Good half-year results for CS Holding.

NEW YORK--(BUSINESS WIRE)--Aug. 21, 1995--

A good result for the Credit Suisse Group, improvement at Swiss Volksbank, CS First Boston: focusing on core business brings tangible success.

In its letter to shareholders CS Holding provides detailed information on the consolidated results of the CS Holding Group and on the business performance of the different group companies. At Sfr 749 million, interim net profit for the Group, including minority interests, was up 2 percent on last year's good first-half figure.

Good income development for the CS Holding Group, strict cost controls pay off.

After a slow start in the first few months of the year, income performed significantly better in the second quarter. A clear 20 percent improvement in trading revenue and a slight year-on-year increase in income from balance sheet business (3 percent) almost entirely offset the 13 percent fall in commission income. At Sfr 5,306 million, gross income was only 2 percent less than in the first half of 1994. Gross profit before tax stood at Sfr 1,969, thus matching the interim figure for 1994. The solid earning power of the group was reflected in the slight increase in cash flow to Sfr 1,674 million (up 1.6 percent).

With practically no change in staff costs (up 1 percent) and significantly lower operating expenses (down 11 percent), total costs amounted to Sfr 3,337 million, a reduction of 3 percent against the same period last year. This demonstrates CS Holding management's ongoing commitment to keeping tight control of the group's cost base.

Encouraging signs of good annual results

The CS Holding Group's good overall result at the half-year stage is an encouraging sign of a steadily improving performance for all the group companies. Although the persistent weakness of the Swiss property market and a hesitant economic recovery in Switzerland suggest that there is little likelihood of a significant reduction in loan loss provisions, CS Holding is nevertheless confident of achieving good overall results for 1995.

Good result for the Credit Suisse Group, successful trading and derivatives business.

The Credit Suisse Group posted a good interim result, despite unfavorable exchange rate movements. Gross profit, at Sfr 1,694 million, showed a drop of just under 4 percent on the same period last year, but was still 4 percent higher than the average half-year performance for 1994.

Income from balance sheet business rose to Sfr 1,381 million, with around half of this increase accounted for by the first-time consolidation of New Bank of Argovie. Commission income, on the other hand, declined by 12% to Sfr 1,144 million.

The Group's trading areas posted good results, showing a rise in earnings of 21% to Sfr 1,148 million. Whilst earnings from foreign exchange, precious metal and banknote trading were slightly down on the good results posted for the first half of 1994, income from securities trading saw a marked improvement after unsatisfactory figures in the same period last year.

Credit Suisse Financial Products matched 1994's impressive first-half results despite difficult operating conditions. It benefited from its strong position in global customer business. The company's performance in Europe and the Pacific region was particularly good.

Although the situation with regard to write-downs, provisions and losses requires ongoing attention, provisions for problem loans were reduced thanks to the cautious provisioning policy which has been pursued over the last few years. The persistent weakness of the Swiss property market and Switzerland's hesitant economic recovery mean that most additional capital risk is associated with Swiss domestic lending.

Swiss Volksbank and New Bank of Argovie show good improvement

Swiss Volksbank recorded a significant increase of 55% in gross profit to Sfr 198 million. The implementation of a joint Credit-Suisse-SVB logistics platform will be completed on schedule by the end of 1995. Swiss Volksbank is now ideally placed to devote its full energies to strengthening its market position. The provisions situation has improved, allowing SVB to return to profit after only two years.

New Bank of Argovie and Gewerbebank Baden, Group banks which are based in Canton Aargau, also made a profit.

CS First Boston: successful restructuring, stronger market position

CS First Boston has successfully implemented all the restructuring measures announced in February and has withdrawn from all non-core businesses. Staff headcount has been cut by around 20% and second-quarter operational costs were trimmed back 18% compared with the average quarterly figure for 1994.

CS First Boston has reinforced its status as one of the world's leading investment banks. It occupies high positions in a number of rankings including second place for worldwide bond and equity issues and, in conjunction with Credit Suisse, second place for number of mergers and acquisitions transactions worldwide.

Balance sheet in the Shadow of the Dollar

Consolidated total assets for CS Holding amounted to Sfr 366 billion at the end of June 1995, compared with Sfr 391 billion at the end of December 1994. This 6.6 percent reduction is due principally (80 percent) to the weakness of the dollar and the lower balance sheet total at CS First Boston.

Total assets for the Credit Suisse Group fell 1.4 percent to Sfr 228.3 billion in the first half of 1995. However, if the effects of the weak dollar were discounted, this would represent a rise of Sfr 2.3 billion. At Sfr 125.3 billion, lendings were down 1.2 percent on the end -- 1994 figure. Without the movements in the dollar there would, however, have been a real-term rise of Sfr 1 billion. The 2.8 percent fall in customer deposits to Sfr 158.9 billion is also almost exclusively attributable to the dollar exchange rate.

CONTACT: Credit Suisse Group, New York 

Edgar Mitchell or Gail Quinn, 212/238-5016