Corporate Press Release
Credit Suisse Group reports 3Q14 and 9M14 results
Credit Suisse 3Q14 results: Core pre-tax income of CHF 1,622 million for strategic businesses and return on equity of 11%; reported Core pre-tax income of CHF 1,301 million and return on equity of 10%
Credit Suisse Group reports 3Q14 and 9M14 results
Credit Suisse 9M14 results: Core pre-tax income of CHF 5,341 million for strategic businesses and return on equity of 13%; reported Core pre-tax income of CHF 2,331 million and return on equity of 4%
Look-through CET1 ratio of 9.8% as of the end of 3Q14; on track to exceed 10% by year-end 2014
3Q14 Private Banking & Wealth Management results for strategic businesses reflect continued cost discipline and stable revenues; strategic net new assets of CHF 8.8 billion and total net new assets of CHF 7.4 billion
3Q14 Investment Banking results reflect stronger profitability and returns, as well as increased client activity; continued progress in winding down non-strategic unit
Private Banking & Wealth Management strategic businesses with continued progress on costs:
- Strategic businesses with pre-tax income of CHF 872 million, up 8% compared to 3Q13; return on regulatory capital of 27%
- 3Q14 total reported pre-tax income of CHF 943 million, reflecting solid strategic business performance and a gain recorded in the non-strategic unit on the sale of the domestic private banking business booked in Germany
- Continued cost efficiency gains in strategic businesses with cost/income ratio of 69% for 9M14 and 3Q14
- Wealth Management Clients net margin of 27 basis points for 9M14 and 25 basis points for 3Q14; excluding certain litigation provisions of CHF 41 million, net margin of 27 basis points for 3Q14
- Strong net new assets from strategic businesses of CHF 8.8 billion in 3Q14, with particularly strong growth in Asia Pacific, notwithstanding continued outflows of CHF 0.7 billion from Western European cross-border business due to ongoing regularization of asset base; total net new assets of CHF 7.4 billion, including total Western European cross-border outflows of CHF 1.5 billion
- Sustained growth from ultra-high-net-worth individual lending initiatives with good momentum across both emerging and mature markets; CHF 3.9 billion in net new lending for 9M14 compared to CHF 1.0 billion in 9M13
Investment Banking 3Q14 strategic results reflect substantially increased profitability, improved returns and robust client activity:
- Strategic businesses with pre-tax income of CHF 995 million, up 43% against 3Q13, and return on regulatory capital of 17%; driven by higher client activity across many businesses
- Strong fixed income performance, particularly in securitized products and emerging markets
- Stable equities results as robust derivatives revenues were offset by muted trading volumes in cash equities
- Underwriting and advisory results reflect strong origination activity and sustained market shares
- Total reported pre-tax income of CHF 516 million with broad-based increase in client activity across many strategic businesses, partly offset by increased expenses
- 9M14 return on regulatory capital of 19% from strategic businesses and 11% from total reported results
- Continued progress in wind-down of non-strategic unit with risk-weighted assets reduced by USD 2 billion and leverage exposure reduced by USD 11 billion
Resilient capital base and leverage ratio as of the end of 3Q14; progress toward exceeding 10% Look-through CET1 ratio by year-end:
- Look-through BIS CET1 ratio of 9.8%; progress in executing capital measures announced after settlement of the US cross-border matter and on track to exceed 10% by year-end, including continued accrual of cash dividend for 2014; Look-through Swiss total capital ratio at 15.8%
- Look-through Swiss leverage ratio of 3.8%, within reach of the 2019 requirement of 4.1%, effective in 2015; targeting approximately 4.5% by end-2015
On track to reach cost reduction targets:
- Delivered CHF 3.6 billion of adjusted annualized savings compared to the annualized expense run rate for 6M11; on track towards target of over CHF 4.5 billion by end-2015
Brady W. Dougan, Chief Executive Officer, said: "We delivered a good performance, with our strategic businesses generating returns on equity of 11% for the quarter and 13% for the first nine months of this year. During the quarter, our momentum with clients across both divisions remained strong. With a Look-through CET1 ratio of 9.8% at quarter end, we are executing our capital measures and are on track to exceed 10% by the end of the year."
Commenting on Private Banking & Wealth Management, he said: "Our profitability benefitted from ongoing cost discipline, although margins remain subdued and revenues continue to be impacted by the low interest-rate environment. We generated net new assets of CHF 8.8 billion in our strategic businesses, driven by strong growth in emerging markets, particularly in Asia Pacific. This was partly offset by continued outflows from the Western European cross-border business due to the importance that we have placed on the regularization of our asset base. We saw sustained growth in our ultra-high-net-worth individual lending initiative and increased collaboration revenues across both divisions, which we view as a competitive advantage, particularly with this client segment."
Commenting on Investment Banking, he said: "Investment Banking’s strategic results reflect substantially increased profitability, improved returns and robust client activity across many of our businesses. Our strong results in fixed income trading, especially in emerging markets and securitized products, and in equity underwriting were driven by significant client transactions. We continued to work towards increasing the capital and cost efficiency of our strategic businesses, reporting a return on regulatory capital of 19% and a cost/income ratio of 69% for the first nine months of this year. We also made further progress in winding down the capital positions in our non-strategic unit."
On the outlook for the fourth quarter, he said: "We have seen a mixed start to October, with recent market volatility benefitting certain businesses across both divisions, while negatively impacting others. We have a strong advisory and underwriting pipeline but the pace of execution in the fourth quarter will depend on market conditions."
The full Earnings Release is available in PDF