Financial Report 1Q18

Transcription

1 Financial Report Q8

2 Key metrics in / end of % change Q8 4Q7 Q7 QoQ YoY Credit Suisse (CHF million, except where indicated) Net income/(loss) attributable to shareholders 694 (2,26) Basic earnings/(loss) per share (CHF) 0.27 (0.83) Diluted earnings/(loss) per share (CHF) 0.26 (0.83) Return on equity attributable to shareholders (%) 6.7 (9.5) 5.7 Effective tax rate (%) Core Results (CHF million, except where indicated) Net revenues 5,839 5,340 5, Provision for credit losses Total operating expenses 4,328 4,704 4,502 (8) (4) Income before taxes, , Cost/income ratio (%) Assets under management and net new assets (CHF billion) Assets under management,379.9,376., Net new assets Balance sheet statistics (CHF million) Total assets 809, ,289 8, Net loans 283, ,49 276, Total shareholders equity 42,540 4,902 4, Tangible shareholders equity 37,66 36,937 36, Basel III regulatory capital and leverage statistics CET ratio (%) Look-through CET ratio (%) Look-through CET leverage ratio (%) Look-through tier leverage ratio (%) Share information Shares outstanding (million) 2, , , of which common shares issued 2, , , of which treasury shares (6.4) (5.7) (6.3) Book value per share (CHF) (6) Tangible book value per share (CHF) (6) Market capitalization (CHF million) 40,87 44,475 3,39 (8) 3 Number of employees (full-time equivalents) Number of employees 46,370 46,840 46,640 () () See relevant tables for additional information on these metrics.

3 Financial Report Q8 I Credit Suisse results 3 II Treasury, risk, balance sheet and off-balance sheet 49 III Condensed consolidated financial statements unaudited 8 List of abbreviations 62 Investor information 63 Financial calendar and contacts 64 Cautionary statement regarding forward-looking information 65 For purposes of this report, unless the context otherwise requires, the terms Credit Suisse, the Group, we, us and our mean Credit Suisse Group AG and its consolidated subsidiaries. The business of Credit Suisse AG, the direct bank subsidiary of the Group, is substantially similar to the Group, and we use these terms to refer to both when the subject is the same or substantially similar. We use the term the Bank when we are only referring to Credit Suisse AG and its consolidated subsidiaries. Abbreviations are explained in the List of abbreviations in the back of this report. Publications referenced in this report, whether via website links or otherwise, are not incorporated into this report. In various tables, use of indicates not meaningful or not applicable.

4 2 Credit Suisse at a glance Credit Suisse Our strategy builds on Credit Suisse s core strengths: its position as a leading global wealth manager, its specialist investment banking capabilities and its strong presence in our home market of Switzerland. We seek to follow a balanced approach to wealth management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia Pacific and other emerging markets. Founded in 856, we today have a global reach with operations in about 50 countries and 46,370 employees from over 50 different nations. Our broad footprint helps us to generate a geographically balanced stream of revenues and net new assets and allows us to capture growth opportunities around the world. We serve our clients through three regionally focused divisions: Swiss Universal Bank, International Wealth Management and Asia Pacific. These regional businesses are supported by two other divisions specializing in investment banking capabilities: Global Markets and Investment Banking & Capital Markets. The Strategic Resolution Unit consolidates the remaining portfolios from the former non- strategic units plus additional businesses and positions that do not fit with our strategic direction. Our business divisions cooperate closely to provide holistic financial solutions, including innovative products and specially tailored advice. Swiss Universal Bank The Swiss Universal Bank division offers comprehensive advice and a wide range of financial solutions to private, corporate and institutional clients primarily domiciled in our home market Switzerland, which offers attractive growth opportunities and where we can build on a strong market position across our key businesses. Our Private Clients business has a leading franchise in our Swiss home market and serves ultra-high-net-worth individuals, high-net-worth individuals, affluent and retail clients. Our Corporate & Institutional Clients business serves large corporate clients, small and mediumsized enterprises, institutional clients, external asset managers and financial institutions. International Wealth Management The International Wealth Management division through its Private Banking business offers comprehensive advisory services and tailored investment and financing solutions to wealthy private clients and external asset managers in Europe, the Middle East, Africa and Latin America, utilizing comprehensive access to the broad spectrum of Credit Suisse s global resources and capabilities as well as a wide range of proprietary and third-party products and services. Our Asset Management business offers investment solutions and services globally to a broad range of clients, including pension funds, governments, foundations and endowments, corporations and individuals. Asia Pacific In the Asia Pacific division, our wealth management, financing and underwriting and advisory teams work closely together to deliver integrated advisory services and solutions to our target ultra-highnet-worth, entrepreneur and corporate clients. Our Wealth Management & Connected business combines our activities in wealth management with our financing, underwriting and advisory activities. Our Markets business represents our equities and fixed income trading business in Asia Pacific, which supports our wealth management activities, but also deals extensively with a broader range of institutional clients. Investment Banking & Capital Markets The Investment Banking & Capital Markets division offers a broad range of investment banking services to corporations, financial institutions, financial sponsors and ultra-high-net-worth individuals and sovereign clients. Our range of products and services includes advisory services related to mergers and acquisitions, divestitures, takeover defense mandates, business restructurings and spin-offs. The division also engages in debt and equity underwriting of public securities offerings and private placements. Global Markets The Global Markets division offers a broad range of financial products and services to client-driven businesses and also supports Credit Suisse s global wealth management businesses and their clients. Our suite of products and services includes global securities sales, trading and execution, prime brokerage and comprehensive investment research. Our clients include financial institutions, corporations, governments, institutional investors, such as pension funds and hedge funds, and private individuals around the world. Strategic Resolution Unit The Strategic Resolution Unit was created to facilitate the immediate right-sizing of our business divisions from a capital perspective and includes remaining portfolios from former non-strategic units plus transfers of additional exposures from the business divisions. The unit s primary focus is on facilitating the rapid wind-down of capital usage and costs to reduce the negative impact on the Group s performance. Repositioned as a separate division, this provides clearer accountability, governance and reporting.

5 Credit Suisse results 3 ICredit Suisse results Operating environment 4 Credit Suisse 7 Swiss Universal Bank 5 International Wealth Management 2 Asia Pacific 28 Global Markets 34 Investment Banking & Capital Markets 37 Strategic Resolution Unit 40 Corporate Center 43 Assets under management 45

6 4 Credit Suisse results Operating environment Operating environment In Q8, global economic growth eased from strong levels and inflation showed signs of increasing. Global equity markets ended the quarter lower, with European bank stocks underperforming and volatility strongly increasing. Major government bond yields were stable and the US dollar generally weakened against most major currencies. Commodities ended the quarter higher. ECONOMIC ENVIRONMENT Global growth moderated during Q8 after its best short-term performance in years. A range of business confidence surveys and economic data eased from previously strong levels. Core inflation showed signs of increasing, with particularly strong wage growth in January. In the euro area, business sentiment declined from extremely high levels, but underlying fundamentals remained strong enough to support continued robust growth. In emerging markets, the Brazilian economic recovery gathered strength, while relatively tight monetary and fiscal policies weighed on growth in Russia. The US Federal Reserve (Fed) raised interest rates 25 basis points at its March meeting. The European Central Bank (ECB) left policy rates unchanged. The Swiss National Bank (SNB) kept policy rates unchanged, while expressing concern about the strength of the Swiss franc. The Bank of England (BoE) suggested there could be an interest rate increase in May. Among major emerging markets, policy rates were cut in Brazil and Russia. After a very strong start in January, global equities finished the quarter lower for the first time in two years as volatility returned to markets. The Chicago Board Options Exchange Market Volatility Index (VIX) spiked in Q8 far above the highs from last year (refer to the charts under Equity markets ). Among regions, emerging market and US equities outperformed global stocks as they benefitted from the US dollar weakening, while equities in the UK and Switzerland lagged by comparison. Among sectors, IT continued to outperform despite coming under pressure at the end of the quarter. The telecommunication, energy and consumer staples sectors were the main underperformers in Q8. The Credit Suisse Hedge Fund Index increased.4% in Q8. In fixed income, the US Treasury curve was flat compared to the beginning of the year, with the market repricing an anticipated Fed interest rate increase and expectations of continued subdued long-term inflation. Bond index returns turned positive for non-us dollar markets in March, impacted by the market reassessment of the ECB s and the Fed s monetary policy actions as well as the trade dispute between the US and China. In euro rates, the German Bund curve was stable. In credit markets, corporate bond spreads widened from the historically tight level at the beginning of Q8. Emerging market hard-currency sovereign bond spreads also widened. Emerging market local currency bonds outperformed various investment grade and high yield segments. Refer to the charts under Yield curves and Credit spreads for further information. Yield curves Major government bond yields increased slightly in Q8. USD % 3 2 EUR % 3 2 CHF % () () () Years Years Years p December 3, 207 p March 3, 208 Source: Datastream, Credit Suisse

7 Credit Suisse results Operating environment 5 Equity markets Equity markets ended the quarter lower. Bank stocks generally underperformed. Volatility increased. Performance by region Index (December 3, 207 = 00) Performance world banks Index (December 3, 207 = 00) Volatility % January February March 208 January February March 208 January February March p Emerging markets Asia p Europe p MSCI World banks p MSCI European banks p VDAX p Emerging markets Latin America p North America p MSCI World p VIX Index Source: Datastream, MSCI Barra, Credit Suisse Source: Datastream, MSCI Barra, Credit Suisse Source: Datastream, Credit Suisse The US dollar generally weakened in Q8, despite continued tightening of US monetary policy, as markets expected yields to catch up in other parts of the world. In addition, concerns about trade disputes have been an additional drag along with rising US budget deficits. The euro had a slightly positive performance in Q8 against the US dollar as the economic data for the single currency region remained robust. The Swiss franc also gained against the US dollar, but continued to depreciate slightly against the euro. The British pound continued its positive trend in Q8, recovering from undervalued levels and benefitting from solid economic data. In major emerging markets, the Mexican peso, the Colombian peso and the South African rand performed the best while the Turkish lira was among the currencies that depreciated the most against the US dollar in Q8. The Credit Suisse Commodities Benchmark gained 2.8% in Q8 due to gains in energy and agriculture. Organization of Petroleum Exporting Countries production discipline helped keep oil prices elevated. Agriculture prices rose due to weather concerns in key regions. Industrial metal prices slipped during the first quarter amid fears that trade disputes would negatively impact demand. Precious metals were mixed with generally stronger gold prices versus lower prices for silver. Credit spreads Credit spreads widened in Q8. bp January February March p European CDS (itraxx) p North American CDS (CDX) bp: basis points Source: Bloomberg, Credit Suisse

8 6 Credit Suisse results Operating environment Market volumes (growth in %) Global Europe end of Q8 QoQ YoY QoQ YoY Equity trading volume Announced mergers and acquisitions Completed mergers and acquisitions 2 (2) (7) (9) (6) Equity underwriting 2 (0) (4) (29) (33) Debt underwriting 2 0 (7) 46 3 Syndicated lending investment grade 2 (3) 26 London Stock Exchange, Borsa Italiana, Deutsche Börse and BME. Global also includes ICE and NASDAQ. 2 Dealogic. SECTOR ENVIRONMENT Bank stocks in aggregate underperformed global stocks in Q8, mainly due to the underperformance of European bank stocks, and ended the quarter more than 3% lower. In private banking, market conditions remained challenging in light of political and economic uncertainty and the persistence of the low interest rate environment. The sector continues to face significant structural pressure as it adapts to industry-specific regulatory changes. Despite challenging equity markets, the industry maintained a long-term fundamental growth trend and saw the continued pursuit of new opportunities and efficiencies arising from digital technology. In investment banking, equity trading volumes and announced mergers and acquisitions (M&A) increased globally and in Europe compared to 4Q7 and Q7. Completed M&A decreased globally and in Europe compared to 4Q7 and Q7. Global and European equity underwriting volumes were lower compared to 4Q7 and Q7. Global debt underwriting volumes were higher compared to 4Q7, but lower compared to Q7. European debt underwriting was higher compared to 4Q7 and Q7. Compared to 4Q7 and Q7, total US fixed income trading volumes were higher, mainly driven by an increase in treasury volumes.

9 Credit Suisse results Credit Suisse 7 Credit Suisse In Q8, we recorded net income attributable to shareholders of CHF 694 million. Diluted earnings per share were CHF 0.26 and return on equity attributable to shareholders was 6.7%. As of the end of Q8, our BIS CET ratio was 2.9% on a look-through basis. Results in / end of % change Q8 4Q7 Q7 QoQ YoY Statements of operations (CHF million) Net interest income,585,565,633 (3) Commissions and fees 3,046 3,04 3,046 (2) 0 Trading revenues Other revenues Net revenues 5,636 5,89 5, Provision for credit losses (9) Compensation and benefits 2,538 2,568 2,705 () (6) General and administrative expenses,508,935,60 (22) (6) Commission expenses (6) (7) Restructuring expenses Total other operating expenses,996 2,437 2,06 (8) (5) Total operating expenses 4,534 5,005 4,8 (9) (6) Income before taxes, Income tax expense 362 2, (84) 364 Net income/(loss) 692 (2,093) Net income/(loss) attributable to noncontrolling interests (2) 33 (4) (50) Net income/(loss) attributable to shareholders 694 (2,26) Statement of operations metrics (%) Return on regulatory capital Cost/income ratio Effective tax rate Earnings per share (CHF) Basic earnings/(loss) per share 0.27 (0.83) Diluted earnings/(loss) per share 0.26 (0.83) Return on equity (%, annualized) Return on equity attributable to shareholders 6.7 (9.5) 5.7 Return on tangible equity attributable to shareholders 7.6 (22.0) 6.5 Balance sheet statistics (CHF million) Total assets 809, ,289 8, Risk-weighted assets 2 27,05 27, , Leverage exposure 2 932,07 96, ,9 2 0 Number of employees (full-time equivalents) Number of employees 46,370 46,840 46,640 () () Based on tangible equity attributable to shareholders, a non-gaap financial measure, which is calculated by deducting goodwill and other intangible assets from total equity attributable to shareholders as presented in our balance sheet. Management believes that the return on tangible equity attributable to shareholders is meaningful as it allows consistent measurement of the performance of businesses without regard to whether the businesses were acquired. 2 Disclosed on a look-through basis.

10 8 Credit Suisse results Credit Suisse Credit Suisse reporting structure Credit Suisse includes the results of our six reporting segments, including the Strategic Resolution Unit, and the Corporate Center. Core Results do not include revenues and expenses from our Strategic Resolution Unit. Credit Suisse Core Results Swiss Universal Bank Private Clients International Wealth Management Private Banking Asia Pacific Wealth Management & Connected Global Markets Investment Banking & Capital Markets Corporate Center Strategic Resolution Unit Corporate & Institutional Clients Asset Management Markets RESULTS SUMMARY In Q8, Credit Suisse reported net income attributable to shareholders of CHF 694 million compared to a net loss attributable to shareholders of CHF 2,26 million in 4Q7 and net income attributable to shareholders of CHF 596 million in Q7. Net revenues of CHF 5,636 million increased 9% compared to 4Q7, primarily reflecting higher net revenues in Global Markets, Swiss Universal Bank and Asia Pacific, partially offset by lower net revenues in Corporate Center. The increase in Global Markets was driven by growth across most businesses, particularly in its International Trading Solutions (ITS) franchise. The increase in Swiss Universal Bank was mainly due to significantly higher transactionbased revenues and a gain on the sale of its investment in Euroclear. The increase in Asia Pacific was driven by higher revenues in its Markets business across all revenue categories and higher revenues in its Wealth Management & Connected business, reflecting higher Private Banking revenues, partially offset by lower advisory, underwriting and financing revenues. The decrease in the Corporate Center primarily reflected negative treasury results, partially offset by higher other revenues. Net revenues increased 2% compared to Q7, primarily reflecting increased net revenues in International Wealth Management, Asia Pacific and Swiss Universal Bank, partially offset by lower net revenues in Corporate Center, Investment Banking & Capital Markets and Global Markets. The increase in International Wealth Management reflected higher revenues across all revenue categories. The increase in Asia Pacific was driven by higher revenues in its Wealth Management & Connected business, reflecting higher Private Banking revenues and higher advisory, underwriting and financing revenues, and higher revenues in its Markets business across all revenue categories. The increase in Swiss Universal Bank was mainly driven by the gain on the sale of its investment in Euroclear, higher transaction-based revenues and higher recurring commissions and fees. The decrease in the Corporate Center primarily reflected movements in treasury results. The decrease in Investment Banking & Capital Markets was due to lower revenues from advisory and other fees and debt underwriting activity. The decrease in Global Markets was due to a decline in underwriting and fixed income sales and trading. Provision for credit losses in Q8 was CHF 48 million, primarily related to net provisions of CHF 34 million in Swiss Universal Bank and CHF 0 million in Asia Pacific. Total operating expenses of CHF 4,534 million decreased 9% compared to 4Q7, mainly reflecting a 22% decrease in general and administrative expenses, primarily due to lower professional services fees and lower litigation provisions. Total operating expenses decreased 6% compared to Q7, primarily reflecting a 6% decrease in compensation and benefits, mainly relating to lower deferred compensation expenses from prior-year awards and lower discretionary compensation expenses, and a 6% decrease in general and administrative expenses, mainly relating to lower professional services fees. In Q8, we incurred CHF 44 million of restructuring expenses in connection with the implementation of our strategy, of which CHF 03 million were compensation and benefits-related expenses. Income tax expense of CHF 362 million recorded in Q8 mainly reflected the impact of the geographical mix of results and the impact of a re-assessment of deferred tax assets in Switzerland, partially offset by the impact of tax benefits on the resolution of a tax litigation matter. Overall, net deferred tax assets decreased CHF 36 million to CHF 4,767 million during Q8, mainly driven by earnings, a foreign exchange impact and the re-assessment of deferred tax assets in Switzerland. Deferred tax assets on net operating losses decreased CHF 67 million to CHF 2,046 million during Q8. The Credit Suisse effective tax rate was 34.3% in Q8.

11 Credit Suisse results Credit Suisse 9 Overview of Results Investment Swiss International Banking & Strategic Universal Wealth Global Capital Corporate Core Resolution Credit in / end of Bank Management Asia Pacific Markets Markets Center Results Unit Suisse Q8 (CHF million) Net revenues,43,403 99, (60) 5,839 (203) 5,636 Provision for credit losses 34 () Compensation and benefits , ,538 Total other operating expenses ,855 4,996 of which general and administrative expenses ,382 26,508 of which restructuring expenses Total operating expenses , , ,534 Income/(loss) before taxes (72),463 (409),054 Return on regulatory capital (%) Cost/income ratio (%) Total assets 27,79 89,33 07,85 239,432 5,380 09, ,889 30,63 809,052 Goodwill 603,58, , ,667 Risk-weighted assets 70,558 37,580 33,647 57,990 20,866 28,35 248,776 22,239 27,05 Leverage exposure 246,997 93,92 5, ,778 38,73 0, ,903 43,68 932,07 4Q7 (CHF million) Net revenues,38, , ,340 (5) 5,89 Provision for credit losses () (3) Compensation and benefits , ,568 Total other operating expenses , ,437 of which general and administrative expenses , ,935 of which restructuring expenses (2) Total operating expenses 870,00 702, , ,005 Income/(loss) before taxes (95) 07 (265) 596 (455) 4 Return on regulatory capital (%) (5.5) Cost/income ratio (%) Total assets 228,857 94,753 96, ,59 20,803 67,59 750,660 45, ,289 Goodwill 60,544, , ,742 Risk-weighted assets 65,572 38,256 3,474 58,858 20,058 23, ,067 33,63 27,680 Leverage exposure 257,054 99,267 05, ,809 43,842 67, ,59 59,934 96,525 Q7 (CHF million) Net revenues,354,22 88, ,740 (206) 5,534 Provision for credit losses Compensation and benefits , ,705 Total other operating expenses , ,06 of which general and administrative expenses , ,60 of which restructuring expenses Total operating expenses , , ,8 Income/(loss) before taxes (99),209 (539) 670 Return on regulatory capital (%) Cost/income ratio (%) Total assets 232,334 89,927 96,29 242,745 9,997 69, ,339 6,640 8,979 Goodwill 66,580, ,83 0 4,83 Risk-weighted assets 65,639 35,794 33,077 52,06 8,602 7,80 222,353 4, ,737 Leverage exposure 257,397 93,629 06, ,456 44,08 64,29 853,93 82,78 935,9 Disclosed on a look-through basis.

12 0 Credit Suisse results Credit Suisse US tax reform Tax Cuts and Jobs Act The US tax reform enacted on December 22, 207 resulted in a reduction of the federal corporate income tax rate from 35% to 2%, effective as of January, 208. The reform also introduced the base erosion and anti-abuse tax (BEAT), effective as of January, 208. It is broadly levied on tax deductions created by certain payments, e.g. for interest and services, to affiliated group companies outside the US, in the case where the calculated tax based on a modified taxable income exceeds the amount of ordinary federal corporate income taxes paid. The tax rates applicable for banks are 6% for 208, % for 209 until 2025 and 3.5% from 2026 onward. On the basis of the current analysis of the BEAT tax regime, we continue to regard it as more likely than not that the Group will not be subject to this regime in 208. However, there are significant uncertainties in the application of BEAT and this interpretation will be subject to review once further guidance has been issued by the US Department of Treasury. REGULATORY CAPITAL As of the end of Q8, our Bank for International Settlements (BIS) common equity tier (CET) ratio was 2.9% and our riskweighted assets were CHF 27.0 billion, both on a look-through basis. As previously disclosed, the Swiss Financial Market Supervisory Authority FINMA (FINMA) imposed regulatory changes in Q8, primarily in respect of credit multipliers and banking book securitizations, which resulted in additional risk-weighted assets relating to credit risk of CHF 2.0 billion. As a result of the significant reduction in the size of the Strategic Resolution Unit over the last two years, in Q8 we agreed with FINMA on a change to the methodology for the allocation of risk-weighted assets relating to operational risk to our businesses to reflect the changed portfolio in the Strategic Resolution Unit. Such risk-weighted assets relating to operational risk were reduced in the Strategic Resolution Unit by CHF 8.9 billion and allocated primarily to the Corporate Center, Global Markets, Investment Banking & Capital Markets and Asia Pacific. As previously disclosed, Credit Suisse approached FINMA with a request to review the appropriateness of the level of the riskweighted assets relating to operational risk in the Strategic Resolution Unit, given the progress in exiting businesses and reducing the size of the division over the last two years, with the aim of aligning reductions to the accelerated closure of the Strategic Resolution Unit by the end of 208. In Q8, we concluded discussions with FINMA and reduced the level of risk-weighted assets relating to operational risk by CHF 2.5 billion, primarily in connection with the external transfer of our US private banking business, which was reflected in the Corporate Center. With respect to leverage exposure, in Q8 we increased our centrally held balance of high-quality liquid assets (HQLA) by CHF 7.6 billion, which are allocated to the Corporate Center. In addition, in Q8 we have realigned the allocation of HQLA to the divisions to match their actual business usage in line with our internal risk management guidelines. Any excess HQLA held by legal entities above those levels for local regulatory purposes or economic requirements are allocated to the Corporate Center. HQLA allocated to the Corporate Center and Asia Pacific increased CHF 43.2 billion and CHF 5.0 billion, respectively, as a result of these measures and decreased CHF 3.8 billion, CHF 2.6 billion, CHF 6.7 billion, CHF 6.2 billion and CHF.2 billion in Swiss Universal Bank, Strategic Resolution Unit, International Wealth Management, Investment Banking & Capital Management and Global Markets, respectively. u Refer to Capital management in II Treasury, risk, balance sheet and offbalance sheet for further information. ACCOUNTING DEVELOPMENTS In Q8, the Group adopted Accounting Standard Update Revenue from Contracts with Customers, a new US GAAP standard pertaining to revenue recognition, which was implemented using the modified retrospective approach with a transition adjustment reducing retained earnings by CHF 45 million, net of tax, without restating comparative periods. The new revenue recognition criteria require a change in the gross and net presentation of certain revenues and expenses, including in relation to certain underwriting and brokerage transactions, with most of the impact reflected in our Investment Banking & Capital Markets, Global Markets and Asia Pacific divisions. Both revenues and expenses increased CHF 5 million in Investment Banking & Capital Markets and CHF 8 million in Global Markets and decreased CHF 7 million in Asia Pacific. In Q8, the Group also adopted a new US GAAP standard pertaining to the presentation of net periodic benefit costs of pension and other post-retirement costs, which was implemented retrospectively by restating comparative periods. The new presentation criteria require the service cost component of the net periodic benefit cost to be presented as a compensation expense while other components are to be presented as non-compensation expenses. CORE RESULTS In Q8, Core Results net revenues of CHF 5,839 million increased 9% compared to 4Q7, primarily reflecting higher net revenues in Global Markets, Asia Pacific and Swiss Universal Bank, partially offset by lower net revenues in Corporate Center. Provision for credit losses was CHF 48 million, primarily related to a net provision for credit losses of CHF 34 million in Swiss Universal Bank and CHF 0 million in Asia Pacific. Total operating expenses of CHF 4,328 million decreased 8% compared to 4Q7, mainly reflecting a 20% decrease in general and administrative expenses. The decrease in general and administrative expenses was primarily related to the Corporate Center, International Wealth Management and Swiss Universal Bank. Core Results net revenues increased 2% compared to Q7, primarily reflecting increased net revenues in International Wealth Management, Asia Pacific and Swiss Universal Bank, partially offset by lower net revenues in Corporate Center, Investment Banking & Capital Markets and Global Markets. Total operating expenses decreased 4% compared to Q7, primarily reflecting a 6% decrease in compensation and benefits. The decrease in compensation and benefits primarily related to Global Markets, the Corporate Center and Investment Banking & Capital Markets.

13 Credit Suisse results Credit Suisse Reconciliation of adjusted results Adjusted results referred to in this earnings release are non-gaap financial measures that exclude goodwill impairment and certain other revenues and expenses included in our reported results. Management believes that adjusted results provide a useful presentation of our operating results for purposes of assessing our Group and divisional performance consistently over time, on a basis that excludes items that management does not consider representative of our underlying performance. Provided below is a reconciliation of our adjusted results to the most directly comparable US GAAP measures. Investment Swiss International Banking & Strategic Universal Wealth Asia Global Capital Corporate Core Resolution Credit in Bank Management Pacific Markets Markets Center Results Unit Suisse Q8 (CHF million) Net revenues,43,403 99, (60) 5,839 (203) 5,636 Real estate gains () () (Gains)/losses on business sales (37) (36) (73) 0 (73) Net revenues adjusted,394,367 99, (60) 5,766 (204) 5,562 Provision for credit losses 34 () Total operating expenses , , ,534 Restructuring expenses (28) (26) (6) (42) (30) () (33) () (44) Major litigation provisions 0 0 (48) (48) (37) (85) Total operating expenses adjusted , , ,305 Income/(loss) before taxes (72),463 (409),054 Total adjustments (9) (0) Adjusted income/(loss) before taxes (7),57 (362),209 Adjusted return on regulatory capital (%) Q7 (CHF million) Net revenues,38, , ,340 (5) 5,89 (Gains)/losses on business sales Net revenues adjusted,38, , ,368 (5) 5,27 Provision for credit losses () (3) Total operating expenses 870,00 702, , ,005 Restructuring expenses 2 () (23) (7) (4) (2) (9) (8) (37) Major litigation provisions (7) (3) (27) (65) (90) (255) Expenses related to business sales (8) 0 0 (8) 0 (8) Total operating expenses adjusted , , ,605 Income/(loss) before taxes (95) 07 (265) 596 (455) 4 Total adjustments Adjusted income/(loss) before taxes (6) 2 (36) 96 (347) 569 Adjusted return on regulatory capital (%) (3.3) Q7 (CHF million) Net revenues,354,22 88, ,740 (206) 5,534 (Gains)/losses on business sales (38) (5) Net revenues adjusted,354,22 88, ,763 (244) 5,59 Provision for credit losses Total operating expenses , , ,8 Restructuring expenses (52) (36) (9) (20) (2) () (30) (7) (37) Major litigation provisions (27) (27) (70) (97) Total operating expenses adjusted , , ,577 Income/(loss) before taxes (99),209 (539) 670 Total adjustments Adjusted income/(loss) before taxes (75),389 (500) 889 Adjusted return on regulatory capital (%)

14 2 Credit Suisse results Credit Suisse Core Results by business activity in Q8 4Q7 Q7 Investment Swiss International Banking & Universal Wealth Global Capital Corporate Core Core Core Bank Management Asia Pacific Markets Markets Center Results Results Results Related to private banking (CHF million) Net revenues 762, ,260 2,040 2,005 of which net interest income of which recurring of which transaction-based Provision for credit losses 0 () Total operating expenses ,4,448,448 Income before taxes Related to corporate & institutional banking Net revenues of which net interest income of which recurring of which transaction-based Provision for credit losses (2) Total operating expenses Income before taxes Related to investment banking Net revenues 536, ,60 2,222 2,685 of which fixed income sales and trading of which equity sales and trading of which underwriting and advisory ,027,7,02 Provision for credit losses Total operating expenses 466, ,8 2,240 2,200 Income/(loss) before taxes (25) 474 Related to asset management Net revenues Total operating expenses Income before taxes Related to corporate center Net revenues (60) (60) Provision for credit losses 0 0 (3) 2 Total operating expenses Loss before taxes (72) (72) (265) (99) Total Net revenues,43,403 99, (60) 5,839 5,340 5,740 Provision for credit losses 34 () Total operating expenses , ,328 4,704 4,502 Income/(loss) before taxes (72), ,209 Certain transaction-based revenues in Swiss Universal Bank and certain fixed income and equity sales and trading revenues in Asia Pacific and Global Markets relate to the Group s global advisory and underwriting business. Refer to Global advisory and underwriting revenues in Investment Banking & Capital Markets for further information. Reflects certain financing revenues in Asia Pacific that are not included in the Group s global advisory and underwriting revenues.

15 Credit Suisse results Credit Suisse 3 EMPLOYEES AND OTHER HEADCOUNT There were 46,370 Group employees as of the end of Q8, a decrease of 470 compared to 4Q7, mainly relating to the impact of our cost efficiency initiatives, primarily in Swiss Universal Bank, Global Markets, International Wealth Management and Investment Banking & Capital Markets. The number of outsourced roles, contractors and consultants decreased by 560 compared to 4Q7. Employees and other headcount end of Q8 4Q7 Q7 Employees (full-time equivalents) Swiss Universal Bank 2,420 2,600 2,740 International Wealth Management 0,70 0,250 0,00 Asia Pacific 7,270 7,230 7,080 Global Markets,60,740,600 Investment Banking & Capital Markets 3,20 3,90 3,20 Strategic Resolution Unit,480,530,690 Corporate Center Total employees 46,370 46,840 46,640 Other headcount Outsourced roles, contractors and consultants 20,950 2,50 22,800 Total employees and other headcount 67,320 68,350 69,440 INFORMATION AND DEVELOPMENTS Format of presentation In managing our business, revenues are evaluated in the aggregate, including an assessment of trading gains and losses and the related interest income and expense from financing and hedging positions. For this reason, specific individual revenue categories in isolation may not be indicative of performance. Certain reclassifications have been made to prior periods to conform to the current presentation. International Trading Solutions As previously disclosed, effective July, 207 the Global Markets division entered into an agreement with Swiss Universal Bank and International Wealth Management whereby it provides centralized trading and sales services to private and institutional clients across the three divisions. These services are now managed as a single business within the Global Markets division, referred to as ITS. ITS is expected to provide aligned market strategies, significant cost synergies and enhanced client focus. In exceptional circumstances the agreement may be modified by a formal Executive Board decision and notification to the Audit Committee and Board of Directors. Effective in Q8, the agreement calls for sharing the economic outcome of the business among the three divisions, including fixed minimum payment amounts to the International Wealth Management and Swiss Universal Bank divisions for each financial reporting period. Return on regulatory capital Credit Suisse measures firm-wide returns against total shareholders equity and tangible shareholders equity. In addition, it also measures the efficiency of the firm and its divisions with regard to the usage of capital as determined by the minimum requirements set by regulators. This regulatory capital is calculated as the worst of 0% of risk-weighted assets and 3.5% of leverage exposure. Return on regulatory capital is calculated using income/ (loss) after tax and assumes a tax rate of 30% and capital allocated based on the worst of 0% of average risk-weighted assets and 3.5% of average leverage exposure. These percentages are used in the calculation in order to reflect the 209 fully phased in Swiss regulatory minimum requirements for Basel III CET capital and leverage ratio. For Global Markets and Investment Banking & Capital Markets, return on regulatory capital is based on US dollar denominated numbers. Adjusted return on regulatory capital is calculated using adjusted results, applying the same methodology used to calculate return on regulatory capital. End of / in Q8 (CHF billion, except where indicated) Shareholders equity 42.5 Return on equity 6.7% Tangible shareholders equity 37.7 Return on tangible shareholders equity 7.6% Regulatory capital 32.6 Return on regulatory capital 9.%

16 4 Credit Suisse results Credit Suisse Fair valuations Fair value can be a relevant measurement for financial instruments when it aligns the accounting for these instruments with how we manage our business. The levels of the fair value hierarchy as defined by the relevant accounting guidance are not a measurement of economic risk, but rather an indication of the observability of prices or valuation inputs. As of the end of Q8, 37% and 24% of our total assets and total liabilities, respectively, were measured at fair value. The majority of our level 3 assets are recorded in our investment banking businesses. As of the end of Q8, total assets at fair value recorded as level 3 decreased CHF.8 billion to CHF 4.8 billion compared to the end of 4Q7, primarily reflecting net purchases, mainly in trading assets, and net settlements, mainly in loans. As of the end of Q8, our level 3 assets comprised 2% of total assets and 5% of total assets measured at fair value, unchanged from 4Q7. We believe that the range of any valuation uncertainty, in the aggregate, would not be material to our financial condition; however, it may be material to our operating results for any particular period, depending, in part, upon the operating results for such period. u Refer to Fair valuations in II Operating and financial review Credit Suisse and Note Summary of significant accounting policies and Note 34 Financial instruments in VI Consolidated financial statements Credit Suisse Group in the Credit Suisse Annual Report 207 for further information on fair valuations, fair value hierarchies and models. REGULATORY DEVELOPMENTS AND PROPOSALS Government leaders and regulators continued to focus on reform of the financial services industry, including capital, leverage and liquidity requirements, changes in compensation practices and systemic risk. Since March 208, the US Department of the Treasury s Office of Foreign Assets Control (OFAC) designated a number of Russian business people, Russian government officials and certain related companies as specifically designated nationals (SDNs), blocking their assets and prohibiting further dealings within US jurisdiction with the newly designated SDNs and their direct and indirect subsidiaries. Those measures respond to Russia s activities in Ukraine, Syria and cyberspace. OFAC issued two new general licenses concurrently with the designations to reduce unintended consequences of these sanctions by providing a limited time period to wind down pre-existing contracts and divest or withdraw from business relationships with some of the newly sanctioned persons. Further sanctions are possible, and the possible effects of related disruptions may include an adverse impact on our businesses. u Refer to Regulation and supervision in I Information on the company in the Credit Suisse Annual Report 207 for further information and Regulatory framework and Regulatory developments and proposals in II Treasury, risk, balance sheet and off-balance sheet Liquidity and funding management and Capital management, respectively, for further information.

17 Credit Suisse results Swiss Universal Bank 5 Swiss Universal Bank In Q8, we reported income before taxes of CHF 563 million and net revenues of CHF,43 million. Income before taxes was 30% and 39% higher compared to 4Q7 and Q7, respectively. Adjusted income before taxes increased 26% and 5% compared to 4Q7 and Q7, respectively. RESULTS SUMMARY Q8 results In Q8, we reported income before taxes of CHF 563 million and net revenues of CHF,43 million. Compared to 4Q7, net revenues were 9% higher, mainly due to significantly higher transaction-based revenues and a gain of CHF 37 million on the sale of our investment in Euroclear reflected in other revenues. Provision for credit losses was CHF 34 million compared to CHF 5 million in 4Q7. Total operating expenses were 4% lower compared to 4Q7, primarily reflecting significantly lower general and administrative expenses, partially offset by higher restructuring expenses. Compared to Q7, net revenues were 6% higher, mainly driven by the gain on the sale of our investment in Euroclear reflected in other revenues, higher transaction-based revenues and higher recurring commissions and fees. Provision for credit losses was CHF 34 million compared to CHF 0 million in Q7. Total operating expenses were % lower compared to Q7, primarily reflecting significantly lower general and administrative expenses, significantly lower restructuring expenses and lower commission expenses. Adjusted income before taxes of CHF 554 million was 26% and 5% higher compared to 4Q7 and Q7, respectively. Capital and leverage metrics As of the end of Q8, we reported risk-weighted assets of CHF 70.6 billion, an increase of CHF 5.0 billion compared to the end of 4Q7, driven by changes in certain synthetic loan portfolio securitizations, methodology and policy changes mainly reflecting the phase-in of the Swiss mortgage multipliers and business growth. Leverage exposure was CHF billion, reflecting a decrease of CHF 0. billion compared to the end of 4Q7, driven by the realignment of our HQLA allocations, partially offset by business growth. Divisional results in / end of % change Q8 4Q7 Q7 QoQ YoY Statements of operations (CHF million) Net revenues,43,38, Provision for credit losses Compensation and benefits General and administrative expenses (20) (2) Commission expenses (9) (24) Restructuring expenses 28 (2) 52 (46) Total other operating expenses (0) (24) Total operating expenses (4) () Income before taxes Statement of operations metrics (%) Return on regulatory capital Cost/income ratio Number of employees and relationship managers Number of employees (full-time equivalents) 2,420 2,600 2,740 () (3) Number of relationship managers,850,840,870 ()

18 6 Credit Suisse results Swiss Universal Bank Divisional results (continued) in / end of % change Q8 4Q7 Q7 QoQ YoY Net revenue detail (CHF million) Private Clients Corporate & Institutional Clients Net revenues,43,38, Net revenue detail (CHF million) Net interest income Recurring commissions and fees Transaction-based revenues Other revenues 2 (3) (4) Net revenues,43,38, Provision for credit losses (CHF million) New provisions Releases of provisions (3) (7) (28) (24) (54) Provision for credit losses Balance sheet statistics (CHF million) Total assets 27,79 228, ,334 (5) (7) Net loans 66,537 65,04 66,078 0 of which Private Clients 2,033,222 0,90 2 Risk-weighted assets 70,558 65,572 65, Leverage exposure 246, , ,397 (4) (4) Net interest income includes a term spread credit on stable deposit funding and a term spread charge on loans. Recurring commissions and fees includes investment product management, discretionary mandate and other asset management-related fees, fees for general banking products and services and revenues from wealth structuring solutions. Transaction-based revenues arise primarily from brokerage and product issuing fees, fees from foreign exchange client transactions, trading and sales income, equity participations income and other transaction-based income. Other revenues include fair value gains/(losses) on synthetic securitized loan portfolios and other gains and losses. Reconciliation of adjusted results Private Clients Corporate & Institutional Clients Swiss Universal Bank in Q8 4Q7 Q7 Q8 4Q7 Q7 Q8 4Q7 Q7 Adjusted results (CHF million) Net revenues ,43,38,354 Gains on business sales (9) 0 0 (8) 0 0 (37) 0 0 Adjusted net revenues ,394,38,354 Provision for credit losses (2) Total operating expenses Restructuring expenses (22) (47) (6) (5) (28) 2 (52) Major litigation provisions 0 (2) 0 0 (5) (27) 0 (7) (27) Adjusted total operating expenses Income before taxes Total adjustments 3 47 (2) 4 32 (9) 5 79 Adjusted income before taxes Adjusted return on regulatory capital (%) Adjusted results are non-gaap financial measures. Refer to Reconciliation of adjusted results in Credit Suisse for further information.

19 Credit Suisse results Swiss Universal Bank 7 PRIVATE CLIENTS RESULTS In Q8, income before taxes of CHF 265 million was 25% higher compared to 4Q7, with higher net revenues and lower total operating expenses. Compared to Q7, income before taxes increased 65%, primarily reflecting higher net revenues and lower total operating expenses. Adjusted income before taxes of CHF 268 million increased 26% and 29% compared to 4Q7 and Q7, respectively. Net revenues Compared to 4Q7, net revenues of CHF 762 million were 5% higher, mainly driven by significantly higher transaction-based revenues and a gain of CHF 9 million on the sale of our investment in Euroclear reflected in other revenues. Transaction-based revenues of CHF 09 million were 22% higher, mainly due to significantly increased revenues from ITS and significantly higher brokerage and product issuing fees. Net interest income of CHF 428 million was stable with stable loan margins and higher deposit margins on stable average loan and deposit volumes. Recurring commissions and fees of CHF 206 million were stable. Adjusted net revenues of CHF 743 million were slightly higher compared to 4Q7. Results Private Clients Compared to Q7, net revenues increased 7% reflecting higher revenues across all revenue categories, including the gain on the sale of our investment in Euroclear. Net interest income was 4% higher with slightly higher loan margins on slightly higher average loan volumes and higher deposit margins on higher average deposit volumes. Recurring commissions and fees increased 5%, primarily due to increased investment advisory fees, higher discretionary mandate management fees and slightly higher security account and custody services fees. Transaction-based revenues were 9% higher, mainly driven by higher fees from foreign exchange client business and higher brokerage and product issuing fees. Adjusted net revenues were 5% higher compared to Q7. Provision for credit losses The Private Clients loan portfolio is substantially comprised of residential mortgages in Switzerland and loans collateralized by securities and, to a lesser extent, consumer finance loans. In Q8, Private Clients recorded provision for credit losses of CHF 0 million compared to CHF 0 million in 4Q7 and CHF 2 million in Q7. The provisions were primarily related to our consumer finance business. in / end of % change Q8 4Q7 Q7 QoQ YoY Statements of operations (CHF million) Net revenues Provision for credit losses (7) Compensation and benefits General and administrative expenses (9) (0) Commission expenses (3) (43) Restructuring expenses 22 () 47 (53) Total other operating expenses (8) (23) Total operating expenses (3) (9) Income before taxes Statement of operations metrics (%) Cost/income ratio Net revenue detail (CHF million) Net interest income Recurring commissions and fees () 5 Transaction-based revenues Other revenues 9 Net revenues Margins on assets under management (annualized) (bp) Gross margin Net margin Number of relationship managers Number of relationship managers,30,300,330 (2) Net revenues divided by average assets under management. 2 Income before taxes divided by average assets under management.