Corporate Earning Release

Earning Release

Credit Suisse Group announces 4Q16 and FY16 results

Strong asset inflows in 2016 with increased margins, highlighting the strength, diversification and scale of the Wealth Management platform. NNA of CHF 28.5 billion1 in 2016, with record AuM up 8% to CHF 734 billion1

IBCM delivers best fourth quarter revenue performance since 2012. Significant increase in transaction activity maintained across ECM and DCM in January 2017

Rightsizing of GM substantially completed with good momentum in 4Q16 and a strong start to the year in January 2017. GM franchise well positioned to capture future upside

Look-through CET1 ratio of 11.6% post-DOJ RMBS settlement (12.5%2 pre-settlement), an improvement of 140 bps compared to 3Q15 CET1 ratio of 10.2% reported at announcement of our new strategy in October 2015

Look-through CET1 leverage ratio of 3.3% post-DOJ RMBS settlement (3.5%3 pre-settlement), an improvement of 50 bps compared to 3Q15 CET1 leverage ratio of 2.8% reported at announcement of our new strategy in October 2015

Key business highlights

  • 4Q16 reported PTL of CHF 1,903 million; FY16 reported PTL of CHF 1,966 million
  • 4Q16 adjusted* PTI of CHF 171 million; FY16 adjusted* PTI of CHF 615 million
  • 4Q16 and FY16 net loss attributable to shareholders of CHF 2,347 million and CHF 2,438 million, respectively
  • FY16 net cost savings of CHF 1.9 billion4, resulting in adjusted* total operating expenses of CHF 19.4 billion measured at constant FX rates, or CHF 19.1 billion at actual FX rates; exceeded end-2016 target of below CHF 19.8 billion
  • Substantial progress in reducing legacy assets within SRU, with RWA and leverage exposure both down 39%, in US dollars, at end-2016 compared to end-2015

Continued progress in core franchises

  • Strong NNA of CHF 28.5 billion1, up 58% compared to FY15 at higher adjusted* gross margin of 114 bp5, demonstrating the scale and diversification of our Wealth Management franchise. Record FY16 Wealth Management AuM of CHF 734 billion1, up 8% compared to FY15
  • FY16 NNA comprised CHF 14.3 billion of assets from Emerging Europe, the Middle East and Africa (13% growth rate), CHF 14.6 billion from the APAC region (10% growth rate), including positive inflows of CHF 0.7 billion in 4Q16, and CHF 4.2 billion from Europe, including International Private Clients (4% growth rate). NNA in Switzerland and in Latin America were negative in 4Q16. This was primarily due to the proactive measures we took to reduce the number of EAMs we work with in Switzerland, and was also driven by outflows from regularization both in Latin America and Switzerland
  • Our Wealth Management focused divisions of SUB, IWM and APAC have made good progress. Compared to FY15, adjusted* PTI in SUB rose 9% (excluding Swisscard5) and adjusted* PTI in IWM rose 9% in FY16. In APAC Wealth Management and connected activities6 pro-forma PTI increased 65% in FY16
  • Strong IBCM performance; FY16 net revenues in US dollars up 8% year on year, with higher market share across key products7. 4Q16 adjusted* net revenues of USD 569 million represent our strongest fourth quarter since 2012; FY16 IBCM adjusted* PTI in US dollars increased 219% compared to FY15
  • Rightsizing of GM substantially completed with FY16 adjusted* PTI of USD 284 million in a year of significant restructuring. Improved operating leverage with FY16 revenues of USD 5,575 million

Tidjane Thiam, Chief Executive Officer of Credit Suisse, stated: “2016 was the first full year of implementing our new strategy and it was a challenging and busy 12 months. Thanks to our strong client franchise and the dedication of our teams, we have made good progress on our key objectives.”

“We have significantly reduced our fixed operating cost base and increased our operating leverage. We have generated industry-leading net inflows at higher margins. We have achieved meaningful successes in advisory and underwriting, with strong increases in both market share and profitability.7 We have substantially completed the rightsizing of GM and the division was profitable for FY16, with good momentum in 4Q16.”

“We have reached an agreement with the US Department of Justice on the RMBS matter, thus removing a major source of uncertainty for our future.”

“We have significantly strengthened the Group’s capital ratio, increasing the look-through CET1 ratio by 140 bps8 to 11.6% post-DOJ RMBS settlement compared to the ratio reported when we announced our new strategy in October 2015. Our look-through CET1 ratio pre-settlement would have been 12.5%2.”

“Our teams have worked hard and made good progress during a challenging year: they achieved a positive finish to the year. Many of the positive trends that we observed in 4Q16 have continued into January 2017. We believe we are well positioned to continue to make progress with our restructuring program in 2017 and 2018, and to capture profitable growth opportunities across our franchises and geographies.”

“With global geopolitical uncertainty increasing, we believe that our Swiss heritage and identity will be an asset as we work hard to provide performance, stability and safety for our clients around the world.”

The complete 4Q16 Earnings Release and Results Presentation Slides are available for download from 07:00 CET today at:

Read the full Press Release (PDF)