Credit Suisse — FY2022 Earnings Presentation
44 slides from Credit Suisse's earnings presentation, Feb 9, 2023
Slide 1: 4Q22 and Full Year 2022 Results Analyst and Investor Call
4Q22 and Full Year 2022 Results Analyst and Investor Call Ulrich Körner Chief Executive Officer Dixit Joshi Chief Financial Officer February 9, 2023
Slide 2: Disclaimer (1/2)
Disclaimer (1/2) Credit Suisse has not finalized restated historical information according to its new divisional structure and Credit Suisse’s independent registered public accounting firm has not reviewed such information. Accordingly, the preliminary information contained in this presentation is s
Slide 3: Disclaimer (2/2)
Disclaimer (2/2) Cautionary statements relating to interim financial information This document contains certain unaudited interim financial information for the first quarter of 2023. This information has been derived from management accounts, is preliminary in nature, does not reflect the complete r
Slide 4: Disciplined strategic execution with accelerated de-risking and deleveraging
Disciplined strategic execution with accelerated de-risking and deleveraging ➢ Reported pre-tax loss of CHF 1.3 bn; adjusted pre-tax loss of CHF 1.0 bn 4Q22 Financial Performance in ➢ CET1 ratio of 14.1% and Tier 1 leverage ratio of 7.7%; successful execution of CHF ~4 bn of capital raises line with
Slide 5: 4Q22 net loss impacted by Investment Bank performance and lower client activity
4Q22 net loss impacted by Investment Bank performance and lower client activity 4Q22 net results analysis in CHF mn Wealth Management (155) Adjusted pre-tax income/(loss) Swiss Bank 259 Asset Management (15) Investment Bank (USD mn) (1,259) Corporate Center 104 Group adjusted pre-tax loss (1,015) Re
Slide 6: Strategic transformation into new Credit Suisse is well underway
Strategic transformation into new Credit Suisse is well underway Strengthening business Delivering on strategic priorities momentum in 2023 and beyond Capitalize on the core strengths of our Wealth Management franchise and Restructure the Investment Bank reinvigorate growth; reinforce Swiss Bank’s l
Slide 7: Driving strategic change at pace
Driving strategic change at pace Strategic priorities Progress update since 3Q22 ▪ Securitized Products: Achieved ~2/3rd of targeted asset reduction since 3Q22, or USD ~35 bn reduction out of USD ~55 bn in total Restructure the ▪ Non-Core Unit: Reduced RWA and leverage exposure by USD ~5 bn and USD
Slide 8: Substantial progress on deleveraging and de-risking Securitized Products and Non-Core Unit
Substantial progress on deleveraging and de-risking Securitized Products and Non-Core Unit Securitized Products assets in USD bn 2/3rd of targeted reduction in Securitized Products ~74 ▪ Achieved USD ~35 bn SPG asset reduction since 3Q22, or ~2/3rd of targeted reduction ~39 ▪ First closing of the Ap
Slide 9: Transformation to CS First Boston: creating significant value for shareholders
Transformation to CS First Boston: creating significant value for Credit Suisse shareholders An advisory led partnership model Progress to Date Risk-weighted assets In USD bn; illustrative ▪ Global independent, capital markets and advisory led business with distinctive capabilities and unique market
Slide 10: CS First Boston's capabilities enhanced by acquisition of M. Klein & Company
CS First Boston’s capabilities enhanced by the acquisition of the investment banking business of M. Klein & Company Strategic Rationale Illustrative Transactions4 ▪ M. Klein & Company1 is a leading boutique investment bank and has advised on USD 1.5 trn of transactions since its formation in 2010 Ar
Slide 11: Significant progress on cost transformation already achieved in 4Q22
Significant progress on cost transformation already achieved in 4Q22 Group cost base targets in CHF bn Decisive actions executed in 4Q22 Excluding impact of SP transaction and other divestments ➢ Achieved reduction in number of employees of ~4% in 4Q222 ~ (1.2) ~ (2.5) ➢ Reduced contractor headcount
Slide 12: Our roadmap to create the new Credit Suisse
Our roadmap to create the new Credit Suisse 2025 onwards 2023-24 onwards 4Q22 Stabilize andsustainable Deliver re-shape portfolio, returns Stabilize Transform into and Suisse new Credit re-shapeand CS secureand grow core business capital Re-shape Stabilize and portfolio, re-shapestrengthen portfolio
Slide 13: Detailed Financials
Detailed Financials
Slide 14: Group Overview
Group Overview Credit Suisse Group in CHF mn 4Q22 3Q22 4Q21 Δ 4Q21 2022 2021 Δ 2021 Net revenues 3,060 3,804 4,582 (33)% 14,921 22,696 (34)% Reported pre-tax loss Rev. Adjusted net revenues 2,964 3,798 4,384 (32)% 15,164 22,544 (33)% ▪ of CHF 1,315 mn driven by losses in the Investment Bank and Weal
Slide 15: Assets under management impacted by idiosyncratic events in October 2022
Assets under management impacted by idiosyncratic events in October 2022 Wealth Management AuM in CHF bn 635 12 540 (93) (15) Group AuM2 of CHF 1,294 bn ▪ down ~8% vs. 3Q22, driven by net asset outflows and adverse 3Q22 Market moves NNA FX impact & other1 4Q22 FX impact, partly offset by positive ma
Slide 16: Wealth Management Profitability
Wealth Management 4Q22 pre-tax loss driven by lower revenues, mainly reflecting client asset outflows, and higher costs in CHF mn 4Q22 3Q22 4Q21 Δ 4Q21 2022 2021 Δ 2021 Net interest income 416 615 502 (17)% 2,103 2,110 - Adjusted net revenues down 18% vs. 4Q21 Revenues Recurring commissions and fees
Slide 17: Swiss Bank Profitability
Swiss Bank Resilient 4Q22 negatively impacted by normalizing provisions and compensation expenses in CHF mn 4Q22 3Q22 4Q21 Δ 4Q21 2022 2021 Δ 2021 Net interest income 523 525 587 (11)% 2,219 2,345 (5)% Adjusted net revenues down 10% vs. 4Q21 Revenues Recurring commissions and fees 300 323 332 (10)%
Slide 18: Asset Management Profitability
Asset Management Pre-tax income and NNA negatively affected by the challenging macro environment in CHF mn 4Q22 3Q22 4Q21 Δ 4Q21 2022 2021 Δ 2021 Management fees 231 250 286 (19)% 1,011 1,137 (11)% Adjusted net revenues down 28% vs. 4Q21 Revenues Perf., transaction & placement rev. 30 33 94 (68)% 11
Slide 19: Investment Bank Profitability
Investment Bank Pre-tax loss driven by impact of strategic actions and continued challenging market conditions in USD mn 4Q22 3Q22 4Q21 Δ 4Q21 2022 2021 Δ 2021 Adjusted net revenues down 74% compared vs. 4Q21 Fixed income sales & trading 81 558 504 (84)% 2,063 3,861 (47)% ▪ Capital Market and Adviso
Slide 20: CET1 ratio of 14.1%
CET1 ratio of 14.1% CET1 ratio development in bps 80 bps 147 bps 14.1% (24) bps CET1 ratio up ~150 bps to 14.1% 12.6% (53) bps ▪ CET1 ratio improved by 147 bps from the capital raises of CHF ~4.0 bn ▪ Negatively impacted by (53) bps from our net loss of CHF 1.4 bn, offset by RWA reductions of 80 bps
Slide 21: Tier 1 leverage ratio of 7.7%
Tier 1 leverage ratio of 7.7% Tier 1 leverage ratio development in bps 59 bps 7.7% 102 bps 47 bps 6.0% (21) bps Tier 1 leverage ratio up to 7.7% (17) bps ▪ Tier 1 leverage ratio improved by 47 bps from the capital raises of CHF ~4.0 bn ▪ HQLA impact from deposit outflows and business deleveraging in
Slide 22: Successful start to NCU's de-risking process
Successful start to NCU’s de-risking process Risk-weighted asset progression Illustrative in USD bn 35 Operational Risk 6 ~25 4Q22 Highlights 6 ~20 De-risking activity, run down and market moves resulted in ~17 6 estimated: 6 ▪ RWA reduction of USD ~5 bn ▪ Leverage exposure reduction of USD ~15 bn1
Slide 23: Decisive actions have rebuilt liquidity coverage ratio from lower levels
Decisive actions have rebuilt liquidity coverage ratio from lower levels in the quarter Liquidity coverage ratio1 average in % Average LCR at 144% at the end of 4Q22 ▪ Improved from lower levels in the quarter following the idiosyncratic events of October 2022 ▪ Supported by deleveraging, CHF ~4 bn
Slide 24: Deleveraging to significantly reduce funding needs
Deleveraging to significantly reduce funding needs Long-term debt capital markets issuance and redemption1 volumes in CHF bn Liquidity instruments2 Covered bonds Liquidity TLAC-eligible instruments3 Senior bonds (OpCo) instruments Senior bonds (HoldCo) TLAC-eligible Capital instruments (AT1) instrum
Slide 25: CHF ~0.9 bn additional group revenues by 2025 from higher forward rate expectations
CHF ~0.9 bn additional group revenues by 2025 from higher forward rate expectations Sensitivity of Group revenues to interest rates1 Revenue impact from realization of forward rates2 pre-funding cost CHF USD EUR CHF ~0.9 bn CHF ~0.6 bn CHF ~0.2 bn Key messages ▪ Cumulative group revenues sensitivity
Slide 26: Significant progress on our CHF ~2.5 bn cost transformation
Significant progress on our CHF ~2.5 bn cost transformation Group cost base Full time employees1 in CHF bn in ’000s) Excluding impact of SP transaction and other divestments ~ (1.2) ~ (2.5) ~17.0 ~16.5-17.0 Group cost update 16.2 52 15.8 ~(17)% ▪ 2022 adjusted operating expenses of CHF 16.2 bn 50 be
Slide 27: Group financial targets reaffirmed
Group financial targets reaffirmed Cost base1 in CHF bn CET1 ratio2 Return on tangible equity‡ 2025 >13.5% in 2025 15.8 in 2023 Core: >8% At least 13% through ~14.5 in 2025 Group: ~6% transformation3 Note: Results excluding certain items in our reported results are non-GAAP financial measures. See t
Slide 28: Appendix
CREDIT SUISSE WS
Slide 29: Corporate Center
Corporate Center Corporate Center ARU within Corporate Center in CHF mn 4Q22 3Q22 4Q21 2022 2021 in CHF mn 4Q22 3Q22 4Q21 2022 2021 Treasury results 212 (7) (130) (204) (174) Net revenues (5) (1) 17 55 (93) Revenues Rev. Asset Resolution Unit (5) (1) 17 55 (93) Other1 (21) 43 48 106 274 Provision fo
Slide 30: We have a strong capital and liquidity position
We have a strong capital and liquidity position 4Q22 CET1 ratio – Peers1 4Q22 Liquidity coverage ratio – Peers2 15.3% 14.4% 14.2% 14.1% 13.6% 13.5% 13.4% 13.4% 13.2% 12.3% 12.1% 11.2% 164% 156% 145% 144% 142% 136% 133% 129% 124% 123% 118% 112% Credit * * * Credit * * * * Suisse Suisse 4Q22 Tier 1 le
Slide 31: Capital exceeding regulatory requirements
Capital exceeding regulatory requirements Total loss-absorbing capacity 15.2% as of end-4Q22, in CHF bn 39.5% 99.1 7.6% Gone 19.6% 8.8% concern 49.1 capital 25.1% 4 3.8% 4 2.2% 10.5% 5.8% AT1 14.7 1.5% Going 4.3% 2025 target5 Pillar 2 add-on2 concern Pillar 2 add-on2 >13.5% capital Other going capit
Slide 32: Our loan book is highly collateralized with a majority in Switzerland
Our loan book is highly collateralized with a majority in Switzerland Group gross loans – 4Q22 Provision for credit losses ratio vs. peers4 Provision for credit losses / average net loans, in bps Corporate & institutional1 Consumer2 CHF 115 bn or 43% 1% CHF 151 bn or 57% 9% Swiss Bank & Wealth Manag
Slide 33: Oil & Gas / Leveraged Finance exposure
Oil & Gas / Leveraged Finance exposure Oil & Gas exposure1 Leveraged Finance exposure2 in USD bn in USD bn 4.4 4.5 4.2 3.9 7.4 3.7 6.7 1.9 1.8 5.9 Non-IG 1.9 1.8 Non-IG 1.7 Non-IG Non-IG Non-IG 3.6 3.4 2.5 2.7 2.3 2.1 1.9 IG IG IG IG IG 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 33 1 Oil & Ga
Slide 34: TBVPS impacted by rights issue and net loss in the quarter
TBVPS impacted by rights issue and net loss in the quarter Tangible book value per share (TBVPS)‡ in CHF 15.22 (0.54) 0.44 0.12 10.60 (3.98) (0.66) 1 2 3Q22 Net income Rights FX Own credit Other 4Q22 attr. to issue shareholders Note: Results excluding certain items in our reported results are non-GA
Slide 35: Wealth Management
Wealth Management Adjusted net revenues in CHF mn Adjusted cost/income ratio Assets under Management in CHF bn 1,506 1,444 115% 743 1,345 1,355 707 93% 94% 662 635 1,107 90% 84% 540 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 Adjusted pre-tax income in CHF mn Adjusted
Slide 36: Swiss Bank
Swiss Bank Adjusted net revenues in CHF mn Adjusted cost/income ratio Assets under Management in CHF bn 69% 598 583 1,039 1,047 58% 60% 60% 58% 545 527 526 1,022 956 931 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 Adjusted pre-tax income in CHF mn Adjusted return on re
Slide 37: Asset Management
Asset Management Adjusted net revenues in CHF mn Adjusted cost/income ratio Assets under Management in CHF bn 105% 399 477 462 359 346 86% 89% 427 411 77% 402 311 70% 286 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 Adjusted pre-tax income in CHF mn Adjusted return on r
Slide 38: Investment Bank
Investment Bank Adjusted Fixed Income Adjusted Equity Adjusted pre-tax income in USD mn sales & trading in USD mn sales & trading1 in USD mn 526 (55) 802 (184) 622 403 558 342 504 (640) 248 (860) 81 15 (1,259) 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 Adjusted Adviso
Slide 39: Net and gross margins
Net and gross margins Wealth Management Swiss Bank 12 30 28 28 7 26 7 5 20 Adjusted net margin in bps (11) 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 83 83 82 76 74 71 70 70 70 70 Adjusted gross margin in bps 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q22 3Q22 4Q22 Adjusted net revenues in CHF mn 1,
Slide 40: Currency mix & Group capital metrics
Currency mix & Group capital metrics Adjusted Credit Suisse Group results Sensitivity analysis on Group results2 Applying a +/- 10% movement on the average FX rates Contribution for 4Q22 LTM, the sensitivities are: 4Q22 LTM in CHF mn CHF USD EUR GBP Other ▪ USD/CHF impact on 4Q22 LTM pre-tax income
Slide 41: Reconciliation of adjustment items (1/2)
Results excluding certain items included in our reported results are non-GAAP financial measures. Following the reorganization implemented at the beginning of 2022, we have amended the presentation of our adjusted results. Management believes that such results provide a useful presentation of our op
Slide 42: Reconciliation of adjustment items (2/2)
Results excluding certain items included in our reported results are non-GAAP financial measures. Following the reorganization implemented at the beginning of 2022, we have amended the presentation of our adjusted results. Management believes that such results provide a useful presentation of our op
Slide 43: Notes
Notes General notes ▪ Throughout this presentation rounding differences may occur ▪ Unless otherwise stated, all financial numbers presented and discussed are adjusted. Results excluding certain items included in our reported results are non-GAAP financial measures. All percentage changes and compar
Slide 44: CREDIT SUISSE WS
CREDIT SUISSE WS