Credit Suisse (Bank) Financial Statements 6M08 |
Condensed consolidated financial statements – unaudited |
Consolidated statements of income (unaudited) | |||||
in | 6M08 | 6M07 | |||
Consolidated statements of income (CHF million) | |||||
Interest and dividend income | 25,351 | 30,811 | |||
Interest expense | (21,742) | (26,917) | |||
Net interest income | 3,609 | 3,894 | |||
Commissions and fees | 7,507 | 9,508 | |||
Trading revenues | (1,126) | 7,003 | |||
Other revenues | 89 | 3,185 | |||
Net revenues | 10,079 | 23,590 | |||
Provision for credit losses | 186 | 28 | |||
Compensation and benefits | 7,082 | 10,026 | |||
General and administrative expenses | 3,095 | 3,198 | |||
Commission expenses | 1,130 | 1,141 | |||
Total other operating expenses | 4,225 | 4,339 | |||
Total operating expenses | 11,307 | 14,365 | |||
Income/(loss) before taxes and minority interests | (1,414) | 9,197 | |||
Income tax expense/(benefit) | (303) | 1,631 | |||
Minority interests | 41 | 2,391 | |||
Net income/(loss) | (1,152) | 5,175 | |||
The accompanying notes to the unaudited condensed consolidated financial statements are an integral part of these statements. |
Consolidated balance sheets (unaudited) | |||||
end of | 2Q08 | 4Q07 | |||
Assets (CHF million) | |||||
Cash and due from banks | 31,008 | 36,304 | |||
Interest-bearing deposits with banks | 6,588 | 4,526 | |||
Central bank funds sold, securities purchased under resale agreements and securities borrowing transactions | 280,633 | 296,341 | |||
of which reported at fair value | 148,087 | 183,719 | |||
Securities received as collateral, at fair value | 27,391 | 28,728 | |||
Trading assets, at fair value | 444,072 | 530,125 | |||
of which encumbered | 108,793 | 141,764 | |||
Investment securities | 12,870 | 14,515 | |||
of which reported at fair value | 12,629 | 14,267 | |||
of which encumbered | 44 | 1,908 | |||
Other investments | 27,534 | 27,907 | |||
of which reported at fair value | 24,954 | 25,080 | |||
Net loans | 215,149 | 221,570 | |||
of which reported at fair value | 28,478 | 31,047 | |||
allowance for loan losses | 983 | 1,000 | |||
Premises and equipment | 5,506 | 5,590 | |||
Goodwill | 8,670 | 9,746 | |||
Other intangible assets | 565 | 421 | |||
of which reported at fair value | 123 | 179 | |||
Other assets | 145,888 | 157,969 | |||
of which reported at fair value | 47,149 | 49,298 | |||
of which encumbered | 5,599 | 12,084 | |||
Total assets | 1,205,874 | 1,333,742 | |||
The accompanying notes to the unaudited condensed consolidated financial statements are an integral part of these statements. |
Consolidated balance sheets (unaudited) | |||||
2Q08 | 4Q07 | ||||
Liabilities and shareholder's equity (CHF million) | |||||
Due to banks | 88,413 | 106,979 | |||
of which reported at fair value | 6,527 | 6,348 | |||
Customer deposits | 275,101 | 307,598 | |||
of which reported at fair value | 3,706 | 5,551 | |||
Central bank funds purchased, securities sold under repurchase agreements and securities lending transactions | 256,811 | 300,476 | |||
of which reported at fair value | 137,526 | 140,424 | |||
Obligation to return securities received as collateral, at fair value | 27,391 | 28,728 | |||
Trading liabilities, at fair value | 194,479 | 200,575 | |||
Short-term borrowings | 9,481 | 14,398 | |||
of which reported at fair value | 6,222 | 8,120 | |||
Long-term debt | 150,040 | 157,282 | |||
of which reported at fair value | 94,579 | 107,290 | |||
Other liabilities | 156,108 | 162,353 | |||
of which reported at fair value | 25,625 | 24,221 | |||
Minority interests | 21,184 | 24,019 | |||
Total liabilities | 1,179,008 | 1,302,408 | |||
Common shares | 4,400 | 4,400 | |||
Additional paid-in capital | 22,242 | 20,849 | |||
Retained earnings | 12,120 | 15,872 | |||
Treasury shares, at cost | (5,416) | (5,497) | |||
Accumulated other comprehensive income/(loss) | (6,480) | (4,290) | |||
Total shareholder's equity | 26,866 | 31,334 | |||
Total liabilities and shareholder's equity | 1,205,874 | 1,333,742 | |||
end of | 2Q08 | 4Q07 | |||
Additional share information | |||||
Par value (CHF) | 100.00 | 100.00 | |||
Issued shares (million) | 44.0 | 44.0 | |||
Shares outstanding (million) | 44.0 | 44.0 | |||
The accompanying notes to the unaudited condensed consolidated financial statements are an integral part of these statements. |
Consolidated statements of changes in shareholder's equity (unaudited) | |||||||||||||||
Common shares | Additional paid-in capital | Retained earnings | Treasury shares, at cost | 1 | Accumu- lated other compre- hensive income/ (loss) | Total share- holder's equity | Number of common shares outstanding | 2 | |||||||
6M08 (CHF million) | |||||||||||||||
Balance at beginning of period | 4,400 | 20,849 | 15,872 | (5,497) | (4,290) | 31,334 | 43,996,652 | ||||||||
Net income/(loss) | – | – | (1,152) | – | – | (1,152) | – | ||||||||
Other comprehensive income/(loss), net of tax | – | – | – | – | (2,190) | (2,190) | – | ||||||||
Issuance of common shares | – | 1,208 | – | – | – | 1,208 | – | ||||||||
Issuance of treasury shares | – | (3) | – | 158 | – | 155 | – | ||||||||
Repurchase of treasury shares | – | – | – | (222) | – | (222) | – | ||||||||
Share-based compensation, net of tax | – | 184 | – | 145 | – | 329 | – | ||||||||
Dividends on share-based compensation, net of tax | – | (10) | – | – | – | (10) | – | ||||||||
Cash dividends paid | – | – | (2,600) | – | – | (2,600) | – | ||||||||
Other | – | 14 | – | – | – | 14 | – | ||||||||
Balance at end of period | 4,400 | 22,242 | 12,120 | (5,416) | (6,480) | 26,866 | 43,996,652 | ||||||||
6M07 (CHF million) | |||||||||||||||
Balance at beginning of period | 4,400 | 19,593 | 11,652 | (6,149) | (3,451) | 26,045 | 43,996,652 | ||||||||
Net income | – | – | 5,175 | – | – | 5,175 | – | ||||||||
Cumulative effect of accounting changes, net of tax | – | – | (680) | – | 10 | (670) | – | ||||||||
Other comprehensive income/(loss), net of tax | – | – | – | – | 360 | 360 | – | ||||||||
Repurchase of treasury shares | – | – | – | (287) | – | (287) | – | ||||||||
Share-based compensation, net of tax | – | (346) | – | 857 | – | 511 | – | ||||||||
Dividends on share-based compensation, net of tax | – | 122 | – | – | – | 122 | – | ||||||||
Cash dividends paid | – | – | (10) | – | – | (10) | – | ||||||||
Other | – | 311 | (232) | – | – | 79 | – | ||||||||
Balance at end of period | 4,400 | 19,680 | 15,905 | (5,579) | (3,081) | 31,325 | 43,996,652 | ||||||||
1 Reflects Credit Suisse Group shares which are reported as treasury shares. Those shares are held to economically hedge share award obligations. 2 The Bank's total share capital is fully paid and consists of 43,996,652 registered shares with nominal value of CHF 100 per share. Each share is entitled to one vote. The Bank has no warrants or convertible rights on its own shares outstanding. |
Comprehensive income (unaudited) | |||||
in | 6M08 | 6M07 | |||
Comprehensive income (CHF million) | |||||
Net income/(loss) | (1,152) | 5,175 | |||
Gains/(losses) on cash flow hedges | 1 | 9 | |||
Cumulative translation adjustments | (2,171) | 311 | |||
Unrealized gains/(losses) on securities | (34) | 12 | |||
Actuarial gains/(losses) | 14 | 28 | |||
Other comprehensive income/(loss), net of tax | (2,190) | 360 | |||
Comprehensive income/(loss) | (3,342) | 5,535 | |||
The accompanying notes to the unaudited condensed consolidated financial statements are an integral part of these statements. |
Consolidated statements of cash flows (unaudited) | |||||
in | 6M08 | 6M07 | |||
Operating activities (CHF million) | |||||
Net income/(loss) | (1,152) | 5,175 | |||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities (CHF million) | |||||
Impairment, depreciation and amortization | 460 | 415 | |||
Provision for credit losses | 186 | 28 | |||
Deferred tax provision | (322) | 0 | |||
Share of net income from equity method investments | (22) | (27) | |||
Trading assets and liabilities | 43,497 | (39,634) | |||
(Increase)/decrease in accrued interest, fees receivable and other assets | (4,976) | (47,275) | |||
Increase/(decrease) in accrued expenses and other liabilities | 9,759 | 34,071 | |||
Other, net | (8,949) | 7,883 | |||
Total adjustments | 39,633 | (44,539) | |||
Net cash provided by/(used in) operating activities | 38,481 | (39,364) | |||
Investing activities (CHF million) | |||||
(Increase)/decrease in interest-bearing deposits with banks | (2,146) | 1,070 | |||
(Increase)/decrease in central bank funds sold, securities purchased under resale agreements and securities borrowing transactions | (10,338) | (19,738) | |||
Purchase of investment securities | (138) | (28) | |||
Proceeds from sale of investment securities | 8 | 511 | |||
Maturities of investment securities | 1,034 | 2,473 | |||
Investments in subsidiaries and other investments | (2,400) | (1,604) | |||
Proceeds from sale of other investments | 1,240 | 884 | |||
(Increase)/decrease in loans | (655) | (15,783) | |||
Proceeds from sales of loans | 472 | 285 | |||
Capital expenditures for premises and equipment and other intangible assets | (539) | (580) | |||
Proceeds from sale of premises and equipment and other intangible assets | 2 | 11 | |||
Other, net | (14) | (40) | |||
Net cash provided by/(used in) investing activities | (13,474) | (32,539) | |||
The accompanying notes to the unaudited condensed consolidated financial statements are an integral part of these statements. |
Consolidated statements of cash flows (unaudited) (continued) | |||||
in | 6M08 | 6M07 | |||
Financing activities (CHF million) | |||||
Increase/(decrease) in due to banks and customer deposits | (28,841) | 67,073 | |||
Increase/(decrease) in short-term borrowings | (4,172) | 5,136 | |||
Increase/(decrease) in central bank funds purchased, securities sold under repurchase agreements and securities lending transactions | (17,766) | 2,732 | |||
Issuances of long-term debt | 60,873 | 38,217 | |||
Repayments of long-term debt | (40,332) | (33,495) | |||
Issuances of trust preferred securities | 0 | 22 | |||
Issuance of common shares | 1,208 | 0 | |||
Issuance of treasury shares | 155 | 0 | |||
Repurchase of treasury shares | (222) | (287) | |||
Dividends paid/capital repayments | (2,646) | 72 | |||
Other, net | 3,561 | 2,663 | |||
Net cash provided by/(used in) financing activities | (28,182) | 82,133 | |||
Effect of exchange rate changes on cash and due from banks (CHF million) | |||||
Effect of exchange rate changes on cash and due from banks | (2,121) | 1 | |||
Net increase/(decrease) in cash and due from banks (CHF million) | |||||
Net increase/(decrease) in cash and due from banks | (5,296) | 10,231 | |||
Cash and due from banks at beginning of period | 36,304 | 27,865 | |||
Cash and due from banks at end of period | 31,008 | 38,096 | |||
Supplemental cash flow information (unaudited) | |||||
in | 6M08 | 6M07 | |||
Cash paid for income taxes and interest (CHF million) | |||||
Cash paid for income taxes | 1,270 | 952 | |||
Cash paid for interest | 23,050 | 27,155 | |||
The accompanying notes to the unaudited condensed consolidated financial statements are an integral part of these statements. |
Notes to the condensed consolidated financial statements – unaudited |
Note 1 Summary of significant accounting policies |
Basis of presentation |
The accompanying unaudited condensed consolidated financial statements of Credit Suisse (the Bank) are prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) and are stated in Swiss francs (CHF). These condensed consolidated financial statements should be read in conjunction with the US GAAP consolidated financial statements and notes thereto for the year ended December 31, 2007, included in the Credit Suisse Annual Report 2007. For a description of the Bank’s significant accounting policies, refer to Note 1 – Summary of significant accounting policies in VII – Consolidated financial statements – Credit Suisse (Bank) in the Credit Suisse Annual Report 2007. For a complete description of recently adopted accounting standards, refer to Note 2 – Recently issued accounting standards in VII – Consolidated financial statements – Cre dit Suisse (Bank) in the Credit Suisse Annual Report 2007. |
Certain financial information, which is normally included in annual consolidated financial statements prepared in accordance with US GAAP but not required for interim reporting purposes have been condensed or omitted. Certain reclassifications have been made to the prior period’s consolidated financial statements to conform to the current period’s presentation. These condensed consolidated financial statements reflect, in the opinion of management, all adjustments that are necessary for a fair presentation of the condensed consolidated financial statements for the periods presented. The results of operations for interim periods are not indicative of results for the entire year. |
In preparing these condensed consolidated financial statements, management is required to make estimates and assumptions, which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated balance sheets and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
For the most recently adopted accounting standards and standards to be adopted in future periods, refer to Note 1 – Summary of significant accounting policies in V – Condensed consolidated financial statements – unaudited in Credit Suisse Group AG’s (the Group) financial report for the second quarter of 2008 (Credit Suisse Financial Report 2Q08). With the exception of the following standards, the impact on the Bank’s and Group’s financial condition, results of operations or cash flows was or is expected to be identical. |
Recently adopted accounting standards |
SFAS 159 |
The Bank adopted the provisions of SFAS 159 on January 1, 2007. As a result of adoption and election of certain existing instruments under the fair value option, the Bank reported a decrease in opening retained earnings of CHF 832 million, net of tax. For further information on fair values, refer to Note 20 – Fair value of financial instruments. |
SFAS 157 |
The Bank adopted the provisions of SFAS 157 on January 1, 2007. As a result of this adoption, the Bank reported an increase in opening retained earnings of CHF 165 million, net of tax. For further information on fair values, refer to Note 20 – Fair value of financial instruments. |
SFAS 158 |
The cumulative effect of the Bank adopting the recognition provisions of SFAS 158 as of December 31, 2006, was an after-tax decrease in AOCI and consolidated net assets of CHF 0.3 billion. The Bank did not early adopt the measurement date provisions and is evaluating the impact of those provisions for adoption in 2008. |
Note 2 Business developments |
The Bank had no significant acquisitions or divestitures in 6M08 and 6M07. |
Note 3 Segment Results |
Overview |
For purpose of presentation of reportable segments, the Bank has included accounts of affiliate entities wholly owned by the same parent which are managed together with the operating segments of the Bank. These affiliate entities include certain bank and trust affiliates, primarily managed by Private Banking. Income before taxes and minority interests of these non-consolidated affiliate entities included in the segment presentation for 6M08 and 6M07 were CHF 453 million and CHF 543 million, respectively. For the same periods, net revenues of these non-consolidated affiliate entities included in the segment presentation were CHF 1,112 million and CHF 1,235 million, respectively. Total assets of these non-consolidated affiliate entities included in the segment presentation as of June 30, 2008 and December 31, 2007 were CHF 55.5 billion and CHF 56.2 billion, respectively. For further information, refer to Note 3 – Segme nt reporting in V – Condensed consolidated financial statements – unaudited in the Credit Suisse Financial Report 2Q08. |
Net revenues and income before taxes | |||||
in | 6M08 | 6M07 | |||
Net revenues (CHF million) | |||||
Private Banking | 6,620 | 6,719 | |||
Investment Banking | 3,251 | 14,120 | |||
Asset Management | 802 | 1,629 | |||
Adjustments 1 2 | (594) | 1,122 | |||
Net revenues | 10,079 | 23,590 | |||
Income before taxes and minority interests (CHF million) | |||||
Private Banking | 2,544 | 2,820 | |||
Investment Banking | (3,179) | 4,492 | |||
Asset Management | (301) | 556 | |||
Adjustments 1 3 | (478) | 1,329 | |||
Income/(loss) before taxes and minority interests | (1,414) | 9,197 | |||
1 Adjustments represent certain consolidating entries and balances, including those relating to items that are managed but are not legally owned by the Bank and vice-versa and certain expenses that were not allocated to the segments. 2 Includes minority interest-related revenues of CHF 369 million in 6M08 and CHF 2,353 million in 6M07, from the consolidation of certain private equity funds and other entities in which the Bank does not have a significant economic interest in such revenues. 3 Includes minority interest income of CHF 299 million in 6M08 and CHF 2,268 million in 6M07, from the consolidation of certain private equity funds and other entities in which the Bank does not have a significant economic interest in such income. |
Total assets | |||||
end of | 2Q08 | 4Q07 | |||
Total assets (CHF million) | |||||
Private Banking | 375,064 | 376,800 | |||
Investment Banking | 1,021,587 | 1,140,740 | |||
Asset Management | 24,834 | 27,784 | |||
Adjustments 1 | (215,611) | (211,582) | |||
Total assets | 1,205,874 | 1,333,742 | |||
1 Adjustments represent certain consolidating entries and balances, including those relating to items that are managed but are not legally owned by the Bank and vice-versa and certain expenses that were not allocated to the segments. |
Note 4 Net interest income |
in | 6M08 | 6M07 | |||
Net interest income (CHF million) | |||||
Loans | 4,106 | 3,779 | |||
Investment securities | 310 | 361 | |||
Trading assets | 10,119 | 11,867 | |||
Central bank funds sold, securities purchased under resale agreements and securities borrowing transactions | 7,289 | 11,239 | |||
Other | 3,527 | 3,565 | |||
Interest and dividend income | 25,351 | 30,811 | |||
Deposits | (5,742) | (7,897) | |||
Short-term borrowings | (245) | (478) | |||
Trading liabilities | (5,157) | (4,787) | |||
Central bank funds purchased, securities sold under repurchase agreements and securities lending transactions | (7,162) | (10,266) | |||
Long-term debt | (2,118) | (2,400) | |||
Other | (1,318) | (1,089) | |||
Interest expense | (21,742) | (26,917) | |||
Net interest income | 3,609 | 3,894 | |||
Note 5 Commissions and fees |
in | 6M08 | 6M07 | |||
Commissions and fees (CHF million) | |||||
Lending business | 458 | 1,288 | |||
Investment and portfolio management | 2,580 | 2,510 | |||
Other securities business | 113 | 105 | |||
Fiduciary | 2,693 | 2,615 | |||
Underwriting | 661 | 1,331 | |||
Brokerage | 2,416 | 2,704 | |||
Underwriting and brokerage | 3,077 | 4,035 | |||
Other customer services | 1,279 | 1,570 | |||
Commissions and fees | 7,507 | 9,508 | |||
Note 6 Other revenues |
in | 6M08 | 6M07 | |||
Other revenues (CHF million) | |||||
Minority interests without significant economic interest | 259 | 2,322 | |||
Loans held-for-sale | (469) | (13) | |||
Long-lived assets held-for-sale | 6 | 6 | |||
Equity method investments | 22 | 68 | |||
Other investments | (90) | 453 | |||
Other | 361 | 349 | |||
Other revenues | 89 | 3,185 | |||
Note 7 Provision for credit losses |
in | 6M08 | 6M07 | |||
Provision for credit losses (CHF million) | |||||
Allowance for loan losses | 60 | 38 | |||
Provisions for lending-related and other exposures | 126 | (10) | |||
Provision for credit losses | 186 | 28 | |||
Note 8 Compensation and benefits |
in | 6M08 | 6M07 | |||
Compensation and benefits (CHF million) | |||||
Salaries and bonuses | 6,193 | 8,968 | |||
Social security | 415 | 550 | |||
Other | 474 | 508 | |||
Compensation and benefits | 7,082 | 10,026 | |||
Note 9 General and administrative expenses |
in | 6M08 | 6M07 | |||
General and administrative expenses (CHF million) | |||||
Occupancy expenses | 398 | 417 | |||
IT, machinery, etc. | 225 | 226 | |||
Provisions and losses | (45) | 17 | |||
Travel and entertainment | 280 | 273 | |||
Professional services | 941 | 978 | |||
Depreciation of property and equipment | 426 | 400 | |||
Amortization and impairment of other intangible assets | 34 | 15 | |||
Other | 836 | 872 | |||
General and administrative expenses | 3,095 | 3,198 | |||
Note 10 Trading assets and liabilities |
end of | 2Q08 | 4Q07 | |||
Trading assets (CHF million) | |||||
Debt securities | 176,458 | 208,988 | |||
Equity securities 1 | 146,378 | 194,379 | |||
Derivative instruments 2, 3 | 100,338 | 97,356 | |||
Other | 20,898 | 29,402 | |||
Trading assets | 444,072 | 530,125 | |||
Trading liabilities (CHF million) | |||||
Short positions | 120,199 | 122,655 | |||
Derivative instruments 2, 4 | 74,280 | 77,920 | |||
Trading liabilities | 194,479 | 200,575 | |||
1 Including convertible bonds. 2 In accordance with the provisions of FSP FIN 39-1, the Bank offset cash collateral receivables and payables of CHF 18.7 billion and CHF 16.9 billion, respectively, as of the end of 2Q08 against the derivative positions. Cash colleratal receivables and payables of CHF 13.1 billion and CHF 36.7 billion, respectively, as of the end of 2Q08 were not netted, primarily due to the fact that no valid Master Netting Agreement exist. The Bank adopted the provisions of FSP FIN 39-1 on a prospective basis as of January 1, 2008. 3 The positive replacement values of trading derivatives before netting as of the end 2Q08 and 4Q07 was CHF 580.7 billion and CHF 443.8 billion, respectively. 4 The negative replacement v alues of trading derivatives before netting as of the end 2Q08 and 4Q07 was CHF 552.8 billion and CHF 424.5 billion, respectively. |
Note 11 Loans |
end of | 2Q08 | 4Q07 | |||
Loans (CHF million) | |||||
Banks | 1,853 | 2,128 | |||
Commercial | 44,329 | 45,961 | |||
Consumer | 72,013 | 70,197 | |||
Public authorities | 962 | 982 | |||
Lease financings | 2,791 | 2,604 | |||
Switzerland | 121,948 | 121,872 | |||
Banks | 9,375 | 9,622 | |||
Commercial | 60,783 | 69,448 | |||
Consumer | 21,740 | 19,021 | |||
Public authorities | 2,259 | 2,563 | |||
Lease financings | 104 | 115 | |||
Foreign | 94,261 | 100,769 | |||
Gross loans | 216,209 | 222,641 | |||
Net (unearned income)/deferred expenses | (77) | (71) | |||
Allowance for loan losses | (983) | (1,000) | |||
Net loans | 215,149 | 221,570 | |||
Impaired loan portfolio (CHF million) | |||||
Gross impaired loans | 1,352 | 1,540 | |||
of which with a specific allowance | 1,215 | 1,185 | |||
of which without a specific allowance | 137 | 355 | |||
in | 6M08 | 6M07 | |||
Allowance for loan losses (CHF million) | |||||
Balance at beginning of period | 1,000 | 1,305 | |||
Change in accounting 1 | 0 | (61) | |||
Change in scope of consolidation | 0 | (92) | |||
Net additions charged to statements of income | 60 | 38 | |||
Gross write-offs | (99) | (108) | |||
Recoveries | 54 | 38 | |||
Net write-offs | (45) | (70) | |||
Provisions for interest | 0 | 0 | |||
Foreign currency translation impact and other adjustments, net | (32) | 3 | |||
Balance at end of period | 983 | 1,123 | |||
of which a specific allowance | 621 | 730 | |||
of which an inherent credit loss allowance | 362 | 393 | |||
1 Related to the adoption of SFAS 159. |
Note 12 Other assets and liabilities |
end of | 2Q08 | 4Q07 | |||
Other assets (CHF million) | |||||
Cash collateral on derivative instruments | 13,092 | 18,766 | |||
Derivative instruments used for hedging | 1,233 | 1,039 | |||
Brokerage receivables | 54,759 | 54,890 | |||
Assets held-for-sale | 38,947 | 48,206 | |||
of which loans | 38,700 | 47,975 | |||
of which real estate | 247 | 231 | |||
Interest and fees receivable | 7,997 | 10,700 | |||
Deferred tax assets | 5,776 | 5,728 | |||
Prepaid expenses | 545 | 521 | |||
Other | 23,539 | 18,119 | |||
Other assets | 145,888 | 157,969 | |||
Other liabilities (CHF million) | |||||
Cash collateral on derivative instruments | 36,706 | 48,968 | |||
Derivative instruments used for hedging | 283 | 73 | |||
Brokerage payables | 64,489 | 55,823 | |||
Provisions 1 | 1,785 | 2,219 | |||
of which off-balance sheet risk | 374 | 266 | |||
Interest and fees payable | 10,445 | 11,737 | |||
Current tax liabilities | 2,291 | 3,083 | |||
Deferred tax liabilities | 683 | 537 | |||
Failed sales | 11,669 | 10,627 | |||
Other | 27,757 | 29,286 | |||
Other liabilities | 156,108 | 162,353 | |||
1 Includes provision for bridge commitments. |
Note 13 Long-term debt |
end of | 2Q08 | 4Q07 | |||
Long-term debt (CHF million) | |||||
Senior | 129,425 | 138,237 | |||
Subordinated | 20,615 | 19,045 | |||
Long-term debt | 150,040 | 157,282 | |||
of which reported at fair value | 94,579 | 107,290 | |||
Note 14 Accumulated other comprehensive income |
Gains/ (losses) on cash flow hedges | Cumulative translation adjustments | Unrealized gains/ (losses) on securities | Actuarial gains/ (losses) | Net prior service cost/ (credit) | Accumu- lated other compre- hensive income/ (loss) | ||||||||
6M08 (CHF million) | |||||||||||||
Balance at beginning of period | 7 | (3,979) | 125 | (450) | 7 | (4,290) | |||||||
Increase/(decrease) | 1 | (2,171) | (42) | 0 | 0 | (2,212) | |||||||
Reclassification adjustments, included in net income | 0 | 0 | 8 | 14 | 0 | 22 | |||||||
Balance at end of period | 8 | (6,150) | 91 | (436) | 7 | (6,480) | |||||||
6M07 (CHF million) | |||||||||||||
Balance at beginning of period | (1) | (2,811) | 106 | (754) | 9 | (3,451) | |||||||
Increase/(decrease) | 10 | 311 | 9 | 0 | 0 | 330 | |||||||
Reclassification adjustments, included in net income | (1) | 0 | 3 | 28 | 0 | 30 | |||||||
Adoption of SFAS 159, net of tax | 6 | 0 | 4 | 0 | 0 | 10 | |||||||
Balance at end of period | 14 | (2,500) | 122 | (726) | 9 | (3,081) | |||||||
Note 15 Tax |
For further information, refer to Note 16 – Tax in V – Condensed consolidated financial statements – unaudited in the Credit Suisse Financial Report 2Q08. |
Note 16 Employee share-based compensation and other benefits |
Share-based compensation |
For further information, refer to Note 17 – Employee share-based compensation and other benefits in V – Condensed consolidated financial statements – unaudited in the Credit Suisse Financial Report 2Q08 and to Note 25 – Employee share-based compensation and other benefits in VII – Consolidated financial statements – Credit Suisse (Bank) in the Credit Suisse Annual Report 2007. |
Compensation expense |
Total compensation expense for share-based compensation recognized in the consolidated statements of income in compensation and benefits was CHF 1,727 million and CHF 1,208 million in 6M08 and 6M07, respectively. As of June 30, 2008, the total estimated unrecognized compensation expense related to non-vested share-based compensation of CHF 3,724 million will be recognized over the remaining weighted-average requisite service period of 1.3 years. |
Credit Suisse Incentive Share Unit |
The compensation expense recognized in 6M08 related to ISUs was CHF 1,197 million. The estimated unrecognized compensation expense related to ISUs as of June 30, 2008, was CHF 3,123 million and will be recognized over the term of the award, subject to the early retirement rules. |
Incentive Share Unit activities | |||
in 6M08 | ISU | ||
Number of awards (million) | |||
Balance at beginning of period | 25.4 | ||
Granted | 46.3 | ||
Settled | (8.8) | ||
Forfeited | (0.5) | ||
Balance at end of period | 62.4 | ||
of which vested | 0.3 | ||
of which unvested | 62.1 | ||
Performance Incentive Plan |
The compensation expense recognized in 6M08 related to PIP I and PIP II was CHF 163 million. The estimated unrecognized compensation expense related to PIP I and PIP II as of June 30, 2008, was CHF 164 million. None of the PIP units were deliverable as of June 30, 2008. |
Performance Incentive Plan activities | |||||
in 6M08 | PIP II | PIP I | |||
Number of awards (million) | |||||
Balance at beginning of period | 6.2 | 11.9 | |||
Granted | 0.1 | – | |||
Settled | – | – | |||
Forfeited | (0.1) | – | |||
Balance at end of period | 6.2 | 11.9 | |||
of which vested | 2.8 | 7.7 | |||
of which unvested | 3.4 | 4.2 | |||
Shares |
Special awards are generally shares granted to new employees and are in addition to the annual bonus grants. During the first half of 2008, 2.3 million new special awards were granted, 13.3 million share awards were settled, and 0.5 million share awards were forfeited. |
The compensation expense recognized in 6M08 related to shares awarded under phantom share, LPA and special awards was CHF 367 million. The estimated unrecognized compensation expense related to these awards as of June 30, 2008 was CHF 437 million. |
Share options |
The Bank has discontinued the practice of issuing options and the majority of the original grants have since vested. |
Note 17 Pension |
The Bank previously disclosed in the Credit Suisse Annual Report 2007, that it expected to contribute CHF 199 million to the defined benefit pension plans and to other post-retirement defined benefit plans in 2008. As of June 30, 2008, CHF 163 million of contributions have been made, including approximately CHF 140 million as a special contribution to the UK plan. |
in | 6M08 | 6M07 | |||
Total pension costs (CHF million) | |||||
Service costs on benefit obligation | 24 | 26 | |||
Interest costs on benefit obligation | 73 | 80 | |||
Expected return on plan assets | (86) | (80) | |||
Amortization of recognized prior service cost | (1) | 0 | |||
Amortization of recognized actuarial (gains)/losses | 21 | 42 | |||
Net periodic pension costs | 31 | 68 | |||
Note 18 Guarantees and commitments |
Guarantees | |||||||||||||
end of | Maturity less than 1 year | Maturity greater than 1 year | Total gross amount | Total net amount | 1 | Carrying value | Collateral received | ||||||
end of 2Q08 (CHF million) | |||||||||||||
Credit guarantees and similar instruments | 3,874 | 4,527 | 8,401 | 7,094 | 345 | 5,097 | |||||||
Performance guarantees and similar instruments | 7,479 | 3,762 | 11,241 | 9,537 | 84 | 2,864 | |||||||
Securities lending indemnifications | 35,703 | 0 | 35,703 | 35,703 | 0 | 35,703 | |||||||
Derivatives | 249,457 | 900,988 | 1,150,445 | 1,150,445 | 46,748 | – | 2 | ||||||
Other guarantees | 3,281 | 1,044 | 4,325 | 4,248 | 0 | 1,777 | |||||||
Total guarantees | 299,794 | 910,321 | 1,210,115 | 1,207,027 | 47,177 | 45,441 | |||||||
end of 4Q07 (CHF million) | |||||||||||||
Credit guarantees and similar instruments | 3,181 | 5,982 | 9,163 | 7,777 | 23 | 5,064 | |||||||
Performance guarantees and similar instruments | 4,249 | 7,995 | 12,244 | 10,494 | 141 | 3,469 | |||||||
Securities lending indemnifications | 40,006 | 0 | 40,006 | 40,006 | 0 | 40,006 | |||||||
Derivatives | 127,332 | 991,516 | 1,118,848 | 1,118,848 | 37,853 | – | 2 | ||||||
Other guarantees | 2,942 | 930 | 3,872 | 3,838 | 0 | 1,564 | |||||||
Total guarantees | 177,710 | 1,006,423 | 1,184,133 | 1,180,963 | 38,017 | 50,103 | |||||||
1 Total net amount is computed as the gross amount less any participations. 2 Collateral for derivatives accounted for as guarantees is not considered significant. |
Other commitments | |||||||||||
end of | Maturity less than 1 year | Maturity greater than 1 year | Total gross amount | Total net amount | 1 | Collateral received | |||||
end of 2Q08 (CHF million) | |||||||||||
Irrevocable commitments under documentary credits | 5,778 | 78 | 5,856 | 5,159 | 2,411 | ||||||
Loan commitments | 164,065 | 53,495 | 217,560 | 217,387 | 146,630 | ||||||
Forward reverse repurchase agreements | 58,903 | 0 | 58,903 | 58,903 | 58,903 | ||||||
Other commitments | 6,359 | 1,708 | 8,067 | 8,067 | 831 | ||||||
Total other commitments | 235,105 | 55,281 | 290,386 | 289,516 | 208,775 | ||||||
end of 4Q07 (CHF million) | |||||||||||
Irrevocable commitments under documentary credits | 5,854 | 96 | 5,950 | 5,221 | 2,439 | ||||||
Loan commitments | 180,390 | 56,939 | 237,329 | 237,077 | 160,978 | ||||||
Forward reverse repurchase agreements | 40,403 | 0 | 40,403 | 40,403 | 40,403 | ||||||
Other commitments | 2,603 | 2,263 | 4,866 | 4,866 | 346 | ||||||
Total other commitments | 229,250 | 59,298 | 288,548 | 287,567 | 204,166 | ||||||
1 Total net amount is computed as the gross amount less any participations. |
For further information, refer to Note 19 – Guarantees and commitments in V – Condensed consolidated financial statements – unaudited in the Credit Suisse Financial Report 2Q08 and to Note 29 – Guarantees and commitments in VII – Consolidated financial statements – Credit Suisse (Bank) in the Credit Suisse Annual Report 2007. |
Note 19 Variable interest entities |
As of June 30, 2008, the Bank consolidated all VIEs for which it is the primary beneficiary under FIN 46(R). Net income was unaffected, as offsetting minority interests were recorded in the consolidated statements of income. For further information, refer to Note 20 – Variable interest entities in V – Condensed consolidated financial statements – unaudited in the Credit Suisse Financial Report 2Q08. |
Consolidated and non-consolidated VIEs | |||||
end of | 2Q08 | 4Q07 | |||
Consolidated VIEs (CHF million) | |||||
CDO | 5,034 | 6,672 | |||
CP conduit | 0 | 1 | |||
Financial intermediation | 15,756 | 17,397 | |||
Total assets of consolidated VIEs | 20,790 | 24,070 | |||
Non-consolidated VIEs (CHF million) | |||||
CDO | 8,713 | 16,360 | |||
CP conduit | 9,948 | 12,642 | |||
Financial intermediation | 92,781 | 99,288 | |||
Total assets of non-consolidated VIEs | 111,442 | 128,290 | |||
Total maximum exposure to loss of non-consolidated VIEs (CHF million) | |||||
CDO | 2,568 | 2,453 | |||
CP conduit | 14,852 | 17,347 | |||
Financial intermediation | 23,313 | 20,556 | |||
Collateralized debt obligations |
The Bank has consolidated all CDO VIEs for which it is the primary beneficiary, resulting in the inclusion by the Bank of approximately CHF 5.0 billion and CHF 6.7 billion of assets and liabilities of these VIEs as of June 30, 2008 and December 31, 2007, respectively. |
The Bank’s maximum loss exposure is generally equal to the carrying value of certain debt and equity retained interests in open CDO VIEs, which are reported as trading assets and carried at fair value and totaled CHF 2.6 billion and CHF 2.5 billion as of June 30, 2008 and December 31, 2007, respectively. |
Commercial paper conduits |
As of June 30, 2008, the Bank’s maximum loss exposure to non-consolidated CP conduits was CHF 14.9 billion, which consisted of CHF 9.9 billion of funded assets and the CP conduits’ commitments to purchase CHF 5.0 billion of additional assets. As of December 31, 2007, the Bank’s maximum loss exposure was CHF 17.4 billion. |
Financial intermediation |
The Bank’s maximum loss exposure to non-consolidated VIEs related to financial intermediation activities was CHF 23.3 billion and CHF 20.6 billion as of June 30, 2008 and December 31, 2007, respectively, which represents the notional amount of any guarantees from the Bank and the fair value of all other Bank interests held, rather than the amount of total assets of the VIEs. |
Note 20 Fair value of financial instruments |
For further information, refer to Note 21– Fair value of financial instruments in V – Condensed consolidated financial statements – unaudited in the Credit Suisse Financial Report 2Q08 and to Note 31 – Financial instruments in VII – Consolidated financial instruments – Credit Suisse (Bank) in the Credit Suisse Annual Report 2007. |
Fair value hierarchy |
Fair value of assets and liabilities measured at fair value on a recurring basis | |||||||||||
end of 6M08 | Quoted prices in active markets for identical assets or liabilities (level1) | Significant other observable inputs (level 2) | Significant unobserv- able inputs (level 3) | Impact of netting | 1 | Total at fair value | |||||
Assets (CHF million) | |||||||||||
Central bank funds sold, securities purchased under resale agreements and securities borrowing transactions | 0 | 148,087 | 0 | 0 | 148,087 | ||||||
Securities received as collateral | 24,916 | 2,475 | 0 | 0 | 27,391 | ||||||
Trading assets | 199,018 | 660,518 | 64,921 | (480,385) | 444,072 | ||||||
Investment securities | 12,033 | 596 | 0 | 0 | 12,629 | ||||||
Other investments | 497 | 6,621 | 17,836 | 0 | 24,954 | ||||||
Loans | 0 | 16,294 | 12,184 | 0 | 28,478 | ||||||
Other intangible assets | 0 | 0 | 123 | 0 | 123 | ||||||
Other assets | 4,539 | 23,543 | 19,183 | (116) | 47,149 | ||||||
Total assets at fair value | 241,003 | 858,134 | 114,247 | (480,501) | 732,883 | ||||||
Liabilities (CHF million) | |||||||||||
Due to banks | 0 | 6,523 | 4 | 0 | 6,527 | ||||||
Customer deposits | 0 | 3,680 | 26 | 0 | 3,706 | ||||||
Central bank funds purchased, securities sold under repurchase agreements and securities lending transactions | 0 | 137,526 | 0 | 0 | 137,526 | ||||||
Obligations to return securities received as collateral | 24,916 | 2,475 | 0 | 0 | 27,391 | ||||||
Trading liabilities | 105,598 | 544,689 | 22,857 | (478,665) | 194,479 | ||||||
Short-term borrowings | 0 | 5,573 | 649 | 0 | 6,222 | ||||||
Long-term debt | 0 | 65,855 | 28,724 | 0 | 94,579 | ||||||
Other liabilities | 0 | 24,098 | 1,560 | (33) | 25,625 | ||||||
Total liabilities at fair value | 130,514 | 790,419 | 53,820 | (478,698) | 496,055 | ||||||
Net assets/liabilities at fair value | 110,489 | 67,715 | 60,427 | (1,803) | 2 | 236,828 | |||||
1 Derivative contracts are reported on a gross basis by level. The impact of netting represents an adjustment related to counterparty netting. 2 In accordance with the provisions of FSP FIN 39-1, the Bank offset cash collateral receivables and payables of CHF 18.7 billion and CHF 16.9 billion, respectively, as of the end of 6M08 against the derivative positions. The Bank adopted the provisions of FSP FIN 39-1 on a prospective basis as of January 1, 2008. |
Fair value of assets and liabilities measured at fair value on a recurring basis | |||||||||||
end of 4Q07 | Quoted prices in active markets for identical assets or liabilities (level1) | Significant other observable inputs (level 2) | Significant unobserv- able inputs (level 3) | Impact of netting | 1 | Total at fair value | |||||
Assets (CHF million) | |||||||||||
Central bank funds sold, securities purchased under resale agreements and securities borrowing transactions | 0 | 183,719 | 0 | 0 | 183,719 | ||||||
Securities received as collateral | 25,576 | 3,152 | 0 | 0 | 28,728 | ||||||
Trading assets | 253,052 | 562,940 | 60,622 | (346,489) | 530,125 | ||||||
Investment securities | 13,393 | 874 | 0 | 0 | 14,267 | ||||||
Other investments | 565 | 6,893 | 17,622 | 0 | 25,080 | ||||||
Loans | 0 | 25,409 | 5,638 | 0 | 31,047 | ||||||
Other intangible assets | 0 | 0 | 179 | 0 | 179 | ||||||
Other assets | 4,091 | 37,221 | 8,080 | (94) | 49,298 | ||||||
Total assets at fair value | 296,677 | 820,208 | 92,141 | (346,583) | 862,443 | ||||||
Liabilities (CHF million) | |||||||||||
Due to banks | 0 | 6,342 | 6 | 0 | 6,348 | ||||||
Customer deposits | 0 | 5,551 | 0 | 0 | 5,551 | ||||||
Central bank funds purchased, securities sold under repurchase agreements and securities lending transactions | 0 | 140,424 | 0 | 0 | 140,424 | ||||||
Obligations to return securities received as collateral | 25,576 | 3,152 | 0 | 0 | 28,728 | ||||||
Trading liabilities | 111,632 | 415,885 | 19,599 | (346,541) | 200,575 | ||||||
Short-term borrowings | 0 | 7,426 | 694 | 0 | 8,120 | ||||||
Long-term debt | 0 | 76,053 | 31,237 | 0 | 107,290 | ||||||
Other liabilities | 0 | 24,090 | 173 | (42) | 24,221 | ||||||
Total liabilities at fair value | 137,208 | 678,923 | 51,709 | (346,583) | 521,257 | ||||||
Net assets/liabilities at fair value | 159,469 | 141,285 | 40,432 | 0 | 341,186 | ||||||
1 Derivative contracts are reported on a gross basis by level. The impact of netting represents an adjustment related to counterparty netting. |
Fair value of assets and liabilities measured at fair value on a recurring basis for level 3 | |||||||||
6M08 | Derivatives, net | Private equity investments | Other | Total | |||||
Assets (CHF million) | |||||||||
Balance at beginning of period | 5,633 | 17,622 | 49,556 | 1 | 72,811 | ||||
Net realized/unrealized gains/(losses) included in net revenues | 4,704 | (1,278) | (11,425) | (7,999) | |||||
Purchases, sales, issuances and settlements | (207) | 1,506 | 718 | 2,017 | |||||
Transfers in and/or out of level 3 | (1,481) | (14) | 26,372 | 24,877 | |||||
Balance at end of period | 8,649 | 17,836 | 65,221 | 2 | 91,706 | ||||
Liabilities (CHF million) | |||||||||
Balance at beginning of period | – | – | 32,379 | 3 | 32,379 | ||||
Net realized/unrealized gains/(losses) included in net revenues | – | – | (4,475) | (4,475) | |||||
Purchases, sales, issuances and settlements | – | – | (1,229) | (1,229) | |||||
Transfers in and/or out of level 3 | – | – | 4,604 | 4,604 | |||||
Balance at end of period | – | – | 31,279 | 3 | 31,279 | ||||
Net | 8,649 | 17,836 | 33,942 | 60,427 | |||||
Total realized/unrealized gains/(losses) included in net revenues | 4,704 | (1,278) | (6,950) | (3,524) | |||||
1 Includes primarily RMBS, CMBS, CDO, collateralized bond and loan obligations and internally managed private equity funds. 2 Includes primarily equity derivatives, internally managed private equity funds, RMBS, CMBS and CDO. 3 Includes primarily structured notes. |
Fair value of assets and liabilities measured at fair value on a recurring basis for level 3 | |||||||||
6M07 | Derivatives, net | Private equity investments | Other | Total | |||||
Assets (CHF million) | |||||||||
Balance at beginning of period | 192 | 14,722 | 10,701 | 1 | 25,615 | ||||
Net realized/unrealized gains/(losses) included in net revenues | 1,004 | 2,500 | 1,441 | 4,945 | |||||
Purchases, sales, issuances and settlements | 1,919 | (1,232) | 11,056 | 11,743 | |||||
Transfers in and/or out of level 3 | 1,965 | (68) | 5,708 | 7,605 | |||||
Balance at end of period | 5,080 | 15,922 | 28,906 | 1 | 49,908 | ||||
Liabilities (CHF million) | |||||||||
Balance at beginning of period | – | – | 27,939 | 2 | 27,939 | ||||
Net realized/unrealized gains/(losses) included in net revenues | – | – | 265 | 265 | |||||
Purchases, sales, issuances and settlements | – | – | 8,943 | 8,943 | |||||
Transfers in and/or out of level 3 | – | – | (4,226) | (4,226) | |||||
Balance at end of period | – | – | 32,921 | 2 | 32,921 | ||||
Net | 5,080 | 15,922 | (4,015) | 16,987 | |||||
Total realized/unrealized gains/(losses) included in net revenues | 1,004 | 2,500 | 1,176 | 4,680 | |||||
1 Includes primarily RMBS, CMBS, CDO, collateralized bond and loan obligations and internally managed private equity funds. 2 Includes primarily structured notes. |
Gains and losses on assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (level 3) | |||||||||||||
6M08 | 6M07 | ||||||||||||
Trading revenues | Other revenues | Total revenues | Trading revenues | Other revenues | Total revenues | ||||||||
Gains and losses on assets and liabilities (CHF million) | |||||||||||||
Net realized/unrealized gains/(losses) included in net revenues | (4,142) | 618 | (3,524) | 2,370 | 2,310 | 4,680 | |||||||
Whereof: | |||||||||||||
Unrealized gains/(losses) relating to assets and liabilities still held as of the reporting date | 2,562 | 298 | 2,860 | 1,037 | 779 | 1,816 | |||||||
Nonrecurring fair value changes |
As of June 30, 2008 and December 31, 2007, CHF 4.8 billion and CHF 6.3 billion, respectively, of loans have been recorded at fair value, of which CHF 1.8 billion and CHF 5.7 billion, respectively, were classified as level 2 and CHF 3.0 billion and CHF 0.6 billion, respectively, were classified as level 3. |
. |
Difference between the aggregate fair value and the aggregate unpaid principal balances of loans and financial instruments | |||||||||||||
6M08 | 4Q07 | ||||||||||||
Aggregate fair value | Aggregate unpaid principal | Difference | Aggregate fair value | Aggregate unpaid principal | Difference | ||||||||
Loans (CHF million) | |||||||||||||
Non-performing loans (90 days or more past due) | 187 | 229 | (42) | 0 | 0 | 0 | |||||||
Non-accrual loans | 423 | 854 | (431) | 232 | 459 | (227) | |||||||
Financial instruments (CHF million) | |||||||||||||
Central bank funds sold, securities purchased under resale agreements and securities borrowing transactions | 148,087 | 147,763 | 324 | 183,71 9 | 183,303 | 416 | |||||||
Loans | 28,478 | 28,872 | (394) | 31,047 | 31,517 | (470) | |||||||
Other assets | 31,835 | 35,975 | (4,140) | 33,936 | 35,420 | (1,484) | |||||||
Due to banks and customer deposits | (2,846) | (2,870) | 24 | (5,805) | (5,798) | (7) | |||||||
Central bank funds purchased, securities sold under repurchase agreements and securities lending transactions | (137,526) | (137,685) | 159 | (140,424) | (140,436) | 12 | |||||||
Short-term borrowings | (6,222) | (6,609) | 387 | (8,120) | (8,409) | 289 | |||||||
Long-term debt | (94,579) | (101,921) | 7,342 | (107,290) | (107,323) | 33 | |||||||
Other liabilities | (4,620) | (4,671) | 51 | (3,648) | (3,646) | (2) | |||||||
Gains and losses on financial instruments | |||||
6M08 | 6M07 | ||||
Net gains/(losses) | Net gains/(losses) | ||||
Financial instruments (CHF million) | |||||
Central bank funds sold, securities purchased under resale agreements and securities borrowing transactions | 4,896 | 1 | 7,112 | 1 | |
Trading loans | 87 | 2 | 106 | 1 | |
of which related to credit risk | 0 | 21 | |||
Other investments | (219) | 2 | 33 | 2 | |
Loans | 622 | 1 | 593 | 1 | |
of which related to credit risk | (170) | (26) | |||
Other assets | (2,341) | 2 | 825 | 1 | |
of which related to credit risk | (3,566) | 123 | |||
Due to banks and customer deposits | (48) | 1 | (79) | 1 | |
of which related to credit risk | 9 | 0 | |||
Central bank funds purchased, securities sold under repurchase agreements and securities lending transactions | (3,745) | 1 | (6,018) | 1 | |
Short-term borrowings | (202) | 2 | (232) | 1 | |
Long-term debt | 2,749 | 2 | (2,691) | 2 | |
of which related to credit risk | 698 | (108) | |||
Other liabilities | (421) | 2 | (5) | 2 | |
of which related to credit risk | (498) | (5) | |||
1 Primarily recognized in net interest income. 2 Primarily recognized in trading revenues. |
Note 21 Litigation |
For further information, refer to Note 23 – Litigation in V – Condensed consolidated financial statements – unaudited in the Credit Suisse Financial Report 2Q08. |
Report of Independent Registered Public Accounting Firm |
Report of Independent Registered Public Accounting Firm to the Board of Directors of |
Credit Suisse, Zurich |
We have reviewed the accompanying condensed consolidated balance sheets of Credit Suisse and subsidiaries (the “Bank”) as of June 30, 2008 and 2007, and the related condensed consolidated statements of income, changes in shareholder's equity, comprehensive income and cash flows for the six-month periods ended June 30, 2008 and 2007. These condensed consolidated financial statements are the responsibility of the Bank's management. |
We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. |
Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles. |
We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Bank as of December 31, 2007, and the related consolidated statements of income, changes in shareholder's equity, comprehensive income and cash flows for the year then ended (not presented herein); and in our report dated March 18, 2008, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2007, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. |
KPMG Klynveld Peat Marwick Goerdeler SA |
David L. Jahnke Robert S. Overstreet |
Auditor in charge |
Zurich, Switzerland |
July 23, 2008 |