Credit Suisse reports net revenues of CHF 3.8 bn and pre-tax loss of CHF 342 mn along with a CET1 ratio of 12.6% in 3Q22
“The third quarter, and more broadly 2022 so far, have been significantly impacted by the continued challenging market and macroeconomic conditions, leading to a weaker performance for our Investment Bank in particular. Our recent Group level performance has been disappointing for our stakeholders. From today, we are taking a series of decisive actions to re-focus Credit Suisse around the needs of our clients and stakeholders. Our new, integrated model will be focused on Wealth Management, the Swiss Bank, as well as Asset Management, and we will radically restructure the Investment Bank, strengthen capital, and accelerate our cost transformation. We believe these actions will lead Credit Suisse to a more stable performance and generate lasting value for our shareholders.”
Ulrich Körner, Chief Executive Officer of Credit Suisse Group AG
Please refer to the additional media release relating to our Strategy Update published on October 27, 2022, which summarizes the conclusions of our strategic review.
Summary of 3Q22 performance
Credit Suisse’s performance in the third quarter of 2022 continued to be challenged by the current economic and market environment. The combination of the geopolitical situation as well as the significant monetary tightening by major central banks worldwide in response to the continued and significant increase in inflation have resulted in continued heightened market volatility, weak customer flows and ongoing client deleveraging.
The performance in the Investment Bank (IB) was weak, impacted by extremely challenging market conditions driven by higher volatility, widened credit spreads and muted primary issuance. As a result, our areas of core strength across trading as well as Investment Banking & Capital Markets were affected by the significant slowdown in capital markets activity and the cumulative impact of our de-risking. Our performance in Wealth Management (WM) was challenged due to lower client activity, AuM and recurring revenues. However, WM benefited from the improved rates environment leading to higher net interest income. Swiss Bank’s (SB) performance was resilient notwithstanding the adverse impact of the recent change in interest rates by the Swiss National Bank (SNB). Asset Management’s (AM) performance year on year was adversely impacted by continued market uncertainty.
The Corporate Center’s performance in 3Q22 improved year on year with adjusted* net revenues up due to improved revenue performance in Treasury as well as lower legacy expenses in the Asset Resolution Unit. Adjusted* operating expenses were also down 62% year on year leading to a smaller adjusted* pre-tax loss for 3Q22 of CHF 41 mn, compared to CHF 212 mn in 3Q21.
In 3Q22, we saw net revenues decrease by 30% year on year, driven by a decline in IB net revenues, down 58%, on a USD basis; a decline in WM net revenues, down 18%; as well as a decline in SB net revenues, down 9%. We had a net revenue increase in AM, up 15% year on year. We had adjusted* net revenues of CHF 3.8 bn, down 31% year on year, driven by lower Equity Capital Markets and Leveraged Finance activity, as well as mark-to-market losses of USD 120 mn, in the IB and subdued client activity in WM.