UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
October 22, 2009
Commission File Number 001-15244
CREDIT SUISSE GROUP AG
(Translation of registrant’s name into English)
Paradeplatz 8, P.O. Box 1, CH-8070 Zurich, Switzerland
(Address of principal executive office)
Commission File Number 001-33434
CREDIT SUISSE
(Translation of registrant’s name into English)
Paradeplatz 8, P.O. Box 1, CH-8070 Zurich, Switzerland
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
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Form 20-F |
Form 40-F |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
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Yes |
No |
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-.
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CREDIT SUISSE GROUP AG | |
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Paradeplatz 8 P.O. Box CH-8070 Zurich Switzerland |
Telephone +41 844 33 88 44 Fax +41 44 333 88 77 media.relations@credit-suisse.com
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Media Release
Credit Suisse Group reports net income of CHF 2.4 billion in 3Q09 and return on equity of 25.1%; tier 1 ratio of 16.4%; net income of CHF 5.9 billion in 9M09 and return on equity of 21.8%
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3Q09 and 9M09 performance confirms strength of Credit Suisse’s client-focused, capital-efficient strategy; reduced-risk business model provides foundation for sustainable, high-quality, lower volatility earnings |
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Total net new assets of CHF 16.7 billion in 3Q09 as Credit Suisse’s capital strength and integrated model continue to attract clients globally |
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Solid Private Banking performance with pre-tax income of CHF 0.9 billion in 3Q09: |
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Net new assets of CHF 13.1 billion in Private Banking, with inflows in international and Swiss businesses |
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Assets under management of CHF 902 billion, up 4.6% vs. 2Q09 |
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Strong results from differentiated Investment Banking strategy and realigned platform in 3Q09: |
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Continued strong profitability: pre-tax income of CHF 1.7 billion and high pre-tax return on capital of 35.1% |
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Continued disciplined approach to risk management: risk-weighted assets declined vs. 2Q09 to USD 137 billion with shift in composition to support growth in client-focused businesses; average one-day, 99% Value-at-Risk in CHF decreased 25% vs. 2Q09 |
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Asset Management recorded pre-tax income of CHF 0.3 billion in 3Q09 benefiting from valuation gains; continued progress in refocusing business |
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Net new assets of CHF 3.9 billion, including good net inflows of CHF 3.9 billion in multi-asset class solutions, CHF 2.0 billion in Swiss advisory and CHF 1.4 billion in alternative investment strategies, partially offset by net outflows in money market assets |
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Results in 9M09 underscore value of Credit Suisse’s strategy and business model and sustainability of performance: |
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Net income of CHF 5.9 billion |
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Return on equity of 21.8% |
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Total net new assets of CHF 31.7 billion |
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Tier 1 ratio improved by 310 basis points to 16.4% as of end-3Q09 from 13.3% at beginning of year |
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Collaboration revenues from integrated bank were CHF 3.6 billion |
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Media Release |
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October 22, 2009 Page 2/7 |
Zurich, October 22, 2009 Credit Suisse Group reported net income attributable to shareholders of CHF 2,354 million in 3Q09 compared to CHF 1,571 million in 2Q09. Core net revenues were CHF 8,917 million in 3Q09 compared to CHF 8,610 million in 2Q09. The return on equity attributable to shareholders was 25.1% in 3Q09 and diluted earnings per share were CHF 1.81. The tier 1 ratio was 16.4% as of the end of 3Q09.
Brady W. Dougan, Chief Executive Officer, said: “Credit Suisse has responded to the changes in the industry over the past two years with the accelerated implementation of our client-focused, capital-efficient strategy and reduced-risk business model. Our third-quarter performance, including our strong return on equity of 25.1%, shows that our approach continues to work well and is providing the foundation for sustainable, high-quality, lower volatility earnings. Our strategy and business model and industry-leading capital strength, demonstrated by our tier 1 ratio of 16.4%, position Credit Suisse to prosper in the new competitive landscape.”
On Private Banking’s performance, he noted: “We had a solid quarter in Private Banking, with strong asset inflows across all regions. Our business model in wealth management enables us to deliver our expertise as an integrated bank through a scalable, global platform and will help us to benefit from a market recovery. Wealth management is a very attractive growth market and, while client activity has picked up in selected areas, risk appetite has improved only moderately; however, we remain confident that overall levels of demand for comprehensive investment solutions will recover in the medium term. We will therefore continue to invest in our international expansion as well as in our Swiss home market, where our integrated model is producing strong results.”
With regard to Investment Banking’s results, he said: “Our differentiated strategy has been affirmed by strong profitability throughout the first nine months of the year. In the third quarter we achieved very good performances in our client and flow-based businesses, as well as in our repositioned businesses. We also remained disciplined regarding risk and capital allocation. Our decision a year ago to accelerate the implementation of a client-focused, capital-efficient strategy in Investment Banking in the changed environment is yielding strong benefits.”
On the performance of Asset Management, he said: “Our Asset Management business saw good net inflows, particularly in our focus areas such as multi-asset class solutions, Swiss advisory and alternative investment strategies. Over the last 12 months we have aligned our Asset Management business with the integrated bank. Our progress shows that our focus on asset allocation, the Swiss businesses and alternative investment strategies is benefiting our integrated model.”
He added: “One of our priorities is to play a responsible role in economic recovery, both in Switzerland where we remain an important and committed lender to corporate and institutional clients, and as a positive force in global capital markets. As part of this responsible approach we have announced a new compensation structure, consistent with the best practice guidelines from the G-20. We are also actively engaged in discussions with regulators to foster a globally coordinated approach to regulation in an effort to build a more robust financial sector that can promote global economic prosperity.”
He concluded: “We are confident about our business model and our competitive position. If markets remain constructive, we expect to be able to maintain our momentum. Even if markets become more difficult, we believe that Credit Suisse is still positioned to perform well.”
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Media Release |
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October 22, 2009 Page 3/7 |
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Financial Highlights |
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in CHF million |
3Q09 |
2Q09 |
3Q08 |
Change in % |
Change in % |
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vs. 2Q09 |
vs. 3Q08 |
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Net income/(loss) attributable to shareholders |
2,354 |
1,571 |
(1,261) |
50 |
- |
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Diluted earnings/(loss) per share (CHF) |
1.81 |
1.18 |
(1.22) |
53 |
- |
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Return on equity attributable to shareholders (annualized) |
25.1% |
17.5% |
(13.1)% |
- |
- |
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Tier 1 ratio (end of period) |
16.4% |
15.5% |
10.4% |
- |
- |
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Core results 1) |
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Net revenues |
8,917 |
8,610 |
3,023 |
4 |
195 |
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Provision for credit losses |
53 |
310 |
131 |
(83) |
(60) |
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Total operating expenses |
6,244 |
6,736 |
5,393 |
(7) |
16 |
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Income/(loss) from continuing operations before taxes |
2,620 |
1,564 |
(2,501) |
68 |
- |
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1) Core Results include the results of the three segments, the Corporate Center and discontinued operations, but do not include non-controlling interests without significant economic interest. | |||||
Segment Results
Private Banking
Private Banking, which comprises the Wealth Management Clients and Corporate & Institutional Clients businesses1, reported income before taxes of CHF 867 million in 3Q09. While this was a solid result, it was 7% below the 2Q09 level. This reflected a 4% decline in net revenues to CHF 2,833 million, mainly due to lower net interest income, while costs remained stable.
The Wealth Management Clients business reported income before taxes of CHF 723 million in 3Q09, down 5% from 2Q09. Net revenues were 3% lower than in 2Q09. Recurring revenues were stable, as lower net interest income was offset by higher asset-based commissions and fees. Transaction-based revenues declined 7%; this was mainly due to significantly lower integrated solutions revenues compared to the very strong performance in 2Q09. Excluding the impact of integrated solutions revenues, transaction-based revenues would have grown 6% compared to 2Q09. The gross margin was 125 basis points, down 10 basis points from 2Q09, mainly reflecting the decrease in net interest income and in integrated solutions revenues while average assets under management increased.
The Corporate & Institutional Clients business reported income before taxes of CHF 144 million in 3Q09, down 18% from 2Q09. Net revenues declined 10% compared to 2Q09, mainly due to fair value losses related to Clock Finance, a synthetic collateralized loan portfolio. Net provision for credit losses was a moderate CHF 40 million in 3Q09, despite some further deterioration in the credit environment, compared to CHF 59 million in 2Q09.
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1 Following a realignment of Credit Suisse’s client coverage in Switzerland in 3Q09, Swiss private client coverage is part of Wealth Management Clients, which covers all individual clients, including affluent, high-net-worth and ultra-high-net-worth clients. Corporate & Institutional Clients provides banking services to corporates and institutions in Switzerland. Reclassifications have been made to prior periods to conform to the current presentation.
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Media Release |
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October 22, 2009 Page 4/7 |
Investment Banking
Investment Banking reported income before taxes of CHF 1,746 million in 3Q09, up 5% compared to 2Q09, as the business continued to execute its client-focused, capital-efficient strategy and maintain market share momentum across products and regions. Net revenues were CHF 5,046 million, the bulk of which was generated in key client and repositioned businesses, driven by good results in global rates and foreign exchange, cash equities, US leveraged finance, US residential mortgage-backed securities (RMBS) secondary trading, prime services, and flow and corporate derivatives. Compared to 2Q09, net revenues declined 16%, reflecting reduced market activity, including the normal seasonal slowdown in many of the flow businesses. Investment Banking’s results reflected net fair value losses on Credit Suisse debt of CHF 251 million in 3Q09, compared to CHF 269 million in 2Q09. The pre-tax income margin was 34.6% compared to 27.5% in 2Q09. The pre-tax return on capital was 35.1% in 3Q09, compared to 31.5% in 2Q09.
Investment Banking is investing in its businesses and technology infrastructure while maintaining its focus on expense discipline and efficiency improvement. Non-compensation expenses increased 12% from 2Q09, excluding litigation charges of CHF 383 million in 2Q09 and litigation charges of CHF 47 million in 3Q09, mainly due to IT investment costs. Compensation expenses were CHF 2,129 million in 3Q09, down 22% from 2Q09, primarily due to lower performance-related compensation.
Investment Banking continued to reallocate capital from its exit businesses to its ongoing businesses. Risk-weighted assets of USD 137 billion as of the end of 3Q09 declined from the 2Q09 level and there was a shift in composition to support growth in the client-focused businesses. Risk-weighted assets in ongoing businesses increased to USD 119 billion from USD 113 billion as of the end of 2Q09. Risk-weighted assets in exit businesses declined to USD 18 billion from USD 26 billion as of the end of 2Q09. Average one-day, 99% Value at Risk in CHF decreased 25% compared to 2Q09.
Asset Management
Asset Management reported income before taxes of CHF 311 million in 3Q09 compared to CHF 55 million in 2Q09. The improved results benefited from a gain of CHF 207 million related to the completion of the sale of part of Credit Suisse’s traditional investment strategies business to Aberdeen Asset Management, as well as investment-related gains of CHF 97 million, compared to investment-related losses of CHF 28 million in 2Q09, primarily reflecting unrealized gains in credit strategies and private equity. Asset Management’s results also reflected an increasing asset base, improved performance and its focus on its core alternative investment and asset allocation businesses. Asset management fees increased, particularly in multi-asset class solutions and other traditional investment strategies. Net revenues were CHF 765 million, up 76% compared to 2Q09. As of the end of 3Q09, the fair value of the balance sheet exposure to securities previously purchased from Credit Suisse’s money market funds was CHF 252 million, down CHF 279 million, or 53%, from 2Q09, and gains were CHF 42 million. Excluding the purchased securities and investment-related gains/(losses), net revenues rose 49% compared to 2Q09. Total operating expenses increased 20% compared to 2Q09, as a 3% decrease in general and administrative expenses was offset by a 28% increase in compensation and benefits, partly due to higher deferred compensation.
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Media Release |
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October 22, 2009 Page 5/7 |
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Segment Results |
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in CHF million |
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3Q09 |
2Q09 |
3Q08 |
Change in % |
Change in % |
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vs. 2Q09 |
vs. 3Q08 |
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Private |
Net revenues |
2,833 |
2,951 |
3,148 |
(4) |
(10) |
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Banking |
Provision for credit losses |
35 |
72 |
13 |
(51) |
169 |
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Total operating expenses |
1,931 |
1,944 |
2,346 |
(1) |
(18) |
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Income before taxes |
867 |
935 |
789 |
(7) |
10 |
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Investment |
Net revenues |
5,046 |
6,011 |
(555) |
(16) |
- |
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Banking |
Provision for credit losses |
18 |
238 |
119 |
(92) |
(85) |
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Total operating expenses |
3,282 |
4,118 |
2,539 |
(20) |
29 |
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Income/(loss) before taxes |
1,746 |
1,655 |
(3,213) |
5 |
- |
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Asset |
Net revenues |
765 |
434 |
374 |
76 |
105 |
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Management |
Provision for credit losses |
0 |
0 |
0 |
- |
- |
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Total operating expenses |
454 |
379 |
483 |
20 |
(6) |
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Income/(loss) before taxes |
311 |
55 |
(109) |
465 |
- |
Net New Assets
Private Banking recorded net new assets of CHF 13.1 billion in 3Q09, benefiting from inflows across all regions from a broad client base, of which CHF 7.5 billion were generated in the international businesses and CHF 5.6 billion in the Swiss businesses. The annualized quarterly growth rate in net new assets in Wealth Management Clients was 5.9% in 3Q09.
Asset Management reported net new assets of CHF 3.9 billion, which included inflows of CHF 3.9 billion in multi-asset class solutions, CHF 2.0 billion in Swiss advisory and CHF 1.4 billion in alternative investment strategies, partially offset by outflows of CHF 3.4 billion in money market assets.
The Group’s total assets under management from continuing operations were CHF 1,225.3 billion as of the end of 3Q09, up 4.3% from the end of 2Q09, primarily reflecting favorable market performance and positive net new assets in Private Banking and Asset Management, partially offset by adverse foreign exchange-related movements.
Benefits of the integrated bank
Credit Suisse generated CHF 1.1 billion in collaboration revenues from the integrated bank in 3Q09 compared to CHF 1.5 billion in 2Q09, bringing the total in 9M09 to CHF 3.6 billion.
Capital position
Credit Suisse’s capital position remains very strong. The tier 1 ratio was 16.4% as of the end of 3Q09, compared to 15.5% as of the end of 2Q09.
First nine months of 2009
Credit Suisse Group reported net income attributable to shareholders of CHF 5,931 million in 9M09, compared to a loss of CHF 2,194 million in the prior-year period. Core net revenues were CHF 27,084 million compared to CHF 13,692 million in the prior-year period. The return on equity attributable to shareholders was 21.8% and diluted earnings per share were CHF 4.59. Total net new assets were CHF 31.7 billion.
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Media Release |
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October 22, 2009 Page 6/7 |
Information
Media Relations Credit Suisse, telephone +41 844 33 88 44, media.relations@credit-suisse.com
Investor Relations Credit Suisse, telephone +41 44 333 71 49, investor.relations@credit-suisse.com
Credit Suisse
As one of the world’s leading banks, Credit Suisse provides its clients with private banking, investment banking and asset management services worldwide. Credit Suisse offers advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as retail clients in Switzerland. Credit Suisse is active in over 50 countries and employs approximately 47,400 people. Credit Suisse’s parent company, Credit Suisse Group, is a leading global financial services company headquartered in Zurich. Credit Suisse Group’s registered shares (CSGN) 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 and non-GAAP information
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. 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:
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our plans, objectives or goals; |
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our future economic performance or prospects; |
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the potential effect on our future performance of certain contingencies; and |
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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:
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the ability to maintain sufficient liquidity and access capital markets; |
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market and interest rate fluctuations; |
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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 a continued US or global economic downturn in 2009 and beyond; |
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the direct and indirect impacts of continuing deterioration of subprime and other real estate markets; |
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further adverse rating actions by credit rating agencies in respect of structured credit products or other credit-related exposures or of monoline insurers; |
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the ability of counterparties to meet their obligations to us; |
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the effects of, and changes in, fiscal, monetary, trade and tax policies, and currency fluctuations; |
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political and social developments, including war, civil unrest or terrorist activity; |
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the possibility of foreign exchange controls, expropriation, nationalization or confiscation of assets in countries in which we conduct our operations; |
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operational factors such as systems failure, human error, or the failure to implement procedures properly; |
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actions taken by regulators with respect to our business and practices in one or more of the countries in which we conduct our operations; |
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the effects of changes in laws, regulations or accounting policies or practices; |
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competition in geographic and business areas in which we conduct our operations; |
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the ability to retain and recruit qualified personnel; |
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the ability to maintain our reputation and promote our brand; |
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the ability to increase market share and control expenses; |
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technological changes; |
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the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users; |
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acquisitions, including the ability to integrate acquired businesses successfully, and divestitures, including the ability to sell non-core assets; |
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the adverse resolution of litigation and other contingencies; |
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the ability to achieve our cost efficiency goals and other cost targets; and |
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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, as well as the information set forth in our Form 20-F Item 3 - Key Information - Risk Factors.
This press release contains non-GAAP financial information. Information needed to reconcile such non-GAAP financial information to the most directly comparable measures under GAAP can be found in the Credit Suisse Financial Release 3Q09.
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Media Release |
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October 22, 2009 Page 7/7 |
Presentation of Credit Suisse Group’s 3Q09 results via audio webcast and telephone conference
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Date |
Thursday, October 22, 2009 |
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Time |
10:00 Zurich / 09:00 London / 04:00 New York |
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Speakers |
Brady W. Dougan, Chief Executive Officer Renato Fassbind, Chief Financial Officer The presentations will be held in English |
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Audio webcast |
www.credit-suisse.com/results |
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Telephone |
Switzerland: |
+41 44 580 40 01 |
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Europe: |
+44 1452 565 510 |
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US: |
+1 866 389 9771 |
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Reference: Credit Suisse Group quarterly results |
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Q&A session |
You will have the opportunity to ask questions during the telephone conference following the presentations. | |||
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Playbacks |
Playback available approximately 2 hours after the event at www.credit-suisse.com/results or on the telephone numbers below: | |||
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Telephone replay available approximately 2 hours after the event: | |||
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Switzerland: |
+41 44 580 34 56 |
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Europe: |
+44 1452 55 00 00 |
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US: |
+1 866 247 4222 |
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Conference ID: 34233700# |
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Third Quarter Results 2009
Zurich
October 22, 2009
Cautionary statement
Cautionary statement regarding forward-looking and non-GAAP information
This presentation contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks
and uncertainties,
and we might not be able to achieve the predictions, forecasts,
projections and other outcomes we describe or imply in forward-looking statements.
A number of important factors could cause results to differ materially from the plans,
objectives, expectations, estimates and intentions we express in these forward-looking
statements, including
those we identify in "Risk Factors" in our Annual Report on Form 20-F
for the fiscal year ended December 31, 2008 filed with the US Securities and Exchange
Commission, and in other public filings and press releases. We do not intend to update
these
forward-looking statements except as may be required by applicable laws.
This presentation contains non-GAAP financial information. Information needed to reconcile
such non-GAAP financial information to the most directly comparable measures under
GAAP can be found
in Credit Suisse Group's third quarter report 2009 and in the appendix
to this presentation.
Third Quarter Results 2009
Slide 1
Third quarter 2009 results detail
Renato Fassbind, Chief Financial Officer
Introduction
Brady W. Dougan, Chief Executive Officer
Summary
Brady W. Dougan, Chief Executive Officer
Third Quarter Results 2009
Slide 2
Differentiated strategic direction: client focused and capital efficient
Strategy implementation
Counter-cyclical investments in PB
Repositioned IB to client businesses
AM focused on core competencies
Delivering
strong results
Net income
of CHF 2.4 bn in 3Q09
and CHF
5.9 bn in 9M09
Return on equity of
25.1% in 3Q09
and 21.8%
in 9M09
Strong net asset inflows of
CHF 17 bn in 3Q09
and
CHF 32 bn in 9M09
PB with attractive industry
opportunity and significant
operating leverage
IB with more sustainable
revenue pools, many with
potential for growth
Active risk management
Aggressive risk reduction
and
remaining risks well diversified
Competitive strengths
Consistency in integrated bank
strategy, leadership and client
coverage resulting in market share
gains
Well positioned to
face changes in industry
regulation
Capital strength provides
flexibility to grow the
franchise
and deliver
attractive returns to
shareholders
PB = Private Banking IB = Investment Banking AM = Asset Management
Looking ahead
Third Quarter Results 2009
Slide 3
Third quarter 2009 results detail
Renato Fassbind, Chief Financial Officer
Introduction
Brady W. Dougan, Chief Executive Officer
Summary
Brady W. Dougan, Chief Executive Officer
Third Quarter Results 2009
Slide 4
Results overview
1) Excluding impact from movements of spreads on own debt of CHF (93) m, CHF (1,054) m, CHF 670 m and CHF (477) m in 3Q09, 2Q09, 1Q09 and 9M09, respectively
EPS = earnings per share
1)
Third Quarter Results 2009
Slide 5
Core results in CHF m, except where indicated
3Q09
2Q09
1Q09
9M09
Net revenues
8,917
8,610
9,557
27,084
Provision for credit losses
53
310
183
546
Total operating expenses
6,244
6,736
6,320
19,300
Pre-tax income
2,620
1,564
3,054
7,238
Net income attributable to shareholders
2,354
1,571
2,006
5,931
Diluted EPS attributable to shareholders in CHF
1.81
1.18
1.59
4.59
Cost/income ratio
69.3%
69.7%
71.1%
70.0%
Return on equity
25.1%
17.5%
22.6%
21.8%
992
2,049
(490)
935
1,924
55
867
1,997
311
Results by division
Asset Management
Pre-tax income in CHF m
Investment Banking
Private Banking
1) Including proceeds from captive insurance settlements of CHF 100 m in 1Q09
2) Excluding impact from movements in spreads on own debt of CHF 365 m, CHF (269) m and CHF (251) m in 1Q09, 2Q09 and 3Q09, respectively
3) Including gain on shares received from the completion of the sale of part of the traditional investment strategies business of CHF 21 m and CHF 207 m in 2Q09 and 3Q09, respectively
2Q09
3Q09
1Q09
2)
1)
3)
Third Quarter Results 2009
Slide 6
2,392
724
759
723
2,206
Wealth Management Clients with strong inflows and higher
assets under management
Pre-tax income
CHF m
Increased transaction-related revenues and
higher asset-based commissions offset by
lower interest income
Continued strong asset inflows of
CHF 11.2 bn with
balanced contributions
from all regions
Assets under management in 3Q09 up CHF
32 bn, or 4.2%, to CHF 793 bn
Continued hiring of senior relationship
managers
and talent upgrades
9M08
9M09
1Q09
2Q09
3Q09
(5)%
(8)%
1) Including proceeds from captive insurance settlements of CHF 100 m
1)
1)
Third Quarter Results 2009
Slide 7
Pre-tax income margin in %
29.2
30.2
30.6
30.3
29.8
Based on former Wealth Management business reporting for periods prior to 2007
NNA in CHF bn by region in 3Q09 were 3.7 from Switzerland, 2.4 from EMEA, 2.8 from Americas and 2.3 from Asia Pacific
NNA growth rates are annualized
Wealth Management Clients with continued strong net new
assets inflows evidencing market share gains
Net new assets (NNA)
CHF bn
9M09
Asia Pacific
Americas
Europe, Middle East
and Africa (EMEA)
Switzerland
1Q09
2005
2007
2008
2Q09
9.6
42.8
9.1
31.4
2006
52.7
43.9
2004
50.5
3Q09
11.2
29.9
7.7
4.9
9.7
7.6
5.9% NNA growth rate 3Q09
3.8% NNA growth rate rolling
four-quarters
Third Quarter Results 2009
Slide 8
100
103
97
30
31
38
92
97
33
34
Gross margin in Wealth Management Clients impacted by lower
interest income and continued conservative client behavior
Gross margin on assets under management
Basis points
9M08
9M09
1Q09
2Q09
3Q09
130
131
134
135
125
9M09 gross margin increased to 131 bp
Recurring margin
Transaction-based margin
Product issuing fees
vs.
2Q09
Integrated solutions revenues
(which were very strong in 2Q09)
Brokerage fees
vs.
2Q09
Interest income
Asset-based commissions and fees
Third Quarter Results 2009
Slide 9
941
588
268
144
176
Corporate & Institutional Clients with resilient underlying results
Pre-tax income
CHF m
Solid net new assets of CHF 1.9 bn
Reduction in revenues by 10% vs. 2Q09
driven by fair value changes on loan hedges
Moderate credit provisions of CHF 40 m
despite the challenging economic conditions
Underlying pre-tax income resilient
(down 1% to
CHF 205 m)
Strong pre-tax income margin both in 3Q09
with 35.6% and in 9M09 with 43.1%
9M08
9M09
1Q09
Provision for credit losses in CHF m
(23) 130 31 59 40
2Q09
3Q09
(38)%
(18)%
Pre-tax income margin in %
59.2 43.1 52.7 39.1 35.6
1) adjusted for fair value changes on loan hedges
Third Quarter Results 2009
Slide 10
1)
Fair value change on loan hedges in CHF m
53
(88)
5
(32)
(61)
Investment Banking with continued strong results
Note: Excluding impact from movements in spreads on own debt of CHF (251) m, CHF (269) m, CHF 365 m and CHF (155) m in 3Q09, 2Q09, 1Q09 and 9M09, respectively
Third Quarter Results 2009
Slide 11
Investment Banking (CHF m)
3Q09
2Q09
1Q09
9M09
Net revenues
5,297
6,280
6,077
17,654
Pre-tax income
1,997
1,924
2,049
5,970
Pre-tax income margin
38%
31%
34%
34%
Pre-tax return on economic capital
40%
37%
37%
38%
Risk weighted assets (USD bn)
137
139
154
137
Average 1-day VaR (USD m)
89
112
121
107
Solid revenues in ongoing businesses despite seasonal
slowdown
Investment Banking revenues (in CHF bn)
Key client
businesses
Repositioned
businesses
Exit
businesses
Loss on
own debt
3Q09
3Q09 revenues of CHF 5.0 bn
Key client revenues with higher
underwriting market share and
strong non-agency RMBS
revenues offset by seasonally
lower client activity
Repositioned businesses with
higher leveraged finance results
partly offset by subdued emerging
markets activity
Further progress in exit portfolio
with commercial mortgage
exposure cut to CHF 3.6 bn
9M09 revenues of CHF 17.5 bn
Strong performance in key client
and repositioned businesses
5.0
4.1
1.4
(0.2)
(0.3)
Net revenues 9M09 (in CHF bn)
17.5 15.6 4.8 (2.7) (0.2)
Ongoing
Third Quarter Results 2009
Slide 12
Equity revenues reflect improved market share
Higher equity under-
writing fees (improved
market share, especially
in EMEA) offset by lower
seasonal equity market
volumes
Revenues reflecting
reduction in risk
positions and refocused
operating models
Risk reduction in illiquid
trading activities largely
completed with
negligible P&L drag
2.0
2.1
1.9
0.2
0.4
0.5
1Q09
2Q09
3Q09
1Q09
2Q09
3Q09
1.8
0.4
Key client businesses
Repositioned businesses
Exit businesses
CHF bn
Total equity revenues
2.2
2.5
2.4
1Q09
2Q09
3Q09
2.2
Market rebound revenues:
estimated rebound revenues
resulting from normalized market conditions, including the reduction in market volatility and the
stabilization of the convertible bond market compared to 4Q08
Note: All data based on equity trading and
underwriting revenues before impact from
movements in spreads on own debt
=
9M09 revenues of
CHF 7.1 bn reflect
continued market share
gains across our cash
equities and prime services
businesses
1Q09
2Q09
3Q09
0.0
(0.0)
(0.0)
Third Quarter Results 2009
Slide 13
Fixed income revenues reflect diversified business mix and
reduced exit losses
Key client businesses
Repositioned businesses
Exit businesses
1Q09
CHF bn
2Q09
Revenues in 3Q09
marginally lower as
improved performance in
US leveraged finance was
offset by lower revenues
from emerging markets and
corporate lending
Lower losses in 3Q09 due
to continued wind-down of
exit businesses
Reduced commercial
mortgage exposure to CHF
3.6 bn with significant
portfolio sales in Europe
and US
3Q09
2.0
2.9
4.3
1Q09
2Q09
3Q09
1.2
1.3
1.2
1Q09
2Q09
3Q09
(0.2)
(0.6)
(1.6)
3.7
0.7
Total fixed income revenues
1Q09
2Q09
3Q09
3.0
3.6
3.9
2.8
Market rebound revenues:
estimated rebound revenues
resulting from normalized market conditions, including the narrowing of credit spreads and the
reduction in the differential between cash and synthetic instruments compared to 4Q08
=
Note: All data based on fixed income trading and
debt underwriting revenues before impact from
movements in spreads on own debt
9M09 revenues of
CHF 10.5 bn reflect growth
in client and flow activities,
improved performance from
repositioned areas and
reduced exit loses
Third Quarter Results 2009
Slide 14
Lower revenues in 3Q09 due to
seasonally reduced activity and
volatility in rates, FX and high
grade trading
Improved debt underwriting fees
with higher market share
Increased non-agency US
RMBS business offset by
reduced agency activity
Continued reallocation of capital to ongoing businesses
Investment Banking RWAs (period end in USD bn)
3Q08
4Q08
1Q09
159
2Q09
112
Investment Banking average 1-Day VaR (USD m)
3Q08
4Q08
1Q09
2Q09
End 3Q09
Average Value-at-Risk (VaR) declined 21% vs.
2Q09
and 44% vs. 3Q08
Stable revenues – no backtesting exceptions in
9M09
Expect VaR to modestly increase as capital is
reinvested
in client and flow businesses
193
3Q09
139
3Q09
Risk-weighted assets (RWA) in ongoing
businesses grew to USD 119 bn as capital is
reallocated from exit businesses
Priority remains to release remaining capital
from exit portfolio
for reinvestment into our
targeted client businesses
Exit
businesses
137
26
113
18
119
89
86
Third Quarter Results 2009
Slide 15
Compensation and non-compensation expenses
Investment Banking compensation expenses (CHF m)
Investment Banking non-compensation expenses (CHF m)
3Q08
1Q09
3Q09
Compensation accrual based on our economic profit
model, which reflects the risk-adjusted profitability
overall and of each business as well as the industry
environment
Model utilizes a diminishing scale for incremental variable
compensation accrual as performance improves
Compensation/revenue ratio of 40% in 3Q09
is a
result, not a driver, of this accrual
2,907
1,470
3Q08
2Q09
3Q09
1,350
350
1,000
272
713
985
1) Before impact from movements in spreads on own debt
2) Excludes litigation charges of CHF 383 m in 2Q09, corporation settlement, litigation reserve
releases of CHF 333 m in 4Q08 and CHF 73 m in 3Q08, and litigation charges of CHF 47m in 3Q09
2Q09
4Q08
1,450
4Q08
1Q09
1,162
347
815
Declined vs. 3Q08 due to cost reduction measures
and FX impact; partly offset by higher legal, consulting
and service fees in line with higher deal activity and
business exit costs
Increase vs. 2Q09 primarily due to incremental IT
investment costs and legal, consulting and service
fees in part relating to the exit businesses
989
2,746
696
293
1,106
805
301
2,129
Commission expenses
G&A expenses
2)
Third Quarter Results 2009
Slide 16
1)
Positive medium-term outlook for market share and/or market
environment in many key businesses
Relative revenue contribution from major business lines
Relative revenue
contribution in 9M09
9M09 market environment
Credit
Suisse
market
share
Strong
Revenue growth potential
from increasing market share
Revenue growth potential
from improving environment
Some risk of revenue
reduction from normalizing
environment
Worse than historic levels
Better than historic levels
Upside
potential
Prime
services
Cash
equities
RMBS trading
Emerging
markets
Rates
Equity capital
markets
Equity
derivatives
M&A
FX
Commodities
General direction of
movement of business within
same-colored segments
Note: Excludes 1Q09 rebound revenues.
Leveraged
finance
Investment
grade
Third Quarter Results 2009
Slide 17
Constructive medium-term outlook for overall revenue base
Investment Bank 9M09 revenues (in CHF bn)
Revenue growth potential
from increasing market share
Revenue growth potential
from improving environment
Some risk of revenue
reduction from normalizing
environment
More
sustainable
revenues with
good growth
prospects
Greatest risk
of revenue
reduction
9M09
reported
revenues
1) 9M09 reported revenues from all businesses, excluding rebound revenue of CHF 1.3 bn in 1Q09
9M09
adjusted
revenues
16.2
4.7
9.8
(3.6)
5.3
19.8
9M09 wind-
down losses
and other
Potential
normalization of
environment
Potential from
improved
environment
Potential from
higher market
share
Third Quarter Results 2009
Slide 18
1)
(529)
(490)
311
(124)
55
Asset Management with continued progress
Closed transaction with Aberdeen,
recording gain of CHF 207 m
Asset inflows into targeted growth areas
Assets under management up
CHF 17 bn, or 4.2%, to CHF 428 bn
Business positioned well to benefit from
normalizing market environment
Stable gross margin, with asset
management
fees up 5% vs. 2Q09
Pre-tax income
CHF m
9M08
9M09
1Q09
2Q09
3Q09
Total gains/(losses)
(584) (256) (408) 13 139
1) Including gain on sale of business of CHF 21 m and CHF 207 m in 2Q09 and 3Q09, respectively
2) On securities purchased from our money market funds and investment-related gains/(losses)
3) Before total gains/(losses) and gains on sale of business in 2Q09 and 3Q09
Gross margin
39 40 40 39 40
Third Quarter Results 2009
Slide 19
1)
2)
3)
Securities purchased from our
money market funds
42
Investment-related
97
Total gains/(losses)
139
(2.7)
Asset Management with good inflows in targeted growth
businesses
Assets under management
CHF bn
Asset
Management
Division
Multi-asset
class solutions
(MACS)
Traditional
strategies and
other
Alternative
investment
strategies (AI)
Net new assets
+1.4
(1.4)
+3.9
Gross margin
Before total gains/(losses) and gain on sale in 9M09
+3.9
CHF bn
428
104
176
148
40
37
28
54
(3.7)
+1.0
(2.0)
3Q09
9M09
CHF (3.4) bn in 3Q and CHF (5.0) bn in 9M
from US money market business
Third Quarter Results 2009
Slide 20
Continued strengthening of industry leading capital position
4Q08
1Q09
3Q09
Basel 2 risk-weighted assets (in CHF bn) and capital ratios (in %)
4Q07
Basel 2 tier 1 ratio of 16.4
%,
up 310 basis points year-to-date
Core tier 1 ratio of 11.3%
Continue to accrue towards a normalized
dividend
Risk-weighted assets further decreased
5% in 3Q09
10.0
13.3
14.1
257
261
324
15.5
235
2Q09
(31)%
(5)%
16.4
222
Third Quarter Results 2009
Slide 21
Maintained strong funding structure
1,064
1,064
Assets
3Q09
Capital & liabilities
3Q09
Reverse 263
repo
Trading 353
assets
Loans 234
Other 165
Repo 221
Trading liab.149
Short-term 56
Long-term
debt
Deposits 280
Capital 192
& Other
120%
coverage
Asset and liabilities by category (period-end in CHF bn)
Strong balance sheet structure maintained
Stable and low cost deposit base a key funding
advantage
Regulatory leverage ratio increased to 4.1%
Expect total assets to increase by less than
CHF 60 bn
from changes to consolidation rules
for VIEs under SFAS 167
Cash 49
1) Includes due from/to banks
VIE = Variable Interest Entities
Third Quarter Results 2009
Slide 22
1)
1)
166
Third quarter 2009 results detail
Renato Fassbind, Chief Financial Officer
Introduction
Brady W. Dougan, Chief Executive Officer
Summary
Brady W. Dougan, Chief Executive Officer
Third Quarter Results 2009
Slide 23
Evolving industry landscape
Regulatory
focus areas
Leverage
Liquidity
Capital
Compensation
structure
Credit Suisse well positioned
Strategy adjusted early:
client focused and capital efficient business model
with significantly reduced risks
Maintained exceptionally strong capital position
Strong funding and liquidity
Developed state of the art compensation structure
consistent with G-20 principles
Third Quarter Results 2009
Slide 24
Differentiated strategic direction: client focused and capital efficient
Strategy implementation
Counter-cyclical investments in PB
Repositioned IB to client businesses
AM focused on core competencies
Delivering
strong results
Net income
of CHF 2.4 bn in 3Q09
and CHF
5.9 bn in 9M09
Return on equity of
25.1% in 3Q09
and 21.8%
in 9M09
Strong net asset inflows of
CHF 17 bn in 3Q09
and
CHF 32 bn in 9M09
PB with attractive industry
opportunity and significant
operating leverage
IB with more sustainable
revenue pools, many with
potential for growth
Active risk management
Aggressive risk reduction
and
remaining risks well diversified
Competitive strengths
Consistency in integrated bank
strategy, leadership and client
coverage resulting in market share
gains
Well positioned to
face changes in industry
regulation
Capital strength provides
flexibility to grow the
franchise
and deliver
attractive returns to
shareholders
PB = Private Banking IB = Investment Banking AM = Asset Management
Looking ahead
Third Quarter Results 2009
Slide 25
Appendix
Third Quarter Results 2009
Slide 26
Slide
Reconciliation from underlying to reported results
27 to 28
Collaboration revenues
29
Repositioned Investment Bank
30
Client market share momentum in the Investment Bank
31
Investment Banking market and margin trends
32 to 33
Commercial mortgage exposures detail
34
Loan portfolio characteristics
35 to 36
Reconciliation from reported to underlying results 3Q09
3Q09
reported
Note: numbers may not add to total due to rounding
CHF bn
2Q09
underlying
Impact from
tightening of
spreads on
own
debt
Legal
provisions
1Q09
underlying
3Q09
underlying
Discrete
tax
benefit
Gain on
sale of
business
Underlying return on
equity of 23.0% in 9M09
Third Quarter Results 2009
Slide 27
Net revenues
8.9
0.1
–
–
–
9.0
9.8
8.9
Prov. for credit losses
(0.1)
–
–
–
–
(0.1)
(0.3)
(0.2)
Total oper. expenses
(6.2)
–
0.3
–
–
(5.9)
(6.4)
(6.3)
Pre-tax income
2.6
0.1
0.3
–
–
3.0
3.1
2.4
Income taxes
(0.4)
0.0
(0.1)
–
(0.2)
(0.7)
(0.6)
(0.8)
Income from discon-
tinued operations
0.2
–
–
(0.2)
–
0.0
0.0
Net income
2.4
0.1
0.2
(0.2)
(0.2)
2.3
2.5
1.5
Return on equity
25.1%
24.2%
27.4%
17.1%
Reconciliation from reported to underlying results 2Q09, 1Q09
Note: numbers may not add to total due to rounding
2Q09
reported
2Q09
under-
lying
Impact from
the tightening
of spreads on
own
debt
Charges
related to
Huntsman
settlement
Discrete
tax
benefit
1Q09
under-
lying
1Q09
reported
Impact from
the widening
of spreads on
own debt
CHF bn
Third Quarter Results 2009
Slide 28
Net revenues
8.6
1.1
0.1
–
9.8
9.6
(0.7)
8.9
Prov. for credit losses
(0.3)
–
–
–
(0.3)
(0.2)
–
(0.2)
Total oper. expenses
(6.7)
–
0.3
–
(6.4)
(6.3)
–
(6.3)
Pre-tax income
1.6
1.1
0.5
–
3.1
3.1
(0.7)
2.4
Income taxes
(0.0)
(0.1)
(0.2)
(0.4)
(0.6)
(1.0)
0.2
(0.8)
Net income
1.6
1.0
0.3
(0.4)
2.5
2.0
(0.5)
1.5
Return on equity
17.5%
27.2%
22.6%
17.4%
Collaboration revenues
Collaboration revenues
remained resilient reflecting
the strength of the integrated
bank model
Total collaboration revenues
targeted to reach
CHF 10 bn in 2012
CHF bn
2006
2007
2008
4.9
5.9
5.2
9M09
3.6
Third Quarter Results 2009
Slide 29
Repositioned businesses
Exit businesses
Emerging Markets – maintain
leading business but with more
limited risk/credit provision
US Leveraged Finance –
maintain leading business
but focus on smaller/quicker to
market deals
Corporate Lending – improved
alignment of lending with
business and ability to hedge
Cash equities
Electronic trading
Prime services
Equity derivatives – focus on
flow and corporate trades
December 2008: Realignment of the Investment Bank
Equity Trading – focus on
quantitative and liquid
strategies
Convertibles – focus on
client flow
Highly structured derivatives
Illiquid principal trading
Equities
Fixed
Income
Advisory
Develop existing strong
market positions
Maintain competitive advantage
but reduce risk and volatility
Release capital and resources;
reduce volatility
Global Rates
Currencies (FX)
High Grade Credit / DCM
US RMBS secondary trading
Commodities trading (joint
venture)
Strategic advisory (M&A) and
capital markets origination
Mortgage origination and CDO
Non-US leveraged finance
trading
Non-US RMBS
Highly structured derivatives
Power & emission trading
Origination of slow to market,
capital-intensive financing
transactions
Key client businesses
Third Quarter Results 2009
Slide 30
#1 equity trading in US cash products (McLagan); #1
in
S&P 500 equity trading (Bloomberg)
#1 RMBS pass-through trading (Tradeweb)
Significant increase in convertibles underwriting market
share in the Americas in 3Q09, leading to an increase in
global market share
(Dealogic)
#1 European convertible trading
(Greenwich Associates)
#1 LSE Order Book (LSE)
#1 FTSE 100, #1 Eurostoxx 600
(Markit MSA)
#2 in EMEA Investment Banking
wallet share (Dealogic)
Increase in EMEA market share in 3Q09,
leading to increase in Global ECM market
share (Dealogic)
#1 APAC M&A (Thomson)
Significant increase in convertibles
underwriting market share (Dealogic)
Emerging Markets Bond House of the Year (IFR)
#1 Latin America M&A market share (Thomson)
#1 Middle East and Africa Equity
underwriting wallet share (Dealogic)
Best M&A House in the Middle East
(Euromoney)
Client market share momentum across products and regions
Best bank in Switzerland
(Euromoney)
Best Emerging Markets
M&A House (Euromoney)
Third Quarter Results 2009
Slide 31
Equity
Fixed
income
Invest-
ment
banking
Cash equities
Electronic trading
Prime services
Global rates
Foreign exchange
US RMBS trading
High grade trading
M&A
High yield underwriting
Equity underwriting
Product
Investment grade underwriting
Credit Suisse margin trends across selected products
in Investment Banking
3Q09 vs.
2Q09
2Q09 vs.
1Q09
1Q09 vs.
4Q08
Margin trends
9M09 vs.
4Q08
Third Quarter Results 2009
Slide 32
Cash equities
Electronic trading
Prime services
Global rates
Foreign exchange
US RMBS trading
High grade trading
M&A
High yield underwriting
Equity underwriting
Product
Investment grade underwriting
Credit Suisse market share trends across selected products
in Investment Banking
3Q09 vs.
2Q09
2Q09 vs.
1Q09
1Q09 vs.
4Q08
Market share trends
9M09 vs.
4Q08
Third Quarter Results 2009
Slide 33
Equity
Fixed
income
Invest-
ment
banking
6.6
Commercial mortgage exposure reduction in Investment Banking
1) This price represents the average mark on loans and bonds combined
36
26
(90)%
19
15
13
9
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
Commercial mortgages (CHF bn)
Exposure by region
3Q09 exposure reduction mainly due to
bulk sale of European
portfolio
Average price of remaining positions
is 48% (from 56% in 2Q09)
Positions are fair valued;
no reclassifications to accrual book
Other
8%
Asia
18%
Germany
27%
US
23%
UK
3%
Other
Continental
Europe
29%
Office
32%
Retail
11%
Hotel
25%
Multi-
family
24%
Exposure by loan type
2Q09
7
3.6
3Q09
Third Quarter Results 2009
Slide 34
1)
Investment Banking loan book
Developed market lending
Corporate loan portfolio 78% is investment grade, and is mostly
(87%) accounted for on a fair value basis
Fair value is a forward looking view which balances
accounting
risks, matching treatment of loans and hedges
Loans are carried at an average mark of approx. 98%
with
average mark of 93% in non-investment grade portfolio
Continuing good performance of individual credits:
limited
specific provisions during the quarter
Unfunded
commitments
Loans
Hedges
CHF bn
Emerging market lending
Well diversified by name and evenly spread between EMEA,
Americas and Asia and approx. 50% accounted for
on a fair
value basis
Emerging market loans are carried at an
average mark of approx. 92%
No significant provisions during the quarter
Note: Average mark data is net of fair value discounts and credit provisions
46
14
(19)
Loans
Hedges
CHF bn
15
(10)
Third Quarter Results 2009
Slide 35
Wealth Management Clients: CHF 125 bn
Securities-backed lending (CHF 31 bn) with conservative haircuts
Residential mortgages (CHF 88 bn) underwriting based on
conservative client income and loan-to-value requirements
Switzerland avoided real estate ‘bubble’ seen in other markets
Price falls discernible in peripheral and structurally weaker regions, not
yet in attractive regions (e.g., Zurich, Lac Léman); stable outlook
Segment not expected to be significantly affected by economic downturn
Corporate & Institutional Clients: CHF 51 bn
Sound credit quality with relatively low concentrations
Over 70% collateralized by mortgages and securities
Counterparties are Swiss corporates incl. real-estate industry
Negative outlook for commercial property (office space/retail)
Corporate client segment will be most affected by an economic
downturn, but no significant deterioration discernible yet
Impact highly dependent on the severity and length of downturn
Private Banking loan book
BB+ to BB 6%
BB- and below 2%
Portfolio ratings by
transaction rating
LTV = Loan to value
CHF 176 bn
Total loan book of CHF 176 bn; 85% collateralized and primarily on accrual accounting
BBB
29%
AAA to A
63%
Third Quarter Results 2009
Slide 36
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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CREDIT SUISSE GROUP AG and CREDIT SUISSE |
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(Registrant) |
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By: |
/s/ Romeo Cerutti |
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(Signature)* |
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General Counsel |
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Credit Suisse Group AG and Credit Suisse |
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Date: October 22, 2009 |
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/s/ Charles Naylor |
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Head of Corporate Communications |
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*Print the name and title under the signature of the signing officer. |
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Credit Suisse Group AG and Credit Suisse |