2005 Annual Report / Crédit Agricole (Suisse) SA

26 – 2005 Annual Report / Crédit Agricole (Suisse) SANotes to the Consolidated Financial Statements1. Comments on the Group’soperations and workforceCrédit Agricole (Suisse) SA (hereinafter “the Group”) isactive in Private Banking, Commercial Banking andTransactional Commodity Finance, as well as spot andforward trading in money-market instruments, currenciesand precious metals, both as an intermediary and on aproprietary basis.In 2005, the Group increased its shareholders’ equity byCHF 461,883,000, including CHF 225,458,000 of sharecapital, following the merger by absorption of the CréditLyonnais (Suisse) SA Group. This operation was completedon 19 March, with retroactive effect from 1 January 2005.On this same date, Crédit Agricole Indosuez (Suisse) SAwas renamed Crédit Agricole (Suisse) SA.Through the acquisition of Crédit Lyonnais (Suisse) SA,the Group strengthened its international presence,notably with a branch in Singapore and a subsidiary inthe Bahamas. Its position in Switzerland was also reinforcedby a branch in Basel.The Group has three business lines, which give riseprimarily to counterparty risk, market risk, operationalrisk, legal risk and reputation risk.Counterparty riskCounterparty risk, or credit risk, represents the loss borneby the Group in the event of default by a counterparty.Loans are granted according to a system of authoritydelegation and are subject to a rating system.A credit committee examines loan applications, grantingauthorisations on the basis of the aforementioned delegationsand policy. This policy encompasses the commitmentsof the Group’s customers and correspondents that resultfrom lending activities, issuance of guarantees, and tradingin currencies, derivatives and securities. Risks areregularly monitored by the Credit and Risk divisionaccording to stringent procedures. Management and theBoard of Directors are kept informed on a regular basis.At 31 December 2005, the Group had a workforce of1 119 (on a full-time equivalent basis), compared with732 at 31 December 2004.Risk managementGeneral risk policyThe Board of Directors establishes the risk policy on thebasis of statutory requirements and head-office directives.Responsibility for implementing the policy lies withManagement.