UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
UNDER THE SECURITIES EXCHANGE ACT OF 1934
July 31, 2018
Commission File Number 001-15244
CREDIT SUISSE GROUP AG
(Translation of registrant’s name into English)
Paradeplatz 8, CH 8001 Zurich, Switzerland
(Address of principal executive office)
(Address of principal executive office)
Commission File Number 001-33434
CREDIT SUISSE AG
(Translation of registrant’s name into English)
Paradeplatz 8, CH 8001 Zurich, Switzerland
(Address of principal executive office)
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or
Form 40-F.
Form 40-F.
Form 20-F 
Form 40-F 
Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
This report includes the media release and the slides for the presentation to investors in connection with the 2Q18 results.
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CREDIT SUISSE GROUP AG
Paradeplatz 8
P.O. Box
CH-8070 Zurich
Switzerland
Telephone +41 844 33 88 44
Fax +41 44 333 88 77
media.relations@credit-suisse.com
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2Q18 and 1H18 financial results
2Q18 adjusted* PTI +88% YoY to CHF 1.3 billion
Highest adjusted* PTI in 12 quarters
Continued client-led growth in Wealth Management: NNA of CHF 23.5 billion for 1H18
Seven successive quarters of positive operating leverage, with Group 2Q18 net revenues up 7% and adjusted* total operating expenses down 5% year on year
SRU already below end-2018 RWA1 and leverage exposure target levels
Group adjusted* pre-tax income of CHF 2.5 billion in 1H18, up 58% year on year; Group reported pre-tax income of CHF 2.1 billion, up 68% year on year
Wealth Management 1H18 NNA of CHF 23.5 billion; annualized NNA growth rate of 6%; record AuM of CHF 784 billion at higher profit margin
Global advisory and underwriting 2Q18 net revenues of USD 1.2 billion, up 14% year on year; IBCM net revenues up 23% in USD year on year
Global Markets 2Q18 continued discipline on capital and costs, and adjusted* total operating expenses down 2% in USD year on year. GM net revenues of USD 1.4 billion, down 8% year on year; ITS revenues show particular strength, up 25% year on year
Maintained strong capital ratios with look-through CET1 ratio of 12.8% and look-through Tier 1 leverage ratio of 5.2% at end-2Q18
Net income attributable to shareholders of CHF 647 million for 2Q18, up 114% year on year, and of CHF 1.3 billion for 1H18, up 49%
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Tidjane Thiam, Chief Executive Officer of Credit Suisse, said: “2Q18 was a period of continued strong performance as we achieved our highest adjusted* pre-tax income in the last 12 quarters and our seventh consecutive quarter of year-on-year profit growth.
The Group’s 2Q18 adjusted* profit increased 88% year on year, driven by strong revenue growth of 7%, and continued positive operating leverage supported by strict cost discipline. The compounding effect of these two factors quarter after quarter – growing revenues and reducing costs – has allowed us to significantly increase our profits cumulatively by CHF 4.4 billion since 4Q162.
Across Wealth Management, profit momentum increased significantly in 1H18. NNA flows remained strong at CHF 23.5 billion, driven mainly by UHNW clients. Annualised NNA growth rate was 6% on a record asset base at a higher profit margin – a clear indication of the power of our client franchises and our diversified business model across income streams and geographies.
We have continued to increase the collaboration between our Global Markets and Wealth Management divisions, while maintaining our strict capital, cost and risk discipline. We delivered a resilient revenue performance with continued strong momentum in International Trading Solutions (ITS) – our strategic initiative between GM and our wealth management focused divisions of SUB and IWM – as we continue to deliver institutional-quality solutions for our wealth management clients.
2Q18 global advisory and underwriting revenues benefited from the completion of several marquee M&A transactions, and we outperformed the Street across all key products in IBCM, led by advisory.
In the SRU, we have already achieved our end-2018 targets for both RWA1 and leverage exposure, marking a significant milestone in our efforts to deal effectively with legacy issues at the bank.
For the remainder of 2018, we will continue to focus on growing our wealth management franchise and completing the last two quarters of our restructuring successfully.
Looking to 2019 and beyond, we will continue to deliver improved profitability, higher returns and growing shareholder value.”
Outlook
The outlook for global economic growth in 2H18 remains positive. However, geopolitical developments and growing tensions surrounding global trade, as well as the impact of monetary policy changes by central banks, are likely to trigger periods of heightened uncertainty through the remainder of 2018. That uncertainty has, over time, the potential to negatively affect confidence, which in turn could impact a wide range of asset classes and activities, relevant for our more market-dependent activities.
Looking at the rest of the year, we believe that the growth potential of our Wealth Management-related businesses of Switzerland, Asia Pacific and International Wealth Management remains intact and we expect them to continue to benefit from broad-based, client-led growth in 2H18 as we support our clients and allocate capital to our highest returning business opportunities.
The progress we have made – 10 quarters into the implementation of our restructuring – combined with a number of decisions and actions that are under our control, leave us on track to achieve our 10-11% Group RoTE 2019 target.
2
Group highlights
• 1H18 Group reported net revenues of CHF 11.2 billion, up 5% year on year (2Q18: CHF 5.6 billion, up 7% year on year)
• 1H18 Group adjusted* net revenues of CHF 11.2 billion, up 4% year on year (2Q18: CHF 5.6 billion, up 7% year on year)
• 1H18 Group reported total operating expenses of CHF 9 billion, down 4% year on year (2Q18: CHF 4.5 billion, down 2% year on year)
• 1H18 adjusted* total operating expenses of CHF 8.5 billion, down 5% year on year (2Q18: CHF 4.2 billion, down 5% year on year)
• 1H18 Group reported pre-tax income of CHF 2.1 billion, up 68% year on year (2Q18: CHF 1.1 billion, up 81% year on year)
• 1H18 Group adjusted* pre-tax income of CHF 2.5 billion, up 58% year on year (2Q18: CHF 1.3 billion, up 88% year on year)
Divisional summaries
All comparisons are provided on a year-on-year basis unless specified otherwise.
In 2Q18, Swiss Universal Bank (SUB) delivered its 10th consecutive quarter of year-on-year adjusted* profit growth and its highest quarterly adjusted* profit since 2013. Adjusted* pre-tax income reached CHF 580 million, reflecting continued positive operating leverage on the back of solid revenue performance and rigorous cost discipline across both businesses. Adjusted* return on regulatory capital was 19%, up 3 percentage points. In 1H18, adjusted* pre-tax income for the division rose 15% to CHF 1.1 billion, reflecting further profit acceleration compared to the prior-year period.
We were recognized as the ‘Best Bank in Switzerland’ and ‘Best Investment Bank in Switzerland’ for 2018 by Euromoney3.
In Private Clients, we saw continued good momentum in 2Q18 with our UHNW, HNW and Entrepreneur clients businesses, which drove a 28% increase in adjusted* pre-tax income. 1H18 adjusted* pre-tax income rose 29%. NNA totaled CHF 0.5 billion for 2Q18, and CHF 3.2 billion for 1H18, representing an annualized NNA growth rate of 3% for 1H18.
Corporate & Institutional Clients continued to generate solid results in both 2Q18 and 1H18, with adjusted* pre-tax income up 5% and 4%, respectively.
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In 2Q18, International Wealth Management (IWM) delivered another excellent performance, reflecting continued positive operating leverage from revenue growth and stable adjusted* costs across both businesses. Adjusted* pre-tax income was CHF 461 million and adjusted* return on regulatory capital was 34%. NNA totaled CHF 13.2 billion. In 1H18, adjusted* pre-tax income rose 33% to CHF 935 million. NNA totaled CHF 27.7 billion.
Euromoney3 named Credit Suisse ‘Best Bank for Wealth Management 2018’ in every region served by IWM – Western Europe, Central and Eastern Europe, the Middle East and Latin America.
Private Banking adjusted* pre-tax income rose 21% in 2Q18 on the back of increases across all major revenue categories. 1H18 adjusted* pre-tax income increased 33% to CHF 754 million. Mandate penetration grew to 33%, with net mandate sales rising to over CHF 10 billion as we continued to successfully implement our House View. 1H18 NNA totaled CHF 10.7 billion, corresponding to annualized growth of 6%, with Europe and emerging markets achieving equally strong growth rates.
In Asset Management, we benefited from higher recurring revenues with a 10% increase in management fees in 2Q18 and 1H18, both at stable recurring margins of 32 basis points. Adjusted* pre-tax income grew 25% in 2Q18 and 33% in 1H18. 1H18 NNA totaled CHF 17 billion, driven by broad-based inflows across a number of flagship strategies and by successful product launches across traditional and alternative investments.
In 2Q18, Asia Pacific (APAC) delivered solid results with adjusted* pre-tax income up 34% to CHF 266 million, despite challenging conditions – particularly in China, which saw lower equity markets and selective deleveraging by clients. 1H18 adjusted* pre-tax income rose 52%, with strong profitable growth in our Wealth Management & Connected (WM&C) business and significantly improved performance in our Markets business. This resulted in a 6 percentage point increase in adjusted* return on regulatory capital to 20% for the division.
We were named ‘Best Private Bank’ in APAC by Asian Investor4 and, for the first time, ‘Asia’s Best Investment Bank’ by Euromoney3.
APAC WM&C adjusted* pre-tax income was CHF 208 million in 2Q18 and adjusted* return on regulatory capital was 27%. NNA totaled CHF 3.4 billion. 1H18 adjusted* pre-tax income was CHF 464 million and adjusted* return on regulatory capital was 31%. Recurring commissions and fees rose to record levels and drove 6% growth in Private Banking net revenues. 1H18 NNA totaled CHF 9.6 billion on record AuM of CHF 206 billion, passing the CHF 200 billion mark for the first time. We continued to benefit from our integrated client offering, bringing together wealth management and investment banking activities with a focus on our target Entrepreneur clients, with M&A and equity underwriting revenues rising 84% in 1H18. APAC advisory and underwriting maintained its top 2 ranking in terms of share of wallet5.
Our APAC Markets business significantly improved its profitability, delivering adjusted* pre-tax income of USD 60 million in 2Q18 and USD 94 million in 1H18, compared to adjusted* pre-tax income of USD 1 million in 2Q17 and an adjusted* pre-tax loss of USD 38 million in 1H17.
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In 2Q18, Global Markets (GM) maintained its strict capital, cost and risk discipline. GM reduced its leverage exposure – its main capital constraint – by 7% year on year. In that context, revenues were resilient in a challenging quarter and adjusted* total operating expenses were 2% lower in USD. We continued to invest in Equities6 and in strengthening our ITS capabilities to more effectively deliver our full suite of capabilities to our wealth management clients. Adjusted* pre-tax income was USD 206 million. In 1H18, adjusted* pre-tax income was USD 563 million and we generated an adjusted* return on regulatory capital of 8%. Growth in Equities6 revenues was driven primarily by equity derivatives as we benefited from investments in the business, a rebound in volatility and increased collaboration in ITS. Fixed Income6 revenues were lower due to a decrease in securitized products revenues compared to a particularly strong prior-year period as well as lower debt underwriting issuance activity, partially offset by higher trading revenues. We maintained our leading market share7 in our asset finance and leveraged finance underwriting franchises despite the industry-wide decline in underwriting volumes8.
In 2Q18, Investment Banking & Capital Markets (IBCM) delivered a 53% increase in adjusted* pre-tax income to USD 141 million and revenue growth of 23%. In addition to our strength in the Americas, we maintained our momentum in EMEA, where we gained market share in 2Q18. We ranked in the top 58 in both global ECM and Leveraged Finance. Adjusted* return on regulatory capital was 18% in 2Q18 and 15% in 1H18.
1H18 net revenues in global advisory and underwriting rose 5% to USD 2.3 billion, significantly outperforming the Street8.
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For further information
Adam Gishen, Investor Relations, Credit Suisse
Tel: +41 44 333 71 49
e-mail: investor.relations@credit-suisse.com
Tel: +41 44 333 71 49
e-mail: investor.relations@credit-suisse.com
Amy Rajendran, Media Relations, Credit Suisse
Tel: +41 844 33 88 44
e-mail: media.relations@credit-suisse.com
Tel: +41 844 33 88 44
e-mail: media.relations@credit-suisse.com
The complete 2Q18 Financial Report and Results Presentation Slides are available for download from 07:00 CEST today at: https://www.credit-suisse.com/results.
Presentation of 2Q18 results – Tuesday, 31 July 2018
| Event | Analyst Call | Media Conference Call | |||
| Time |
08:15 Zurich 07:15 London 02:15 New York |
10:15 Zurich 09:15 London 04:15 New York |
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| Speakers |
Tidjane Thiam, Chief Executive Officer David Mathers, Chief Financial Officer |
Tidjane Thiam, Chief Executive Officer David Mathers, Chief Financial Officer |
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| Language |
The presentation will be held in English. |
The presentation will be held in English. Simultaneous interpreting in German will be available. |
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Access via Telephone |
+41 44 580 40 01 (Switzerland) +44 1452 565 510 (Europe) +1 866 389 9771 (US) Reference: Credit Suisse Analysts and Investors call or meeting ID: 1597206 Please dial in 15 minutes before the start of the presentation. |
+41 44 580 40 01 (Switzerland) +44 1452 565 510 (Europe) +1 866 389 9771 (US) Reference: Credit Suisse Group quarterly results Please dial in 10 minutes before the start of the presentation. |
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| Q&A Session |
Opportunity to ask questions via the telephone conference. |
Following the presentation, you will have the opportunity to ask the speakers questions. |
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| Playback |
Replay available approximately one hour after the event: +41 44 580 40 26 (Switzerland) +44 3333 00 97 85 (Europe) +1 917 677 75 32 (US) Conference ID: 1597206# |
Replay available approximately one hour after the event: +41 44 580 40 26 (Switzerland) +44 3333 00 97 85 (Europe) +1 917 677 75 32 (US) Conference ID English: 8497606# Conference ID German: 1248555# |
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The results of Credit Suisse Group comprise the results of our six reporting segments, including the Strategic Resolution Unit, and the Corporate Center. Core results exclude revenues and expenses from our Strategic Resolution Unit.
As we move ahead with the implementation of our strategy, it is important to measure the progress achieved by our underlying business performance in a consistent manner. To achieve this, we will focus our analyses on adjusted results.
Adjusted results referred to in this Media Release are non-GAAP financial measures that exclude goodwill impairment and certain other revenues and expenses included in our reported results. Management believes that adjusted results provide a useful presentation of our operating results for the purposes of assessing our Group and divisional performance consistently over time, on a basis that excludes items that management does not consider representative of our underlying performance. We will report quarterly on the same adjusted* basis for the Group, Core and divisional results until end-2018 to allow investors to monitor our progress in implementing our strategy, given the material restructuring charges we are likely to incur and other items which are not reflective of our underlying performance but are to be borne in the interim period. Tables in the Appendix of this Media Release provide the detailed reconciliation between reported and adjusted results for the Group, Core businesses and the individual divisions.
Footnotes
* Refers to adjusted results. Adjusted results are non-GAAP financial measures. For a reconciliation of the adjusted results to the most directly comparable US GAAP measures, see the Appendix of this Media Release.
1 Excluding operational risk of CHF 19 billion in 1H15 and CHF 11 billion in 1H18.
2 Refers to the cumulative total of year over year increases for quarterly adjusted* pre-tax income.
3 Source: Euromoney as of July 11, 2018.
4 Source: Asian Investor as of April 10, 2018.
5 Source: Dealogic as of June 30, 2018, for Asia Pacific ex-Japan and ex-China onshore.
6 Includes sales and trading and underwriting.
7 Source: Thomson Reuters / IFRS as per June 30, 2018.
8 Source: Dealogic as per June 30, 2018.
Abbreviations
APAC – Asia Pacific; AuM – assets under management; CHF – Swiss francs; CET1 – common equity tier 1; ECM – equity capital markets; EMEA – Europe, Middle East and Africa; FINMA – Swiss Financial Market Supervisory Authority; FX – foreign exchange; GM – Global Markets; HNW – high-net-worth; IBCM – Investment Banking & Capital Markets; ITS – International Trading Solutions; IWM – International Wealth Management; M&A – mergers and acquisitions; NNA – net new assets; PB – Private Banking; PC – Private Clients; PTI – pre-tax income; RoTE – return on tangible equity; RWA – risk-weighted assets; SEC – Securities and Exchange Commission; SRU – Strategic Resolution Unit; SUB – Swiss Universal Bank; UHNW – ultra-high-net-worth; USD – US dollars; US GAAP – US generally accepted accounting principles; WM&C – Wealth Management & Connected
Important information
This Media Release contains select information from the full 2Q18 Financial Report and 2Q18 Results Presentation Slides that Credit Suisse believes is of particular interest to media professionals. The complete 2Q18 Financial Report and 2Q18 Results Presentation Slides, which have been distributed simultaneously, contain more comprehensive information about our results and operations for the reporting quarter, as well as important information about our reporting methodology and some of the terms used in these documents. The complete 2Q18 Financial Report and 2Q18 Results Presentation Slides are not incorporated by reference into this Media Release.
Information referenced in this Media Release, whether via website links or otherwise, is not incorporated into this Media Release.
Our cost savings program is measured using adjusted operating cost base at constant FX rates. “Adjusted operating cost base at constant FX rates” includes adjustments as made in all our disclosures for restructuring expenses, major litigation expenses and a goodwill impairment taken in 4Q15 as well as adjustments for debit valuation adjustments (DVA) related volatility, FX and for certain accounting changes (which had not been in place at the launch of the cost savings program). Adjustments for certain accounting changes have been restated to reflect grossed up expenses in the Corporate Center and, starting in 1Q18, also include adjustments for changes from ASU 2014-09 “Revenue from Contracts with Customers”, which is described further in our 1Q18 and 2Q18 Financial Reports. Adjustments for FX apply unweighted currency exchange rates, i.e., a straight line average of monthly rates, consistently for the periods under review.
Regulatory capital is calculated as the worst of 10% of RWA and 3.5% of leverage exposure. Return on regulatory capital is calculated using (adjusted) income/(loss) after tax and assumes a tax rate of 30% and capital allocated based on the worst of 10% of average RWA and 3.5% of average leverage exposure. For the Markets business within the APAC division and for the Global Markets and Investment Banking & Capital Markets divisions, return on regulatory capital is based on US dollar denominated numbers. Adjusted return on regulatory capital is calculated using adjusted results, applying the same methodology to calculate return on regulatory capital.
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Return on tangible equity attributable to shareholders, a non-GAAP financial measure, is based on tangible equity attributable to shareholders, which is calculated by deducting goodwill and other intangible assets from total equity attributable to shareholders as presented in our balance sheet. Management believes that the return on tangible equity attributable to shareholders is meaningful as it allows consistent measurement of the performance of businesses without regard to whether the businesses were acquired. For end-2Q18, 1Q18, 2Q17 and 2Q16, tangible equity excluded goodwill of CHF 4,797 million, CHF 4,667 million, CHF 4,673 million and CHF 4,745 million, respectively, and other intangible assets of CHF 212 million, CHF 212 million, CHF 195 million and CHF 191 million, respectively from total equity attributable to shareholders of CHF 43,470 million, CHF 42,540 million, CHF 43,493 million and CHF 44,962 million, respectively, as presented in our balance sheet.
We may not achieve all of the expected benefits of our strategic initiatives. Factors beyond our control, including but not limited to the market and economic conditions, changes in laws, rules or regulations and other challenges discussed in our public filings, could limit our ability to achieve some or all of the expected benefits of these initiatives.
In particular, the terms “Estimate”, “Illustrative”, “Ambition”, “Objective”, “Outlook” and “Goal” are not intended to be viewed as targets or projections, nor are they considered to be Key Performance Indicators. All such estimates, illustrations, ambitions, objectives, outlooks and goals are subject to a large number of inherent risks, assumptions and uncertainties, many of which are completely outside of our control. These risks, assumptions and uncertainties include, but are not limited to, general market conditions, market volatility, interest rate volatility and levels, global and regional economic conditions, political uncertainty, changes in tax policies, regulatory changes, changes in levels of client activity as a result of any of the foregoing and other factors. Accordingly, this information should not be relied on for any purpose. We do not intend to update these estimates, illustrations, ambitions, objectives, outlooks or goals.
In preparing this media release, management has made estimates and assumptions that affect the numbers presented. Actual results may differ. Annualized numbers do not take into account variations in operating results, seasonality and other factors and may not be indicative of actual, full-year results. Figures throughout this media release may also be subject to rounding adjustments. All opinions and views constitute judgments as of the date of writing without regard to the date on which the reader may receive or access the information. This information is subject to change at any time without notice and we do not intend to update this information.
As of January 1, 2013, Basel III was implemented in Switzerland along with the Swiss “Too Big to Fail” legislation and regulations thereunder (in each case, subject to certain phase-in periods). As of January 1, 2015, the Bank for International Settlements (BIS) leverage ratio framework, as issued by the Basel Committee on Banking Supervision (BCBS), was implemented in Switzerland by FINMA. Our related disclosures are in accordance with our interpretation of such requirements, including relevant assumptions. Changes in the interpretation of these requirements in Switzerland or in any of our assumptions or estimates could result in different numbers from those shown in this media release.
Unless otherwise noted, leverage exposure is based on the BIS leverage ratio framework and consists of period-end balance sheet assets and prescribed regulatory adjustments. The look-through tier 1 leverage ratio and CET1 leverage ratio are calculated as look-through BIS tier 1 capital and CET1 capital, respectively, divided by period end leverage exposure. Swiss leverage ratios are measured on the same period-end basis as the leverage exposure for the BIS leverage ratio.
Margin calculations for APAC are aligned with the performance metrics of the Private Banking business and its related assets under management within the WM&C business in APAC. Assets under management and net new assets for APAC relate to the Private Banking business within the Wealth Management & Connected business.
Gross margin is calculated by dividing net revenues by average assets under management. Net margin is calculated by dividing income before taxes by average assets under management. Adjusted margins are calculated using adjusted results, applying the same methodology to calculate gross and net margin.
Mandate penetration reflects advisory and discretionary mandates volumes as a percentage of assets under management, excluding those from the external asset manager business.
References to Wealth Management mean SUB PC, IWM PB and APAC PB within WM&C or their combined results. References to Wealth Management-related mean SUB, IWM and APAC WM&C or their combined results. References to global advisory and underwriting include global revenues from advisory, debt and equity underwriting generated across all divisions before cross-divisional revenue sharing agreements.
Generic references to profit and costs in this media release refer to pre-tax income and operating expenses, respectively.
Investors and others should note that we announce material information (including quarterly earnings releases and financial reports) to the investing public using press releases, SEC and Swiss ad hoc filings, our website and public conference calls and webcasts. We intend to also use our Twitter account @creditsuisse (https://twitter.com/creditsuisse) to excerpt key messages from our public disclosures, including earnings releases. We may retweet such messages through certain of our regional Twitter accounts, including @csschweiz (https://twitter.com/csschweiz) and @csapac (https://twitter.com/csapac). Investors and others should take care to consider such abbreviated messages in the context of the disclosures from which they are excerpted. The information we post on these Twitter accounts is not a part of this Media Release.
In various tables, use of “–” indicates not meaningful or not applicable.
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Appendix
| Key metrics | |||||||||||||||||
| in / end of | % change | in / end of | % change | ||||||||||||||
| 2Q18 | 1Q18 | 2Q17 | QoQ | YoY | 6M18 | 6M17 | YoY | ||||||||||
| Credit Suisse Group results (CHF million) | |||||||||||||||||
| Net revenues | 5,595 | 5,636 | 5,205 | (1) | 7 | 11,231 | 10,739 | 5 | |||||||||
| Provision for credit losses | 73 | 48 | 82 | 52 | (11) | 121 | 135 | (10) | |||||||||
| Total operating expenses | 4,470 | 4,534 | 4,541 | (1) | (2) | 9,004 | 9,352 | (4) | |||||||||
| Income before taxes | 1,052 | 1,054 | 582 | 0 | 81 | 2,106 | 1,252 | 68 | |||||||||
| Net income attributable to shareholders | 647 | 694 | 303 | (7) | 114 | 1,341 | 899 | 49 | |||||||||
| Assets under management and net new assets (CHF million) | |||||||||||||||||
| Assets under management | 1,398.4 | 1,379.6 | 1,307.3 | 1.4 | 7.0 | 1,398.4 | 1,307.3 | 7.0 | |||||||||
| Net new assets | 15.4 | 25.1 | 12.1 | (38.6) | 27.3 | 40.5 | 36.5 | 11.0 | |||||||||
| Basel III regulatory capital and leverage statistics | |||||||||||||||||
| CET1 ratio (%) | 12.8 | 12.9 | 14.2 | – | – | 12.8 | 14.2 | – | |||||||||
| Look-through CET1 ratio (%) | 12.8 | 12.9 | 13.3 | – | – | 12.8 | 13.3 | – | |||||||||
| Look-through CET1 leverage ratio (%) | 3.9 | 3.8 | 3.8 | – | – | 3.9 | 3.8 | – | |||||||||
| Look-through tier 1 leverage ratio (%) | 5.2 | 5.1 | 5.2 | – | – | 5.2 | 5.2 | – | |||||||||
A-1
| Credit Suisse and Core Results | |||||||||||||||||||
| Core Results | Strategic Resolution Unit | Credit Suisse | |||||||||||||||||
| in / end of | 2Q18 | 1Q18 | 2Q17 | 2Q18 | 1Q18 | 2Q17 | 2Q18 | 1Q18 | 2Q17 | ||||||||||
| Statements of operations (CHF million) | |||||||||||||||||||
| Net revenues | 5,771 | 5,839 | 5,479 | (176) | (203) | (274) | 5,595 | 5,636 | 5,205 | ||||||||||
| Provision for credit losses | 74 | 48 | 69 | (1) | 0 | 13 | 73 | 48 | 82 | ||||||||||
| Compensation and benefits | 2,476 | 2,473 | 2,501 | 71 | 65 | 94 | 2,547 | 2,538 | 2,595 | ||||||||||
| General and administrative expenses | 1,313 | 1,382 | 1,363 | 107 | 126 | 164 | 1,420 | 1,508 | 1,527 | ||||||||||
| Commission expenses | 326 | 340 | 343 | 2 | 4 | 7 | 328 | 344 | 350 | ||||||||||
| Restructuring expenses | 162 | 133 | 58 | 13 | 11 | 11 | 175 | 144 | 69 | ||||||||||
| Total other operating expenses | 1,801 | 1,855 | 1,764 | 122 | 141 | 182 | 1,923 | 1,996 | 1,946 | ||||||||||
| Total operating expenses | 4,277 | 4,328 | 4,265 | 193 | 206 | 276 | 4,470 | 4,534 | 4,541 | ||||||||||
| Income/(loss) before taxes | 1,420 | 1,463 | 1,145 | (368) | (409) | (563) | 1,052 | 1,054 | 582 | ||||||||||
| Statement of operations metrics (%) | |||||||||||||||||||
| Return on regulatory capital | 12.8 | 13.4 | 10.9 | – | – | – | 9.1 | 9.1 | 5.1 | ||||||||||
| Balance sheet statistics (CHF million) | |||||||||||||||||||
| Total assets | 770,719 | 778,889 | 728,984 | 27,439 | 30,163 | 54,427 | 798,158 | 809,052 | 783,411 | ||||||||||
| Risk-weighted assets 1 | 256,677 | 248,776 | 221,236 | 20,448 | 22,239 | 38,101 | 277,125 | 271,015 | 259,337 | ||||||||||
| Leverage exposure 1 | 881,310 | 888,903 | 834,583 | 38,692 | 43,168 | 71,611 | 920,002 | 932,071 | 906,194 | ||||||||||
| Credit Suisse and Core Results | |||||||||||||
| Core Results | Strategic Resolution Unit | Credit Suisse | |||||||||||
| in / end of | 6M18 | 6M17 | 6M18 | 6M17 | 6M18 | 6M17 | |||||||
| Statements of operations (CHF million) | |||||||||||||
| Net revenues | 11,610 | 11,219 | (379) | (480) | 11,231 | 10,739 | |||||||
| Provision for credit losses | 122 | 98 | (1) | 37 | 121 | 135 | |||||||
| Compensation and benefits | 4,949 | 5,118 | 136 | 182 | 5,085 | 5,300 | |||||||
| General and administrative expenses | 2,695 | 2,757 | 233 | 371 | 2,928 | 3,128 | |||||||
| Commission expenses | 666 | 704 | 6 | 14 | 672 | 718 | |||||||
| Restructuring expenses | 295 | 188 | 24 | 18 | 319 | 206 | |||||||
| Total other operating expenses | 3,656 | 3,649 | 263 | 403 | 3,919 | 4,052 | |||||||
| Total operating expenses | 8,605 | 8,767 | 399 | 585 | 9,004 | 9,352 | |||||||
| Income/(loss) before taxes | 2,883 | 2,354 | (777) | (1,102) | 2,106 | 1,252 | |||||||
| Statement of operations metrics (%) | |||||||||||||
| Return on regulatory capital | 13.2 | 11.1 | – | – | 9.1 | 5.4 | |||||||
|
1
Disclosed on a look-through basis.
|
|||||||||||||
A-2
Adjusted results referred to in this media release are non-GAAP financial measures that exclude goodwill impairment and certain other revenues and expenses included in our reported results. Management believes that adjusted results provide a useful presentation of our operating results for purposes of assessing our Group and divisional performance over time, on a basis that excludes items that management does not consider representative of our underlying performance. Provided below is a reconciliation of our adjusted results to the most directly comparable US GAAP measures.
| Reconciliation of adjusted results | |||||||||||||||||||
| Core Results | Strategic Resolution Unit | Credit Suisse | |||||||||||||||||
| in | 2Q18 | 1Q18 | 2Q17 | 2Q18 | 1Q18 | 2Q17 | 2Q18 | 1Q18 | 2Q17 | ||||||||||
| Reconciliation of adjusted results (CHF million, except where indicated) | |||||||||||||||||||
| Net revenues | 5,771 | 5,839 | 5,479 | (176) | (203) | (274) | 5,595 | 5,636 | 5,205 | ||||||||||
| Real estate gains | 0 | 0 | 0 | 0 | (1) | 0 | 0 | (1) | 0 | ||||||||||
| (Gains)/losses on business sales | 0 | (73) | 0 | 0 | 0 | 0 | 0 | (73) | 0 | ||||||||||
| Adjusted net revenues | 5,771 | 5,766 | 5,479 | (176) | (204) | (274) | 5,595 | 5,562 | 5,205 | ||||||||||
| Provision for credit losses | 74 | 48 | 69 | (1) | 0 | 13 | 73 | 48 | 82 | ||||||||||
| Total operating expenses | 4,277 | 4,328 | 4,265 | 193 | 206 | 276 | 4,470 | 4,534 | 4,541 | ||||||||||
| Restructuring expenses | (162) | (133) | (58) | (13) | (11) | (11) | (175) | (144) | (69) | ||||||||||
| Major litigation provisions | (29) | (48) | (12) | (26) | (37) | (21) | (55) | (85) | (33) | ||||||||||
| Expenses related to business sales | 0 | 0 | 0 | (1) | 0 | 0 | (1) | 0 | 0 | ||||||||||
| Adjusted total operating expenses | 4,086 | 4,147 | 4,195 | 153 | 158 | 244 | 4,239 | 4,305 | 4,439 | ||||||||||
| Income/(loss) before taxes | 1,420 | 1,463 | 1,145 | (368) | (409) | (563) | 1,052 | 1,054 | 582 | ||||||||||
| Total adjustments | 191 | 108 | 70 | 40 | 47 | 32 | 231 | 155 | 102 | ||||||||||
| Adjusted income/(loss) before taxes | 1,611 | 1,571 | 1,215 | (328) | (362) | (531) | 1,283 | 1,209 | 684 | ||||||||||
| Adjusted return on regulatory capital (%) | 14.6 | 14.4 | 11.5 | – | – | – | 11.1 | 10.5 | 5.9 | ||||||||||
| Core Results | Strategic Resolution Unit | Credit Suisse | |||||||||||
| in | 6M18 | 6M17 | 6M18 | 6M17 | 6M18 | 6M17 | |||||||
| Reconciliation of adjusted results (CHF million, except where indicated) | |||||||||||||
| Net revenues | 11,610 | 11,219 | (379) | (480) | 11,231 | 10,739 | |||||||
| Real estate gains | 0 | 0 | (1) | 0 | (1) | 0 | |||||||
| (Gains)/losses on business sales | (73) | 23 | 0 | (38) | (73) | (15) | |||||||
| Adjusted net revenues | 11,537 | 11,242 | (380) | (518) | 11,157 | 10,724 | |||||||
| Provision for credit losses | 122 | 98 | (1) | 37 | 121 | 135 | |||||||
| Total operating expenses | 8,605 | 8,767 | 399 | 585 | 9,004 | 9,352 | |||||||
| Restructuring expenses | (295) | (188) | (24) | (18) | (319) | (206) | |||||||
| Major litigation provisions | (77) | (39) | (63) | (91) | (140) | (130) | |||||||
| Expenses related to business sales | 0 | 0 | (1) | 0 | (1) | 0 | |||||||
| Adjusted total operating expenses | 8,233 | 8,540 | 311 | 476 | 8,544 | 9,016 | |||||||
| Income/(loss) before taxes | 2,883 | 2,354 | (777) | (1,102) | 2,106 | 1,252 | |||||||
| Total adjustments | 299 | 250 | 87 | 71 | 386 | 321 | |||||||
| Adjusted income/(loss) before taxes | 3,182 | 2,604 | (690) | (1,031) | 2,492 | 1,573 | |||||||
| Adjusted return on regulatory capital (%) | 14.5 | 12.3 | – | – | 10.8 | 6.7 | |||||||
|
Adjusted return on regulatory capital is calculated using adjusted results, applying the same methodology used to calculate return on regulatory capital.
|
|||||||||||||
A-3
| Reconciliation of adjusted results | |||||||||||||||||||
| Credit Suisse | |||||||||||||||||||
| in | 4Q17 | 3Q17 | 2Q17 | 1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | 4Q15 | ||||||||||
| Reconciliation of adjusted results (CHF million, except where indicated) | |||||||||||||||||||
| Net revenues | 5,189 | 4,972 | 5,205 | 5,534 | 5,181 | 5,396 | 5,108 | 4,638 | 4,210 | ||||||||||
| Fair value on own debt | – | – | – | – | – | – | – | – | 697 | ||||||||||
| Real estate gains | 0 | 0 | 0 | 0 | (78) | (346) | 0 | 0 | (72) | ||||||||||
| (Gains)/losses on business sales | 28 | 0 | 0 | (15) | 2 | 0 | 0 | 56 | (34) | ||||||||||
| Adjusted net revenues | 5,217 | 4,972 | 5,205 | 5,519 | 5,105 | 5,050 | 5,108 | 4,694 | 4,801 | ||||||||||
| Provision for credit losses | 43 | 32 | 82 | 53 | 75 | 55 | (28) | 150 | 133 | ||||||||||
| Total operating expenses | 5,005 | 4,540 | 4,541 | 4,811 | 7,309 | 5,119 | 4,937 | 4,972 | 10,518 | ||||||||||
| Goodwill impairment | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (3,797) | ||||||||||
| Restructuring expenses | (137) | (112) | (69) | (137) | (49) | (145) | (91) | (255) | (355) | ||||||||||
| Major litigation provisions | (255) | (108) | (33) | (97) | (2,401) | (306) | 0 | 0 | (564) | ||||||||||
| Expenses related to business sales | (8) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||
| Adjusted total operating expenses | 4,605 | 4,320 | 4,439 | 4,577 | 4,859 | 4,668 | 4,846 | 4,717 | 5,802 | ||||||||||
| Income/(loss) before taxe | 141 | 400 | 582 | 670 | (2,203) | 222 | 199 | (484) | (6,441) | ||||||||||
| Total adjustments | 428 | 220 | 102 | 219 | 2,374 | 105 | 91 | 311 | 5,307 | ||||||||||
| Adjusted income/(loss) before taxes | 569 | 620 | 684 | 889 | 171 | 327 | 290 | (173) | (1,134) | ||||||||||
| Reconciliation of adjusted results | |||||||||
| SUB, IWM, and APAC WM&C | |||||||||
| in | 6M18 | 6M17 | 6M16 | 6M15 | 1 | ||||
| Adjusted results (CHF million) | |||||||||
| Net revenues | 6,824 | 6,392 | 5,874 | 5,789 | |||||
| Real estate gains | 0 | 0 | 0 | (23) | |||||
| (Gains)/losses on business sales | (73) | 0 | 0 | 0 | |||||
| Adjusted net revenues | 6,751 | 6,392 | 5,874 | 5,766 | |||||
| Provision for credit losses | 88 | 59 | 13 | 65 | |||||
| Total operating expenses | 4,330 | 4,374 | 4,199 | 4,083 | |||||
| Restructuring expenses | (123) | (97) | (69) | – | |||||
| Major litigation provisions | (77) | (39) | 0 | 10 | |||||
| Adjusted total operating expenses | 4,130 | 4,238 | 4,130 | 4,093 | |||||
| Income before taxes | 2,406 | 1,959 | 1,662 | 1,641 | |||||
| Total adjustments | 127 | 136 | 69 | (33) | |||||
| Adjusted income before taxes | 2,533 | 2,095 | 1,731 | 1,608 | |||||
|
1
Excludes net revenues and total operating expenses for Swisscard of CHF 148 million and CHF 123 million, respectively.
|
|||||||||
A-4
| Swiss Universal Bank | |||||||||||||||||
| in / end of | % change | in / end of % change | |||||||||||||||
| 2Q18 | 1Q18 | 2Q17 | QoQ | YoY | 6M18 | 6M17 | YoY | ||||||||||
| Results (CHF million) | |||||||||||||||||
| Net revenues | 1,419 | 1,431 | 1,405 | (1) | 1 | 2,850 | 2,759 | 3 | |||||||||
| of which Private Clients | 757 | 762 | 733 | (1) | 3 | 1,519 | 1,444 | 5 | |||||||||
| of which Corporate & Institutional Clients | 662 | 669 | 672 | (1) | (1) | 1,331 | 1,315 | 1 | |||||||||
| Provision for credit losses | 35 | 34 | 36 | 3 | (3) | 69 | 46 | 50 | |||||||||
| Total operating expenses | 831 | 834 | 867 | 0 | (4) | 1,665 | 1,807 | (8) | |||||||||
| Income before taxes | 553 | 563 | 502 | (2) | 10 | 1,116 | 906 | 23 | |||||||||
| of which Private Clients | 268 | 265 | 222 | 1 | 21 | 533 | 383 | 39 | |||||||||
| of which Corporate & Institutional Clients | 285 | 298 | 280 | (4) | 2 | 583 | 523 | 11 | |||||||||
| Metrics (%) | |||||||||||||||||
| Return on regulatory capital | 17.7 | 17.9 | 15.5 | – | – | 17.7 | 14.1 | – | |||||||||
| Cost/income ratio | 58.6 | 58.3 | 61.7 | – | – | 58.4 | 65.5 | – | |||||||||
| Private Clients | |||||||||||||||||
| Assets under management (CHF billion) | 207.9 | 206.7 | 201.5 | 0.6 | 3.2 | 207.9 | 201.5 | 3.2 | |||||||||
| Net new assets (CHF billion) | 0.5 | 2.7 | 1.7 | – | – | 3.2 | 3.7 | – | |||||||||
| Gross margin (annualized) (bp) | 145 | 147 | 146 | – | – | 146 | 146 | – | |||||||||
| Net margin (annualized) (bp) | 51 | 51 | 44 | – | – | 51 | 39 | – | |||||||||
| Corporate & Institutional Clients | |||||||||||||||||
| Assets under management (CHF billion) | 355.8 | 352.0 | 352.5 | 1.1 | 0.9 | 355.8 | 352.5 | 0.9 | |||||||||
| Net new assets (CHF billion) | 0.9 | 3.8 | 0.0 | – | – | 4.7 | 0.0 | – | |||||||||
A-5
| Reconciliation of adjusted results | |||||||||||||||||||
| Private Clients | Corporate & Institutional Clients | Swiss Universal Bank | |||||||||||||||||
| in | 2Q18 | 1Q18 | 2Q17 | 2Q18 | 1Q18 | 2Q17 | 2Q18 | 1Q18 | 2Q17 | ||||||||||
| Adjusted results (CHF million, except where indicated) | |||||||||||||||||||
| Net revenues | 757 | 762 | 733 | 662 | 669 | 672 | 1,419 | 1,431 | 1,405 | ||||||||||
| Gains on business sales | 0 | (19) | 0 | 0 | (18) | 0 | 0 | (37) | 0 | ||||||||||
| Adjusted net revenues | 757 | 743 | 733 | 662 | 651 | 672 | 1,419 | 1,394 | 1,405 | ||||||||||
| Provision for credit losses | 11 | 10 | 11 | 24 | 24 | 25 | 35 | 34 | 36 | ||||||||||
| Total operating expenses | 478 | 487 | 500 | 353 | 347 | 367 | 831 | 834 | 867 | ||||||||||
| Restructuring expenses | (17) | (22) | 2 | (10) | (6) | 2 | (27) | (28) | 4 | ||||||||||
| Major litigation provisions | 0 | 0 | (2) | 0 | 0 | (4) | 0 | 0 | (6) | ||||||||||
| Adjusted total operating expenses | 461 | 465 | 500 | 343 | 341 | 365 | 804 | 806 | 865 | ||||||||||
| Income before taxes | 268 | 265 | 222 | 285 | 298 | 280 | 553 | 563 | 502 | ||||||||||
| Total adjustments | 17 | 3 | 0 | 10 | (12) | 2 | 27 | (9) | 2 | ||||||||||
| Adjusted income before taxes | 285 | 268 | 222 | 295 | 286 | 282 | 580 | 554 | 504 | ||||||||||
| Adjusted return on regulatory capital (%) | – | – | – | – | – | – | 18.6 | 17.6 | 15.6 | ||||||||||
|
Private Clients |
Corporate & Institutional Clients |
Swiss Universal Bank |
|||||||||||
| in | 6M18 | 6M17 | 6M18 | 6M17 | 6M18 | 6M17 | |||||||
| Adjusted results (CHF million, except where indicated) | |||||||||||||
| Net revenues | 1,519 | 1,444 | 1,331 | 1,315 | 2,850 | 2,759 | |||||||
| Gains on business sales | (19) | 0 | (18) | 0 | (37) | 0 | |||||||
| Adjusted net revenues | 1,500 | 1,444 | 1,313 | 1,315 | 2,813 | 2,759 | |||||||
| Provision for credit losses | 21 | 23 | 48 | 23 | 69 | 46 | |||||||
| Total operating expenses | 965 | 1,038 | 700 | 769 | 1,665 | 1,807 | |||||||
| Restructuring expenses | (39) | (45) | (16) | (3) | (55) | (48) | |||||||
| Major litigation provisions | 0 | (2) | 0 | (31) | 0 | (33) | |||||||
| Adjusted total operating expenses | 926 | 991 | 684 | 735 | 1,610 | 1,726 | |||||||
| Income before taxes | 533 | 383 | 583 | 523 | 1,116 | 906 | |||||||
| Total adjustments | 20 | 47 | (2) | 34 | 18 | 81 | |||||||
| Adjusted income before taxes | 553 | 430 | 581 | 557 | 1,134 | 987 | |||||||
| Adjusted return on regulatory capital (%) | – | – | – | – | 18.0 | 15.4 | |||||||
A-6
| International Wealth Management | |||||||||||||||||
| in / end of | % change | in / end of | % change | ||||||||||||||
| 2Q18 | 1Q18 | 2Q17 | QoQ | YoY | 6M18 | 6M17 | YoY | ||||||||||
| Results (CHF million) | |||||||||||||||||
| Net revenues | 1,344 | 1,403 | 1,264 | (4) | 6 | 2,747 | 2,485 | 11 | |||||||||
| of which Private Banking | 992 | 1,043 | 927 | (5) | 7 | 2,035 | 1,810 | 12 | |||||||||
| of which Asset Management | 352 | 360 | 337 | (2) | 4 | 712 | 675 | 5 | |||||||||
| Provision for credit losses | 5 | (1) | 8 | – | (38) | 4 | 10 | (60) | |||||||||
| Total operating expenses | 906 | 920 | 891 | (2) | 2 | 1,826 | 1,819 | 0 | |||||||||
| Income before taxes | 433 | 484 | 365 | (11) | 19 | 917 | 656 | 40 | |||||||||
| of which Private Banking | 347 | 401 | 297 | (13) | 17 | 748 | 536 | 40 | |||||||||
| of which Asset Management | 86 | 83 | 68 | 4 | 26 | 169 | 120 | 41 | |||||||||
| Metrics (%) | |||||||||||||||||
| Return on regulatory capital | 31.8 | 35.7 | 28.3 | – | – | 33.6 | 25.6 | – | |||||||||
| Cost/income ratio | 67.4 | 65.6 | 70.5 | – | – | 66.5 | 73.2 | – | |||||||||
| Private Banking | |||||||||||||||||
| Assets under management (CHF billion) | 370.7 | 369.7 | 336.4 | 0.3 | 10.2 | 370.7 | 336.4 | 10.2 | |||||||||
| Net new assets (CHF billion) | 5.2 | 5.5 | 4.6 | – | – | 10.7 | 9.3 | – | |||||||||
| Gross margin (annualized) (bp) | 107 | 114 | 110 | – | – | 110 | 109 | – | |||||||||
| Net margin (annualized) (bp) | 37 | 44 | 35 | – | – | 41 | 32 | – | |||||||||
| Asset Management | |||||||||||||||||
| Assets under management (CHF billion) | 401.4 | 391.2 | 366.0 | 2.6 | 9.7 | 401.4 | 366.0 | 9.7 | |||||||||
| Net new assets (CHF billion) | 8.0 | 9.0 | 2.8 | – | – | 17.0 | 17.8 | – | |||||||||
A-7
| Reconciliation of adjusted results | |||||||||||||||||||
| Private Banking | Asset Management | International Wealth Management | |||||||||||||||||
| in | 2Q18 | 1Q18 | 2Q17 | 2Q18 | 1Q18 | 2Q17 | 2Q18 | 1Q18 | 2Q17 | ||||||||||
| Adjusted results (CHF million, except where indicated) | |||||||||||||||||||
| Net revenues | 992 | 1,043 | 927 | 352 | 360 | 337 | 1,344 | 1,403 | 1,264 | ||||||||||
| (Gains)/losses on business sales | 0 | (37) | 0 | 0 | 1 | 0 | 0 | (36) | 0 | ||||||||||
| Adjusted net revenues | 992 | 1,006 | 927 | 352 | 361 | 337 | 1,344 | 1,367 | 1,264 | ||||||||||
| Provision for credit losses | 5 | (1) | 8 | 0 | 0 | 0 | 5 | (1) | 8 | ||||||||||
| Total operating expenses | 640 | 643 | 622 | 266 | 277 | 269 | 906 | 920 | 891 | ||||||||||
| Restructuring expenses | (25) | (18) | (4) | (3) | (8) | (3) | (28) | (26) | (7) | ||||||||||
| Major litigation provisions | 0 | 0 | (6) | 0 | 0 | 0 | 0 | 0 | (6) | ||||||||||
| Adjusted total operating expenses | 615 | 625 | 612 | 263 | 269 | 266 | 878 | 894 | 878 | ||||||||||
| Income before taxes | 347 | 401 | 297 | 86 | 83 | 68 | 433 | 484 | 365 | ||||||||||
| Total adjustments | 25 | (19) | 10 | 3 | 9 | 3 | 28 | (10) | 13 | ||||||||||
| Adjusted income before taxes | 372 | 382 | 307 | 89 | 92 | 71 | 461 | 474 | 378 | ||||||||||
| Adjusted return on regulatory capital (%) | – | – | – | – | – | – | 33.9 | 34.9 | 29.3 | ||||||||||
|
Private Banking |
Asset Management |
International Wealth Management |
|||||||||||
| in | 6M18 | 6M17 | 6M18 | 6M17 | 6M18 | 6M17 | |||||||
| Adjusted results (CHF million, except where indicated) | |||||||||||||
| Net revenues | 2,035 | 1,810 | 712 | 675 | 2,747 | 2,485 | |||||||
| (Gains)/losses on business sales | (37) | 0 | 1 | 0 | (36) | 0 | |||||||
| Adjusted net revenues | 1,998 | 1,810 | 713 | 675 | 2,711 | 2,485 | |||||||
| Provision for credit losses | 4 | 10 | 0 | 0 | 4 | 10 | |||||||
| Total operating expenses | 1,283 | 1,264 | 543 | 555 | 1,826 | 1,819 | |||||||
| Restructuring expenses | (43) | (27) | (11) | (16) | (54) | (43) | |||||||
| Major litigation provisions | 0 | (6) | 0 | 0 | 0 | (6) | |||||||
| Adjusted total operating expenses | 1,240 | 1,231 | 532 | 539 | 1,772 | 1,770 | |||||||
| Income before taxes | 748 | 536 | 169 | 120 | 917 | 656 | |||||||
| Total adjustments | 6 | 33 | 12 | 16 | 18 | 49 | |||||||
| Adjusted income before taxes | 754 | 569 | 181 | 136 | 935 | 705 | |||||||
| Adjusted return on regulatory capital (%) | – | – | – | – | 34.3 | 27.5 | |||||||
A-8
| Asia Pacific | |||||||||||||||||
| in / end of | % change | in / end of | % change | ||||||||||||||
| 2Q18 | 1Q18 | 2Q17 | QoQ | YoY | 6M18 | 6M17 | YoY | ||||||||||
| Results (CHF million) | |||||||||||||||||
| Net revenues | 914 | 991 | 848 | (8) | 8 | 1,905 | 1,729 | 10 | |||||||||
| of which Wealth Management & Connected | 564 | 663 | 559 | (15) | 1 | 1,227 | 1,148 | 7 | |||||||||
| of which Markets | 350 | 328 | 289 | 7 | 21 | 678 | 581 | 17 | |||||||||
| Provision for credit losses | 7 | 10 | (1) | (30) | – | 17 | 3 | 467 | |||||||||
| Total operating expenses | 690 | 747 | 661 | (8) | 4 | 1,437 | 1,391 | 3 | |||||||||
| Income before taxes | 217 | 234 | 188 | (7) | 15 | 451 | 335 | 35 | |||||||||
| of which Wealth Management & Connected | 168 | 205 | 196 | (18) | (14) | 373 | 397 | (6) | |||||||||
| of which Markets | 49 | 29 | (8) | 69 | – | 78 | (62) | – | |||||||||
| Metrics (%) | |||||||||||||||||
| Return on regulatory capital | 14.8 | 16.9 | 14.4 | – | – | 15.9 | 12.7 | – | |||||||||
| Cost/income ratio | 75.5 | 75.4 | 77.9 | – | – | 75.4 | 80.5 | – | |||||||||
| Wealth Management & Connected – Private Banking | |||||||||||||||||
| Assets under management (CHF billion) | 205.6 | 199.1 | 177.8 | 3.3 | 15.6 | 205.6 | 177.8 | 15.6 | |||||||||
| Net new assets (CHF billion) | 3.4 | 6.2 | 4.5 | – | – | 9.6 | 9.8 | – | |||||||||
| Gross margin (annualized) (bp) | 80 | 92 | 91 | – | – | 86 | 94 | – | |||||||||
| Net margin (annualized) (bp) | 29 | 34 | 33 | – | – | 32 | 33 | – | |||||||||
A-9
| Reconciliation of adjusted results | |||||||||||||||||||
| Wealth Management & Connected | Markets | Asia Pacific | |||||||||||||||||
| in | 2Q18 | 1Q18 | 2Q17 | 2Q18 | 1Q18 | 2Q17 | 2Q18 | 1Q18 | 2Q17 | ||||||||||
| Adjusted results (CHF million, except where indicated) | |||||||||||||||||||
| Net revenues | 564 | 663 | 559 | 350 | 328 | 289 | 914 | 991 | 848 | ||||||||||
| Provision for credit losses | 6 | 9 | (1) | 1 | 1 | 0 | 7 | 10 | (1) | ||||||||||
| Total operating expenses | 390 | 449 | 364 | 300 | 298 | 297 | 690 | 747 | 661 | ||||||||||
| Restructuring expenses | (11) | (3) | (2) | (9) | (3) | (9) | (20) | (6) | (11) | ||||||||||
| Major litigation provisions | (29) | (48) | 0 | 0 | 0 | 0 | (29) | (48) | 0 | ||||||||||
| Adjusted total operating expenses | 350 | 398 | 362 | 291 | 295 | 288 | 641 | 693 | 650 | ||||||||||
| Income/(loss) before taxes | 168 | 205 | 196 | 49 | 29 | (8) | 217 | 234 | 188 | ||||||||||
| Total adjustments | 40 | 51 | 2 | 9 | 3 | 9 | 49 | 54 | 11 | ||||||||||
| Adjusted income before taxes | 208 | 256 | 198 | 58 | 32 | 1 | 266 | 288 | 199 | ||||||||||
| Adjusted return on regulatory capital (%) | – | – | – | – | – | – | 18.3 | 20.8 | 15.3 | ||||||||||
|
Wealth Management & Connected |
Markets |
Asia Pacific |
|||||||||||
| in | 6M18 | 6M17 | 6M18 | 6M17 | 6M18 | 6M17 | |||||||
| Adjusted results (CHF million, except where indicated) | |||||||||||||
| Net revenues | 1,227 | 1,148 | 678 | 581 | 1,905 | 1,729 | |||||||
| Provision for credit losses | 15 | 3 | 2 | 0 | 17 | 3 | |||||||
| Total operating expenses | 839 | 748 | 598 | 643 | 1,437 | 1,391 | |||||||
| Restructuring expenses | (14) | (6) | (12) | (24) | (26) | (30) | |||||||
| Major litigation provisions | (77) | 0 | 0 | 0 | (77) | 0 | |||||||
| Adjusted total operating expenses | 748 | 742 | 586 | 619 | 1,334 | 1,361 | |||||||
| Income/(loss) before taxes | 373 | 397 | 78 | (62) | 451 | 335 | |||||||
| Total adjustments | 91 | 6 | 12 | 24 | 103 | 30 | |||||||
| Adjusted income/(loss) before taxes | 464 | 403 | 90 | (38) | 554 | 365 | |||||||
| Adjusted return on regulatory capital (%) | – | – | – | – | 19.6 | 13.8 | |||||||
| APAC Markets | ||||||||||||||
| in | 2Q18 | 2Q17 | 6M18 | 6M17 | ||||||||||
| Adjusted results (USD million) | ||||||||||||||
| Net revenues | 354 | 298 | 702 | 591 | ||||||||||
| Total operating expenses | 304 | 305 | 619 | 652 | ||||||||||
| Restructuring expenses | (10) | (8) | (13) | (23) | ||||||||||
| Adjusted total operating expenses | 294 | 297 | 606 | 629 | ||||||||||
| Income before taxes | 50 | (7) | 81 | (61) | ||||||||||
| Total adjustments | 10 | 8 | 13 | 23 | ||||||||||
| Adjusted income before taxes | 60 | 1 | 94 | (38) | ||||||||||
A-10
| Global Markets | |||||||||||||||||
| in / end of | % change | in / end of | % change | ||||||||||||||
| 2Q18 | 1Q18 | 2Q17 | QoQ | YoY | 6M18 | 6M17 | YoY | ||||||||||
| Results (CHF million) | |||||||||||||||||
| Net revenues | 1,426 | 1,546 | 1,517 | (8) | (6) | 2,972 | 3,126 | (5) | |||||||||
| Provision for credit losses | 12 | 4 | 12 | 200 | 0 | 16 | 17 | (6) | |||||||||
| Total operating expenses | 1,266 | 1,247 | 1,248 | 2 | 1 | 2,513 | 2,535 | (1) | |||||||||
| Income before taxes | 148 | 295 | 257 | (50) | (42) | 443 | 574 | (23) | |||||||||
| Metrics (%) | |||||||||||||||||
| Return on regulatory capital | 4.2 | 8.5 | 7.4 | – | – | 6.5 | 8.2 | – | |||||||||
| Cost/income ratio | 88.8 | 80.7 | 82.3 | – | – | 84.6 | 81.1 | – | |||||||||
| Reconciliation of adjusted results | |||||||||||
| Global Markets | |||||||||||
| in | 2Q18 | 1Q18 | 2Q17 | 6M18 | 6M17 | ||||||
| Adjusted results (CHF million, except where indicated) | |||||||||||
| Net revenues | 1,426 | 1,546 | 1,517 | 2,972 | 3,126 | ||||||
| Provision for credit losses | 12 | 4 | 12 | 16 | 17 | ||||||
| Total operating expenses | 1,266 | 1,247 | 1,248 | 2,513 | 2,535 | ||||||
| Restructuring expenses | (56) | (42) | (32) | (98) | (52) | ||||||
| Adjusted total operating expenses | 1,210 | 1,205 | 1,216 | 2,415 | 2,483 | ||||||
| Income before taxes | 148 | 295 | 257 | 443 | 574 | ||||||
| Total adjustments | 56 | 42 | 32 | 98 | 52 | ||||||
| Adjusted income before taxes | 204 | 337 | 289 | 541 | 626 | ||||||
| Adjusted return on regulatory capital (%) | 5.8 | 9.8 | 8.3 | 7.9 | 9.0 | ||||||
| Global Markets | ||||||||||||
| in | 2Q18 | 2Q17 | 6M18 | 6M17 | ||||||||
| Adjusted results (USD million) | ||||||||||||
| Net revenues | 1,441 | 1,560 | 3,083 | 3,175 | ||||||||
| Provision for credit losses | 13 | 12 | 17 | 17 | ||||||||
| Total operating expenses | 1,279 | 1,281 | 2,604 | 2,573 | ||||||||
| Restructuring expenses | (57) | (33) | (101) | (53) | ||||||||
| Adjusted total operating expenses | 1,222 | 1,248 | 2,503 | 2,520 | ||||||||
| Income before taxes | 149 | 267 | 462 | 585 | ||||||||
| Total adjustments | 57 | 33 | 101 | 53 | ||||||||
| Adjusted income before taxes | 206 | 300 | 563 | 638 | ||||||||
A-11
| Investment Banking & Capital Markets | |||||||||||||||||
| in / end of | % change | in / end of | % change | ||||||||||||||
| 2Q18 | 1Q18 | 2Q17 | QoQ | YoY | 6M18 | 6M17 | YoY | ||||||||||
| Results (CHF million) | |||||||||||||||||
| Net revenues | 644 | 528 | 511 | 22 | 26 | 1,172 | 1,117 | 5 | |||||||||
| Provision for credit losses | 15 | 1 | 13 | – | 15 | 16 | 19 | (16) | |||||||||
| Total operating expenses | 519 | 468 | 420 | 11 | 24 | 987 | 871 | 13 | |||||||||
| Income before taxes | 110 | 59 | 78 | 86 | 41 | 169 | 227 | (26) | |||||||||
| Metrics (%) | |||||||||||||||||
| Return on regulatory capital | 13.9 | 8.1 | 12.0 | – | – | 11.1 | 17.4 | – | |||||||||
| Cost/income ratio | 80.6 | 88.6 | 82.2 | – | – | 84.2 | 78.0 | – | |||||||||
| Reconciliation of adjusted results | |||||||||||
| Investment Banking & Capital Markets | |||||||||||
| in | 2Q18 | 1Q18 | 2Q17 | 6M18 | 6M17 | ||||||
| Adjusted results (CHF million, except where indicated) | |||||||||||
| Net revenues | 644 | 528 | 511 | 1,172 | 1,117 | ||||||
| Provision for credit losses | 15 | 1 | 13 | 16 | 19 | ||||||
| Total operating expenses | 519 | 468 | 420 | 987 | 871 | ||||||
| Restructuring expenses | (31) | (30) | (10) | (61) | (12) | ||||||
| Adjusted total operating expenses | 488 | 438 | 410 | 926 | 859 | ||||||
| Income before taxes | 110 | 59 | 78 | 169 | 227 | ||||||
| Total adjustments | 31 | 30 | 10 | 61 | 12 | ||||||
| Adjusted income before taxes | 141 | 89 | 88 | 230 | 239 | ||||||
| Adjusted return on regulatory capital (%) | 17.8 | 12.4 | 13.5 | 15.2 | 18.3 | ||||||
| Investment Banking & Capital Markets | |||||||||
| in | 2Q18 | 2Q17 | 6M18 | 6M17 | |||||
| Adjusted results (USD million) | |||||||||
| Net revenues | 650 | 527 | 1,209 | 1,135 | |||||
| Provision for credit losses | 15 | 14 | 16 | 20 | |||||
| Total operating expenses | 525 | 431 | 1,021 | 884 | |||||
| Restructuring expenses | (31) | (10) | (63) | (12) | |||||
| Adjusted total operating expenses | 494 | 421 | 958 | 872 | |||||
| Income before taxes | 110 | 82 | 172 | 231 | |||||
| Total adjustments | 31 | 10 | 63 | 12 | |||||
| Adjusted income before taxes | 141 | 92 | 235 | 243 | |||||
| Global advisory and underwriting revenues | |||||||||||||||||
| in | % change | in | % change | ||||||||||||||
| 2Q18 | 1Q18 | 2Q17 | QoQ | YoY | 6M18 | 6M17 | YoY | ||||||||||
| Global advisory and underwriting revenues (USD million) | |||||||||||||||||
| Global advisory and underwriting revenues | 1,156 | 1,106 | 1,016 | 5 | 14 | 2,262 | 2,149 | 5 | |||||||||
| of which advisory and other fees | 313 | 251 | 192 | 25 | 63 | 564 | 470 | 20 | |||||||||
| of which debt underwriting | 568 | 616 | 582 | (8) | (2) | 1,184 | 1,229 | (4) | |||||||||
| of which equity underwriting | 275 | 239 | 242 | 15 | 14 | 514 | 450 | 14 | |||||||||
A-12
Cautionary statement regarding forward-looking information
This document contains statements that constitute forward-looking statements. In addition, in the future we, and others on our behalf, may make statements that constitute forward-looking statements. Such forward-looking statements may include, without limitation, statements relating to the following:
– our plans, objectives, ambitions, targets or goals;
– our future economic performance or prospects;
– the potential effect on our future performance of certain contingencies; and
– assumptions underlying any such statements.
Words such as “believes,” “anticipates,” “expects,” “intends” and “plans” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. We do not intend to update these forward-looking statements.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. We caution you that a number of important factors could cause results to differ materially from the plans, objectives, ambitions, targets, expectations, estimates and intentions expressed in such forward-looking statements. These factors include:
– the ability to maintain sufficient liquidity and access capital markets;
– market volatility and interest rate fluctuations and developments affecting interest rate levels;
– the strength of the global economy in general and the strength of the economies of the countries in which we conduct our operations, in particular the risk of continued slow economic recovery or downturn in the US or other developed countries or in emerging markets in 2018 and beyond;
– the direct and indirect impacts of deterioration or slow recovery in residential and commercial real estate markets;
– adverse rating actions by credit rating agencies in respect of us, sovereign issuers, structured credit products or other credit-related exposures;
– the ability to achieve our strategic goals, including those related to cost efficiency, income/(loss) before taxes, capital ratios and return on regulatory capital, leverage exposure threshold, risk-weighted assets threshold, return on tangible equity and other targets, objectives and ambitions;
– the ability of counterparties to meet their obligations to us;
– the effects of, and changes in, fiscal, monetary, exchange rate, trade and tax policies, as well as currency fluctuations;
– political and social developments, including war, civil unrest or terrorist activity;
– the possibility of foreign exchange controls, expropriation, nationalization or confiscation of assets in countries in which we conduct our operations;
– operational factors such as systems failure, human error, or the failure to implement procedures properly;
– the risk of cyber attacks on our business or operations;
– actions taken by regulators with respect to our business and practices and possible resulting changes to our business organization, practices and policies in countries in which we conduct our operations;
– the effects of changes in laws, regulations or accounting or tax standards, policies or practices in countries in which we conduct our operations;
– the potential effects of proposed changes in our legal entity structure;
– competition or changes in our competitive position in geographic and business areas in which we conduct our operations;
– the ability to retain and recruit qualified personnel;
– the ability to maintain our reputation and promote our brand;
– the ability to increase market share and control expenses;
– technological changes;
– the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users;
– acquisitions, including the ability to integrate acquired businesses successfully, and divestitures, including the ability to sell non-core assets;
– the adverse resolution of litigation, regulatory proceedings and other contingencies; and
– other unforeseen or unexpected events and our success at managing these and the risks involved in the foregoing.
We caution you that the foregoing list of important factors is not exclusive. When evaluating forward-looking statements, you should carefully consider the foregoing factors and other uncertainties and events, including the information set forth in “Risk factors” in I – Information on the company in our Annual Report 2017.
A-13
Tidjane Thiam, Chief Executive OfficerDavid Mathers, Chief Financial OfficerJuly 31, 2018 Credit SuisseSecond Quarter 2018 Results
2 July 31, 2018 Disclaimer This material does not purport to contain all of the information that you may wish to consider. This material is not to be relied upon as such or used in substitution for the exercise of independent judgment.Cautionary statement regarding forward-looking statements This presentation contains forward-looking statements that involve inherent risks and uncertainties, and we might not be able to achieve the predictions, forecasts, projections and other outcomes we describe or imply in forward-looking statements. A number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions we express in these forward-looking statements, including those we identify in "Risk factors” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2017 and in the “Cautionary statement regarding forward-looking information" in our 2Q18 Financial Report, published on July 31, 2018 and filed with the US Securities and Exchange Commission, and in other public filings and press releases. We do not intend to update these forward-looking statements. In particular, the terms “Estimate”, “Illustrative”, “Ambition”, “Objective”, “Outlook” and “Goal” are not intended to be viewed as targets or projections, nor are they considered to be Key Performance Indicators. All such estimates, illustrations, ambitions, objectives, outlooks and goals are subject to a large number of inherent risks, assumptions and uncertainties, many of which are completely outside of our control. These risks, assumptions and uncertainties include, but are not limited to, general market conditions, market volatility, interest rate volatility and levels, global and regional economic conditions, political uncertainty, changes in tax policies, regulatory changes, changes in levels of client activity as a result of any of the foregoing and other factors. Accordingly, this information should not be relied on for any purpose. We do not intend to update these estimates, illustrations, ambitions, objectives, outlooks or goals. We may not achieve the benefits of our strategic initiativesWe may not achieve all of the expected benefits of our strategic initiatives. Factors beyond our control, including but not limited to the market and economic conditions, changes in laws, rules or regulations and other challenges discussed in our public filings, could limit our ability to achieve some or all of the expected benefits of these initiatives. Estimates and assumptionsIn preparing this presentation, management has made estimates and assumptions that affect the numbers presented. Actual results may differ. Annualized numbers do not take account of variations in operating results, seasonality and other factors and may not be indicative of actual, full-year results. Figures throughout this presentation may also be subject to rounding adjustments. All opinions and views constitute judgments as of the date of writing without regard to the date on which the reader may receive or access the information. This information is subject to change at any time without notice and we do not intend to update this information. Statement regarding non-GAAP financial measuresThis presentation also contains non-GAAP financial measures, including adjusted results. Information needed to reconcile such non-GAAP financial measures to the most directly comparable measures under US GAAP can be found in this presentation in the Appendix, which is available on our website at www.credit-suisse.com.Statement regarding capital, liquidity and leverageAs of January 1, 2013, Basel III was implemented in Switzerland along with the Swiss “Too Big to Fail” legislation and regulations thereunder (in each case, subject to certain phase-in periods). As of January 1, 2015, the Bank for International Settlements (BIS) leverage ratio framework, as issued by the Basel Committee on Banking Supervision (BCBS), was implemented in Switzerland by FINMA. Our related disclosures are in accordance with our interpretation of such requirements, including relevant assumptions. Changes in the interpretation of these requirements in Switzerland or in any of our assumptions or estimates could result in different numbers from those shown in this presentation. Unless otherwise noted, leverage exposure is based on the BIS leverage ratio framework and consists of period-end balance sheet assets and prescribed regulatory adjustments. The look-through tier 1 leverage ratio and CET1 leverage ratio are calculated as look-through BIS tier 1 capital and CET1 capital, respectively, divided by period-end leverage exposure. Swiss leverage ratios are measured on the same period-end basis as the leverage exposure for the BIS leverage ratio.SourcesCertain material in this presentation has been prepared by Credit Suisse on the basis of publicly available information, internally developed data and other third-party sources believed to be reliable. Credit Suisse has not sought to independently verify information obtained from public and third-party sources and makes no representations or warranties as to accuracy, completeness or reliability of such information.
Earnings Review 3 July 31, 2018
4 July 31, 2018 Key messagesPTI1 of CHF 1.3 bn, up 88% YoY, highest in 12 quarters, driven by continued positive operating leverage with revenues1 up 7% YoY Accelerating profitable growth in Wealth Management2Continued strong growth momentum with CHF 23.5 bn of Wealth Management NNA in 1H18; representing an annualized NNA growth rate of 6% Record AuM of CHF 784 bn, at higher net margin year on yearDelivering disciplined, quality, client-led revenue growth; adj. revenues up 7% in 1H18 year-on-yearDriving positive operating leverage with higher revenues and lower costs leading to significant growth inpre-tax income2Q18 adj. revenues up 7% year on year; 1H18 adj. revenues up 4% year on year2Q18 adj. operating expenses down 5% year on year; 1H18 adj. operating expenses down 5% year on yearCHF 4.4 bn of cumulative adj. PTI increase over 7 quartersRestructuring: already achieved end-2018 SRU RWA and leverage exposure target levels On track for SRU wind-down by end-2018, with RWA ex Op Risk and leverage exposure target levels already achieved in 2Q18, while further reducing the drag on our Group resultsAccreting capital and growing shareholder returnsStrong capital position with CET1 ratio of 12.8%; Tier 1 leverage ratio of 5.2%Core adj. RoRC† at 15%3; Group RoTE‡ at 7.2%3 with a clear path to achieving our 2019 target of between 10-11% 1 2 3 Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix † See Appendix ‡ See Appendix1 Adjusted 2 Relating to SUB PC, IWM PB and APAC PB within WM&C 3 In 1H18 4
5 July 31, 2018 1Q Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix Seventh consecutive quarter of year-on-year profit growth, starting from 4Q16 +36% +88% -1,135 ‘16 ‘17 ‘18 3Q ‘16 ‘17 4Q ‘15 ‘16 ‘17 2Q ‘16 ‘17 ‘18 Group adjusted pre-tax incomein CHF mn Starting point
6 July 31, 2018 2Q18 the highest Group adjusted PTI since 3Q15 Group adjusted pre-tax incomein CHF mn Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix -1,135 Full-year 2016 Full-year 2017 615 2,762 Half-year 2018 2,492 2Q18
7 July 31, 2018 In Wealth Management, we are delivering strong NNA flows… 1 Relating to SUB PC, IWM PB and APAC PB within WM&C 2 APAC PB within WM&C Wealth Management1 NNA1H18, in CHF bn 2 NNA growth rate1H18 annualized 3% 6% 10% 6% 2Q 1Q 9.1 14.4
8 July 31, 2018 …reaching record AuM levels… Wealth Management1 AuMin CHF bn 1 Relating to SUB PC, IWM PB and APAC PB within WM&C +21% +10% CAGR
9 July 31, 2018 …increasing our mandate penetration… Mandate volume1in CHF bn +51% 21% 24% 25% 27% 1 Relating to SUB PC, IWM PB and APAC PB within WM&C Mandate penetration1
10 July 31, 2018 …supporting our overall revenue growth Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix1 Relating to SUB PC, IWM PB and APAC PB within WM&C +7% Wealth Management1 adjusted revenuesin CHF mn
11 July 31, 2018 We have materially lowered our cost base Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix* Adjusted operating cost base at constant 2015 FX rates; see Appendix -18% Adjusted operating cost base at constant FX rates*in CHF bn
12 July 31, 2018 Seven consecutive quarters of value creation through positive operating leverage Group adjusted resultsin CHF mn Pre-tax incomeincreaseYear-on-year Net revenuesincreaseYear-on-year Operating expensesdecreaseYear-on-year 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 +1,306 +1,062 +394 +293 +398 +320 +599 Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix +4,372 Cumulative PTI improvement +6% +18% +2% -2% +2% +1% +7% -16% -3% -8% -7% -5% -6% -5%
13 July 31, 2018 Compounding effect of consistent delivery of higher revenues and lower costs drives higher profits Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix1 Includes provision for credit losses of CHF 122 mn in 1H16, CHF 135 mn in 1H17 and CHF 121 mn in 1H18 2.5 8.5 11.2 9.0 10.7 1H18 1H16 1H17 Net revenues Pre-tax income1 Operating expenses -11% Group adjusted resultsin CHF bn 9.6 9.8 0.1 1.6 +2.4 bn +9% -6% 1H18 vs. 1H16 +4% -5% +14%
14 July 31, 2018 End-2018 SRU capital targets achieved in 2Q18 SRU RWA excl. Op Risk1in USD bn -83% SRU leverage exposurein USD bn 1 Excludes Op Risk RWA of CHF 19 bn in 1H15 and CHF 11 bn in 1H18 2 SRU program will be economically completed by end-2018; residual operations and assets to be absorbed into the rest of the Group from 2019 onwards 2 -81% 2 57 203 39 10
15 July 31, 2018 Strong capital ratios CET1 ratio Tier 1 leverage ratio Guidance>12.5% 11.8% Guidance>5.0%
16 July 31, 2018 We have won a number of industry awards 1 Euromoney as of July 11, 2018 Global Award for BestInvestment Bank in the Emerging Markets Best Bank in Switzerland Best Investment Bankin Switzerland Best Bank for Wealth Management Western Europe Best Bank for WealthManagement Latin America Best Bank for Wealth Management Central and Eastern Europe Best Bank for WealthManagement Middle East Best Investment Bankin Asia Banker of the Year Select accolades1
Divisional Overview 17 July 31, 2018
18 July 31, 2018 Strict capital discipline, allocating more capital to our Wealth Management and IBCM businesses… RWA contributionin CHF bn Before Now SUB, IWM,APAC WM&Cand IBCM Marketsactivities1 243 222 235 236 1 Includes Global Markets, APAC Markets and SRU. SRU excludes Op Risk RWA of CHF 19 bn in 1H15 and 1H16, CHF 20 bn in 1H17 and CHF 11 bn in 1H18
19 July 31, 2018 …allowing us to simultaneously grow profits, change the composition of our earnings and reduce risk Core adjustedPTI contribution1in CHF mn Group VaR4 47 30 40 26 3,346 3,182 2,604 2,026 SUB3, IWM,APAC WM&Cand IBCM Marketsactivities2 Core adjusted RoRC† 15.6% 9.9% 12.3% 14.5% Before Now CET1 ratio 10.3% 11.8% 13.3% 12.8% CorporateCenter Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix † See Appendix1 Percentages refer to contribution to Core adjusted pre-tax income excluding Corporate Center adjusted pre-tax income of CHF -159 mn in 1H15 and CHF -212 mn in 1H18 2 Includes Global Markets and APAC Markets 3 Excludes Swisscard pre-tax income of CHF 25 mn in 1H15 4 Trading book average one-day, 98% risk management Value-at-Risk in CHF mn
20 July 31, 2018 In Global Markets, we maintained our capital discipline, lowered our cost base and delivered a profitable quarter… GM RWA1in USD bn GM leverage exposurein USD bn ThresholdUSD 60 bn 54 59 ThresholdUSD 290 bn 289 268 Binding capital constraint Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix1 Global Markets RWA in 2Q18 of USD 59 bn included an increase year-over-year of USD 1.9 bn from the re-allocation of operational risk RWA in 1Q18. GM adj. operating expensesin USD mn GM net revenuesin USD mn 1,560 1,441 1,248 1,222 Global Markets IBCM Wealth Management GM adj. PTIin USD mn 206 -8% -2%
21 July 31, 2018 …while continuing to invest in growing our strategic ITS business ITS net revenuesin USD terms 1Q 2Q +11% +25% +17% Global Markets IBCM Wealth Management Structured products investments up CHF 5.5 bn, driven by House View led solutions and client demand for risk management solutions in volatile marketsLandmark structured product - flow issuance up 40%25% more wealth management client interactions in structured products in 1H18FX client revenues up ~10%
22 July 31, 2018 In IBCM we have outperformed the Street across all key products led by strong performance in advisory… Global underwriting and advisory revenues1in USD mn IBCM net revenuesin USD mn +14% 1 Gross global revenues from advisory, debt and equity underwriting generated across all divisions before cross-divisional revenue sharing agreements 2 Source: Dealogic as of June 30, 2018 (Global) 3 Source: Dealogic as of June 30, 2018, includes Americas and EMEA only +23% IBCM 2Q18 YoY performance3 AdvisoryEquity underwritingDebt underwriting Street fees Performance vs. market Global Markets IBCM Wealth Management -3%-5%+1% -1% 2 -2% 3 Street Street
23 July 31, 2018 …and have driven both profits and returns higher IBCM adjusted pre-tax incomein USD mn IBCM adjusted RoRC† 14% 18% Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix † See Appendix +53% Global Markets IBCM Wealth Management
Half-year 2018 24 July 31, 2018 Highest quarterly profit in SUB since 2013… SUB adjusted pre-tax income1in CHF mn Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix1 Excludes Swisscard pre-tax income of CHF 16 mn in 1Q14, CHF 19 mn in 2Q14, CHF 22 mn in 3Q14, CHF 17 mn in 4Q14, CHF 12 mn in 1Q15 and CHF 13 mn in 2Q15 2Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Full-year 2014 Full-year 2015 Full-year 2016 Full-year 2017 SUB IWM APAC Quarterlyadj. PTIAverage Global Markets IBCM Wealth Management
Half-year 2018 25 July 31, 2018 …building a clear ascending profitability trend SUB adjusted pre-tax income1in CHF mn Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix † See Appendix1 Excludes Swisscard pre-tax income of CHF 35 mn in 1H14, CHF 39 mn in 2H14, CHF 25 mn in 1H15 2 SUB PC 1H Full-year 2014 Full-year 2015 Full-year 2016 Full-year 2017 SUB IWM APAC Global Markets IBCM Wealth Management Half-yearadj. PTIAverage Adj. RoRC† n/a 14% 15% 15% 18% NNA2in CHF bn 4 3 1 4 3 -1 1 -1 1
Half-year 2018 26 July 31, 2018 Step-change in IWM profits… IWM adjusted pre-tax incomein CHF mn Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix † See Appendix 1H 2H 1H 2H 1H 2H Full-year 2015 Full-year 2016 Full-year 2017 SUB IWM APAC Global Markets IBCM Wealth Management 1H Half-yearadj. PTIAverage 24% 24% 28% 34% Adj. RoRC† 17 16 27 28 7 5 9 NNAin CHF bn
27 July 31, 2018 …with strong contribution from Asset Management Asset Managementadjusted pre-tax incomein CHF mn +41% Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix † See Appendix Asset Managementadjusted RoRC† 15% 25% 16% SUB IWM APAC Global Markets IBCM Wealth Management Asset Management NNAin CHF bn 5.0 17.0 17.8
Half-year 2018 28 July 31, 2018 Step-change in APAC WM&C profits… APAC WM&C adjusted pre-tax incomein CHF mn Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix 1H 2H 1H 2H 1H 2H Full-year 2015 Full-year 2016 Full-year 2017 Half-yearadj. PTIAverage SUB IWM APAC Global Markets IBCM Wealth Management 1H 234 20% 22% 29% 31% Adj. RoRC† 11 9 10 10 7 5 7 NNAin CHF bn
29 July 31, 2018 …significant improvement in APAC Markets performance… Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix † See Appendix APAC Markets adjusted PTIin USD mn +132 mn APAC Markets adjusted RoRC† -2% 1% 6% SUB IWM APAC Global Markets IBCM Wealth Management APAC Markets adjusted revenuesin USD mn 591 618 702
30 July 31, 2018 …driving higher returns for the division Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix † See Appendix APAC adjusted RoRC† +6 pp. SUB IWM APAC Global Markets IBCM Wealth Management
31 July 31, 2018 Recurring commissionsand fees Net interest income Transaction- and performance based Wealth Management1 adjusted net revenues2in CHF mn +7% +7% 1H18 vs. 1H16 CAGR +6% +9% Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix1 Relating to SUB PC, IWM PB and APAC PB within WM&C 2 Excludes other revenues of CHF -18 mn in 1H16, CHF -3 mn in 2H16, CHF 2 mn in 1H17, CHF 1 mn in 2H17, CHF 0m in 1H18 +6% +10% 1H16 2H16 1H17 2H17 1H18 YoYgrowth Across Wealth Management, we are delivering disciplined, quality, client-led revenue growth… Global Markets IBCM Wealth Management 1H16 2H16 1H17 2H17 1H18 1H16 2H16 1H17 2H17 1H18
32 July 31, 2018 …and have achieved a significant profit acceleration SUB IWM APAC WM&C 2,533 Wealth Management-related businesses1adjusted pre-tax incomein CHF mn 2 Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix1 Relating to SUB, IWM and APAC WM&C 2 Excludes Swisscard pre-tax income of CHF 25 mn 1H18 vs. 1H15 2,095 1,608 1,731 +925 mn +31% +73% +126% +58% Global Markets IBCM Wealth Management
Increasing returns across our core businesses and eliminating the drag of the SRU 1H16 Size of bar represents 1H18 RWA allocation 1H18 10% Core 15% 12% 1H17 SUB 15% 18% 15% IWM 24% 34% 28% APAC 19% 20% 1 14% Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix † See Appendix1 Thereof WM&C 31% and Markets 6% 2 SRU program will be economically completed by end-2018; residual operations and assets to be absorbed into the rest of the Group from 2019 onwards 33 July 31, 2018 -41%USD -1.9 bn SRU -38%USD -0.7 bn -35%USD -1.0 bn Drag on Group RoRC† to reduce further by 20192 Global Markets 2% 8% 9% IBCM 8% 15% 18% Adjusted Return onRegulatory Capital† Adj. RoRC†Adj. PTI drag
34 July 31, 2018 Significant improvement in Return on Tangible Equity over 24 months… ‡ See Appendix 1H16 1H17 1H18 Group reportedReturn on Tangible Equity‡
35 July 31, 2018 …with a number of known actions identified to drive further value… As per 2017 Investor Day
36 July 31, 2018 …allowing us to increase our Return on Tangible Equity in 2019 and 2020 10-11% 11-12% ‡ See Appendix 1H16 1H17 1H18 2019 Target 2020 Target Group reportedReturn on Tangible Equity‡
37 July 31, 2018 Summary Accelerating profitable growth in Wealth ManagementDriving positive operating leverage with higher revenues and lower costs leading to significant growth in pre-tax incomeRestructuring: already achieved end-2018 SRU RWA and leverage exposure target levels Accreting capital and growing shareholder returns
Detailed Financials 38 July 31, 2018
39 July 31, 2018 Results Overview Credit Suisse Group results 2Q18 1Q18 2Q17 1H18 1H17 vs. 1H17 Net revenues 5,595 5,636 5,205 11,231 10,739 5% Provision for credit losses 73 48 82 121 135 Total operating expenses 4,470 4,534 4,541 9,004 9,352 -4%Pre-tax income 1,052 1,054 582 2,106 1,252 68% Real estate gains - -1 - -1 - Gains (-)/losses on business sales - -73 - -73 -15 Restructuring expenses -175 -144 -69 -319 -206 Major litigation provisions -55 -85 -33 -140 -130 Expenses related to business sales -1 - - -1 - Net revenues 5,595 5,562 5,205 11,157 10,724 4% Provision for credit losses 73 48 82 121 135 Total operating expenses 4,239 4,305 4,439 8,544 9,016 -5% Pre-tax income 1,283 1,209 684 2,492 1,573 58%Net income attributable to shareholders 647 694 303 1,341 899 49%Diluted earnings per share in CHF 0.25 0.26 0.13 0.51 0.39 31%Return on tangible equity‡ 6.9% 7.6% 3.4% 7.2% 5.0% Adjusted Note: All values shown are in CHF mn unless otherwise specified. Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix ‡ See Appendix
40 July 31, 2018 CET1 ratio at 12.8% and Tier 1 leverage ratio increased to 5.2% Basel III RWA in CHF bn 271 4 2 -2 2 277 Leverage exposure in CHF bn 932 15 -27 920 1 Includes model and parameter updates; core businesses include Corporate Center 2 Represents externally prescribed regulatory changes impacting how exposures are treated 1 1 2 12.9% 12.8% CET1 ratio 3.8% 3.9% CET1 leverage ratio 5.1% 5.2% Tier 1 leverage ratio Key messagesCET1 ratio of 12.8% above our 2018 target level of > 12.5%CET1 leverage ratio increased to 3.9% from 3.8% in 1Q18, in excess of the Swiss 2020 requirement of 3.5%Year-end 2018 SRU capital target levels exceeded by the end of 1H18Risk-weighted assetsRWA increase during the quarter driven by FX impact, external methodology changes and growth in our businessesContinued reduction of RWA by CHF 2 bn in the SRU to USD 10 bn excl. operational risk; exceeded year-end target level of USD 11 bn in RWA excl. operational risk by the end of 1H18Leverage exposureLeverage exposure lower by CHF 12 bn compared to prior quarter; reduction of CHF 27 bn from lower business usage, primarily in GM, partly offset by FXSRU leverage exposure reduced to USD 39 bn, below year-end target level of USD 40 bnExpect to call CHF 6.3 bn of CoCo's in 3Q18; even with partial offset from July's USD 2 bn AT1 issuance, expect Tier 1 leverage ratio to decrease in 3Q18; intend to meet our target of > 5% Tier 1 leverage ratio by end-2018 SUB, IWM, APAC +6IBCM +4SRU -5Corp. Ctr. -10GM -22
41 July 31, 2018 Continued cost savings of CHF 0.5 bn in 1H18; on track to achieve targeted cost base of <CHF 17.0 by end-2018 Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix * Adjusted operating cost base at constant 2015 FX rates; see Appendix1 Measures 1H18 vs. 1H15 CHF 0.5 bn or 5% cost reduction vs. 1H17; 2Q18 with incremental net savings of CHF 0.2 bnEfficiency gains and cost savings across expense types and divisions as well as from the continued wind-down of the SRU18% cost reduction since inception of the cost reduction program in late 20151; target 20% reduction over the lifetime of the program by end-2018On track to achieve our end-2018 target of net savings of > CHF 4.2 bn since the end of 2015 and an adjusted operating cost base of < CHF 17.0 bn for the year Adjusted operating cost base at constant FX rates*in CHF bn 21.2 19.3 18.0 -0.5 > -0.5 <17.0 10.5 9.6 9.0 8.6 -18% -5%
42 July 31, 2018 Swiss Universal Bank Strong operating leverage delivers continued profit momentum Note: All financial numbers presented and discussed are adjusted, unless otherwise stated. Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix. All percentage changes and comparative descriptions refer to year on year measurements unless otherwise indicated † See Appendix PC Key messages2Q18 pre-tax income up 15%; 10th consecutive quarter with YoY PTI growth, resulting in an RoRC† of 19% Revenues up 1% with increases across net interest income and recurring revenues Continued cost momentum with operating expenses down 21% since 4Q15, resulting in a cost/income ratio of 57% for 2Q18Named ‘Best Bank in Switzerland 2018’ by EuromoneyPrivate ClientsRevenues up 3%, supported by continued momentum of our UHNW and Bank for Entrepreneurs franchisesContinued positive development in mandates, structured products and FX transactions reflecting client needs in current market environment NNA of CHF 0.5 bn, taking the 1H18 annualized growth rateto 3%; net margin of 55 bps at highest quarterly level to dateCorporate & Institutional ClientsRobust profit growth reflecting stable revenues and decreased operating expensesStrong FX transactions and institutional mandates; 2Q17 included a gain from the sale of an investment Named ‘Best Investment Bank in Switzerland 2018’ by Euromoney Key metrics in CHF bn 2Q18 1Q18 2Q17 Δ 2Q17 Adj. net margin in bps 55 52 44 11 Net new assets 0.5 2.7 1.7 Mandates penetration 32% 32% 31% Net loans 167 167 165 1% Risk-weighted assets 73 71 64 13% Leverage exposure 252 247 260 -3% Adjusted key financials in CHF mn 2Q18 1Q18 2Q17 Δ 2Q17 Net revenues 1,419 1,394 1,405 1% o/w Private Clients 757 743 733 3% o/w Corp. & Inst. Clients 662 651 672 -1% Provision for credit losses 35 34 36 Total operating expenses 804 806 865 -7% Pre-tax income 580 554 504 15% o/w Private Clients 285 268 222 28% o/w Corp. & Inst. Clients 295 286 282 5% Cost/income ratio 57% 58% 62% Return on regulatory capital† 19% 18% 16%
43 July 31, 2018 International Wealth Management1H18 PTI of CHF 935 mn up 33%; strong NNA of CHF 27.7 bn Note: All financial numbers presented and discussed are adjusted, unless otherwise stated. Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix. All percentage changes and comparative descriptions refer to year on year measurements unless otherwise indicated † See Appendix PB Adjusted key financials in CHF mn 2Q18 1Q18 2Q17 Δ 2Q17 Net revenues 1,344 1,367 1,264 6% o/w Private Banking 992 1,006 927 7% o/w Asset Management 352 361 337 4% Provision for credit losses 5 -1 8 Total operating expenses 878 894 878 0% Pre-tax income 461 474 378 22% o/w Private Banking 372 382 307 21% o/w Asset Management 89 92 71 25% Cost/income ratio 65% 65% 69% Return on regulatory capital† 34% 35% 29% Key metrics in CHF bn 2Q18 1Q18 2Q17 Δ 2Q17 Adj. net margin in bps 40 42 36 4 Net new assets 5.2 5.5 4.6 Number of RM 1,120 1,130 1,120 0% Net loans 52 51 46 13% Net new assets AM 8.0 9.0 2.8 Risk-weighted assets 39 38 37 6% Leverage exposure 99 94 93 6% Key messagesDelivering positive operating leverage in PB and AM confirming sustainability of strong 1Q18 resultsOn track to achieve 2018 PTI target of CHF 1.8 bnCost/income ratio of 65% and RoRC† of 34% with continued capital disciplinePrivate Banking2Q18 PTI up 21% driven by 7% higher revenues with increases across all major revenue categoriesStable expenses as we continue to self-fund growth investments; strong net margin of 40 bps and cost/income ratio of 62%Mandate penetration increased to 33% with CHF 5.3 bn net mandate sales reflecting successful House View implementationNNA of CHF 5.2 bn at an annualized growth rate of 6%, with emerging markets and Europe achieving equally strong growth ratesAsset Management2Q18 PTI up 25% with continued growth in management fees(up 10%) at resilient recurring margins at 32 bpsNNA of CHF 8.0 bn, primarily driven by traditional and alternative investments
44 July 31, 2018 Asia PacificContinued strong performance and asset accumulation Note: All financial numbers presented and discussed are adjusted, unless otherwise stated. Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix. All percentage changes and comparative descriptions refer to year on year measurements unless otherwise indicated † See Appendix 1 In 1Q18, the US-GAAP standard ASU 2014-09 “Revenue from Contracts with Customers” became effective. As a result, both APAC net revenues and operating expenses decreased vs. prior year by CHF 7 mn and CHF 6 mn in 1Q18 and 2Q18, respectively 2 APAC PB within WM&C 3 All numbers quoted under key messages for Markets are based on USD PB2 Key messagesPre-tax income of CHF 266 mn, up 34%; continued profit growth in WM&C and substantially improved Markets performanceRecord AuM of CHF 206 bn and NNA of CHF 3.4 bn; 1H18 NNA annualized growth rate of 10%Wealth Management & Connected (WM&C)Continued growth in WM&C with PTI of CHF 208 mn vs. CHF 198 mn in 2Q17Strong performance in M&A and ECM and improved collaboration revenues with PBSome slowdown in transactional and financing activity reflecting weaker conditionsContinued cost discipline with 3% lower costsMarkets3Significant improvement in both Equities and Fixed Income revenues following the restructuring measures implemented in 2017Equities up 20%, led by Prime Services16% increase in Fixed Income revenues driven by higher client activity in structured products and emerging markets ratesContinued capital and cost discipline Adjusted key financials in CHF mn 2Q18 1Q18 2Q17 Δ 2Q17 Net revenues1 914 991 848 8% o/w WM&C 564 663 559 1% o/w Markets 350 328 289 21% Provision for credit losses 7 10 -1 Total operating expenses1 641 693 650 -1% Pre-tax income 266 288 199 34% o/w WM&C 208 256 198 5% o/w Markets 58 32 1 n/m Cost/income ratio 70% 70% 77% Return on regulatory capital† 18% 21% 15% Key metrics in CHF bn 2Q18 1Q18 2Q17 Δ 2Q17 Adj. net margin in bps 30 35 34 -4 Net new assets 3.4 6.2 4.5 Number of RM 610 600 610 0% Assets under management 206 199 178 16% Net loans 44 45 42 7% Risk-weighted assets 34 34 32 4% Leverage exposure 118 116 102 16%
45 July 31, 2018 Investment Banking & Capital Markets Strong performance reflects increased M&A closings Note: All financial numbers presented and discussed are adjusted, unless otherwise stated. Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix. All percentage changes and comparative descriptions refer to year on year measurements unless otherwise indicated † See Appendix 1 In 1Q18, the US-GAAP standard ASU 2014-09 “Revenue from Contracts with Customers” became effective. As a result, both IBCM net revenues and operating expenses increased vs. prior year by USD 16 mn and USD 21 mn in 1Q18 and 2Q18, respectively 2 Gross global revenues from advisory, debt and equity underwriting generated across all divisions before cross-divisional revenue sharing agreements 3 Source: Dealogic for the period ending June 30, 2018 (Global) 4 Source: Dealogic for the period ending June 30, 2018 (Americas and EMEA only) Key messages2Q18 results reflect continued execution of our strategy:Significant improvement in advisory driven by substantial M&A closings in the quarterTop 5 ranks in global ECM and Leveraged Finance3Continued momentum driving share gains in EMEA3Revenues of USD 650 mn1 up 23%, significantly outperforming the Street4Reduced cost/income ratio to 76% from 80% in 2Q17, notwithstanding higher variable and fixed compensation expenses in line with the improvement in business performance as well as USD 21 mn of US-GAAP changesRoRC† of 18% within the targeted range of 15-20%Increased RWA of USD 23 bn vs. USD 22 bn in 1Q18 primarily reflects growth in underwriting commitments and the corporate lending portfolio; YoY increase reflects the 1Q18 re-allocation of operational risk RWAGlobal advisory and underwriting revenues for 2Q18 up 14% Key metrics in USD bn 2Q18 1Q18 2Q17 Δ 2Q17 Risk-weighted assets 23 22 19 17% Leverage exposure 44 41 45 -3% Adjusted key financials in USD mn 2Q18 1Q18 2Q17 Δ 2Q17 Net revenues1 650 559 527 23% Provision for credit losses 15 1 14 Total operating expenses1 494 464 421 17% Pre-tax income 141 94 92 53% Cost/income ratio 76% 83% 80% Return on regulatory capital† 18% 12% 14% Global advisory and underwriting revenues2 in USD mn 2Q18 1Q18 2Q17 Δ 2Q17 Global advisory and underwriting revenues1 1,156 1,106 1,016 14%
46 July 31, 2018 Global MarketsResults reflect disciplined capital management and continued momentum in ITS Note: All financial numbers presented and discussed are adjusted, unless otherwise stated. Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix. All percentage changes and comparative descriptions refer to year on year measurements unless otherwise indicated † See Appendix1 Includes sales and trading and underwriting 2 In 1Q18, the US-GAAP standard ASU 2014-09 “Revenue from Contracts with Customers” became effective. As a result, both Global Markets net revenues and operating expenses increased vs. prior year by USD 8 mn and USD 7 mn in 1Q18 and 2Q18, respectively Key messages2Q18 PTI of USD 206 mn amid slowdown in client activity in credit franchise compared to a strong 2Q17; solid 1H18 RoRC† of 8%Continued momentum in ITS with pivot towards wealth management growthHigher Equities revenues, up 3%, with significant increase in equity derivatives reflecting benefits of business investments and increased collaboration in ITSFixed Income revenues decreased 6%; higher results in leveraged finance trading and in structured credit and financing offset by lower securitized products vs. a strong 2Q17Expenses declined both YoY and QoQ driven by continued progress on efficiency initiativesContinued discipline in capital management with QoQ decline in RWA and leverage exposure Key metrics in USD bn 2Q18 1Q18 2Q17 Δ 2Q17 Risk-weighted assets 59 61 54 11% Leverage exposure 268 296 289 -7% Adjusted key financials in USD mn 2Q18 1Q18 2Q17 Δ 2Q17 Equities1 571 588 557 3% Fixed Income1 986 1,152 1,049 -6% Other -116 -98 -46 Net revenues2 1,441 1,642 1,560 -8% Provision for credit losses 13 4 12 Total operating expenses2 1,222 1,281 1,248 -2% Pre-tax income/(loss) 206 357 300 -31% Cost/income ratio 85% 78% 80% Return on regulatory capital† 6% 10% 8%
Adjusted 47 July 31, 2018 Strategic Resolution UnitEnd–2018 capital targets achieved in 2Q18 Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix. All percentage changes and comparative descriptions refer to year on year measurements unless otherwise indicated Key messagesRWA excl. operational risk of USD 10 bn compares to year-end target level of USD 11 bnLeverage exposure of USD 39 bn compares to year-end target level of USD 40 bn1H18 adjusted pre-tax loss of USD 714 mn, on track for full-year target of ~USD 1.4 bnAdjusted pre-tax loss reduced by USD 214 mn vs. 2Q17, primarily due to lower overall funding costs and a reduction in costs related to the settlements with US authorities regarding US cross-border matters2Q18 revenues included a USD 72 mn loss relating to the settlement of legacy claims with Lehman Brothers Holding Inc. and certain of its subsidiariesLeverage exposure and RWA excl. operational risk lower vs. 1Q18 by USD 6 bn and USD 2 bn, respectivelyDerivatives exposure reduced by more than 20% through unwinds, clearing and compression, and portfolio hedgingContinued progress in reducing loan and financing exposure, notably through the sale of emerging markets loans Key financials in USD mn 2Q18 1Q18 2Q17 Δ 2Q17 Net revenues -178 -216 -280 -36% Provision for credit losses -1 0 14 Total operating expenses 155 166 252 -38% Pre-tax loss -332 -382 -546 Real estate gains - -1 - Restructuring expenses 12 12 12 Major litigation provisions 26 41 20 Expenses related to business sales 1 - - Pre-tax loss reported -371 -434 -578 Key metrics 2Q18 1Q18 2Q17 Δ 2Q17 Risk-weighted assets in CHF bn 20 22 38 -46% RWA excl. operational risk in USD bn 10 12 19 -49% Leverage exposure in USD bn 39 45 75 -48%
48 July 31, 2018 Summary Accelerating profitable growth in Wealth ManagementDriving positive operating leverage with higher revenues and lower costs leading to significant growth in pre-tax incomeRestructuring: already achieved end-2018 SRU RWA and leverage exposure target levels Accreting capital and growing shareholder returns
Appendix 49 July 31, 2018
50 July 31, 2018 Overview of Credit Suisse 2Q18 results Pre-tax income Reported Adjusted in CHF mn unless otherwise specified 2Q18 1Q18 2Q17 1H18 1H17 2Q18 1Q18 2Q17 1H18 1H17 SUB 553 563 502 1,116 906 580 554 504 1,134 987 IWM 433 484 365 917 656 461 474 378 935 705 APAC 217 234 188 451 335 266 288 199 554 365 IBCM in USD mn 110 62 82 172 231 141 94 92 235 243 Global Markets in USD mn 149 313 267 462 585 206 357 300 563 638 Total Core 1,420 1,463 1,145 2,883 2,354 1,611 1,571 1,215 3,182 2,604 SRU in USD mn -371 -434 -578 -805 -1,118 -332 -382 -546 -714 -1,048 Group 1,052 1,054 582 2,106 1,252 1,283 1,209 684 2,492 1,573 RWA in CHF bn 277 271 259 CET1 ratio 12.8% 12.9% 13.3% Leverage exposure in CHF bn 920 932 906 Tier 1 leverage ratio 5.2% 5.1% 5.2%
51 July 31, 2018 IBCM with continued momentum in executing marquee global M&A transactions in 1H18 Selected announced global M&A transactions in 1H18Deal value and Credit Suisse role USD 10 bn Combination of Sainsbury’sand Asda (Walmart UK) USD 11 bn Sale to Conagra Brands USD 23 bn Merger withKeurig Green Mountain USD 15 bn Acquisition of SCANA Corp Financial Advisor to Walmart Financial Advisor to Pinnacle Foods Financial Advisor to Dr Pepper Snapple Exclusive Financial Advisor to Dominion Sale to KKR Not disclosed Financial Advisor to BMC andJoint Lead Arranger on financing Acquisition ofWestinghouse Electric Co. USD 5 bn Acquisition ofImpact Biomedicines Inc. USD 7 bn Financial Advisor to Brookfield Exclusive Financial Advisor to Celgene Sale to Informa PLC USD 6 bn Financial Advisor and Corporate Broker to UBM
52 July 31, 2018 Positive operating leverage in SUB Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix1 Includes provision for credit losses of CHF 56 mn in 1H15, CHF 15 mn in 1H16, CHF 46 mn in 1H17 and CHF 69 mn in 1H18 2 Excludes Swisscard net revenues of CHF 148 mn, total operating expenses of CHF 123 mn and pre-tax income of CHF 25 mn 1,134 1,610 2,813 1,749 2,759 1H18 1H152 1H16 Net revenues Pre-tax income1 Operating expenses -9% SUB adjusted resultsin CHF bn 1,772 2,691 863 929 +271 mn +0.1% 1H18 vs. 1H15 +5% 1H17 987 2,693 1,726 +2% +2% -1% -1% -7%
53 July 31, 2018 Positive operating leverage in IWM Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix1 Includes provision for credit losses of CHF 1 mn in 1H15, CHF 14 mn in 1H16, CHF 10 mn in 1H17 and CHF 4 mn in 1H18 935 1,772 2,711 2,318 1H18 1H15 1H17 Net revenues Pre-tax income1 Operating expenses +2% IWM adjusted resultsin CHF mn 1,745 2,286 540 568 +395 mn 1H18 vs. 1H15 +19% 705 1H16 1,736 1,770 2,485 +1% -1% +7% +9% +2% +0%
54 July 31, 2018 Positive operating leverage in APAC WM&C Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in the Appendix1 Includes provision for credit losses of CHF 8 mn in 1H15, CHF -16 mn in 1H16, CHF 3 mn in 1H17 and CHF 15 mn in 1H18 464 748 1,227 863 1H18 1H15 1H17 Net revenues Pre-tax income1 Operating expenses +30% APAC WM&C adjusted resultsin CHF mn 576 789 205 234 +259 mn 1H18 vs. 1H15 +56% 403 1H16 645 742 1,148 +9% +33% +7% +12% +15% +1%
55 July 31, 2018 Wealth Management businessesNNA generation NNA growth (annualized) Regularization outflows included in NNA in CHF bn 2Q17 10% 7% 13% 13% APAC PB1 NNA in CHF bn -0.1 - - - 2Q18 3Q17 4Q17 1Q18 -0.1 3% IWM PB NNA in CHF bn NNA growth (annualized) Regularization outflows included in NNA in CHF bn 2Q17 6% 6% 4% 6% -0.4 - -0.4 -0.1 2Q18 3Q17 4Q17 1Q18 -0.5 3% SUB PC NNA in CHF bn NNA growth (annualized) Regularization outflows included in NNA in CHF bn 2Q17 3% 1% 2% 5% - -0.1 - -0.1 2Q18 3Q17 4Q17 1Q18 -0.1 -% 1 APAC PB within WM&C
56 July 31, 2018 Wealth Management businessesNet and gross margins Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in this presentation. For details on calculations see under ‘Notes’ at the end of this Appendix1 APAC PB within WM&C APAC PB1 Adj. net margin in bps 2Q17 2Q18 4Q17 Adj. gross margin in bps 3Q17 1Q18 2Q17 2Q18 4Q17 3Q17 1Q18 IWM PB Adj. net margin in bps Adj. gross margin in bps 2Q17 2Q18 4Q17 3Q17 1Q18 2Q17 2Q18 4Q17 3Q17 1Q18 SUB PC Adj. net margin in bps Adj. gross margin in bps 178 205 198 Average AuM in CHF bn 184 196 337 372 366 346 365 201 208 208 204 208 151 153 171 Adj. pre-tax income in CHF mn 141 116 307 372 382 272 275 222 285 268 217 213 405 412 455 Adj. net revenues in CHF mn 400 391 927 992 1,006 870 923 733 757 743 727 726 2Q17 2Q18 4Q17 3Q17 1Q18 2Q17 2Q18 4Q17 3Q17 1Q18
57 July 31, 2018 Swiss Universal BankPrivate Clients and Corporate & Institutional Clients Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in this presentation Corporate & Institutional Clients Adjusted key financials in CHF mn 2Q18 1Q18 2Q17 Δ 2Q17 Net interest income 309 303 309 0% Recurring commissions & fees 175 174 161 9% Transaction-based 189 190 207 -9% Other revenues -11 -16 -5 Net revenues 662 651 672 -1% Provision for credit losses 24 24 25 Total operating expenses 343 341 365 -6% Pre-tax income 295 286 282 5% Cost/income ratio 52% 52% 54% Key metrics in CHF bn 2Q18 1Q18 2Q17 Δ 2Q17 Adj. net margin in bps 55 52 44 11 Net new assets 0.5 2.7 1.7 Mandates penetration 32% 32% 31% Assets under management 208 207 202 3% Number of RM 1,290 1,310 1,310 -2% Key metrics in CHF bn 2Q18 1Q18 2Q17 Δ 2Q17 Assets under management 356 352 353 1% Number of RM 530 540 550 -4% Private Clients Adjusted key financials in CHF mn 2Q18 1Q18 2Q17 Δ 2Q17 Net interest income 430 428 408 5% Recurring commissions & fees 211 206 202 4% Transaction-based 116 109 123 -6% Other revenues 0 0 0 Net revenues 757 743 733 3% Provision for credit losses 11 10 11 Total operating expenses 461 465 500 -8% Pre-tax income 285 268 222 28% Cost/income ratio 61% 63% 68%
58 July 31, 2018 International Wealth ManagementPrivate Banking and Asset Management Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in this presentation Private Banking Adjusted key financials in CHF mn 2Q18 1Q18 2Q17 Δ 2Q17 Net interest income 394 388 360 9% Recurring commissions & fees 313 307 302 4% Transaction- and perf.-based 285 311 265 8% Net revenues 992 1,006 927 7% Provision for credit losses 5 -1 8 Total operating expenses 615 625 612 0% Pre-tax income 372 382 307 21% Cost/income ratio 62% 62% 66% Key metrics in CHF bn 2Q18 1Q18 2Q17 Δ 2Q17 Adj. net margin in bps 40 42 36 4 Net new assets 5.2 5.5 4.6 Assets under management 371 370 336 10% Mandates penetration 33% 31% 30% Net loans 52 51 46 13% Number of RM 1,120 1,130 1,120 0% Asset Management Adjusted key financials in CHF mn 2Q18 1Q18 2Q17 Δ 2Q17 Management fees 278 267 253 10% Performance & placement rev. 38 27 35 9% Investment & partnership inc. 36 67 49 -27% Net revenues 352 361 337 4% Total operating expenses 263 269 266 -1% Pre-tax income 89 92 71 25% Cost/income ratio 75% 75% 79% Key metrics in CHF bn 2Q18 1Q18 2Q17 Δ 2Q17 Net new assets 8.0 9.0 2.8 Assets under management 401 391 366 10%
59 July 31, 2018 Asia PacificWealth Management & Connected and Markets Note: Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in this presentation † See under ‘Notes’ at the end of this Appendix 1 APAC PB within WM&C Wealth Management & Connected Adjusted key financials in CHF mn 2Q18 1Q18 2Q17 Δ 2Q17 Private Banking 412 455 405 2% Adv., Underwr. and Financing 152 208 154 -1% Net revenues 564 663 559 1% Provision for credit losses 6 9 -1 Total operating expenses 350 398 362 -3% Pre-tax income 208 256 198 5% Cost/income ratio 62% 60% 65% Return on regulatory capital† 27% 36% 28% Risk-weighted assets in CHF bn 22 21 20 9% Leverage exposure in CHF bn 60 60 45 31% Markets Adjusted key financials in USD mn 2Q18 1Q18 2Q17 Δ 2Q17 Equity sales & trading 233 258 194 20% Fixed income sales & trading 121 90 104 16% Net revenues 354 348 298 19% Provision for credit losses 0 2 0 Total operating expenses 294 312 297 -1% Pre-tax income/(loss) 60 34 1 n/m Cost/income ratio 83% 90% 100% Return on regulatory capital† 8% 5% 0% Risk-weighted assets in USD bn 11 13 12 -9% Leverage exposure in USD bn 59 59 59 0% Private Banking1 revenue details in CHF mn 2Q18 1Q18 2Q17 Δ 2Q17 Net interest income 158 159 161 -2% Recurring commissions & fees 112 111 94 19% Transaction-based revenues 142 185 149 -5% Other revenues 0 0 1 Net revenues 412 455 405 2%
60 July 31, 2018 Corporate Center Note: All financial numbers presented and discussed are adjusted, unless otherwise stated. Adjusted results are non-GAAP financial measures. A reconciliation to reported results is included in this presentation. ‘Other revenues’ include required elimination adjustments associated with trading in own shares and treasury commissions charged to divisions Key metrics in CHF bn 2Q18 1Q18 2Q17 Δ 2Q17 Total assets 101 110 63 59% Risk-weighted assets 30 28 18 67% Leverage exposure 103 111 60 72% Adjusted key financials in CHF mn 2Q18 1Q18 2Q17 Δ 2Q17 Treasury results -5 -109 -91 Other 29 49 25 Net revenues 24 -60 -66 n/m Provision for credit losses 0 0 1 Compensation and benefits 74 55 112 -34% G&A expenses -30 37 56 n/m Commission expenses 21 19 8 163% Total other operating expenses -9 56 64 n/m Total operating expenses 65 111 176 -63% Pre-tax loss -41 -171 -243
61 July 31, 2018 Currency mix & Group capital metrics 1 As reported 2 Total expenses include provisions for credit losses 3 Sensitivity analysis based on weighted average exchange rates of USD/CHF of 0.96 and EUR/CHF of 1.16 for the 1H18 results 4 Data based on June 2018 month-end currency mix and on a “look-through” basis 5 Reflects actual capital positions in consolidated Group legal entities (net assets) including net asset hedges less applicable Basel III regulatory adjustments (e.g. goodwill) Currency mix capital metric4 “look-through” A 10% strengthening / weakening of the USD (vs. CHF) would have a -0.1 bps / +0.1 bps impact on the“look-through” BIS CET1 ratio Basel III Risk-weighted assets Swiss leverage exposure CHF EUR Other USD USD CET1 capital 5 CHF Credit Suisse Core results1 1H18in CHF mn Applying a +/- 10% movement on the average FX rates for 1H18, the sensitivities are:USD/CHF impact on 1H18 pre-tax income by CHF +263 / -263 mnEUR/CHF impact on 1H18 pre-tax income by CHF +86 / -86 mn Sensitivity analysis on Core results3 Contribution Swiss Universal Bank International Wealth Management Asia Pacific Global Markets Investment Bank & Capital Markets Core results CHF USD EUR GBP Other Net revenues 11,610 23% 51% 11% 3% 12%Total expenses2 8,727 31% 37% 4% 10% 18% Net revenues 2,850 73% 18% 6% 1% 2%Total expenses2 1,734 81% 12% 3% 2% 2% Net revenues 2,747 17% 53% 19% 3% 8%Total expenses2 1,830 41% 28% 9% 9% 13% Net revenues 1,905 3% 45% 2% 2% 48%Total expenses2 1,454 8% 18% -% 1% 73% Net revenues 2,972 3% 72% 14% 5% 6%Total expenses2 2,529 7% 60% 4% 19% 10% Net revenues 1,172 -% 80% 11% 7% 2%Total expenses2 1,003 4% 72% 5% 15% 4%
62 July 31, 2018 Group in CHF mn 2Q18 1Q18 4Q17 3Q17 2Q17 1Q17 4Q16 3Q16 2Q16 1Q16 4Q15 3Q15 2Q15 1Q15 1H18 1H17 1H16 1H15 Net revenues reported 5,595 5,636 5,189 4,972 5,205 5,534 5,181 5,396 5,108 4,638 4,210 5,985 6,955 6,647 11,231 10,739 9,746 13,602 Fair value on own debt - - - - - - - - - - 697 -623 -228 -144 - - - -372 Real estate gains - -1 - - - - -78 -346 - - -72 - -23 - -1 - - -23 Gains (-)/losses on business sales - -73 28 - - -15 2 - - 56 -34 - - - -73 -15 56 - Net revenues adjusted 5,595 5,562 5,217 4,972 5,205 5,519 5,105 5,050 5,108 4,694 4,801 5,362 6,704 6,503 11,157 10,724 9,802 13,207 Provision for credit losses 73 48 43 32 82 53 75 55 -28 150 133 110 51 30 121 135 122 81 Total operating expenses reported 4,470 4,534 5,005 4,540 4,541 4,811 7,309 5,119 4,937 4,972 10,518 5,023 5,248 5,106 9,004 9,352 9,909 10,354 Goodwill impairment - - - - - - - - - - -3,797 - - - - - - - Restructuring expenses -175 -144 -137 -112 -69 -137 -49 -145 -91 -255 -355 - - - -319 -206 -346 - Major litigation provisions -55 -85 -255 -108 -33 -97 -2,401 -306 - - -563 -204 -63 10 -140 -130 - -53 Expenses related to business sales -1 - -8 - - - - - - - - - - - -1 - - - Total operating expenses adjusted 4,239 4,305 4,605 4,320 4,439 4,577 4,859 4,668 4,846 4,717 5,803 4,819 5,185 5,116 8,544 9,016 9,563 10,301 Pre-tax income/loss (-) reported 1,052 1,054 141 400 582 670 -2,203 222 199 -484 -6,441 852 1,656 1,511 2,106 1,252 -285 3,167 Total adjustments 231 155 428 220 102 219 2,374 105 91 311 5,306 -419 -188 -154 386 321 402 -342 Pre-tax income/loss (-) adjusted 1,283 1,209 569 620 684 889 171 327 290 -173 -1,135 433 1,468 1,357 2,492 1,573 117 2,825 Group in CHF mn 1H18 1H17 1H16 1H15 2017 2016 2015 Total operating expenses reported 9,004 9,352 9,909 10,354 18,897 22,337 25,895 Goodwill impairment - - - - - - -3,797 Restructuring expenses -319 -206 -346 - -455 -540 -355 Major litigation provisions -140 -130 - -53 -493 -2,707 -820 Expenses related to business sales -1 - - - -8 - - Debit valuation adjustments (DVA) 13 -43 - - -83 - - Certain accounting changes -139 -106 -32 -25 -234 -70 -58 Total operating cost base adjusted 8,418 8,867 9,531 10,276 17,624 19,020 20,865 FX adjustment 164 171 102 253 326 291 310 Total operating cost base adjusted at constant FX 8,582 9,038 9,633 10,529 17,950 19,311 21,175 Reconciliation of adjustment items (1/7) Adjusted results are non-GAAP financial measures that exclude goodwill impairment and certain other revenues and expenses included in our reported results. Management believes that adjusted results provide a useful presentation of our operating results for purposes of assessing our Group and divisional performance consistently over time, on a basis that excludes items that management does not consider representative of our underlying performance. Provided below is a reconciliation of our adjusted results to the most directly comparable US GAAP measures.
63 July 31, 2018 1 Excludes net revenues and total operating expenses for Swisscard of CHF 148 mn and CHF 123 mn, respectively 2 Relating to SUB PC, IWM PB and APAC PB within WM&C Wealth Management2 in CHF mn 2Q18 1Q18 2Q17 1H18 1H17 1H16 1H151 Net revenues reported 2,161 2,260 2,065 4,421 4,070 3,776 3,706 Real estate gains - - - - - - -23 Gains (-)/losses on business sales - -56 - -56 - - - Net revenues adjusted 2,161 2,204 2,065 4,365 4,070 3,776 3,683 Provision for credit losses 22 13 13 35 31 16 21 Total operating expenses reported 1,376 1,411 1,384 2,787 2,832 2,739 2,630 Restructuring expenses -47 -41 -4 -88 -75 -61 - Major litigation provisions - - -8 - -8 - 10 Total operating expenses adjusted 1,329 1,370 1,372 2,699 2,749 2,678 2,640 Pre-tax income reported 763 836 668 1,599 1,207 1,021 1,055 Total adjustments 47 -15 12 32 83 61 -33 Pre-tax income adjusted 810 821 680 1,631 1,290 1,082 1,022 Core in CHF mn 2Q18 1Q18 2Q17 1H18 1H17 1H16 1H151 Net revenues reported 5,771 5,839 5,479 11,610 11,219 10,650 12,729 Fair value on own debt - - - - - - -372 Real estate gains - - - - - - -23 Gains (-)/losses on business sales - -73 - -73 23 52 - Net revenues adjusted 5,771 5,766 5,479 11,537 11,242 10,702 12,334 Provision for credit losses 74 48 69 122 98 44 65 Total operating expenses reported 4,277 4,328 4,265 8,605 8,767 8,879 8,697 Restructuring expenses -162 -133 -58 -295 -188 -247 - Major litigation provisions -29 -48 -12 -77 -39 - -44 Total operating expenses adjusted 4,086 4,147 4,195 8,233 8,540 8,632 8,923 Pre-tax income reported 1,420 1,463 1,145 2,883 2,354 1,727 3,697 Total adjustments 191 108 70 299 250 299 -351 Pre-tax income adjusted 1,611 1,571 1,215 3,182 2,604 2,026 3,346 SUB, IWM, APAC WM&C in CHF mn 2Q18 1Q18 2Q17 1H18 1H17 1H16 1H151 3,327 3,497 3,228 6,824 6,392 5,874 5,789 - - - - - - -23 - -73 - -73 - - - 3,327 3,424 3,228 6,751 6,392 5,874 5,766 46 42 43 88 59 13 65 2,127 2,203 2,122 4,330 4,374 4,199 4,083 -66 -57 -5 -123 -97 -69 - -29 -48 -12 -77 -39 - 10 2,032 2,098 2,105 4,130 4,238 4,130 4,093 1,154 1,252 1,063 2,406 1,959 1,662 1,641 95 32 17 127 136 69 -33 1,249 1,284 1,080 2,533 2,095 1,731 1,608 Reconciliation of adjustment items (2/7) Adjusted results are non-GAAP financial measures that exclude goodwill impairment and certain other revenues and expenses included in our reported results. Management believes that adjusted results provide a useful presentation of our operating results for purposes of assessing our Group and divisional performance consistently over time, on a basis that excludes items that management does not consider representative of our underlying performance. Provided below is a reconciliation of our adjusted results to the most directly comparable US GAAP measures.
64 July 31, 2018 1 Excludes net revenues and total operating expenses for Swisscard of CHF 75 mn and CHF 62 mn, respectively 2 Excludes net revenues and total operating expenses for Swisscard of CHF 73 mn and CHF 61 mn, respectively 3 Excludes net revenues and total operating expenses for Swisscard of CHF 78 mn and CHF 61 mn, respectively 4 Excludes net revenues, provisions for credit losses and total operating expenses for Swisscard of CHF 83 mn, CHF 2 mn and CHF 59 mn, respectively 5 Excludes net revenues, provisions for credit losses and total operating expenses for Swisscard of CHF 80 mn, CHF 2 mn and CHF 59 mn, respectively 6 Excludes net revenues, provisions for credit losses and total operating expenses for Swisscard of CHF 77 mn, CHF 1 mn and CHF 60 mn, respectively 7 Excludes net revenues and total operating expenses for Swisscard of CHF 148 mn and CHF 123 mn, respectively 8 Excludes net revenues, provisions for credit losses and total operating expenses for Swisscard of CHF 161 mn, CHF 2 mn and CHF 120 mn, respectively 9 Excludes net revenues, provisions for credit losses and total operating expenses for Swisscard of CHF 157 mn, CHF 3 mn and CHF 119 mn, respectively SUB PC in CHF mn SUB C&IC in CHF mn 2Q18 1Q18 4Q17 3Q17 2Q17 2Q18 1Q18 2Q17 757 762 726 727 733 662 669 672 - - - - - - - - - -19 - - - - -18 - 757 743 726 727 733 662 651 672 11 10 10 9 11 24 24 25 478 487 504 512 500 353 347 367 -17 -22 1 -9 2 -10 -6 2 - - -2 -2 -2 - - -4 461 465 503 501 500 343 341 365 268 265 212 206 222 285 298 280 17 3 1 11 - 10 -12 2 285 268 213 217 222 295 286 282 SUB in CHF mn 2Q18 1Q18 4Q17 3Q17 2Q17 1Q17 4Q16 3Q16 2Q16 1Q16 4Q15 3Q15 2Q151 1Q152 4Q143 3Q144 2Q145 1Q146 Net revenues reported 1,419 1,431 1,318 1,319 1,405 1,354 1,399 1,667 1,337 1,356 1,495 1,364 1,387 1,327 1,717 1,301 1,253 1,323 Real estate gains - - - - - - -20 -346 - - -72 - -23 - -375 - -5 -34 Gains (-)/losses on business sales - -37 - - - - - - - - -23 - - - -24 - - - Net revenues adjusted 1,419 1,394 1,318 1,319 1,405 1,354 1,379 1,321 1,337 1,356 1,400 1,364 1,364 1,327 1,318 1,301 1,248 1,289 Provision for credit losses 35 34 15 14 36 10 34 30 9 6 43 39 33 23 29 18 25 17 Total operating expenses reported 831 834 870 879 867 940 983 879 875 918 1,088 925 899 873 951 859 888 857 Restructuring expenses -27 -28 2 -13 4 -52 3 -19 -4 -40 -42 - - - - - - - Major litigation provisions - - -7 -9 -6 -27 -19 - - - -25 - - - - - - - Total operating expenses adjusted 804 806 865 857 865 861 967 860 871 878 1,021 925 899 873 951 859 888 857 Pre-tax income reported 553 563 433 426 502 404 382 758 453 432 364 400 455 431 737 424 340 449 Total adjustments 27 -9 5 22 2 79 -4 -327 4 40 -28 - -23 - -399 - -5 -34 Pre-tax income adjusted 580 554 438 448 504 483 378 431 457 472 336 400 432 431 338 424 335 415 SUB in CHF mn 1H18 2H17 1H17 2H16 1H16 2H15 1H157 2H148 1H149 Net revenues reported 2,850 2,637 2,759 3,066 2,693 2,859 2,714 3,018 2,576 Real estate gains - - - -366 - -72 -23 -375 -39 Gains (-)/losses on business sales -37 - - - - -23 - -24 - Net revenues adjusted 2,813 2,637 2,759 2,700 2,693 2,764 2,691 2,619 2,537 Provision for credit losses 69 29 46 64 15 82 56 47 42 Total operating expenses reported 1,665 1,749 1,807 1,862 1,793 2,013 1,772 1,810 1,745 Restructuring expenses -55 -11 -48 -16 -44 -42 - - - Major litigation provisions - -16 -33 -19 - -25 - - - Total operating expenses adjusted 1,610 1,722 1,726 1,827 1,749 1,946 1,772 1,810 1,745 Pre-tax income reported 1,116 859 906 1,140 885 764 886 1,161 789 Total adjustments 18 27 81 -331 44 -28 -23 -399 -39 Pre-tax income adjusted 1,134 886 987 809 929 736 863 762 750 Reconciliation of adjustment items (3/7) Adjusted results are non-GAAP financial measures that exclude goodwill impairment and certain other revenues and expenses included in our reported results. Management believes that adjusted results provide a useful presentation of our operating results for purposes of assessing our Group and divisional performance consistently over time, on a basis that excludes items that management does not consider representative of our underlying performance. Provided below is a reconciliation of our adjusted results to the most directly comparable US GAAP measures.
65 July 31, 2018 IWM in CHF mn 2Q18 1Q18 2Q17 1H18 2H17 1H17 2H16 1H16 2H15 1H15 Net revenues reported 1,344 1,403 1,264 2,747 2,626 2,485 2,380 2,318 2,266 2,286 Real estate gains - - - - - - -54 - - - Gains (-)/losses on business sales - -36 - -36 28 - - - -11 - Net revenues adjusted 1,344 1,367 1,264 2,711 2,654 2,485 2,326 2,318 2,255 2,286 Provision for credit losses 5 -1 8 4 17 10 6 14 4 1 Total operating expenses reported 906 920 891 1,826 1,914 1,819 1,798 1,759 2,089 1,735 Restructuring expenses -28 -26 -7 -54 -27 -43 -31 -23 -36 - Major litigation provisions - - -6 - -42 -6 12 - -278 10 Total operating expenses adjusted 878 894 878 1,772 1,845 1,770 1,779 1,736 1,775 1,745 Pre-tax income reported 433 484 365 917 695 656 576 545 173 550 Total adjustments 28 -10 13 18 97 49 -35 23 303 -10 Pre-tax income adjusted 461 474 378 935 792 705 541 568 476 540 IWM PB in CHF mn IWM AM in CHF mn 2Q18 1Q18 4Q17 3Q17 2Q17 2Q18 1Q18 2Q17 1H18 1H17 1H16 Net revenues reported 992 1,043 923 870 927 352 360 337 712 675 654 Gains (-)/losses on business sales - -37 - - - - 1 - 1 - - Net revenues adjusted 992 1,006 923 870 927 352 361 337 713 675 654 Provision for credit losses 5 -1 14 3 8 - - - - - - Total operating expenses reported 640 643 673 615 622 266 277 269 543 555 526 Restructuring expenses -25 -18 -8 -9 -4 -3 -8 -3 -11 -16 - Major litigation provisions - - -31 -11 -6 - - - - - - Total operating expenses adjusted 615 625 634 595 612 263 269 266 532 539 526 Pre-tax income reported 347 401 236 252 297 86 83 68 169 120 128 Total adjustments 25 -19 39 20 10 3 9 3 12 16 - Pre-tax income adjusted 372 382 275 272 307 89 92 71 181 136 128 Reconciliation of adjustment items (4/7) Adjusted results are non-GAAP financial measures that exclude goodwill impairment and certain other revenues and expenses included in our reported results. Management believes that adjusted results provide a useful presentation of our operating results for purposes of assessing our Group and divisional performance consistently over time, on a basis that excludes items that management does not consider representative of our underlying performance. Provided below is a reconciliation of our adjusted results to the most directly comparable US GAAP measures.
66 July 31, 2018 APAC Mkts in CHF mn APAC Mkts in USD mn 2Q18 1Q18 2Q17 2Q18 1Q18 2Q17 1H18 2H17 1H17 Net revenues reported 350 328 289 354 348 298 702 618 591 Net revenues adjusted 350 328 289 354 348 298 702 618 591 Provision for credit losses 1 1 - - 2 - 2 - - Total operating expenses reported 300 298 297 304 315 305 619 625 652 Restructuring expenses -9 -3 -9 -10 -3 -8 -13 -19 -23 Major litigation provisions - - - - - - - - - Total operating expenses adjusted 291 295 288 294 312 297 606 606 629 Pre-tax income/loss (-) reported 49 29 -8 50 31 -7 81 -7 -61 Total adjustments 9 3 9 10 3 8 13 19 23 Pre-tax income/loss (-) adjusted 58 32 1 60 34 1 94 12 -38 APAC in CHF mn 2Q18 1Q18 2Q17 1H18 1H17 1H16 Net revenues reported 914 991 848 1,905 1,729 1,818 Net revenues adjusted 914 991 848 1,905 1,729 1,818 Provision for credit losses 7 10 -1 17 3 -19 Total operating expenses reported 690 747 661 1,437 1,391 1,367 Goodwill impairment - - - - - - Restructuring expenses -20 -6 -11 -26 -30 -11 Major litigation provisions -29 -48 - -77 - - Total operating expenses adjusted 641 693 650 1,334 1,361 1,356 Pre-tax income reported 217 234 188 451 335 470 Total adjustments 49 54 11 103 30 11 Pre-tax income adjusted 266 288 199 554 365 481 APAC WM&C in CHF mn 2Q18 1Q18 2Q17 1H18 2H17 1H17 2H16 1H16 2H15 1H15 564 663 559 1,227 1,174 1,148 1,041 863 717 789 564 663 559 1,227 1,174 1,148 1,041 863 717 789 6 9 -1 15 12 3 45 -16 23 8 390 449 364 839 760 748 739 647 1,067 576 - - - - - - - - -446 - -11 -3 -2 -14 -15 -6 -12 -2 -1 - -29 -48 - -77 - - - - -6 - 350 398 362 748 745 742 727 645 614 576 168 205 196 373 402 397 257 232 -373 205 40 51 2 91 15 6 12 2 453 - 208 256 198 464 417 403 269 234 80 205 Reconciliation of adjustment items (5/7) Adjusted results are non-GAAP financial measures that exclude goodwill impairment and certain other revenues and expenses included in our reported results. Management believes that adjusted results provide a useful presentation of our operating results for purposes of assessing our Group and divisional performance consistently over time, on a basis that excludes items that management does not consider representative of our underlying performance. Provided below is a reconciliation of our adjusted results to the most directly comparable US GAAP measures. APAC PB in CHF mn 2Q18 1Q18 4Q17 3Q17 2Q17 412 455 391 400 405 412 455 391 400 405 6 4 7 -1 -6 258 281 271 261 262 -5 -1 -3 -1 -2 - - - - - 253 280 268 260 260 148 170 113 140 149 5 1 3 1 2 153 171 116 141 151
67 July 31, 2018 IBCM in USD mn GM in USD mn 2Q18 1Q18 2Q17 1H18 1H17 1H16 2Q18 1Q18 2Q17 1H18 1H17 1H16 Net revenues reported 650 559 527 1,209 1,135 953 1,441 1,642 1,560 3,083 3,175 2,923 Net revenues adjusted 650 559 527 1,209 1,135 953 1,441 1,642 1,560 3,083 3,175 2,923 Provision for credit losses 15 1 14 16 20 30 13 4 12 17 17 5 Total operating expenses reported 525 496 431 1,021 884 842 1,279 1,325 1,281 2,604 2,573 2,962 Restructuring expenses -31 -32 -10 -63 -12 -19 -57 -44 -33 -101 -53 -154 Major litigation provisions - - - - - - - - - - - - Expenses related to business sales - - - - - - - - - - - - Total operating expenses adjusted 494 464 421 958 872 823 1,222 1,281 1,248 2,503 2,520 2,808 Pre-tax income reported 110 62 82 172 231 81 149 313 267 462 585 -44 Total adjustments 31 32 10 63 12 19 57 44 33 101 53 154 Pre-tax income adjusted 141 94 92 235 243 100 206 357 300 563 638 110 Reconciliation of adjustment items (6/7) Adjusted results are non-GAAP financial measures that exclude goodwill impairment and certain other revenues and expenses included in our reported results. Management believes that adjusted results provide a useful presentation of our operating results for purposes of assessing our Group and divisional performance consistently over time, on a basis that excludes items that management does not consider representative of our underlying performance. Provided below is a reconciliation of our adjusted results to the most directly comparable US GAAP measures.
68 July 31, 2018 Corp. Ctr. in CHF mn SRU in USD mn SRU in CHF mn 2Q18 1Q18 2Q17 2Q18 1Q18 2Q17 1H18 1H17 1H16 1H15 2Q18 1Q18 2Q17 Net revenues reported 24 -60 -66 -178 -215 -280 -393 -487 -917 772 -176 -203 -274 Real estate gains - - - - -1 - -1 - - - - -1 - Gains (-)/losses on business sales - - - - - - - -39 5 - - - - Net revenues adjusted 24 -60 -66 -178 -216 -280 -394 -526 -912 772 -176 -204 -274 Provision for credit losses - - 1 -1 - 14 -1 37 81 18 -1 - 13 Total operating expenses reported 65 112 178 194 219 284 413 594 1,045 1,338 193 206 276 Restructuring expenses - -1 -2 -12 -12 -12 -24 -19 -99 - -13 -11 -11 Major litigation provisions - - - -26 -41 -20 -67 -90 - -10 -26 -37 -21 Expenses related to business sales - - - -1 - - -1 - - - -1 - - Total operating expenses adjusted 65 111 176 155 166 252 321 485 946 1,328 153 158 244 Pre-tax income/loss (-) reported -41 -172 -245 -371 -434 -578 -805 -1,118 -2,043 -584 -368 -409 -563 Total adjustments - 1 2 39 52 32 91 70 104 10 40 47 32 Pre-tax income/loss (-) adjusted -41 -171 -243 -332 -382 -546 -714 -1,048 -1,939 -574 -328 -362 -531 Reconciliation of adjustment items (7/7) Adjusted results are non-GAAP financial measures that exclude goodwill impairment and certain other revenues and expenses included in our reported results. Management believes that adjusted results provide a useful presentation of our operating results for purposes of assessing our Group and divisional performance consistently over time, on a basis that excludes items that management does not consider representative of our underlying performance. Provided below is a reconciliation of our adjusted results to the most directly comparable US GAAP measures.
69 July 31, 2018 Notes Throughout the presentation rounding differences may occurUnless otherwise noted, all CET1 ratio, Tier 1 leverage ratio, risk-weighted assets and leverage exposure figures shown in this presentation are as of the end of the respective period and on a “look-through” basisGross and net margins are shown in basis pointsGross margin = adj. net revenues annualized / average AuM; net margin = adj. pre-tax income annualized / average AuMMandate penetration reflects advisory and discretionary mandates volumes as a percentage of AuM, excluding those from the external asset manager business General notes Specific notes * Our cost savings program is measured using an adjusted operating cost base at constant FX rates. “Adjusted operating cost base at constant FX rates” include adjustments as made in all our disclosures for restructuring expenses, major litigation provisions, expenses related to business sales and a goodwill impairment taken in 4Q15 as well as adjustments for debit valuation adjustments (DVA) related volatility, FX and for certain accounting changes (which had not been in place at the launch of the cost savings program). Adjustments for certain accounting changes have been restated to reflect grossed up expenses in the Corporate Center and, starting in 1Q18, also include adjustments for changes from ASU 2014-09 “Revenue from Contracts with Customers”, which is described further in our 1Q18 and 2Q18 financial reports. Adjustments for FX apply unweighted currency exchange rates, i.e., a straight line average of monthly rates, consistently for the periods under review. † Regulatory capital is calculated as the worst of 10% of RWA and 3.5% of leverage exposure. Return on regulatory capital is calculated using (adjusted) income / (loss) after tax and assumes a tax rate of 30% and capital allocated based on the worst of 10% of average RWA and 3.5% of average leverage exposure. For the Markets business within the APAC division and for the Global Markets and Investment Banking & Capital Markets divisions, return on regulatory capital is based on US dollar denominated numbers. Adjusted return on regulatory capital is calculated using adjusted results, applying the same methodology to calculate return on regulatory capital.‡ Return on tangible equity is based on tangible equity attributable to shareholders, a non-GAAP financial measure, which is calculated by deducting goodwill and other intangible assets from total equity attributable to shareholders as presented in our balance sheet. Management believes that the return on tangible equity attributable to shareholders is meaningful as it allows consistent measurement of the performance of businesses without regard to whether the businesses were acquired. For end-2Q18, tangible equity excluded goodwill of CHF 4,797 mn and other intangible assets of CHF 212 mn from total shareholders’ equity of CHF 43,470 mn as presented in our balance sheet. For end-1Q18, tangible equity excluded goodwill of CHF 4,667 mn and other intangible assets of CHF 212 mn from total shareholders’ equity of CHF 42,540 mn as presented in our balance sheet. For end-2Q17, tangible equity excluded goodwill of CHF 4,673 mn and other intangible assets of CHF 195 mn from total shareholders’ equity of CHF 43,493 mn as presented in our balance sheet. For end-2Q16, tangible equity excluded goodwill of CHF 4,745 mn and other intangible assets of CHF 191 mn from total shareholders’ equity of CHF 44,962 mn as presented in our balance sheet. For end-2Q15, tangible equity excluded goodwill of CHF 8,238 mn and other intangible assets of CHF 205 mn from total shareholders’ equity of CHF 42,642 mn as presented in our balance sheet. Abbreviations Adj. = Adjusted; Adv. = Advisory; AM = Asset Management; APAC = Asia Pacific; AT1 = Additional Tier 1; AuM = Assets under Management; BCBS = Basel Committee on Banking Supervision; BIS = Bank for International Settlements; bps = basis points; CAGR = Compound Annual Growth Rate; CET1 = Common Equity Tier 1; C&IC = Corporate & Institutional Clients; CoCos = Contingent Convertibles; Corp. Ctr. = Corporate Center; DVA = Debit Valuation Adjustments; ECM = Equity Capital Markets; EMEA = Europe, Middle East & Africa; FINMA = Swiss Financial Market Supervisory Authority; FX = Foreign Exchange; G&A = General & Administrative; GM = Global Markets; IBCM = Investment Banking & Capital Markets; inc. = income; ITS = International Trading Solutions; IWM = International Wealth Management; M&A = Mergers & Acquisitions; Mkts = Markets; n/m = not meaningful; NNA = Net new assets; Op Risk = Operational Risk; PB = Private Banking; PC = Private Clients; perf. = performance; pp. = percentage points; PTI = Pre-tax income; rev. = revenues; RM = Relationship Manager(s); RoRC = Return on Regulatory Capital; RoTE = Return on Tangible Equity; RWA = Risk-weighted assets; SRU = Strategic Resolution Unit; SUB = Swiss Universal Bank; TBV = Tangible Book Value; UHNW = Ultra High Net Worth; Underwr. = underwriting; VaR = Value-at-Risk; WM&C = Wealth Management & Connected; YoY = Year on year
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CREDIT SUISSE GROUP AG and CREDIT SUISSE AG
(Registrants)
Date: July 31, 2018
By:
/s/ Tidjane Thiam
Tidjane Thiam
Chief Executive Officer
By:
/s/ David R. Mathers
David R. Mathers
Chief Financial Officer