Credit Suisse accelerates implementation of strategic plan - update on fourth-quarter performance

Commenting on the steps outlined today, Brady W. Dougan, CEO of Credit Suisse Group, said: "Our strategy remains clear and consistent: we will continue to judiciously invest in the growth of Private Banking globally and our Swiss businesses, reduce volatility and risk, and increase our focus on client and flow trading businesses in Investment Banking. The strategic steps we are outlining today will further reinforce the strong position of Credit Suisse from a risk, cost, capital and earnings perspective. These actions will better position us to weather the continuing challenging market conditions, capture opportunities that arise amid the continuing disruption, and prosper when markets improve. Our approach is firmly rooted in the integrated model, which we believe is the most effective means of delivering best-in-class service to our clients, while realizing enhanced operating efficiencies."

Key measures to be accelerated Credit Suisse will continue to judiciously invest in the growth of its Private Banking business globally and its Swiss businesses. In Private Banking, Credit Suisse has made good progress with its international growth strategy and has strengthened its team of professionals this year by hiring 370 relationship managers in Wealth Management, net, as of the end-November 2008, thereby exceeding its target of 330 for 2008. The measures announced today are also designed to further improve the efficiency of the Private Banking business and to position it for further growth in 2009.

In Investment Banking, Credit Suisse is accelerating the implementation of its strategy to reposition the business in light of the changed competitive and market environment. The strategic measures reflect, among other factors, the impact of weaker macroeconomic conditions, continued market volatility and fundamental shifts in client demand away from more complex products towards the greater use of exchange-based and flow trading. This shift towards more liquid products will build upon the momentum that Credit Suisse has already achieved in areas such as algorithmic trading, cash equities, prime services, rates, foreign exchange, high grade credit and strategic advisory businesses. The Investment Banking division will also continue to reduce its origination capacity in complex credit and structured product businesses and cut risk capital usage, including exiting certain proprietary and principal trading operations. The new operating model will reduce earnings volatility, improve capital efficiency and better leverage the strengths of the integrated bank. Risk-weighted assets, measured on a consistent methodology basis, declined from USD 236 billion as of end-2007 to USD 193 billion as of the third quarter of 2008, and are expected to decline to USD 170 billion by end-2008 and to USD 135 billion by end-2009, a 43% reduction since end-2007. Furthermore, as announced in October, Credit Suisse has already reduced its trading risk positions substantially and underlying one-day VaR as of end-November 2008 declined 34% from the third quarter of 2008 and 60% from the fourth quarter of 2007.

The cost efficiency initiatives will be implemented across all divisions throughout the bank and will result in a headcount reduction of 5,300, an 11% reduction of the bank's workforce. These reductions, the vast majority of which will have taken place by the end of the first half of 2009, will be primarily in Investment Banking and in related support areas. Together with additional reductions in compensation and non-compensation costs, these measures will reduce costs by CHF 2 billion, representing 9% of the bank's reported nine-month annualized 2008 cost base. Costs associated with the strategic measures will amount to approximately CHF 900 million and the majority will be taken in the fourth quarter. These costs are not reflected in the estimated quarter-to-date result as of end-November.

Update on Credit Suisse's fourth-quarter 2008 performance Based on preliminary information on its operating performance, Credit Suisse estimates that it had a net loss of approximately CHF 3 billion in the fourth quarter as of end- November. Investment Banking had a significant pre-tax loss, reflecting the challenging conditions in the financial markets in the quarter and costs associated with risk reduction. Credit Suisse had a modest net profit in November. The Private Banking division continues to perform well and attracted solid asset inflows in the fourth quarter as of end-November. Credit Suisse has maintained its strong capital base and expects to have a tier 1 ratio of around 13% at year-end. The bank's deposit base and funding remain very solid.

These results are preliminary and are subject to a number of adjustments, contingencies and review processes.