Press ReleasePress Release including tables
Credit Suisse Group Fourth Quarter and Full-Year 2013 Results:
Credit Suisse Group 4Q13 total reported Core pre-tax income of CHF 428 million, up 11% from CHF 385 million in 4Q12; 4Q13 underlying* pre-tax income of CHF 1,321 million; results reflect strong profitability in PB&WM and solid performance in IB, with particular strength in equities and underwriting
Credit Suisse Group full-year 2013 total reported Core pre-tax income of CHF 4,461 million, up 136% from CHF 1,888 million for 2012; 2013 underlying* pre-tax income of CHF 5,810 million; results demonstrate strength of strategic franchise, with return on equity of 13% for strategic businesses
Board of Directors to propose cash distribution of CHF 0.70 per share for 2013, payout free of Swiss withholding tax
Zurich, February 6, 2014 Credit Suisse Group reports 4Q13 and full-year 2013 results.
4Q13 Core results:
- Total reported results: Pre-tax income of CHF 428 million, including litigation provisions of CHF 514 million, return on equity of 3%
- Underlying* results: Pre-tax income of CHF 1,321 million, return on equity of 9%
- Strategic results: Pre-tax income of CHF 1,461 million, return on equity of 11%
Full-year 2013 Core results:
- Total reported results: Pre-tax income of CHF 4,461 million, return on equity of 8%
- Underlying* results: Pre-tax income of CHF 5,810 million, return on equity of 10%
- Strategic results: Pre-tax income of CHF 7,145 million, return on equity of 13%
Private Banking & Wealth Management:
- 4Q13: Total reported pre-tax income of CHF 870 million, taking into account litigation provisions of CHF 175 million in connection with the SEC-related aspect of the US tax matter, where we are working towards a resolution; strong profitability in strategic businesses with pre-tax income of CHF 1,057 million and after-tax return on Basel III allocated capital of 34%
- 2013: Total reported pre-tax income of CHF 3,686 million; higher pre-tax income in strategic businesses compared to 2012, driven by significantly higher fee-based revenues; Asset Management pre-tax income increased 32% from 2012 to 2013, underscoring importance of restructured Asset Management franchise in profit generation within the division
- Total reported net new assets of CHF 32.1 billion in 2013, with continued growth, primarily in emerging markets and the ultra-high-net-worth individual client segment
4Q13: Total reported pre-tax loss of CHF 40 million, including a CHF 339 million litigation provision relating to ongoing mortgage litigation; solid performance in strategic businesses with pre-tax income of CHF 485 million, with sustained market share positions across high-returning businesses driving revenue growth
2013: Total reported pre-tax income of CHF 2,243 million; improved profitability and pre-tax income in strategic businesses up 13% from 2012, reflecting slightly lower revenues, reduced cost base and lower leverage and capital usage; after-tax return on Basel III allocated capital of 19% in strategic businesses
Continued improvement in capital and leverage positions; surpassed end-2013 targets:
- Look-through Basel III CET1 ratio increased to 10.3%; Look-through Total Capital ratio increased to 16.1% as of end of 4Q13
- Leverage exposure reduced by 20% since 3Q12 to CHF 1,130 billion as of end of 4Q13; Look-through Swiss Total Capital leverage ratio of 3.8% as of end of 4Q13
Continued progress on cost savings initiatives:
- Delivered CHF 3.1 billion of expense savings as of end-2013, on track to realize target of over CHF 4.5 billion of expense savings by end-2015 versus adjusted* annualized 6M11 run-rate
- Reduced total compensation and benefits expense for the full-year 2013 by 8% for the Group and 10% in Investment Banking compared to 2012
Brady W. Dougan, Chief Executive Officer, said: “In 2013, our priorities were to further improve profitability, continue to strengthen our capital position and reduce risks and leverage exposure, while expanding market share in targeted markets. We made strong progress towards these objectives, while at the same time taking a number of additional strategic measures, both on a Group level and in our two divisions, to continue the transformation of our business.”
Commenting on the performance of the Group, he continued: “We generated consistent results throughout 2013 and achieved a 13% after-tax return on equity for the full year 2013 in our strategic businesses, demonstrating the strength of our core franchises. In addition, we showed continued cost discipline, with compensation and benefits expense down 8% for the Group and down 10% in Investment Banking.”
Commenting on the achievements of the Group in 2013, he said: “The creation of the non-strategic units, which we announced in October, will allow us to accelerate the shift of resources to high-returning businesses and represents an important step toward achieving a more balanced allocation of capital between our two divisions. During 2013, we progressed in our efforts to address the Too Big to Fail topic. In November 2013, we announced our program to evolve the Group’s legal entity structure, which is designed to both meet future requirements for global recovery and resolution planning and result in a substantially less complex and more efficient operating infrastructure in view of the new regulatory requirements.”
He added: “We largely completed the capital plan we announced in July 2012, ending the year with a Look-through Basel III CET1 ratio of 10.3%. At the same time, we further reduced leverage exposure and reported a Look-through Swiss Total Capital leverage ratio of 3.8% at year-end 2013. Based on our preliminary assessment, the Basel Committee’s revised guidelines on the calculation of the leverage ratio would increase our end-2013 ratio to around 4%, meeting the 2019 Swiss requirement. We successfully issued 6 billion Swiss francs of low-trigger capital notes in 2013 and are now just approximately 3 billion Swiss francs away from meeting the Swiss 2019 progressive capital requirement. Furthermore, as part of our 2013 compensation structure, we have introduced a similar instrument, which aligns compensation incentives to the capital strength of the Group, as well as providing additional tier 1 benefits.”
Commenting on the divisions, he said: “In Private Banking & Wealth Management, we improved the profitability of our strategic businesses in 2013, including a 32% increase in pre-tax income compared to 2012 from our restructured Asset Management franchise. We continued to reallocate resources to growth areas and recorded a net new asset growth rate of 8% from emerging markets within Wealth Management Clients, where we see further strong potential for growth. Additionally, we made continued progress in adapting our coverage of mature markets during 2013, including the realignment of our activities in Germany, and we continued to leverage our strong market position in Switzerland. We will remain focused on improving the profitability of our Private Banking & Wealth Management businesses by delivering growth in emerging markets and continuing to adjust our capacity in mature markets to client needs.”
He continued: “In Investment Banking, our strategic businesses delivered a solid performance in the fourth quarter and improved profitability and returns for the full year. Sustained market share positions across our high-returning businesses, combined with a reduced cost base, lower leverage and capital usage, helped us achieve an after-tax return on Basel III allocated capital of 19% for 2013. We believe that our transformed Investment Banking division, including a top-three equities franchise, a strong and profitable underwriting & advisory business and a fixed income franchise focused on high-returning yield businesses, is well positioned to continue to serve our clients’ needs and deliver strong returns and profitability in 2014.”
Commenting on the outlook, he said: “Results so far this year have been largely consistent with the good starts we have seen in prior years, with some variability across businesses. We are confident that the continued momentum we see in our strategic businesses, combined with the successful execution of the run-off of positions and losses in the non-strategic units, will allow us to achieve our targeted return on equity of 15% over the cycle.”
Update on certain litigation provisions
In 4Q13, Credit Suisse recorded litigation provisions of CHF 339 million relating to ongoing mortgage litigation and CHF 175 million in connection with the SEC-related aspect of the US tax matter, where we are working towards a resolution.
Update on cost savings
As of the end of 4Q13, Credit Suisse delivered expense savings of CHF 3.1 billion, compared to an adjusted* annualized 6M11 run-rate. Credit Suisse is on track to achieve its end-2015 total run-rate reduction target of over CHF 4.5 billion. As part of the cost savings initiatives, we reduced total compensation and benefits expense for the full-year 2013 by 8% for the Group and 10% in Investment Banking compared to 2012. Business realignment costs recognized in the Corporate Center in 4Q13 were CHF 131 million.
Capital and funding
As of the end of 4Q13, Credit Suisse reported a Look-through Total Capital ratio of 16.1%, increased from 14.5% in 3Q13. As of the end of 4Q13, the Look-through Basel III CET 1 ratio was 10.3%, up from 10.2% in 3Q13.
The Basel III CET1 ratio as of the end of 4Q13 was 16.0%, compared to 16.3% as of the end of 3Q13, primarily due to an increase in risk-weighted assets. Basel III risk-weighted assets for the Group increased 2%, from CHF 269.3 billion as of the end of 3Q13 to CHF 273.8 billion as of the end of 4Q13, reflecting an increase in operational risk together with a minor increase in market risk, partially offset by a decrease in credit risk and a decrease resulting from foreign exchange translation.
As of the end of 4Q13, Credit Suisse’s leverage exposure amounted to CHF 1,130 billion, down 20% from 3Q12. As of the end of 4Q13, the Look-through Swiss Total Capital leverage ratio improved to 3.8% compared to 3.2% at the end of 3Q13.
Credit Suisse is continuing to conservatively manage its liquidity, with an estimated long-term net stable funding ratio (NSFR) in excess of 100% under the current FINMA framework as of the end of 4Q13.
Capital distribution proposal
At the Annual General Meeting on May 9, 2014, the Board of Directors will propose a cash distribution of CHF 0.70 per share to be paid out of reserves from capital contributions for the financial year 2013. This is intended to provide a basis for future progression in our dividend payments as Credit Suisse continues to execute its strategy and resolve legacy issues.
The distribution will be free of Swiss withholding tax and will not be subject to income tax for Swiss resident individuals holding the shares as a private investment.
Benefits of the integrated bank
In 4Q13, Credit Suisse generated CHF 1,112 million of collaboration revenues from the integrated bank. This corresponds to 18.6% of Core net revenues in 4Q13.
4Q13 Segment results detail
Private Banking & Wealth Management
- Total reported net revenues of CHF 3,438 million, higher compared to 4Q12 and 3Q13 reflecting:
- stronger transaction and performance-based revenues in the strategic businesses
- robust performance and increase in management fees from hedge funds and alternative products in Asset Management
- Total reported operating expenses of CHF 2,536 million, increased compared to 4Q12 and 3Q13, as 4Q13 expense includes higher litigation provisions in connection with the SEC-related aspect of the US tax matter, where we are working towards a resolution
- 4Q13 net new assets: Wealth Management Clients inflows of CHF 1.7 billion, from continued growth in emerging markets, partially offset by Western European cross-border outflows; Corporate & Institutional Clients with strong inflows of CHF 4.0 billion; Asset Management with outflows of CHF 0.5 billion
Strategic results: The strategic results for Private Banking & Wealth Management comprise businesses from Wealth Management Clients, Corporate & Institutional Clients and Asset Management. In 4Q13, the strategic businesses within Private Banking & Wealth Management reported income before taxes of CHF 1,057 million and net revenues of CHF 3,269 million.
Net revenues were slightly higher compared to 4Q12, due to higher transaction- and performance-based revenues and higher recurring commissions and fees, partially offset by lower other revenues and lower net interest income. Compared to 3Q13, net revenues were 11% higher, largely driven by significant seasonal performance fees.
Total operating expenses of CHF 2,185 million were slightly higher compared to 4Q12 and 3Q13. Provision for credit losses was CHF 27 million on a net loan portfolio of CHF 212 billion.
The Wealth Management Clients business in 4Q13 reported pre-tax income of CHF 475 million and net revenues of CHF 2,065 million. Net revenues were stable compared to 4Q12, as higher recurring commissions and fees were offset by lower net interest income. Compared to 3Q13, net revenues were also stable with a slight increase in transaction- and performance-based revenues. In 4Q13, the gross margin was 104 basis points, five basis points lower compared to 4Q12, mainly reflecting a continued adverse interest rate environment and 5% higher average assets under management. Compared to 3Q13, the gross margin was one basis point lower, mainly driven by higher average assets under management. Total operating expenses for 4Q13 were CHF 1,572 million, stable compared to 4Q12 and 3% higher compared to 3Q13.
The Corporate & Institutional Clients business, which provides comprehensive coverage for all the financial services needs of corporate and institutional clients in Switzerland and for banks worldwide, reported pre-tax income of CHF 213 million in 4Q13 and net revenues of CHF 485 million. Net revenues were 9% lower compared to 4Q12, mainly driven by lower net interest income as a result of the low interest rate environment and a gain related to a recovery case of CHF 25 million in 4Q12. Compared to 3Q13, net revenues decreased 3%, mainly driven by lower recurring commissions and fees. Total operating expenses of CHF 263 million in 4Q13 were 4% lower compared to 4Q12 and 3% higher compared to 3Q13. Provision for credit losses was CHF 9 million in 4Q13 on a net loan portfolio of CHF 62 billion.
The Asset Management business reported pre-tax income of CHF 369 million, with net revenues of CHF 719 million in 4Q13. Net revenues increased significantly compared to 4Q12 and 3Q13, driven by higher performance fees and private equity placement fees. Performance fees are typically realized semi-annually in both 2Q and 4Q, or annually in 4Q. The recurring fee-based margin increased to 39 basis points, compared to 38 basis points in 4Q12 and in 3Q13, in line with the growth in Assets under Management.
Non-strategic results: The non-strategic results for Private Banking & Wealth Management include positions relating to the restructuring of the former Asset Management division, run-off operations relating to the small markets exit initiative and certain legacy cross-border related run-off operations, litigation costs, primarily related to the US tax matter, the impact of restructuring of the German onshore operations, other smaller non-strategic positions formerly in the Corporate & Institutional Clients business and the run-off and active reduction of selected products.
In 4Q13, the non-strategic businesses for Private Banking & Wealth Management reported a loss before taxes of CHF 187 million, compared to a loss before taxes of CHF 118 million in 4Q12, reflecting higher litigation provisions in connection with the SEC-related aspect of the US tax matter, where we are working towards a resolution. In 3Q13, the non-strategic businesses reported income before taxes of CHF 210 million, which included gains from the sale of former Asset Management businesses.
Net new assets: Private Banking & Wealth Management recorded net new assets of CHF 4.4 billion in 4Q13. The strategic portfolio of Wealth Management Clients contributed net new assets of CHF 1.7 billion with continued strong inflows from emerging markets, partially offset by continued Western European cross-border outflows. Corporate & Institutional Clients reported net inflows of CHF 4.0 billion in 4Q13. Asset Management reported net assets outflows of CHF 0.5 billion in 4Q13, mainly from multi-asset-class solutions and fixed income products, partially offset by inflows in index strategies and credit products.
- Results reflect solid performance in strategic businesses and an increased loss before taxes in non-strategic businesses, due to higher litigation provisions in connection with ongoing mortgage litigation
- Total reported revenues of CHF 2,725 million increased compared to 4Q12 and 3Q13 reflecting:
- Solid performance in strategic businesses; strength in equities, credit and underwriting franchises, partly offset by lower rates results
- Reduced net revenue losses from non-strategic businesses
- Total reported operating expenses of CHF 2,757 million increased from 4Q12 and 3Q13 driven by significantly higher litigation provisions and higher compensation and benefits expense
Strategic results: In 4Q13, the strategic businesses within Investment Banking reported income before taxes of CHF 485 million and net revenues of CHF 2,812 million.
Fixed income sales and trading revenues of CHF 808 million declined 32% from 4Q12, reflecting continued low client trading activity, particularly in global macro products, which includes our rates, foreign exchange and commodities businesses. Revenues declined 22% compared to 3Q13 due to lower client trading activity in leveraged finance, emerging markets and rates businesses.
Equity sales and trading revenues of CHF 1,087 million increased 21% from 4Q12, reflecting continued market leadership, higher equity values and increased client activity. Compared to 3Q13, equity sales and trading revenues were stable.
Underwriting and advisory revenues of CHF 951 million were 3% lower compared to 4Q12, as robust equity underwriting performance was offset by lower debt underwriting and advisory revenues. Compared to 3Q13, underwriting and advisory revenues increased 35%, primarily driven by strong equity underwriting issuance activity as well as higher debt underwriting and advisory results.
Compensation and benefits of CHF 1,335 million increased 17% compared to 4Q12 and 22% compared to 3Q13, driven by higher discretionary performance-related compensation expense. Total other operating expenses declined 7% compared to 4Q12 and were stable compared to 3Q13.
Results were impacted by the weakening of the average rate of the US dollar against the Swiss franc, compared to 4Q12 and 3Q13, which adversely impacted revenues and favorably impacted expenses.
As of the end of 4Q13, the strategic businesses in Investment Banking reported Basel III risk-weighted assets of USD 156 billion, reflecting further progress in reducing risk-weighted assets. From 4Q12, Basel III risk-weighted assets were reduced by USD 8 billion from 4Q12, reflecting USD 22 billion of business reductions, offset by increases of USD 8 billion of methodology changes and parameter updates and an operational risk add-on of USD 6 billion in 4Q13. The leverage exposure of the strategic businesses in Investment Banking was USD 725 billion as of the end of 4Q13, a reduction of USD 46 billion or 6% compared to the end of 3Q13.
Non-strategic businesses: Non-strategic results for Investment Banking include the fixed income wind-down portfolio, legacy rates business, primarily capital instruments that are not compliant with the Basel III capital framework and capital-intensive structured positions, legacy funding costs associated with non-Basel III compliant debt instruments, as well as certain legacy litigation costs and other small non-strategic positions.
In 4Q13, the non-strategic businesses within Investment Banking reported a loss before taxes of CHF 525 million and net revenue losses of CHF 87 million. Total operating expenses of CHF 438 million increased compared to 4Q12 and 3Q13, reflecting significantly higher litigation provisions, primarily relating to ongoing mortgage litigation. Net revenue losses were lower compared to 4Q12 and 3Q13, driven by valuation gains, particularly in the legacy fixed income wind-down portfolio, reflecting various portfolio management measures.
As of the end of 4Q13, the non-strategic businesses reported Basel III risk-weighted assets of USD 20 billion, down USD 3 billion from 4Q12. This compares to the target of USD 6 billion by end 2015. Additionally, the non-strategic businesses reported leverage exposure of USD 87 billion as of the end of 4Q13, a reduction of USD 6 billion, or 6% from 3Q13. This compares to the target of USD 24 billion in leverage exposure by year-end 2015.
The Corporate Center recorded a loss before taxes of CHF 402 million in 4Q13, including fair value losses on own debt of CHF 180 million, debit valuation adjustment losses on certain structured notes liabilities of CHF 69 million and fair value gains on stand-alone derivatives of CHF 47 million, resulting in overall fair value losses on own credit spreads of CHF 202 million in 4Q13. The fair value losses on own debt reflected the narrowing of credit spreads on senior and subordinated debt across most currencies. 4Q13 results also included business realignment costs of CHF 131 million, IT architecture-related costs of CHF 69 million and a gain on sale of real estate of CHF 68 million. This compares to a loss before taxes of CHF 824 million in 4Q12 and a loss before taxes of CHF 559 million in 3Q13.
* Underlying results and adjusted cost run-rates are non-GAAP financial measures. The table below includes a reconciliation of the underlying results to the most directly comparable US GAAP measures. For further information on the calculation of underlying results, including reconciliations for historical periods, and on the cost run-rates on an adjusted annualized basis, see the 4Q13 Results Presentation Slides.
Strategic and non-strategic results are presented in this media release. As previously announced, in 4Q13, Credit Suisse created non-strategic units within the Investment Banking and Private Banking & Wealth Management divisions and separated non-strategic items in the Corporate Center, thereby allowing Credit Suisse to shift resources and to focus on growth in high-returning businesses. For further information on non-strategic results, please see “Format of presentation and changes in reporting” in I – Credit Suisse Results – Credit Suisse – Information and developments in the 4Q13 financial report.
Revenues and expenses and the relevant gains on disposal of Private Banking & Wealth Management businesses are classified as discontinued operations in the Group’s income statement, whereas gains and expenses related to those business disposals are included in the segment’s results but excluded from underlying results. See “Format of presentation and changes in reporting” in I – Credit Suisse Results – Credit Suisse – Information and developments in the 4Q13 financial report.
All references to pre-tax income for Core results in this media release refer to income from continuing operations before taxes.
4Q13 Financial Report
The 4Q13 Financial Report and the related Results Presentation Slides are available for download from 06:30 CET today.
The Financial Report is available for download at:
Hard copies of the Financial Report can be ordered free of charge at:
The Results Presentation Slides are available for download at:
- Media Relations Credit Suisse AG, Tel. +41 844 33 88 44, firstname.lastname@example.org
- Investor Relations Credit Suisse AG, Tel. +41 44 333 71 49, email@example.com
- Credit Suisse AG
- Credit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). As an integrated bank, Credit Suisse offers clients its combined expertise in the areas of private banking, investment banking and asset management. Credit Suisse provides advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 46,000 people. The registered shares (CSGN) of Credit Suisse's parent company, 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 press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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, objectives 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 except as may be required by applicable securities laws. 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, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include:
– the ability to maintain sufficient liquidity and access capital markets;
– market and interest rate fluctuations and interest rate levels;
– 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 the risk of continued slow economic recovery or downturn in the US or other developed countries in 2014 and beyond;
– the direct and indirect impacts of continuing deterioration or slow recovery in residential and commercial real estate markets;
– adverse rating actions by credit rating agencies in respect of sovereign issuers, structured credit products or other credit-related exposures;
– the ability to achieve our strategic objectives, including improved performance, reduced risks, lower costs, and more efficient use of capital;
– the ability of counterparties to meet their obligations to us;
– the effects of, and changes in, fiscal, monetary, trade and tax policies, and currency fluctuations;
– political and social developments, including war, civil unrest or terrorist activity;
– 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;
– actions taken by regulators with respect to our business and practices in one or more of the countries in which we conduct our operations;
– the effects of changes in laws, regulations or accounting policies or practices;
– competition in geographic and business areas in which we conduct our operations;
– the ability to retain and recruit qualified personnel;
– the ability to maintain our reputation and promote our brand;
– the ability to increase market share and control expenses;
– technological changes;
– 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;
– the adverse resolution of litigation and other contingencies;
– the ability to achieve our cost efficiency goals and cost targets; and
– our success at managing 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 2012.
Capital, liquidity and leverage disclosures
As of January 1, 2013, Basel III was implemented in Switzerland along with the Swiss “Too Big to Fail” legislation and regulations thereunder. Our related disclosures are in accordance with our current interpretation of such requirements, including relevant assumptions. We have calculated our Basel III NSFR based on the current FINMA framework. Changes in the interpretation of these requirements in Switzerland or in any of our assumptions or estimates could result in different numbers from those shown herein. Capital and ratio numbers for periods prior to 2013 are based on estimates, which are calculated as if the Basel III framework had been in place in Switzerland during such periods. For Private Banking & Wealth Management’s strategic businesses, after-tax return on Basel III allocated capital is calculated using income after tax denominated in Swiss francs and assumes (i) a tax rate of 30% in 4Q13 and 29% in 2013 and (ii) that capital is allocated at 10% of average Basel III risk-weighted assets. For Investment Banking’s strategic businesses, after-tax return on Basel III allocated capital is calculated using income after tax denominated in US Dollars and assumes (i) a tax rate of 30% in 4Q13 and 28% in 2013 and (ii) that capital is allocated at 10% of average Basel III risk-weighted assets.
Unless otherwise noted, leverage ratio, leverage exposure and total capital amounts included herein are based on the current FINMA framework. The Swiss Total Capital leverage ratio is calculated as Swiss Total Capital, divided by a three-month average leverage exposure, which consists of balance sheet assets, off-balance sheet exposures, which consist of guarantees and commitments, and regulatory adjustments, which include cash collateral netting reversals and derivative add-ons.