Conclusion of FINMA’s proceedings in connection with the Supply Chain Finance Funds

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Conclusion of FINMA’s proceedings in connection with the Supply Chain Finance Funds

Zurich
28.02.2023

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Media Relations Credit Suisse AG,
+41 844 33 88 44,
media.relations@credit-suisse.com

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Credit Suisse welcomes FINMA’s announcement today that it has concluded its proceedings in connection with the Supply Chain Finance Funds (SCFF) matter. Over the course of the last two years, since the closing of the SCFFs, Credit Suisse has implemented a series of extensive organizational measures. Many of these measures were based on the independent investigation into the SCFF matter by Deloitte/Walder Wyss and have addressed FINMA’s findings.

Ulrich Körner, Chief Executive Officer of Credit Suisse Group AG, commented:

“We welcome the conclusion of FINMA’s work. This marks an important step towards the final resolution of the SCFF issue. FINMA’s review has reinforced many of the findings of the Board-initiated independent review and underlines the importance of the actions we have taken in recent years to strengthen our Risk and Compliance culture. We also continue to focus on maximizing recovery for fund investors.”

Since March 2021, Credit Suisse has taken action to directly address many of the issues subsequently highlighted by FINMA, and notes that FINMA is supportive of the measures already taken to strengthen governance and control processes. Specifically in Asset Management we have implemented steps which include:

Senior management changes, including dismissal of several managers and employees, alongside the implementation of disciplinary measures and the recovery of previously granted compensation awards through malus and clawback
Implementation of a global operating model to improve accountability
Improvements to governance, increasing the level of oversight and accountability through simplified and streamlined committees across all levels
Strengthening controls by moving risk oversight into a dedicated divisional risk management function
Fundamental redesign of the product development and approval process to improve global consistency, transparency and oversight

All of the requirements identified by FINMA are being addressed through the organizational measures already underway. FINMA has not ordered any confiscation of profits in connection with the proceedings and the implementation of the additional measures is not expected to result in significant costs for Credit Suisse.

Risk & Compliance improvements

In addition, over the last two years Credit Suisse has significantly strengthened its overall risk management and controls across the Group. We have taken actions which include:

The appointment of new Chief Risk and Chief Compliance Officers and a number of other senior leaders across the Risk and Compliance functions
Enhancement of the Risk and Compliance measurements in performance objectives and reward considerations for Executive Board members and senior managers
Significant investment across Risk and Compliance, and further strengthening of our first line of defense
Investment in risk culture training across the organization

Credit Suisse has a clear strategic plan in place, as communicated on October 27, 2022, which is being executed by a new leadership team. We have made significant progress in terms of embedding a risk management mindset across the Group, and the focus on strengthening Risk and Compliance continues to be a critical part of our broader transformation program.

Progress continues on recovery for Supply Chain Finance Fund investors

Credit Suisse continues to prioritize maximizing recovery for investors in the SCFFs. To date, together with the cash already distributed to investors and cash remaining in the funds, total cash collected amounts to USD 7.4 bn, or 74% of the total USD 10 bn net asset value at the time of the funds’ suspension. As previously announced, the liquidation of two of the four SCFFs – the Liechtenstein-domiciled Credit Suisse Supply Chain Finance Investment Grade Fund and the Credit Suisse Nova (Lux) Supply Chain Finance Investment Grade Fund – has been completed.

Credit Suisse also monitors the free cash available for distribution in the Credit Suisse (Lux) Supply Chain Finance Fund and Credit Suisse Nova (Lux) Supply Chain Finance High Income Fund and, without any assurance that a payment of liquidation proceeds will be made, will assess a further payout to investors in these funds in the first half of this year.

Credit Suisse
Credit Suisse is one of the world's leading financial services providers. The bank’s strategy builds on its core strengths: its position as a leading wealth manager, its specialist investment banking and asset management capabilities and its strong presence in its home market of Switzerland. Credit Suisse seeks to follow a balanced approach to wealth management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia Pacific and other emerging markets, while also serving key developed markets with an emphasis on Switzerland. The bank employs more than 50,000 people. The registered shares (CSGN) of Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.

Cautionary statement regarding forward-looking information
This document 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, targets 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.
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, targets, goals, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to:

the ability to maintain sufficient liquidity and access capital markets;
market volatility, increases in inflation and interest rate fluctuations or developments affecting interest rate levels;
the ongoing significant negative consequences, including reputational harm, of the Archegos and supply chain finance funds matters, as well as other recent events, and our ability to successfully resolve these matters;
the impact of social media speculation and unsubstantiated media reports about our business and its performance;
the extent of outflows of assets or future net new asset generation across our divisions;
our ability to improve our risk management procedures and policies and hedging strategies;
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, but not limited to, the risk of negative impacts of COVID-19 on the global economy and financial markets, Russia’s invasion of Ukraine, the resulting sanctions from the US, EU, UK, Switzerland and other countries and the risk of continued slow economic recovery or downturn in the EU, the US or other developed countries or in emerging markets in 2022 and beyond;
the emergence of widespread health emergencies, infectious diseases or pandemics, such as COVID-19, and the actions that may be taken by governmental authorities to contain the outbreak or to counter its impact;
potential risks and uncertainties relating to the severity of impacts from COVID-19 and the duration of the pandemic, including potential material adverse effects on our business, financial condition and results of operations;
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 initiatives, including those related to our targets, ambitions and goals, such as our financial ambitions as well as various goals and commitments to incorporate certain environmental, social and governance considerations into our business strategy, products, services and risk management processes;
our ability to achieve our announced comprehensive new strategic direction for the Group and significant changes to its structure and organization;
our ability to successfully implement the divestment of any non-core business;
the future level of any impairments and write-downs, including from the revaluation of deferred tax assets, resulting from disposals and the implementation of the proposed strategic initiatives’;
the ability of counterparties to meet their obligations to us and the adequacy of our allowance for credit losses;
the effects of, and changes in, fiscal, monetary, exchange rate, trade and tax policies;
the effects of currency fluctuations, including the related impact on our business, financial condition and results of operations due to moves in foreign exchange rates;
geopolitical and diplomatic tensions, instabilities and conflicts, including war, civil unrest, terrorist activity, sanctions or other geopolitical events or escalations of hostilities, such as Russia’s invasion of Ukraine;
political, social and environmental developments, including climate change;
the ability to appropriately address social, environmental and sustainability concerns that may arise from our business activities;
the effects of, and the uncertainty arising from, the UK’s withdrawal from the EU;
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 cyber attacks, information or security breaches or technology failures on our reputation, business or operations, the risk of which is increased while large portions of our employees work remotely;
the adverse resolution of litigation, regulatory proceedings and other contingencies;
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 or tax standards, policies or practices in countries in which we conduct our operations;
the discontinuation of LIBOR and other interbank offered rates and the transition to alternative reference rates;
the potential effects of 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 protect our reputation and promote our brand;
the ability to increase market share and control expenses;
technological changes instituted by us, our counterparties or competitors;
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; 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 2021 and in “Risk factor” in Credit Suisse results – Credit Suisse in our 3Q22 Financial Report.

Disclaimer
This document was produced by and the opinions expressed are those of Credit Suisse as of the date of writing and are subject to change. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Credit Suisse to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Credit Suisse does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.

The English language version of this document is the controlling version.

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Conclusion of FINMA’s proceedings in connection with the Supply Chain Finance Funds

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