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Credit Suisse Group announces 2Q17 results Freitag, 28. Juli 2017 - 06:30

Credit Suisse Group announces 2Q17 results

Zurich
28.07.2017

Information for Media
Christoph Meier, Media Relations, Credit Suisse
T : +41 844 33 88 44
E : media.relations@credit-suisse.com

Information for Investors
Adam Gishen, Investor Relations, Credit Suisse
T : +41 44 333 71 49
E : investor.relations@credit-suisse.com

Credit Suisse is profitable in first half of 2017, both in 1Q and 2Q, through positive operating leverage

Group 2Q17 adjusted* pre-tax income of CHF 684 million

Group 1H17 adjusted* net revenues up 9% year on year and adjusted* non-compensation expenses1 down 13% year on year resulting in an adjusted* pre-tax income of CHF 1.6 billion

Continued profitable growth in SUB, IWM and APAC WM&C with 1H17 adjusted* pre-tax income2 up 21% year on year. Wealth Management with strong net new assets3 in 1H17 of CHF 22.8 billion, up 12% year on year and our strongest asset inflows in six years. This resulted in record assets under management3 in 2Q17 of CHF 716 billion, up 8%4

IBCM achieved strong adjusted* pre-tax income of USD 243 million in 1H17, up 143% year on year. Net revenues up 19% in 1H17 driven by substantial increases in equity and debt underwriting, with net revenues up 49% and 17% year on year

Global Markets delivered significantly improved year on year performance, with net revenues of USD 3.2 billion, up 9%, and adjusted* total operating expenses down 10%, leading to 1H17 adjusted* pre-tax income of USD 638 million, up 480%

On track to achieve cost target of less than CHF 18.5 billion for 2017, with adjusted* operating expenses at constant FX rates of CHF 9.1 billion in 1H17, down 6% year on year (2Q17: CHF 4.5 billion)

Accelerated wind-down of SRU on track, with USD 8 billion of leverage reduction during 2Q17, a 10% reduction sequentially and a 49% reduction year on year

Strong capital ratios following completion of our rights offering with look-through CET1 ratio of 13.3% at end 2Q17, up 150 bps year over year, and look-through tier 1 leverage ratio of 5.2%, up 80 bps year over year

Group highlights

  • Adjusted* net revenues of CHF 10.7 billion in 1H17, up 9% year on year (2Q17: CHF 5.2 billion)
  • Adjusted* operating expenses at constant FX rates of CHF 9.1 billion in 1H17, down 6% year on year (2Q17: CHF 4.5 billion)
  • Adjusted* non-compensation expenses at constant FX rates of CHF 3.8 billion in 1H17, down 13% year on year (2Q17: CHF 1.9 billion)
  • Reported pre-tax income of CHF 1.3 billion in 1H17, compared to a pre-tax loss of CHF 285 million in 1H16 (2Q17: CHF 582 million)
  • Adjusted* pre-tax income of CHF 1.6 billion in 1H17, compared to adjusted* pre-tax income of CHF 117 million in 1H16 (2Q17: CHF 684 million)
  • Net income attributable to shareholders of CHF 899 million in 1H17, compared to a net loss of CHF 132 million in 1H16 (2Q17: CHF 303 million)

Tidjane Thiam, Chief Executive Officer of Credit Suisse, stated: “We are now midway through the execution of our three-year strategic plan and our strategy is working: we are making good progress against our key objectives. Our focus on the global wealth management opportunity is paying off, with growing net new assets3 and record global assets under management3 growing at 8%4 in this first half. In parallel, our efforts to right-size and restructure Global Markets (GM) are also having an impact as GM was profitable during 1H17. Overall, in 1H17, the Groups adjusted* pre-tax income was CHF 1.6 billion compared with CHF 0.1 billion in 1H16.

We have achieved strong revenue growth3 across our Wealth Management businesses. We were able to serve a growing part of our client needs by offering them customized solutions and services. Net new assets3 of close to CHF 23 billion in our Wealth Management businesses represent our strongest performance in the past six years, leading to our highest assets under management ever. In addition, our Asset Management activities attracted CHF 17.8 billion of net new assets in 1H17.

In GM we are seeing the benefits of the positive operating leverage we have created, with higher revenues, lower costs and a significant increase in profitability in the first half of 2017, year on year.

Our overall cost program is on track to achieve less than CHF 18.5 billion of costs5 in 2017, after we had CHF 9.1 billion of costs5 in 1H17.

The progress we have made in winding down the SRU is another key contributor to our stronger first half performance. While core profitability of the firm has increased by CHF 600 million, the profit drag from our non-core division has reduced by CHF 900 million year on year.

In the last 18 months, the first half of our three year plan, we have made significant progress in (i) generating profitable growth, (ii) reducing costs, (iii) strengthening our capital position, (iv) reducing risk and (v) resolving legacy issues.

I am determined, with our teams across all our markets and geographies, to ensure that during the next 18 months, we continue to build on the positive momentum we have created to date and stay disciplined and focused on executing on our strategy for the benefit of our clients and shareholders.”

Strong profit growth across our core businesses

  • Swiss Universal Bank (SUB) delivered adjusted* pre-tax income of CHF 987 million in 1H17, up 6% compared to 1H16 and up 14%6 compared to 1H15, two years ago. In 2Q17, we achieved record adjusted* pre-tax income of CHF 504 million, making this our sixth consecutive quarter of year on year adjusted* pre-tax income growth and delivering an adjusted* return on regulatory capital of 16%. In line with targeted revenue initiatives across the division, 2Q17 net revenues increased 5% year on year. Adjusted* total operating expenses in 2Q17 continued to decrease year on year, reflecting our disciplined cost management. We ended 2Q17 with record assets under management of CHF 554 billion. Private Clients attracted net new assets of CHF 3.7 billion in 1H17, a significant improvement over the CHF 1 billion recorded in 1H16 and its strongest half-year performance in asset gathering since 1H14. This performance reflected robust inflows from UHNWI and our entrepreneur clients. Our strategy emphasizes quality and compliant growth. Therefore in 2Q17, we continued to invest in compliance, risk and digitalization, including the launch of an innovative online relationship onboarding tool and the further enhancement of our online banking platform. Alongside our Private Clients business, our Corporate & Institutional Clients business delivered a very strong performance in 1H17 and 2Q17, with year on year revenue growth of 6% and 10%, respectively, as it benefited from increased investment banking and lending activities. Net new assets were impacted by continued outflows from our deliberate strategy of exiting selected EAMs. Overall, after a strong 1Q17, 2Q17 was a quarter of continued strong delivery for SUB, with broad-based revenue growth (stable recurring commission and fees, higher net interest income, up 5%, and higher transaction-based revenues, up 8% compared to 2Q16) combined with lower costs, which led to a very strong 1H17 with close to a billion of adjusted* profits7 of CHF 987 million.
  • International Wealth Management (IWM) continued to execute very effectively on its strategy, with a step change in adjusted* pre-tax income as we experienced strong client demand for our solutions and services and our focused approach to our strategic clients. 1H17 adjusted* pre-tax income of CHF 705 million increased 24% compared to 1H16, and 2Q17 adjusted* pre-tax income of CHF 378 million was up 45% compared to 2Q16. We also achieved strong momentum in asset gathering with net new assets of CHF 27 billion in 1H17, almost double our 1H16 result. The increased operating leverage generated by IWM in 1H17 was driven both by higher revenues and continued cost effectiveness. The adjusted* return on regulatory capital improved to 28% in 1H17 and 29% in 2Q17. Private Banking saw a sharp improvement in its profitability with 1H17 adjusted* pre-tax income rising 29% year on year, reflecting a return to profitability in Europe and profitable continued growth in emerging markets. We achieved an even greater improvement in 2Q17 adjusted* pre-tax income, which grew 56% compared to 2Q16, while the adjusted* net margin reached a record 36 bps alongside a 14% increase in net revenues. In both 1H17 and 2Q17, revenue growth was mainly driven by higher net interest income from continued loan growth, while recurring and transaction-based revenues rose as a result of increased client engagement supported by our ‘House View’-linked solutions. Private Banking net new assets totaled CHF 9.3 billion in 1H17, corresponding to an annualized growth rate of 6%, as we generated broad-based inflows from emerging markets and Europe. In 1H17, Asset Management adjusted* pre-tax income grew 6% to CHF 136 million compared to 1H16, which included investment gains of CHF 69 million. Management fees of CHF 523 million rose 18% compared to 1H16, reflecting good investment performance and strong net new assets of CHF 17.8 billion.
  • Asia Pacific (APAC) Wealth Management & Connected business (WM&C) continued to be an effective integrated platform for our UHNWI and entrepreneur clients. WM&C delivered a 33% increase in net revenues to CHF 1,148 million and 72% growth in adjusted* pre-tax income to a record CHF 403 million in 1H17 compared to 1H16. We had a strong performance in 2Q17, with net revenues rising 23% and adjusted* pre-tax income up 78% year on year. Within WM&C, Private Banking 1H17 net revenues grew 24% year on year and adjusted* pre-tax income remained strong. Net new assets in 1H17 totaled CHF 10 billion and assets under management reached a record level of CHF 178 billion. Driven by higher transaction activity and higher loan and deposit volumes, net margins increased 6 bps on both a reported and adjusted* basis, compared to 1H16. We saw further strong demand for our UHNWI financing solutions, which contributed to a 60% rise in net revenues in advisory, underwriting and financing compared to 1H16. WM&C achieved adjusted* return on regulatory capital of 29% in 1H17. Euromoney8 named Credit Suisse Asia’s Best Bank for Wealth Management and Asia’s Best Bank for Financing as part of its 2017 Awards for Excellence. In our Markets business, our restructuring efforts continued in connection with our efforts to increase the profitability of this business and we made good progress: net revenues in US dollars increased slightly compared to 1Q17, while we maintained strong cost discipline in 2Q17. We reduced adjusted* operating expenses by 11% in 2Q17 compared to 1Q17. In 1H17, a resilient performance in our Cash business, as well as in Credit products, was offset by a more subdued performance in Equity Derivative products and significantly reduced activity in Rates. Institutional Investor9 voted our Equities business the top overall sales team in its 2017 All-Asia Sales Team survey. Overall, APAC generated an adjusted* return on regulatory capital of 14% for 1H17.
  • Investment Banking & Capital Markets (IBCM) made continued progress against its strategy in 1H17, resulting in market share gains10 and an increase in net revenues year on year. In addition to our strength in the Americas, our performance improved in EMEA. We announced two of the three largest M&A deals10 in 1H17 and ranked in the top 5 for IPOs11 and top 4 in Leveraged Finance11. IBCM generated adjusted* pre-tax income of USD 243 million in 1H17, an increase of 143% year on year. This represents our strongest half-year adjusted* pre-tax income since 1H14. Net revenues grew to USD 1.1 billion in 1H17, driven by substantial increases in equity and debt underwriting, with net revenues up 49% and 17%, respectively, partially offset by lower revenues in advisory compared to 1H16. Investments continued to be self-funded in 2Q17 and adjusted* operating expenses declined 1% year on year. The adjusted* return on regulatory capital was 18% in 1H17. Net revenues in global advisory and underwriting12 were up 20% year on year to USD 2.2 billion, driven primarily by higher revenues in debt and equity underwriting.
  • Global Markets (GM) delivered improved operating leverage, reflecting the consistent execution of our strategy. 1H17 profitability increased substantially with adjusted* pre-tax income of USD 638 million and an adjusted* return on regulatory capital of 9%. 1H17 net revenues of USD 3.2 billion increased 9% year on year, highlighting the strength of our client franchise and more favorable operating conditions. We maintained our leading market share13 across our trading and underwriting businesses, reflecting solid performance in Securitized Products, Global Credit Products, Emerging Markets, Cash Equities and Prime Services for 1H17. Adjusted* total operating expenses in 1H17 declined 10% compared to the same period in the prior year, demonstrating our strong cost discipline across compensation and benefits and other operating expenses. Our consistent performance leaves us well positioned to achieve our 2018 targets of USD 6 billion of revenues and a cost base of below USD 4.8 billion. In 2Q17, adjusted* pre-tax income of USD 300 million increased 44% year on year, reflecting outperformance in our Securitized Products franchise, positive Equities performance excluding SMG with adjusted* net revenues up 5% and a significant decline in costs. With the majority of our restructuring behind us, we remain focused on opportunistically growing and investing in our franchise, including hiring key talent. As a pillar of Credit Suisse’s strategy, we have focused on increasing cross-divisional collaboration and established a partnership with IWM and SUB to improve the diversity and depth of product offering for institutional and wealth management clients.

Market environment in 1H17

The market environment in the first half of 2017 was characterized by a unique combination of rising market indices and persistently low levels of volatility. This provided a healthy backdrop for primary issuances across equity and debt capital markets but resulted in lower activity across a number of asset classes, most notably in derivatives.

In credit markets, spreads continued to tighten in 2Q17, though the pace of the narrowing slowed, especially for emerging market issuers. As in 1Q17, oil prices remained relatively subdued, given continued concerns over supply, especially in the Middle East.

The US dollar depreciated against most major currencies in 2Q17 as US economic and in particular inflation data weakened more than expected. The Euro demonstrated particular strength positively impacted by the outcome of the French presidential election and stronger economic data.

Outlook

We expect current low levels of volatility, geopolitical concerns and periods of low client activity to continue to impact our more market dependent activities. Wealth management has a more predictable earnings contribution, beyond the traditional and expected seasonality of the third quarter. Therefore, we believe we will continue to benefit from the long-term tail winds underpinning this attractive area of financial services.

On a macroeconomic level, we believe that growth prospects have been improving in many of the geographies in which we operate. Credit quality remains sound and we expect to benefit from rising US interest rates across our wealth management franchise over time.

Notwithstanding the healthy client dialogue we are having across wealth management and investment banking, we expect market activity to be influenced by normal seasonality in the third quarter, but we believe our pipeline will remain strong for the balance of the year.

The complete 2Q17 Financial Report and Results Presentation Slides are available for download from 06:30 CEST today at: https://www.credit-suisse.com/results.

Read the full Media Release (PDF) >

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

* 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 Measured at constant FX rates.

2 Relating to the combined adjusted* pre-tax income for SUB, IWM and APAC WM&C.

3 Figures listed for Wealth Management asset inflows and assets under management are derived by combining the respective net new assets and assets under management for the SUB PC business, the IWM PB business and the APAC PB business within WM&C.

4 Compared to year end-2016, excluding FX effects in 1H17 of CHF 21 billion on the underlying assets and including other effects of CHF 1.5 billion.

5 Referring to operating expenses at constant FX rates.

6 Excluding Swisscard impact of CHF 25 million in 1H15.

7 Referring to adjusted* pre-tax income.

8 Source: Euromoney as of July 13, 2017.

9 Source: Institutional Investor as of June 22, 2017.

10 Source: Dealogic as of June 30, 2017.

11 Source: Dealogic for the period ending June 30, 2017; includes Americas and EMEA only.

12 Gross global revenues from advisory, debt and equity underwriting generated across all divisions before cross-divisional revenue sharing agreements.

13 Source: Dealogic / Thomson Reuters as of June 30, 2017.

Abbreviations

Asia Pacific – APAC; Asia Pacific Private Banking within Wealth Management & Connected – APAC PB within WM&C; basis points – bps; common equity tier 1 – CET1; External Asset Managers – EAM; Europe, the Middle East and Africa – EMEA; Initial Public Offering – IPO; Swiss Financial Market Supervisory Authority FINMA – FINMA; Global Markets – GM; International Wealth Management – IWM; International Wealth Management Private Banking – IWM PB; Investment Banking & Capital Markets – IBCM; mergers and acquisitions – M&A; Strategic Resolution Unit – SRU; Swiss Universal Bank – SUB; Swiss Universal Bank Private Clients – SUB PC; Systematic Market Making Group – SMG; Ultra-High-Net-Worth Individuals – UHNWI; Wealth Management & Connected – WM&C

Important information

This Media Release contains select information from the full 2Q17 Financial Report and 2Q17 Results Presentation Slides that Credit Suisse believes is of particular interest to media professionals. The complete 2Q17 Financial Report and 2Q17 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 2Q17 Financial Report and 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.

* “Adjusted operating expenses at constant FX rates” and “adjusted non-compensation operating expenses at constant FX rates” include 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 certain accounting changes (which had not been in place at the launch of the cost savings program), debit valuation adjustments (DVA) related volatility and for FX, applying the following main currency exchange rates for 1Q15: USD/CHF 0.9465, EUR/CHF 1.0482, GBP/CHF 1.4296, 2Q15: USD/CHF 0.9383, EUR/CHF 1.0418, GBP/CHF 1.4497, 3Q15: USD/CHF 0.9684, EUR/CHF 1.0787, GBP/CHF 1.4891, 4Q15: USD/CHF 1.0010, EUR/CHF 1.0851, GBP/CHF 1.5123, 1Q16: USD/CHF 0.9928, EUR/CHF 1.0941, GBP/CHF 1.4060, 2Q16: USD/CHF 0.9756, EUR/CHF 1.0956, GBP/CHF 1.3845, 3Q16: USD/CHF 0.9728, EUR/CHF 1.0882, GBP/CHF 1.2764, 4Q16: USD/CHF 1.0101, EUR/CHF 1.0798, GBP/CHF 1.2451, 1Q17: USD/CHF 0.9963, EUR/CHF 1.0670, GBP/CHF 1.2464, 2Q17: USD/CHF 0.9736, EUR/CHF 1.0881, GBP/CHF 1.2603. These currency exchange rates are unweighted, i.e. a straight line average of monthly rates. We apply this calculation consistently for the periods under review. Adjusted non-compensation expenses are adjusted operating expenses excluding compensation and benefits. To calculate adjusted non-compensation expenses at constant FX rates, we subtract compensation and benefits (adjusted at constant FX rates in the manner described above) from adjusted operating expenses at constant FX rates.

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 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.

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 “Illustrative”, “Ambition”, “Outlook” and “Goal” are not intended to be viewed as targets or projections, nor are they considered to be Key Performance Indicators. All such illustrations, ambitions and goals are subject to a large number of inherent risks, assumptions and uncertainties, many of which are completely outside of our control. Accordingly, this information should not be relied on for any purpose. We do not intend to update these illustrations, ambitions 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 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.

As of January 1, 2013, Basel 3 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 pre- scribed regulatory adjustments. Beginning in 2015, the Swiss leverage ratio is calculated as Swiss total capital, divided by period-end leverage expo- sure. The look-through BIS tier 1 leverage ratio and CET1 leverage ratio are calculated as look-through BIS tier 1 capital and CET1 capital, respectively, divided by end-period leverage exposure.

Mandates penetration means advisory and discretionary mandates in private banking businesses as a percentage of the related AuM, excluding those from the external asset manager business.

When we refer to Wealth Management focused divisions throughout this Media Release, we mean SUB, IWM and APAC. References to the “Wealth Management businesses” within these divisions refer to the SUB Private Clients business, the IWM Private Banking business and the APAC Private Banking business within Wealth Management & Connected.

Margin calculations for APAC are aligned with the performance metrics of the Private Banking business and its related assets under management within the Wealth Management & Connected business in APAC. Assets under management and net new assets for APAC relate to the Private Banking business within the Wealth Management & Connected business.

Net margin is calculated by dividing income before taxes by average assets under management. Adjusted net margins is calculated using adjusted results, applying the same methodology to calculate net margin.

When we refer to operating divisions throughout this Media Release, we mean SUB, IWM, APAC, IBCM and GM.

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.

Cautionary statement regarding forward-looking information

This media release 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 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 except as may be required by applicable securities laws.

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, 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 2017 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 objectives, including cost efficiency, net new asset, pre-tax income/(loss), capital ratios and return on regulatory capital, leverage exposure threshold, risk-weighted assets threshold and other targets 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 cyberattacks 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 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 2016.

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