(23)
Risk-weighted assets (million)  2
Risk-weighted assets (CHF)	118,565	114,162	141,463	4	(16)	118,565	141,463	(16)
Risk-weighted assets (USD)	130,535	135,584	144,801	(4)	(10)	130,535	144,801	(10)
1    As part of the ongoing review to improve risk management approaches and methodologies, the average one-day, risk management VaR measure was revised in 2Q11. For further information on VaR and changes in VaR methodology, refer to IV – Treasury, risk, balance sheet and off-balance sheet – Risk management – Market risk.   2    Under Basel II: For information on risk-weighted assets under the revisions to the Basel II market risk framework (Basel II.5) refer to IV – Treasury, risk, balance sheet and off-balance sheet – Treasury management – Capital management and – Regulatory capital developments and proposals and the chart "Basel II.5 risk-weighted assets and allocated deductions".

Results overview

In 3Q11, we reported a loss before taxes of CHF 190 million compared to income before taxes of CHF 395 million in 3Q10 and CHF 231 million in 2Q11. Net revenues of CHF 2,494 million were down 27% from 3Q10, and down 12% from 2Q11.

Fixed income sales and trading results were significantly lower than 3Q10, reflecting challenging market-making conditions across most businesses, but stronger compared to a very weak 2Q11. Results in our credit business were significantly impacted by reduced client trading volumes, market illiquidity, and widening credit spreads, resulting in losses on inventory positions held for our client trading business. We took substantial risk reduction measures in our credit businesses to mitigate potential losses. Securitized products results remained weak as further declines in bond prices led to continued low client activity and additional valuation reductions on client flow inventory positions. Fixed income sales and trading business results in 3Q11 mainly consisted of revenues from global rates, emerging markets, foreign exchange, commodities and securitized products. Results also included DVA gains of CHF 266 million relating to certain structured note liabilities and a loss of CHF 83 million related to changes in OIS interest rate yield curves used to determine the fair value of certain collateralized derivatives.

Equity sales and trading results were affected by the volatile market environment. Revenues, which included DVA gains of CHF 272 million related to certain structured note liabilities, increased from 3Q10, but were down 7% from 2Q11. Equity sales and trading business results mainly consisted of revenues from prime services, cash equities, derivatives and equities arbitrage trading.

Underwriting and advisory results declined from 3Q10 and 2Q11, but were in line with industry-wide issuance levels and M&A activity. We had lower debt underwriting revenues, driven by reduced industry-wide issuance levels, particularly in investment grade and high yield. Revenues in our equity underwriting and advisory businesses reflected reduced issuance and completed M&A volumes compared to prior periods.

Compensation and benefits of CHF 1,449 million in 3Q11 were 23% lower than 3Q10, reflecting the foreign exchange translation impact. In US dollars, compensation and benefits decreased 6%, primarily driven by lower deferred compensation expense from prior-year share and other awards. Compensation and benefits were flat compared to 2Q11. Total other operating expenses were flat compared to 3Q10 and increased 4% compared to 2Q11. In US dollars, total other operating expenses increased 22% compared to 3Q10 and 7% compared to 2Q11.

Our results reflected fair value losses on Credit Suisse vanilla debt. For further information, refer to sales and trading results details.

Results in 3Q11 were impacted by the weakening of the average rate of the US dollar against the Swiss franc compared to 3Q10, which adversely affected revenues and favorably impacted expenses and losses. In US dollars, net revenues were 12% lower and total operating expenses were 4% higher compared to 3Q10. For more information on foreign currency translation rates, refer to VI – Investor information.

Refinement of our Investment Banking strategy

In Investment Banking, we are refining our client-focused, capital-efficient strategy in order to continue to deliver attractive returns in spite of the challenging market and regulatory environment. We will redeploy capital and resources in order to invest and grow businesses, and we will significantly reduce risk-weighted assets (RWAs) and our cost base. We will target a 50% reduction in RWAs in our fixed income business from 55% of Group RWAs to 39% by the end of 2014. We will significantly reduce our cost base, including through improved client coverage efficiency and reduced country, industry and product coverage overlaps. We will invest and grow in businesses where we have competitive advantages and synergies with Private Banking and Asset Management.

Our business portfolio will evolve as follows as we redeploy capital and resources.

Invest/Grow

– Foreign exchange

– Global rates (including electronic trading)

– Fixed income businesses in fast growing and emerging markets (including Brazil, Southeast Asia, Greater China, and Russia)

– Commodities

– Prime services

– Derivatives (including flow and corporate)

– Equity underwriting (target top three globally)

Evolve

– Credit products

– Securitized products (including non-agency and agency residential mortgage-backed securities (RMBS) trading and commercial mortgage-backed securities (CMBS) trading)

– Structured financing business in emerging markets

– Cash equities

– Continued alignment of corporate lending with key clients

– Reallocate investment banking resources to growth markets, particularly Asia

Downscale/Exit

– Structured long-dated unsecured trades, including in rates, emerging markets and commodities

– Exit CMBS origination

– Downscale less capital efficient securitized products

– Improve investment banking client coverage efficiency and profitability in Europe, Middle East and Africa (EMEA)

Performance indicators

Pre-tax income margin (KPI)

Our target over market cycles is a pre-tax income margin of 25% or greater. The pre-tax income margin was (7.6)% in 3Q11, compared to 11.5% in 3Q10 and 8.2% in 2Q11.

Value-at-Risk

The average one-day, 98% risk management value-at-risk (VaR) was CHF 76 million in 3Q11, compared to CHF 110 million in 3Q10 and CHF 71 million in 2Q11. For further information on VaR, refer to IV – Treasury, risk, balance sheet and off-balance sheet – Risk management – Market risk.

Significant transactions and achievements

We were active in executing or advising on a number of significant closed and pending transactions, reflecting the breadth and diversity of our investment banking franchise:

– Debt capital markets: We arranged key financings for a diverse set of clients, including American International Group (global insurance and financial services organization), Dynegy Inc. (US producer and seller of electric energy, capacity and ancillary services), Reynolds Group (global packaging manufacturer and supplier), Access Industries (US industrial group) and Terex Corporation (leading global manufacturer).

– Equity capital markets: We executed IPOs for Tudou (Chinese online video platform), Bumi Armada (Malaysian-based international oil and gas offshore services provider) and Banca Cívica (Spanish bank), a follow-on offering for Annaly Capital Management (largest publicly-traded mortgage REIT) and a rights offering for Fondiaria-Sai SpA (Italian financial services company).

– Mergers and acquisitions: We advised on a number of key transactions, including the acquisition of Hsu Fu Chi (Chinese manufacturer of confectionery products) by Nestlé (global food and nutrition company), the merger of Kencana Petroleum (Malaysian oil and gas services provider) and SapuraCrest Petroleum (Malaysian oil and gas services provider) via a sale to Integral Key (shell vehicle owned by private equity unit Maybank Ventures to facilitate the merger), the acquisition of Medco Health Solutions (US pharmacy benefit manager) by Express Scripts (leading pharmacy benefit manager in the US), and the acquisition of Southern Union Company (US natural gas company) by Energy Transfer Equity, L.P. (US diversified energy operator).

Industry awards and surveys

– Maintained #1 ranking in two categories in the 2011 Greenwich Associates Equity Derivatives Survey, including “Important Relationships for US Flow Equity Derivatives” and “Top 5 Relationships & Share for Structured OTC Equity/Securitized Products.”

– Named “Most Innovative Investment Bank for Loans and Leveraged Finance” by The Banker in the 2011 Investment Banking Awards.

– Maintained top ranking in Global Investor’s ISF Equity Lending survey for the second consecutive year. Credit Suisse Prime Services ranked #1 as “Overall Borrower of the Year (weighted).” Additionally, Prime Services ranked #1 in “Global Coordination,” “Relationship Management” and “Trading (Connectivity & Automation).”

– Named “Equity Derivatives House of the Year” by Derivatives Intelligence at the 2011 Derivatives Week Global Awards.

– Awarded “Best Algorithmic Trading Technology - Bank” by FX Week in its 2011 e-FX Awards.

– Awarded “Best Equity Structured Product” for a Taiwan retail note by FinanceAsia in the annual Structured Products Awards for 2010-2011. The trade for Cathay Life represented the re-opening of Taiwan’s structured product market after the financial crisis.

– Awarded “Deal of the Year” in 2011 for the £1.7 billion longevity swap transaction with ITV by Life & Pension Risk, the third largest ever completed.

Market share momentum

– Ranked third by Dealogic in global announced M&A with 17.1% market share for 9M11, up from number four in 2010.

– Advanced to top five globally and number four in EMEA for equity capital markets by Dealogic for 9M11.

– Advanced our global follow-on ranking to number five according to Dealogic, with 7.7% market share for 9M11, up from number seven, with 4.9% market share, in 2010.

Results detail

The following provides a comparison of our 3Q11 results versus 3Q10 (YoY) and versus 2Q11 (QoQ).

Net revenues

Debt underwriting

YoY: Down 39% from CHF 509 million to CHF 312 million

The decrease was primarily due to weaker results in investment grade issuance, reflecting a decline in industry-wide volumes and lower market share, as well as lower revenues from leveraged finance, reflecting a decrease in industry-wide high yield issuance volumes. 3Q10 included significant structuring and syndication fees related to a large private financing.

QoQ: Down 22% from CHF 399 million to CHF 312 million

The decrease was primarily due to lower revenues from investment grade issuance, reflecting lower industry-wide volumes, emerging markets and leveraged finance, reflecting reduced industry-wide high yield issuance volumes.

Equity underwriting

YoY: Down 33% from CHF 169 million to CHF 113 million

The decrease was due to lower revenues from follow-on offerings and IPOs, reflecting reduced industry-wide volumes despite market share gains.

QoQ: Down 62% from CHF 294 million to CHF 113 million

The decrease was due to lower revenues from IPOs and follow-on offerings, reflecting reduced industry-wide volumes.

Advisory and other fees

YoY: Down 15% from CHF 212 million to CHF 181 million

The decrease reflected lower M&A and other advisory fees, driven by lower levels of global industry-wide completed M&A activity.

QoQ: Down 33% from CHF 272 million to CHF 181 million

The decrease reflected lower M&A fees, driven by lower levels of global industry-wide completed M&A activity and a decline in market share.

Fixed income sales and trading

YoY: Down 48% from CHF 1,458 million to CHF 762 million

The decrease was driven by significantly lower revenues in our credit and securitized products businesses compared to strong revenues in 3Q10. Our credit results reflected losses in leveraged finance and investment grade trading, which were impacted by challenging market-making conditions, weak client activity, reduced liquidity in the markets and widening credit spreads, leading to valuation reductions on inventory positions. In addition, we incurred losses from sales of inventory in our credit business as we significantly reduced risk to mitigate the loss impact in light of worsening market conditions. Significantly lower revenues in securitized products reflected a steep decline in cash and synthetic mortgage bond prices, which led to lower client activity and significant valuation reductions on client flow inventory positions, particularly in CMBS and non-agency RMBS. These results were partly offset by net valuation gains on exit securitized products positions and corporate lending, and stronger results in global rates and foreign exchange. Our results included DVA gains on structured note liabilities of CHF 266 million in 3Q11, compared to DVA losses of CHF 54 million in 3Q10, and fair value losses on Credit Suisse vanilla debt of CHF 42 million, compared to fair value losses of CHF 51 million in 3Q10. Revenues included a loss of CHF 83 million related to changes in OIS interest rate yield curves used to determine the fair value of certain collateralized derivatives.

QoQ: Up 28% from CHF 595 million to CHF 762 million

The increase was primarily driven by improved revenues in our global rates business, reflecting increased client flows resulting from higher market volatility. We also had net valuation gains on exit securitized products positions and corporate lending and stronger results in foreign exchange. Results in securitized products improved slightly from a weak 2Q11, as hedge gains were mostly offset by valuation reductions in CMBS and RMBS, reflecting the steep decline in cash and synthetic mortgage bond prices. These results were partly offset by the losses in our credit business. Our results included DVA gains of CHF 266 million compared to DVA gains of CHF 34 million in 2Q11, and fair value losses on Credit Suisse vanilla debt of CHF 42 million, compared to fair values losses of CHF 43 million in 2Q11.

Equity sales and trading

YoY: Up 9% from CHF 1,080 million to CHF 1,182 million

The increase was primarily driven by DVA gains on structured note liabilities of CHF 272 million, compared to DVA losses of CHF 118 million in 3Q10. These gains were mostly offset by lower revenues in cash equities, reflecting the impact of market volatility and the decline in equity prices on our client inventory despite increased client activity, and lower revenues in convertibles, derivatives and prime services. In US dollars, prime services revenues were higher. Our results included fair value losses on Credit Suisse vanilla debt of CHF 5 million, compared to fair value losses of CHF 6 million in 3Q10.

QoQ: Down 7% from CHF 1,269 million to CHF 1,182 million

The decrease was due to lower revenues in derivatives, cash equities and equities arbitrage trading, reflecting increased market volatility. We also had lower results in fund-linked products and in prime services, despite an increase in market share, due to a small decline in client balances given negative market movements. These results were mostly offset by the significant DVA gains on structured note liabilities. Our results included DVA gains of CHF 272 million, compared to DVA gains of CHF 29 million in 2Q11, and fair value losses on Credit Suisse vanilla debt of CHF 5 million, compared to fair value losses of CHF 5 million in 2Q11.

Provision for credit losses

YoY: From CHF (18) million to CHF 59 million

The change reflected higher provisions, mainly against a guarantee provided in a prior year to a third-party bank.

QoQ: From CHF 15 million to CHF 59 million

The change reflected the higher provisions and higher releases and recoveries.

Operating expenses

Compensation and benefits

YoY: Down 23% from CHF 1,872 million to CHF 1,449 million

The decrease primarily reflected the foreign exchange translation impact. In US dollars, compensation and benefits decreased 6%, reflecting lower deferred compensation expense from prior-year share and other awards.

QoQ: Stable at CHF 1,449 million

Compensation and benefits reflected an increase in discretionary performance-related compensation accruals offset by lower deferred compensation expense from prior-year share and other awards, social security taxes on share award deliveries and salaries.

General and administrative expenses

YoY: Up 2% from CHF 877 million to CHF 896 million

General and administrative expenses reflected the foreign exchange translation impact. In US dollars, expenses increased 23%, driven by an accrual for the UK bank levy of CHF 90 million, which was enacted in 3Q11, and an increase in IT investment costs, partly offset by lower consulting and professional fees.

QoQ: Up 8% from CHF 830 million to CHF 896 million

The increase was primarily driven by the UK bank levy accrual, partly offset by decreases in consulting and professional fees.

Personnel

Headcount at the end of 3Q11 was 21,500, up 200 from 2Q11, reflecting the seasonal graduate recruitment in investment banking, fixed income and equities and an increase driven by higher regulatory requirements. This increase was partly offset by headcount reductions in Investment Banking and related support functions as part of cost efficiency initiatives.

Asset Management

In 3Q11, we reported income before taxes of CHF 92 million and net revenues of CHF 471 million. Fee-based revenues of CHF 489 million improved compared with 2Q11 and 3Q10, reflecting higher carried interest on realized private equity gains and placement fees. We had investment-related losses of CHF 17 million and net new assets of CHF 0.2 billion, reflecting the difficult market environment.

Results
	in / end of			% change		in / end of		% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10	YoY
Statements of operations (CHF million)
Net revenues	471	629	582	(25)	(19)	1,691	1,715	(1)
Provision for credit losses	0	0	0	–	–	0	0	–
Compensation and benefits	219	249	261	(12)	(16)	728	832	(13)
General and administrative expenses	128	144	150	(11)	(15)	397	436	(9)
Commission expenses	32	34	36	(6)	(11)	100	124	(19)
Total other operating expenses	160	178	186	(10)	(14)	497	560	(11)
Total operating expenses	379	427	447	(11)	(15)	1,225	1,392	(12)
Income before taxes	92	202	135	(54)	(32)	466	323	44
Statement of operations metrics (%)
Cost/income ratio	80.5	67.9	76.8	–	–	72.4	81.2	–
Pre-tax income margin	19.5	32.1	23.2	–	–	27.6	18.8	–
Utilized economic capital and return
Average utilized economic capital (CHF million)	3,371	3,324	3,732	1	(10)	3,371	3,587	(6)
Pre-tax return on average utilized economic capital (%) 1	12.0	25.3	15.4	–	–	19.4	13.0	–
Number of employees (full-time equivalents)
Number of employees	2,800	2,800	2,900	0	(3)	2,800	2,900	(3)
1    Calculated using a return excluding interest costs for allocated goodwill.

Results (continued)
	in			% change		in			% change
	3Q11	2Q11	3Q10	QoQ	YoY	9M11	9M10		YoY
Net revenue detail by type (CHF million)
Asset management fees	311	313	343	(1)	(9)	951	1,059		(10)
Placement, transaction and other fees	64	60	38	7	68	174	124		40
Performance fees and carried interest	86	60	40	43	115	180	59		205
Equity participations income	28	36	18	(22)	56	96	59		63
Fee-based revenues	489	469	439	4	11	1,401	1,301		8
Investment-related gains/(losses)	(17)	156	160	–	–	299	331		(10)
Equity participations gains/(losses)	15	0	(21)	–	–	15	(48)		–
Other revenues 1	(16)	4	4	–	–	(24)	131	2	–
Net revenues	471	629	582	(25)	(19)	1,691	1,715		(1)
Net revenue detail by investment strategies (CHF million)
Alternative investments	348	309	296	13	18	933	807		16
Traditional investments	124	131	135	(5)	(8)	384	392		(2)
Diversified investments 3	22	39	1	(44)	–	102	52		96
Other	(6)	(6)	(10)	0	(40)	(27)	133	2	–
Net revenues before investment-related gains/(losses)	488	473	422	3	16	1,392	1,384		1
Investment-related gains/(losses)	(17)	156	160