The Credit Suisse Group's 1994 results; Healthy profits in difficult markets.

ZURICH--(BUSINESS WIRE)--March 3, 1995--The Credit Suisse Group posted an annual profit of Sfr 1,202 million in 1994.

While this is 17.7% down on the result for 1993, which was an exceptional year, it still represents a 25.9% improvement on the 1992 profit. Total assets amounted to Sfr 231.6 billion, largely unchanged on the year-back figure.

Gross income was 18.0% down at Sfr 7.5 billion. Income from balance sheet business was slightly lower than in 1993, but commission income fared well. Having doubled in the previous year, trading income from securities, foreign exchange and precious metals (including derivatives) fell sharply, chiefly because of a steep decline in securities trading income.

The company's specialist derivatives subsidiary Credit Suisse Financial Products (CSFP), a joint venture between Credit Suisse and CS First Boston (CSFB), posted an annual profit of Sfr 334 million. As part of a strategic alliance between the Credit Suisse Group's parent company, CS Holding, and Swiss Re, one of the world's leading reinsurance companies, the latter acquired a 20% stake in CSFP (10% from Credit Suisse and 10% from CSFB) at the end of 1994.

Expenditure rose by 4.4% to Sfr 4.3 billion. If the company excludes the newly consolidated Credit Suisse Fides Trust Ltd., formed last year from the merger of all CS Holding units engaged in trust business, the increase in costs was only 2.4%. Staff numbers went up by 1,698 to 26,017. The Group's gross profit before tax was 36.1% down at Sfr 3.2 billion.

Losses, write-downs and provisions registered a substantial decrease, falling by 32%, or Sfr 900 million, to Sfr 1.9 billion. Write-downs and provisions for borrower and country risk amounted to Sfr 1,175 million, of which 95% was charged against Swiss lendings. Taxes shrank by 46%, or Sfr 317 million, to Sfr 369 million, with Sfr 293 million accounted for by our foreign operations.

After allowing for extraordinary net income of Sfr 226 million, the Group's 1994 annual profit amounted to Sfr 1,202 million, a year-on-year drop of 17.7%. Sfr 191 million of the profit is due to minority shareholders. The annual profit is 25.9% higher than the figure for 1992. Return on equity slipped from 12.36% to 9.06%.

The Credit Suisse Group's total assets ended 1994 at Sfr 231.6 billion, largely unchanged on the end-1993 figure. In 1994 the Group acquired New Bank of Argovie, Switzerland's largest regional bank, and its total assets of Sfr 9.3 billion are included in the Group balance sheet for the first time. The weakness of the dollar knocked some Sfr 5.7 billion off the value of the Group's balance sheet. Lendings climbed Sfr 2.9 billion to Sfr 126.8 billion, while customer deposits advanced Sfr 8.7 billion to Sfr 163.5 billion. In off-balance-sheet business, the gross replacement value of positive mark-to-market transactions at 31 December 1994 amounted to Sfr 28.2 billion, representing a mere 1.6% of the aggregate notional value of open OTC contracts.

The Credit Suisse Sub-Group performed well in a difficult banking environment. The results of the SVB Sub-Group, were marred by persistent weaknesses in the structure of its business and the high level of loan loss provisions still required. Thanks to a restructuring contribution from Credit Suisse, the SVB Sub-Group's profit and loss account showed a balance of zero for the year.

The annual profit of Credit Suisse (the parent company) stood at Sfr 833 million, just 5% down on the year-back figure. After inclusion of profit carried forward from 1993, the total disposable profit amounts to Sfr 844 million. The board of directors will ask the Annual General Meeting to be held on 30 March 1995 to cut the gross dividend by Sfr 2 to Sfr 25 per bearer and registered share. Payment of this dividend would require a total of Sfr 537 million. It is envisaged that Sfr 300 million be allocated to reserves, as was the case last year.

The Annual General Meeting will also be asked to approve the creation of Sfr 100 million (nominal) of authorised capital which would be available for use by the board of directors for up to two years, subject to the guarantee of subscription rights for existing shareholders. This move is designed to increase the Group's flexibility with regard to business expansion and enhance its ability to exploit market opportunities as they arise.

At yesterday's meeting the board of directors of Credit Suisse resolved to ask the Annual General Meeting to elect Andreas N. Koopmann, executive vice president of Bobst SA, Prilly-Lausanne, to serve as a new member of the board of directors.

CONTACT: Credit Suisse, New York 

Gail Quinn/Ed Mitchell, 212/238-5016