Third quarter 2021 financial results and Group Strategy Review
On November 4, 2021, Credit Suisse Group presented its third quarter 2021 financial results and the outcomes of its Group Strategy Review to investors and analysts, as well as to the media.
Highlights for the third quarter 2021
Strong pre-tax income growth year on year, together with more conservative risk appetite, driven by solid revenue growth and a net release of CHF 144 mn in provision for credit losses, partly offset by additional costs, including in relation to longstanding litigation issues
- Net income attributable to shareholders of CHF 434 mn, down 21% year on year driven by an elevated effective tax rate
- Reported pre-tax income of CHF 1.0 bn, up 26% year on year, including a gain of CHF 235 mn relating to Archegos, mainly due to a release of provisions pertaining to an assessment of the future recoverability of receivables, and a CHF 129 mn gain related to our equity investment in Allfunds Group. These gains were offset by major litigation charges of CHF 564 mn1, including CHF 214 mn in connection with settlements we announced last month relating to the Mozambique matter and litigation provisions in connection with certain other legacy matters, including mortgage-related matters, and in connection with the Supply Chain Finance Funds (SCFF) matter. We also recorded a further impairment relating to York Capital Management of CHF 113 mn in AM
- On an adjusted basis, excluding significant items and Archegos*, record2 third quarter pre-tax income of CHF 1.4 bn, up 25% year on year
- On an adjusted basis, excluding significant items and Archegos*, net revenues were up 6% year on year driven by higher net revenues across IB, AM and SUB, partly offset by lower net revenues in IWM
- Reported operating expenses of CHF 4.6 bn, up 6% year on year, primarily due to higher major litigation provisions and professional services fees. Adjusted operating expenses, excluding significant items and Archegos*, up 2% year on year, with continued investments in strategic initiatives, partially offset by lower compensation and benefits
- Net release of provision for credit losses of CHF 144 mn relating primarily to a release of USD 202 mn (CHF 188 mn) pertaining to an assessment of the future recoverability of receivables related to Archegos in the IB
- Settlement with US, UK and Swiss regulators of legacy matters related to loan financing for Mozambique state enterprises and related securities transactions that took place between 2013 and 2016; concluded enforcement proceeding with Swiss regulator related to past observation activities
- Continued progress on remediation work on the SCFF matter. Returning cash to investors remains a priority; total cash paid out and current cash and cash equivalents of approximately USD 7.0 bn as of September 30, 2021
* Refers to results excluding certain items included in our reported results. These results are non-GAAP financial measures. For a reconciliation to the most directly comparable US GAAP measures, see the Appendix of this Media Release.
1 Consists of major litigation provisions of CHF 495 mn and a valuation adjustment related to major litigation of CHF 69 mn
2 Since 3Q16
All documents relating to our Group Strategy Review will be available at: www.credit-suisse.com/investorday