Credit Suisse — Q3 2022 Earnings Presentation
26 slides from Credit Suisse's earnings presentation, Oct 27, 2022
Slide 1: 3Q22 Results Analyst and Investor Call
3Q22 Results Analyst and Investor Call Ulrich Körner Chief Executive Officer Dixit Joshi Chief Financial Officer October 27, 2022
Slide 2: Disclaimer (1/2)
Disclaimer (1/2) Credit Suisse has not finalized its 3Q22 Financial Report and Credit Suisse’s independent registered public accounting firm has not completed its review of the condensed consolidated financial statements (unaudited) for the period. Accordingly, the financial information contained in
Slide 3: Disclaimer (2/2)
Disclaimer (2/2) Statement regarding capital, liquidity and leverage Credit Suisse is subject to the Basel framework, as implemented in Switzerland, as well as Swiss legislation and regulations for systemically important banks, which include capital, liquidity, leverage and large exposure requiremen
Slide 4: 3Q22 Key messages
3Q22 Key messages CHF (4.0) bn CHF (0.3) bn CHF (0.1) bn reported net loss reported pre-tax loss adjusted pre-tax loss included CHF (3.7) bn impact from included CHF 0.2 bn of major driven by weak IB performance the impairment of deferred tax assets litigation provisions and lower client activity 12
Slide 5: Select updates on addressing legacy litigation issues
Select updates on addressing legacy litigation issues Proactive approach to reduction of the litigation docket, including through settlement of litigation cases; net litigation provisions of CHF 245 mn in 3Q22, of which CHF 178 mn related to major litigation provisions Settlements of RMBS and French
Slide 6: Group 3Q22 net loss driven by impairment of deferred tax assets and weak Investment Bank performance
Group 3Q22 net loss driven by impairment of deferred tax assets and weak Investment Bank performance 3Q22 net loss analysis in CHF mn Swiss Bank 383 Adjusted pre-tax incom e/ (loss) Asset Management 104 Wealth Management 78 Corporate Center (41) Investment Bank (USD mn) (640) Group adjusted pre-tax
Slide 7: Detailed Financials
Detailed Financials
Slide 8: Profitability: Group Overview
Group Overview Credit Suisse Group in CHF mn 3Q22 2Q22 3Q21 Δ 2Q22 Δ 3Q21 Net revenues 3,804 3,645 5,437 4% (30)% Reported net revenues Rev. Adjusted net revenues 3,798 3,820 5,504 (1)% (31)% down 30% YoY, driven by substantially lower ECM and Leveraged Finance activity, as well as mark-to-market lo
Slide 9: AuM impacted by continued adverse market movements and net outflows
AuM impacted by continued adverse market movements and net outflows Wealth Managem ent AuM in CHF bn 662 - 635 (20) (6) Group AuM of CHF 1,401 bn including CHF (173) bn in assets managed across businesses, 2Q22 Market moves NNA FX impact & other 3Q22 down CHF 53 bn vs. 2Q22 Swiss Bank AuM in CHF bn
Slide 10: Adjusted operating expenses down 6% YoY
Adjusted operating expenses down 6% YoY Group adjusted operating expenses in CHF mn Lower compensation and benefits of CHF 398 mn, reflecting revenue decline 4,098 145 24 3,869 Impairment of IT-related assets of CHF 145 mn in Wealth Management, following a review of our technology and platform strat
Slide 11: CET1 ratio of 12.6%; pro forma CET1 ratio of 14.0% including CHF ~4 bn capital raises
CET1 ratio of 12.6%; pro forma CET1 ratio of 14.0% including CHF ~4 bn capital raises CET1 ratio developm ent in bps Strategy-related ~140 bps 14.0% 13.5% (12) bps (20) bps 13.1% 12.6% CET1 ratio down 90 bps vs. 2Q22 (11) bps ▪ (48) bps from DTA impacts related to our strategic review; (48) bps (12)
Slide 12: Profitability: Wealth Management
Wealth Management Lower PTI with higher NII offset by lower fees and transaction revenues, and an IT-related impairment in CHF mn 3Q22 2Q22 3Q21 Δ 3Q21 Net interest income 615 558 511 20% Adjusted net revenues down 14% Revenues Recurring commissions and fees 382 408 464 (18)% ▪ Net interest income u
Slide 13: Profitability: Swiss Bank
Swiss Bank Resilient performance notwithstanding impact of Swiss threshold benefits in CHF mn 3Q22 2Q22 3Q21 Δ 3Q21 Net interest income 525 595 589 (11)% Adjusted net revenues down 9% Revenues Recurring commissions and fees 323 334 333 (3)% ▪ Net interest income down 11%, mainly driven by lower SNB
Slide 14: Profitability: Asset Management
Asset Management PTI adversely affected by continued market uncertainty in CHF mn 3Q22 2Q22 3Q21 Δ 3Q21 Management fees 250 258 287 (13)% Adjusted net revenues down 15% Revenues Perf., transaction & placement rev. 33 5 75 (56)% due to lower performance, transactions & placement revenues and lower In
Slide 15: Profitability: Investment Bank
Investment Bank Significant pre-tax loss amid persistently challenging capital markets conditions and lower capital usage in USD mn 3Q22 2Q22 3Q21 Δ 3Q21 Adjusted net revenues down 58% Fixed income sales & trading 558 622 825 (32)% ▪ Capital Markets revenues impacted by substantially lower Equity Ca
Slide 16: Revenues: Corporate Center
Corporate Center Corporate Center ARU within Corporate Center in CHF mn 3Q22 2Q22 3Q21 Δ 3Q21 in CHF mn 3Q22 2Q22 3Q21 Δ 3Q21 Treasury results (7) (155) (57) n/m Rev. Net revenues (1) 22 (34) n/m Revenues Asset Resolution unit (1) 22 (34) n/m Other1 43 42 83 (48)% Provision for credit losses (1) - 2
Slide 17: Appendix
CREDIT SUISSE WS
Slide 18: Net and gross margins
Net and gross margins Wealth Managem ent Swiss Bank 30 30 28 28 26 20 Adjusted net margin in bps 12 7 7 5 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 83 83 83 82 74 71 71 70 70 70 Adjusted gross margin in bps 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 Adjusted net revenues in CHF mn 1,5
Slide 19: Oil & Gas / Leveraged Finance exposures
Oil & Gas / Leveraged Finance exposures Oil & Gas exposure 1 Leveraged Finance exposure 2 in USD bn in USD bn 5.0 4.4 4.5 4.2 7.4 2.0 3.9 6.7 1.9 1.8 6.4 Non-IG 1.9 5.9 Non-IG Non-IG 1.8 Non-IG Non-IG 3.6 3.0 IG 2.5 2.7 2.3 2.1 IG IG IG IG 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 19 1 Oil &
Slide 20: 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 – 3Q22 Provision for credit losses ratio vs. peers 4 Provision for credit losses / average net loans, in bps Corporate & institutional 1 Consum er 2 CHF 125 bn or 44% 1% CHF 159 bn or 56% 10% Swiss Bank & Wealth
Slide 21: Leverage ratio: Exceeding both Going and Gone concern requirements
Exceeding both Going and Gone concern requirements Total loss-absorbing capacity as of end-3Q22, in CHF bn 11.6% 97.4 35.5% Gone 8.7% concern 5.7% 47.3 17.2% capital 25.0% 4 3.8% 4 10.5% AT1 15.7 1.9% 5.7% 1.5% Going 4.3% 2025 target 6 Pillar 2 add-on2 concern Pillar 2 add-on2 14.0% >13.5% capital O
Slide 22: Currency mix & Group capital metrics
Currency mix & Group capital metrics Adjusted Credit Suisse Group results Sensitivity analysis on Group results 2 Applying a +/- 10% movement on the average FX rates Contribution for 3Q22 LTM, the sensitivities are: 3Q22 LTM in CHF mn CHF USD EUR GBP Other ▪ USD/CHF impact on 3Q22 LTM pre-tax income
Slide 23: 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 24: 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 25: 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 26: CREDIT SUISSE WS
CREDIT SUISSE WS