Credit Suisse announces 2Q16 results Donnerstag, 28. Juli 2016 - 06:37

Progress in business performance

• Group reported PTI of CHF 199 million (adjusted*: CHF 290 million), an improvement of CHF 683 million compared to a pre-tax loss of CHF 484 million in 1Q16
  - Combined adjusted* PTI of CHF 933 million for APAC, SUB and IWM in 2Q16 with strong wealth management NNA of CHF 11.3 billion
  - Restructured GM platform profitable with reported and adjusted* PTI of CHF 154 million and CHF 204 million in 2Q16, respectively
  - IBCM returned to profitability with reported and adjusted* PTI of CHF 135 million and CHF 127 million, respectively
• Net income attributable to shareholders of CHF 170 million

Continued delivery of execution priorities

• Group reported total operating expenses of CHF 4,937 million (adjusted*: CHF 4,846 million), down 6% compared to 2Q15 (adjusted*: down 8%); on track to be at or below our end-2016 cost target
• Substantial progress on Global Markets Accelerated Restructuring (GMAR): adjusted* total operating expenses down 7% year on year, and de-risking of GM with a 50% reduction of expected quarterly pre-tax loss in an adverse stress scenario
• Continued focus on SRU; RWA reduction of USD 9 billion compared to 1Q16

Improved capital position

• Look-through CET1 ratio of 11.8%
• Look-through CET1 leverage ratio of 3.3%

Tidjane Thiam, Chief Executive Officer of Credit Suisse, stated: “Credit Suisse continued to serve and support clients against a challenging backdrop. We were able to improve our performance in the second quarter and to operate profitably in a volatile context. We continued to execute our strategy with discipline, further lowering our cost base and delivering on the right-sizing and de-risking of GM.

Our three geographic divisions – APAC, SUB and IWM – delivered profitable growth against a challenging backdrop, with strong combined wealth management NNA inflows of CHF 11.3 billion.

In APAC, our wealth management business attracted CHF 5.0 billion of wealth management NNA and achieved solid quarterly revenues, supported by our highest ever level of AuM. We maintained good momentum in hiring RMs, bringing the total in the region to 650 from 550 in the last 12 months.

In IWM, we attracted CHF 5.4 billion of wealth management NNA in 2Q16 and CHF 10.8 billion of wealth management NNA in 1H16, compared to outflows of CHF 0.5 billion in 1H15.   

In Switzerland, SUB achieved an adjusted* return on regulatory capital of 15%1 and improved adjusted* PTI compared to 2Q15, with wealth management NNA inflows of CHF 0.9 billion. 

IBCM improved its performance against the prior quarter, driven by strong debt origination and advisory revenues. Our strategy in IBCM is gaining traction, resulting in market share gains with our clients. We will continue to invest in the business over the coming quarters.

In 2Q16, GM made solid progress in its accelerated restructuring. GM also made clear progress in focusing on supporting clients and improving revenue generation while delivering on our commitment to reduce both costs and risk.

Managing down cost and capital usage in the SRU is key to implementing our strategy. As we reduce the SRU’s footprint, we strengthen our capital position and create the headroom to invest selectively in other parts of the bank. The SRU has continued to reduce both RWA and costs, building on its progress in the first quarter, with total RWA reduction of 21% and a 39% reduction of adjusted* total operating expenses since end-2015.

Markets were particularly challenging towards the end of 2Q16 in connection with the UK referendum on EU membership. Careful planning and coordination of our trading, risk and support functions proved effective in the run-up to the referendum and on the day itself. On that day, we were able to handle significantly increased volumes and provided quality execution for our clients.

Regarding our capital, during 2Q16, we were able to strengthen our look-through CET1 ratio to 11.8%, an increase of 40 basis points compared to 1Q16 – our highest reported look-through CET1 ratio. Looking ahead, our guidance remains unchanged and we aim to operate within a range of 11-12%2 for the remainder of 2016. 

In summary, Credit Suisse operated profitably in 2Q16. We have remained focused on serving our clients during a challenging quarter. APAC, SUB and IWM have attracted significant asset inflows. IBCM has been able to gain market share and generated a profit for the bank. The restructured GM platform has generated a profit. Position risks in GM have been reduced by about 50% in 1H16. The SRU has continued to reduce both its costs and capital usage.

Our cost cutting program is progressing at pace, and we are working hard to build a more flexible, more resilient and more efficient bank that is fit for the new post-crisis regulatory and economic environment.

We remain cautious in our outlook for the second half of 2016 in view of the uncertainty created by significant geopolitical and macro-economic concerns, reinforced a few weeks ago by the outcome of the UK referendum. In the coming quarters, we will continue to work steadily towards delivering our longer-term objectives and creating value for our clients and shareholders.”

The complete 2Q16 Financial Report and Results Presentation Slides are available for download today at: www.credit-suisse.com/results

Read the full Press Release (PDF)