Second quarter 2012 results, progress on cost savings and capital measures

Urs Rohner, Chairman of the Board of Directors, commented: “Unquestioned capital strength is of paramount importance to the Group. Given the current environment, we decided to accelerate the implementation of our capital plans in a manner which eliminates any doubts raised by the 2012 SNB Financial Stability Report. With a business that has strong returns on an industry leading capital base, we are confident that Credit Suisse will further enhance its ability to best serve our clients and provide best in class returns to our shareholders.”

Commenting on the results, Brady W. Dougan, Chief Executive Officer, said: “Our second quarter results underscore the strength of our business model and the positive impacts of the changes we have made to adapt it to the new environment. The first quarter showed that we can produce high returns in moderate markets, and the second quarter shows that the business model is resilient under more challenging conditions. We are convinced that our business model will generate returns on equity of above 15% over the cycle.”

He added: “Expense reductions and capital discipline help ensure the effectiveness of the model going forward. In the first half of the year, we achieved our CHF 2.0 billion cost reduction target 18 months early, and we have further increased the end 2013 target to CHF 3.0 billion. This gives us considerable operating flexibility. The progress we have made towards a Basel III compliant business model including the reduction of CHF 65 billion in risk weighted assets from the third quarter 2011 positions us favorably in the industry’s inevitable transition to the new environment. This allows us to serve our clients consistently and helps us generate more stable returns.”

Commenting on the capital measures, he continued: “The capital measures that we announced today take any question of the strength of our capitalization off the table. A look through Swiss Core Capital Ratio of 9.4% by the end of this year along with our leading total capital and funding structure and our high quality balance sheet confirms our place among the strongest global banks. Using a methodology broadly comparable to the 2012 SNB Financial Stability Report we expect that our look through total capital ratio will move to 10.8% by year end, almost double the 5.9% per 1Q12 as stated in the SNB report. This is a robust and balanced set of capital initiatives, close to 80% of which are non dilutive. Over the past five years and prior to these measures, we have maintained one of the strongest capital levels in the industry with minimal dilution to our shareholders.“

2Q12 results summary
Credit Suisse Group reported 2Q12 pre-tax income of CHF 1.1 billion, net income attributable to shareholders of CHF 0.8 billion, return on equity of 9% and net new assets of CHF 4.4 billion.

Private Banking
with 2Q12 net revenues of CHF 2,704 million and pre-tax income of CHF 775 million

- Revenues slightly higher compared to 1Q12 driven by both higher interest income and recurring revenues - Modest reduction in compensation and benefits, including PAF2 impact in 1Q12, main benefits from efficiency measures expected to come through in the second half of the year - Pre tax income margin improved to 29% - Private Banking with net new assets of CHF 3.4 billion - Wealth Management with net asset inflows of CHF 8.9 billion, before the impact of CHF 3.4 billion of outflows related to Clariden Leu - Corporate & Institutional Clients with outflows of CHF 2.1 billion - Clariden Leu integration now substantially complete with pre tax income benefit to the Group of CHF 125 million to be realized in 2013

Investment Banking
with 2Q12 net revenues of CHF 2,909 million and pre tax income of CHF 383 million

- Significant progress in executing strategy resulting in more consistent performance and continued market share momentum - More balanced business model with repositioned Fixed Income franchise; continued discipline regarding risk and inventory levels - Equity sales & trading revenues reflect lower client activity; maintained market leading positions - Underwriting & advisory result reflects lower industry wide transaction volumes, #2 ranking in global completed M&A - Improved operating and capital efficiency with annualized expense run rate reduced by CHF 1.6 billion from 6M11 and 38% reduction in Basel III RWA since end 2Q11 - 6M12 return on Basel III allocated capital of 12%, up from 8% in 6M11

Asset Management
with 2Q12 net revenues CHF 550 million and pre-tax income of CHF 133 million

- Gain of CHF 66 million on partial sale of a stake in Aberdeen and higher performance fees offset by lower contribution from investment related gains, reflecting the challenging market conditions - Net new assets of CHF 0.4 billion driven by alternative investments in emerging markets partially offset by outflows in traditional investments - On July 2, 2012, Credit Suisse Group completed the sale of its residual stake in Aberdeen Asset Management for a gain of approximately CHF 140 million which will be recognized in 3Q12

Cost saving measures
After successfully delivering CHF 2.0 billion of annualized cost reductions in 6M12 versus 6M11, Credit Suisse increases its end-2013 cost savings target to CHF 3.0 billion.

In 2011 Credit Suisse began implementing a number of cost efficiency initiatives with the goal to achieve CHF 2.0 billion in total cost savings by the end of 2013. We have accelerated the implementation of these measures and achieved the annualized CHF 2.0 billion target already in 6M12. In 2Q12, we recognized related realignment costs of CHF 183 million in the Corporate Center.

Credit Suisse is increasing its end-2013 cost savings target to a total of CHF 3.0 billion. The additional cost savings of CHF 1.0 billion include overall shared services savings of CHF 0.5 billion. Savings of CHF 0.45 billion are targeted in Private Banking and CHF 0.55 billion are targeted in Investment Banking. Remaining realignment costs are expected to be approximately CHF 525 million, of which CHF 225 million are expected to be incurred in the second half of 2012.

Capital measures and liquidity summary
Credit Suisse today announced a number of measures to accelerate the strengthening of its capital position in light of the current regulatory and market environment. An immediate set of actions will be implemented to increase the capital by CHF 8.7 billion. Additional capital actions and earnings related impacts are to increase the capital by a further CHF 6.6 billion by year-end 2012.

The measures will result in an expected end-2012 look-through Swiss Core Capital Ratio of 9.4%, compared to the 2018 requirement of 10%. Look-through Swiss Core Capital includes look-through Basel III Common Equity Tier 1 (CET1) and existing participation securities (“Claudius notes”) that qualify as part of the Swiss equity requirement in excess of the 8.5% Basel III G-SIB Common Equity Tier 1 (CET1) ratio.

The measures will result in an expected look-through Swiss Total Capital Ratio of 10.8% at end 2012. This broadly compares to the figure of 5.9% calculated by the Swiss National Bank (SNB) at the end of 1Q12 and published in its 2012 Financial Stability Report. Look- through Swiss Total Capital includes look-through Basel III CET1 and the participation securities (“Claudius notes”). Additionally it includes the Group’s Buffer Capital Notes (“CoCos with high trigger”).

The definitions for regulatory capital and respective ratios used in this press release refer to the regulations under the Swiss too big to fail regime as determined by Finma. Ratio calculations based on these capital definitions use projected Basel III year end 2012 RWA. The expected end-2012 ratios are based on a pro-forma calculation assuming successful completion of the announced capital actions, and using Bloomberg consensus earnings estimates and Credit Suisse Basel III risk-weighted assets estimates. As Basel III will not be implemented before January 1, 2013, our Basel III risk weighted assets were calculated for purposes of this release in accordance with the currently proposed requirements and our current interpretation of such requirements, including relevant assumptions. Changes in the requirements upon implementation of Basel III would result in different numbers from those used in the release.

The capital measures include mandatory and contingent convertible securities of CHF 3.8 billion issued at a fixed conversion price of CHF 16.29 per share. Investors in the mandatory and contingent convertible securities (“MACCS”) include existing investors, such as the Qatar Holding LLC, The Olayan Group and the Norges Bank Investment Management, as well as new investors such as the Singapore-based investment company Temasek.

Credit Suisse continues to conservatively manage its liquidity. We estimate our Net Stable Funding Ratio (NSFR) to be over 100% at the end of 2Q12.

Media Contact:
Credit Suisse Group Paradeplatz 8 P.O. Box 1 8070 Zürich ZH Tel: 044 212 16 16 Fax: 044 333 25 87

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