Approach & Reporting Objectives & Achievements

Objectives & Achievements

Overview of our objectives in the areas of banking, society and the environment, in our role as an employer and in the dialogue with all our stakeholders.

Objectives 2018

  • Our main priority in 2018 is to maintain strong business momentum while completing our restructuring. Our objectives include:
        • Driving growth and working towards the 2018 profit targets defined for each of our divisions.
        • Further strengthening collaboration between our wealth management and investment banking businesses.
        • Reducing our adjusted operating cost base at constant FX rates1 to below CHF 17 billion by end-2018 while continuing to selectively invest in the Group and in measures to improve efficiency and grow the franchise.
        • Maintaining a strong capital position, with a look-through CET1 ratio of over 12.5%.
        • Completing the wind-down of the SRU by end-2018, earlier than originally planned.
  • Launch a cross-functional project to start implementing the recommendations released by the Financial Stability Board's Task Force on Climate-related Financial Disclosures (FSB TCFD) in various work-streams throughout 2018 and 2019 and to share experiences in the Forum on Implementation of TCFD Recommendations launched by the Institute of International Finance.
  • Roll out and test the recently developed approach to transaction reviews with clients active in sectors with medium sustainability risks.

1 Our cost savings program is measured using and adjusted operating cost base at constant foreign exchange rates. 2017 net cost savings represents the difference between 2015 "adjusted operating cost base at constant FX rates" of CHF 21.2 billion and 2017 "adjusted operating cost base at constant FX rates" of CHF 18.0 billion. "Adjusted operating cost base at constant FX rates" is a non-GAAP financial measure and includes adjustments as made in all our disclosures for restructuring expenses (CHF 355 million in 2015, CHF 540 million in 2016 and CHF 455 million in 2017), major litigation provisions (CHF 820 million in 2015, CHF 2,707 million in 2016 and CHF 493 million in 2017), expenses related to business sales of CHF 8 million in 2017 and a goodwill impairment taken in the fourth quarter of 2015 of CHF 3,797 million as well as adjustments for certain accounting changes (which had not been in place at the launch of the cost savings program) of CHF 170 million in 2017, debit valuation adjustments related to volatility of CHF 83 million in 2017 and for foreign exchange (CHF (319) million in 2015, CHF (293) million in 2016 and CHF (326) million in 2017). Adjustments for FX apply unweighted currency exchange rates, i.e., a straight line average of monthly rates, consistently for the periods under review.

Objectives & Achievements 2017

Objectives Achievements
We remain focused on our key priorities to ensure we are well positioned to grow profitably and produce long-term value for our shareholders. We are committed to maintaining a look-through CET1 ratio of 11–12% in the course of 2017, excluding the impact of the planned partial IPO 1 of Credit Suisse (Schweiz) AG by the end of 2017. We aim to achieve an operating cost base of below CHF 18.5 billion by end-2017 as a result of cost discipline and management, while continuing to invest in strengthening our client franchises and improving our control framework. We will strive to make further progress with our restructuring program in 2017 and to capture profitable growth opportunities across our franchises and geographies. In the second year of our three-year restructuring program, we remained focused on execution and delivered against a number of key objectives:
  • We substantially strengthened our capital position by raising CHF 4.1 billion in a rights offering while retaining full  ownership of our Swiss business, and by generating capital from profitable organic growth and from the disposal of legacy assets and activities.
  • We ended the year with a look-through CET1 ratio of 12.8%, after deduction of approximately 45 basis points from increased risk-weighted assets relating to operational risk in the second half of the year. Our look-through tier 1 leverage ratio rose to 5.2%.
  • We generated profitable growth, increasing our reported pre-tax income to CHF 1.8 billion and our adjusted pre-tax income 2 by 349% compared to 2016 to CHF 2.8 billion in 2017.
  • Our positive operating leverage accelerated, with adjusted net revenues 2 5% higher in 2017 and adjusted operating expenses 2 6% lower, each as compared to 2016.
  • We achieved our 2017 cost target with an adjusted operating cost base at constant foreign exchange rates 2 of CHF 18 billion, bringing our total net cost savings 2 to CHF 3.2 billion over the two years since the start of the cost program. At the same time, we continued to selectively invest in technology, talent and controls.
  • We increased the adjusted return on regulatory capital year on year in all five of our operating divisions.
  • We made further significant progress in disposing of and de-risking legacy positions in the SRU, reducing its drag on Group profitability by 37% in 2017.
  • We will propose an all cash dividend to the Annual General Meeting for the financial year 2017, removing the dilution associated with the option to elect a scrip dividend.
Continue implementation of the Legal Entity Program strategy and focus on the completion of the remaining major deliverables, including: launching service companies in the US, Switzerland, UK and Singapore, completing first non-public comprehensive capital analysis and review (CCAR) framework sub - mission. In addition, the Legal Entity Program has been expanded to assess solutions following the expected withdrawal of the UK from the EU.

The execution of the program evolving the Group's legal entity structure to support the realization of our strategic objectives, increase the resilience of the Group and meet developing and future regulatory requirements has continued to progress, including:

  • Successfully launching service companies in the US, Switzerland, the UK, Singapore and India, supporting the operational continuity of resolution-critical services globally
  • In Switzerland, completing the transfer of our Swiss asset management business from Credit Suisse AG to Credit Suisse (Schweiz) AG
  • In the US, completing the first non-public comprehensive capital analysis and review (CCAR) framework submission
  • In the UK, continued client migrations to Credit Suisse AG Dublin branch − Continued work on strategy implementation relating to the expected withdrawal of the UK from the EU.
Continue to engage with stakeholders on applying environmental and human rights considerations in risk management processes related to business transactionsand client relationships. We have continued to engage in a dialogue with NGOs and other stakeholders in 2017 and have further strengthened the visibility of sustainability concerns in know-your-customer and onboarding processes. Furthermore, we have developed a process to identify engagements with companies in sensitive sectors,and we assign priority to their ongoing monitoring.
Participate in the consultation on the recommendations released by the Financial Stability Board's Task Force on Climate-related Financial Disclosures (FSB TCFD) and engage with industry associations and relevant internal functions to develop approaches to addressing the FSB TCFD recommendations. We participated in the consultation on the draft TCFD recommendations in early 2017. After publication of the final TCFD report, we developed a plan to start to address the recommendations and joined the Forum on Implementation of TCFD Recommendations launched by the Institute of International Finance.

1 In 2017, we decided not to pursue a partial initial public offering of Credit Suisse (Schweiz) AG, thus retaining full ownership of a historically stable income stream in our home market of Switzerland and avoiding complexity in the business structure and activities of a key division of the Group.

2 Adjusted results are non-GAAP financial measures.

Objectives 2018

 

  • Contribute to the future development of financial market regulation by providing thought leadership and engaging in a constructive dialogue with stakeholders.
  • We aim to make a lasting, meaningful contribution to society and to continue contributing to the UN Sustainable Development Goals in key areas. To address the most pressing issues facing society, we utilize the bank’s capital – its financial resources, products and services as well as the skills of our employees and our broad network of public and private partners. We aim to develop solutions that benefit society, our employees and Credit Suisse. These efforts include our two global initiatives in the areas of education and financial inclusion, whose tenth anniversaries are taking place in 2018.

Objectives & Achievements 2017

Objectives Achievements
Maintain a close dialogue with relevant stakeholders on the topics of investor protection, tax rules, the stability of the financial sector and digitalization. Credit Suisse held meetings with different stakeholder groups, including policymakers, to address these topics at different levels and across various regions. Furthermore, we published articles and white papers on a range of subjects, such as digitalization.
Demonstrate how a financial services provider like Credit Suisse can leverage its capital, products and services, clients, employees and network of public and private partners to address society’s most pressing challenges while delivering our strategy and strengthening our own institution. This will be highlighted by our 15 years of Investing for Impact anniversary in 2017. In 2017 we further deepened our cooperation with non-governmental organizations (NGOs), governments, employees and clients in order to meet societal challenges and work together to contribute to the United Nations’ Sustainable Development Goals (SDGs). With regard to SDG 4 (Quality Education), more than 2,640 employees dedicated their time and expertise to mentoring, teaching and tutoring activities benefiting children and youth. Additionally, we reached more than 596,250 enrolled school children and young adults through our Global Education Initiative, including our flagship program Financial Education for Girls and educational programs in all our regions. Through our Financial Inclusion Initiative, for example, we were engaged in topics such as access to finance for women, financing humanitarian aid and supporting fintech innovations in emerging markets. Moreover, around 40 events were held all over the world to mark the 15th anniversary of our work in impact investing – including the Credit Suisse Salon, which explored how we can contribute to the realization of the SDGs through philanthropic and investment activities. In Switzerland, we also expanded our Micro-Donations offering, increasing the number of beneficiary partners from 10 to 20 non-profit organizations.

Objectives 2018

 

  • Further strengthen leadership capabilities at Credit Suisse.
  • Continue to embed the Conduct and Ethics Standards to ensure a common understanding of our expectations at Credit Suisse regarding culture and conduct.

Objectives & Achievements 2017

Objectives Achievements
Further embed the Conduct and Ethics Standards throughout our organization to ensure a common understanding as well as consistency about our expectations at Credit Suisse with regard to culture and conduct and to further drive alignment and standardization. In 2017, our Conduct and Ethics Standards were rolled out across the entire bank to ensure a common understanding and consistent expectations in respect of our culture and conduct. The initiative is sponsored by the Board of Directors and the Executive Board of Credit Suisse, underscoring its strategic importance for the bank. Our Conduct and Ethics Standards have been embedded into our core HR processes, such as performance management, recruitment, promotion, development and the disciplinary process. The Executive Board has participated in a series of videos offering its endorsement and views on each of the standards to all employees. Additionally, with the introduction of the Credit Suisse Employee Award based on our Conduct and Ethics Standards, we recognize our employees’ engagement and drive implementation of these behavioral standards throughout the bank.
Continue to attract, develop and retain employees to optimally support our business. In our performance management process, we ensure that the personal objectives of employees are linked to the bank’s strategic goals, and that their performance and behavior is measured against the bank’s new Conduct and Ethics Standards. To help employees with families achieve a good work/life balance, we provide parental leave in different locations and offer additional coaching and support for new parents who are returning to the workplace. We encourage all employees to make full use of their annual leave entitlement. We offer a comprehensive development curriculum to enable employees to learn new leadership and professional skills, including offerings in personal effectiveness, risk and client management training. We pursue a robust diversity and inclusion agenda on a bank-wide and divisional level, including training for managers to help them mitigate the impact of unconscious bias when making personnel-related decisions.

Objectives 2018

 

  • Successful completion of the audit of our certified environmental management system in the framework of the transition to the new ISO 14001:2015 standard. Successful global re-certification in compliance with the new ISO 14001 standard.
  • Continued global greenhouse gas neutrality.
  • Develop and implement a framework for long-term objectives aiming to reduce our greenhouse gas emissions and to contribute to the overarching goal of the Paris Agreement, which is to limit the rise in the global temperature to well below 2º Celsius above pre-industrial levels.
  • Further expand engagement and advisory services related to sustainable land use.

Objectives & Achievements 2017

Objectives Achivements
Ensure a successful global ISO 14001 control audit under the direction of the certification company SGS. We successfully passed the ISO 14001 control audit under the direction of the certification company SGS without any corrective measures – in 2017, the audit focused on buildings in Singapore, India and southern Switzerland.
Adapt the processes and documentation related to our environment management system to the new ISO 14001 standard (valid from 2018) by revising the governance model across all management areas and levels involved. 

Our ISO 14001 documentation was updated to meet the requirements of the new ISO 14001:2015 standard in readiness for the planned 2018 audit of the transition of our environmental management system to the new standard. We systematically reviewed and addressed all the gaps identified in the analysis of our existing ISO 14001 arrangements and duly adapted the governance model in accordance with our organizational structure.

We also further reduced the ecological footprint of our operating activities by 32% year on year to 141,300 metric tons of CO2 equivalents – thanks, in particular, to the ongoing energy-related optimization of our premises, the further consolidation of the portfolio around buildings with a high level of energy efficiency, and the use of state-of-the-art IT infrastructure.

By substituting existing energy sources through renewable energy certificates (RECs), we also generated 76% of our electricity from renewable energy in 2017, which represents a significant increase of 19% on the previous year.

We achieved global greenhouse gas neutrality for the eighth year in succession.

Deepen engagement with key external stakeholders in relation to sustainable land use management. In 2017, we took part in a series of international workshops about sustainable land use, including workshops organized by the ASEAN Bankers Association and Bursa Malaysia on the topic of sustainable finance. In addition, Credit Suisse organized the Asia Pacific Land Use Forum (APLUF) in Bangkok. We expanded our role as an advisor to the Sustainable Palm Oil Transparency Toolkit (SPOTT), joining the Technical Advisory Group for the SPOTT Timber, Paper and Pulp tool development.