Second Quarter 2014 Results Presentation to Investors July 22, 2014
Introduction Brady W. Dougan, Chief Executive Officer
Key messages from Credit Suisse 2Q14 results In addition to resolving legacy litigation matter, 2Q14 results demonstrate resilience of business model, with continued strong client momentum and significant progress in winding down…
Key messages from Credit Suisse results Non-Strategic & litigation Comprehensive resolution of the most significant outstanding litigation matters, including the U.S. cross-border settlement in May following the FHFA settlement in…
Financial results David Mathers, Chief Financial Officer
Results Overview in CHF mn 2Q14 1Q14 2Q13 6M14 6M13 Net revenues 6,324 6,553 6,795 12,877 13,813 Pre-tax income 1,767 1,940 2,087 3,707 4,294 Strategic Cost / income ratio 72% 70% 69% 71% 69% Return on equity1 13% 14% 15% 13%…
Results against Key Performance Indicators Key Performance Indicators (KPIs)1 Total, excl. Strategic FVoD and settlement2 2Q14 6M14 2Q14 6M14 Return on equity 13% 13% 8% 8% 15% Group Cost/income ratio 72% 71% 81% 79% < 70%…
Private Banking & Wealth Management with lower revenues in subdued trading environment, offsetting strong efficiency gains in CHF mn 2Q14 1Q14 2Q13 6M14 6M13 Strategic results vs. 2Q13 and 6M13 Net revenues 2,932 3,031 3,232 5,963…
Strong inflows in Wealth Management Clients from emerging markets; continued solid inflows in Asset Management Private Banking & Wealth Management Strategic net new assets in 2Q14 in CHF bn Corporate & Wealth Management Asset…
Wealth Management Clients with strong net new assets and reduced expenses, offsetting lower revenues Compared to 2Q13 Pre-tax income of CHF 569 mn, down 8% from a strong 2Q13 in CHF mn 2Q14 1Q14 2Q13 6M14 6M13 Net interest income 688…
Wealth Management Clients with net margin of 28bps Net margin on AuM in basis points 31 29 28 27 28 Net margin of 28 bps for both 2Q14 and 6M14, reflecting higher productivity and lower expense base Net revenues in CHF mn Gross…
Continued improvement in net margin growth in asset base, client mix and lower interest income drove gross margin compression Wealth Management Clients Gross margin on AuM in basis points Net margin on AuM in basis points 110 (3) 101…
Wealth Management Clients business with strong inflows in Asia Pacific and Switzerland Net new assets in 2Q14 in CHF bn Inflows1 of CHF 10.3 bn (annualized 5% growth) Annualized net new and net new assets of CHF 7.4 bn (annualized 4%…
Successful lending growth in UHNWI client segment, especially in emerging markets Net new lending to ultra-high-net-worth individual (UHNWI) segment in Wealth Management Clients in CHF bn Successful growth in UHNWI lending 1.1 2Q14…
Corporate & Institutional Clients with solid performance Compared to 2Q13 in CHF mn 2Q14 1Q14 2Q13 6M14 6M13 Solid performance in 2Q14 with stable recurring Net interest income 266 257 276 523 549 fees Recurring commissions & fees…
Asset Management profit lower on reduced performance- based revenues; net new assets of CHF 4.1 bn in the quarter Compared to 2Q13 Lower performance-based revenues on reduced carried interest (down CHF 28 mn) and the absence in CHF mn…
Progress in unwinding PB&WMs Non-Strategic portfolio Basel 3 RWA in CHF bn Leverage Exposure in CHF bn 8 (33%) 7 19 (77%) 17 (1) 5 (2) 4 1Q14 Business 2Q14 Year-end 2015 1Q14 Business 2Q14 Year-end 2015 reductions target…
Solid 6M14 Investment Banking returns reflect stability of diversified Strategic franchise and accelerated wind-down of Non-Strategic unit in CHF mn 2Q14 1Q14 2Q13 6M14 6M13 Compared to 2Q13 and 6M13 Net revenues 3,395 3,563 3,604…
Solid Fixed Income results driven by strong performance in market-leading yield franchises Fixed Income sales & trading and underwriting Strategic Revenues in CHF mn Compared to 2Q13 Debt underwriting Solid fixed income revenues…
Diversified yield franchise well-positioned to deliver consistent performance across market cycles Strategy: Continuing to diversify yield franchises across regions, products and trading/financing to create a more balanced and…
Strategy Update: Significant progress in transforming Macro franchise to new operating and regulatory environment Macro business impacted by adverse market conditions, Improved Operating Efficiency exacerbated by changes in structural…
Lower Equities results as strong origination activity and Prime Services revenues were offset by subdued trading volumes Equity sales & trading and underwriting Strategic Revenues in CHF mn Compared to 2Q13 Equity underwriting Total…
Solid Underwriting & Advisory results driven by robust origination activity Underwriting & Advisory Strategic Revenues in CHF mn Compared to 2Q13 Advisory Continued franchise momentum with higher revenues, up Equity underwriting 1,743…
Continued shift in capital to high market share and high return Strategic businesses Strategic businesses (market share position vs. return on capital) High % of 2Q14 Optimize risk and capital IB capital base utilization across the…
Accelerated wind-down of Non-Strategic RWA and Leverage Exposure Basel 3 RWA in USD bn Leverage Exposure3 in USD bn 20 19 83 75 72 (66%) 13 (57%) (3) (6) 6 24 4Q13 1Q14 Business impact 2Q14 Year-end 4Q13 1Q14 Business impact…
Solid return on capital from Strategic businesses Investment Banking after-tax return on capital (USD-denominated) Compared to 6M13 Strong Strategic after-tax return on capital Strategic of 20% for 6M14 driven by continued momentum…
Non-Strategic units Progress with planned wind down
Non-Strategic run-off profile expected to significantly reduce pre-tax income drag over time Illustrative reduction of Non-Strategic pre-tax income drag CHF mn 2Q14 Movements in credit Realignment costs & Litigation settlement…
Continued progress on costs and capital
On track to achieve CHF 4.5 bn expense savings by end 2015 Group expense reductions target in CHF bn Direct cost savings by division Fully loaded cost savings by division Infrastructure Corporate Center Private Banking & Private Banking…
On track to meet long-term risk-weighted assets goal of CHF 250 bn + 1.1 (0.8) + 0.9 Group Basel 3 look-through risk-weighted assets CHF bn 280 279 of which: PB&WM + 2.8 PB&WM2: +1.9 (4.5) IB IB: (0.8) 370 (25%) 1Q14…
Long term look through BIS CET1 ratio target of 11%; capital measures aimed at restoring 10% ratio by end 2014 Look-through Basel 3 capital ratios 17.66% 16.66%7 Low-trigger 15.3%2 capital 14.4%2 instruments 14.0%6 12.3%3 13.0%…
By end 2014: announced capital and RWA measures expected to increase look-through CET1 ratio to above 10% Look-through risk-weighted assets in CHF bn 279 Expected Increase 265 RWA Reductions measures Measures expected to offset…
On track to achieve long-term leverage exposure target Leverage exposure end of period in CHF bn 1,405 (18%) Leverage exposure reduction of CHF 249 bn, or 18%, since 3Q12 to CHF 1,156 bn at end 2Q14 Exposure add-ons1 382 1,131…
Leverage ratios within reach of 2019 requirement Leverage calculation Look-through Including settlement2 Look-through BIS Leverage ratio and 4Q13 1Q14 1Q14 2Q14 2Q14 Swiss Total Capital Leverage ratio in CHF bn Lev. ratio 1 leverage…
Summary Brady W. Dougan, Chief Executive Officer
Supplemental slides Slide Group and divisional capital and return profile 40 Financial summary Non-Strategic results 41 Total Investment Banking results in USD 42 Strategic Investment Banking results in USD 43 Investment Banking:…
Accelerated move to more balanced business mix and further operating efficiency to drive returns improvement Leverage exposure Private Banking & Wealth Management Group Basel 3 RWA Capital in CHF bn Return on Capital1 Capital in CHF…
2Q14 Financial summary Non-Strategic results Balance sheet CHF bn Reported Financials CHF mn Leverage Balance Basel 3 Net Total Pre-tax Exposure Sheet Assets RWA Revenues Expenses2 Income Investment Banking Non-Strategic unit Fixed…
Total Investment Banking results in USD 2Q14 2Q14 6M14 vs. vs. vs. in USD mn 2Q14 1Q14 2Q13 1Q14 2Q13 6M14 6M13 6M13 Net revenues 3,766 3,834 3,591 (2%) 5% 7,600 7,842 (3%) Debt underwriting 544 525 565 4% (4%) 1,070 1,059 1%…
Strategic Investment Banking results in USD 2Q14 2Q14 6M14 vs. vs. vs. in USD mn 2Q14 1Q14 2Q13 1Q14 2Q13 6M14 6M13 6M13 Net revenues 3,827 3,999 3,807 (4%) 1% 7,826 8,136 (4%) Debt underwriting 544 525 565 4% (4%) 1,070 1,059 1%…
Investment Banking Strategic Basel 3 RWA movement Basel 3 risk-weighted assets in USD bn Fixed Income Equities Corporate Bank QoQ QoQ QoQ 2Q14 Change 1Q14 2Q13 2Q14 Change 1Q14 2Q13 2Q14 Change 1Q14 2Q13 Macro Corporate 22 - 22 21…
Achieved CHF 3.4 bn annualized expense savings through 6M14 since expense measures announced in mid-2011 Group expense reduction achieved in CHF bn Savings of Savings of 23.7 CHF 2.6 bn CHF 3.4 bn 20.5 17.9 17.1 (5.8)…
Collaboration revenues Collaboration revenues Core results in CHF bn / as % of net revenues 20% Collaboration revenues target range 19% of 18% to 20% of net revenues 17% Contribution to overall net revenues down 16% 15% 2ppts…
Shareholders equity and look-through CET1 capital breakdown Reconciliation of shareholders equity to look- 2Q14 Shareholders equity breakdown in CHF bn through CET1 capital in CHF mn 2Q14 Shareholders equity 40,944 40.9 40.9…
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