a141023-6k.htm
 
 
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 23, 2014
 
Commission File Number 001-15244
 
CREDIT SUISSE GROUP AG
 
(Translation of registrant’s name into English)
 
Paradeplatz 8, 8001 Zurich, Switzerland
(Address of principal executive office)
______________
 
Commission File Number 001-33434
 
CREDIT SUISSE AG
 
(Translation of registrant’s name into English)
 
Paradeplatz 8, 8001 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.
 
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.
 
 


 
 
 
 


This report includes the slides for the presentation to investors and the results summary for media professionals in connection with the 3Q14 results.
 
 
 
 
 
 
Third Quarter 2014 Results Presentation to Investors October 23, 2014
 
 
 
 
Disclaimer Cautionary statement regarding forward-looking statements This presentation contains forward-looking statements that 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, 2013 and in "Cautionary statement regarding forward-looking information" in our third quarter 2014 earnings release 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 law. Statement regarding non-GAAP financial measures This presentation also contains non-GAAP financial measures, including adjusted cost run-rates. Information needed to reconcile such non-GAAP financial measures to the most directly comparable measures under US GAAP can be found in this presentation, which is available on our website at credit-suisse.com. Statement regarding capital, liquidity and leverage As of January 1, 2013, Basel 3 was implemented in Switzerland along with the Swiss “Too Big to Fail” legislation and regulations thereunder. Our related disclosures are in accordance with our current interpretation of such requirements, including relevant assumptions. Changes in the interpretation of these requirements in Switzerland or in any of our assumptions and/or estimates could result in different numbers from those shown in this presentation. Capital and ratio numbers for periods prior to 2013 are based on estimates, which are calculated as if the Basel 3 framework had been in place in Switzerland during such periods. Unless otherwise noted, leverage ratio, leverage exposure and total capital amounts included in this presentation are based on the current FINMA framework. Swiss Total Capital Leverage ratio is calculated as Swiss Total Capital divided by a three-month average leverage exposure, which consists of balance sheet assets, off-balance sheet exposures that consist of guarantees and commitments, and regulatory adjustments that include cash collateral netting reversals and derivative add-ons. The “look-through” CET1 leverage ratio is calculated as “look-through” BIS CET1 capital divided by the three-month average Swiss leverage exposure. October 23, 2014 *
 
 
 
 
Introduction Brady W. Dougan, Chief Executive Officer October 23, 2014 *
 
 
 
 
All data for Core Results. All references on this slide and the rest of the presentation to Group reported pre-tax income refer to income from continuing operations before taxes. Return on regulatory capital is based on after-tax income and assumes that capital is allocated at the average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure. 1 Excludes certain litigation provisions of CHF 41 mn in 3Q14. 3Q14 Strategic pre-tax income of CHF 0.9 bn, up 8% from 3Q13, drove continued high return on regulatory capital of 27% for both Strategic businesses and the division overall Net margin of 25bps in Wealth Management (27bps excluding certain litigation provisions1) in 3Q14 driven by progress on cost reduction amid sustained low interest rate environment Successful franchise expansion in Emerging Markets, including robust results in Wealth Management Clients in Asia Pacific with net new assets of CHF 6.2 bn representing a 19% annualized growth rate Significant progress in executing strategic agenda: transformation of mature markets with the completed sale of the domestic private banking business booked in Germany and continued progress on regularizing client base, while driving sustained improvement of the cost base and reallocating resources to growth areas Investment in growth initiatives with focus on (i) the ongoing UHNWI lending initiative with expanded product capabilities, (ii) a differentiated and enhanced digital client experience, (iii) increasing sales effectiveness and pricing measures and (iv) the upgrading of our mandates offering suite (e.g. Credit Suisse Invest) 3Q14 Strategic revenues up 24%, driving 43% increase in pre-tax income from 3Q13; solid return on regulatory capital of 17% for Strategic businesses and 8% for the overall division in the quarter Strong fixed income results driven by diversified yield franchises while robust origination activity benefited underwriting and advisory results; higher derivatives revenues offset by muted equity trading volumes Continued progress in strategy execution and improvement of profitability in the Strategic business; further reduction of capital allocated to Macro; optimizing delivery and product set across Investment Banking to support growth in Private Banking & Wealth Management Private Banking & Wealth Management Solid 3Q14 results with continued progress on costs and robust Asia Pacific performance Key messages from Credit Suisse 3Q14 results Investment Banking Strong 3Q14 performance driven by higher client activity across diversified Strategic franchises 3Q14 results demonstrate continued momentum from strategy execution, generating return on equity of 11% for Strategic businesses and 10% for the overall business October 23, 2014 *
 
 
 
 
All data for Core Results. All references on this slide and the rest of the presentation to Group reported pre-tax income refer to income from continuing operations before taxes. Continued momentum in winding down of Non-Strategic portfolio; on track to reach end-2015 targets Investment Banking Non-Strategic: Achieved USD 11 bn of leverage reduction and USD 2 bn of RWA reduction in the quarter; pre-tax loss of CHF 479 mn mainly driven by litigation provisions and higher exit costs in the quarter PB&WM Non-Strategic: Pre-tax income of CHF 71 mn primarily driven by the sale of domestic private banking business booked in Germany Capital: “Look-through” CET1 ratio of 9.8% at end 3Q14 and on track to achieve >10% by year-end; continue to target long term CET1 ratio of 11% Investment Banking RWA reduction of USD 10 bn across Strategic and Non-Strategic businesses in the quarter. Despite these business reductions and mitigations, in CHF terms, Group RWA increased CHF 7 bn from 2Q14 due to CHF 10 bn adverse impact from the appreciation of US dollar. There is minimal or neutral FX impact on capital ratios as underlying capital and RWA exposures are approximately hedged Execution of the announced capital measures through real estate sale and business divestitures have generated approx. CHF 0.1 bn of capital and expect to generate an additional approx. CHF 0.3 bn of capital by year-end, with the remainder expected to come through in 2015 Capital measures include continued accrual of cash dividends in respect to 2014; committed to returning half of earnings as cash dividends to shareholders once “look-through” CET1 ratio reaches 10% Leverage: “Look-through” BIS Tier 1 Leverage ratio and Swiss Total Capital Leverage ratio improved to 3.3% and 3.8%, respectively, in 3Q14 Targeting “look-through” Swiss Total Capital Leverage ratio of ~4.5% by end 2015 Non-Strategic unit Further wind-down of Non-Strategic units Key messages from Credit Suisse 3Q14 results Capital On track to achieve >10% “look-through” CET1 ratio target by year-end October 23, 2014 *
 
 
 
 
Regularization of Private Banking assets Identified this trend towards tax transparency a number of years ago and proactively taken measures to tax regularize the client base and restructure the business Initiatives to address margin compression and client mix shift Total Western European cross-border outflows of ~CHF 30 bn from 2011 to 2013 and CHF 7.7 bn in 9M14 as part of this regularization drive Expect regularization-driven cross-border outflows of CHF 10 – 15 bn per annum in 2014 and 2015; further outflows at a slower pace likely thereafter Proactive response to changes Evolution of strategy and impacts Achieved total Strategic NNAs1 of CHF 94 bn from 2011 - 2013 and CHF 37 bn in 9M14 Continue to target WMC NNA growth of 3-4% through 2015 and 6% long term Continue to focus on profitability and net margin Rationalization of expense base has resulted in CHF 1.3 bn2 of cost savings to date, targeting CHF 1.65 bn2 by end 2015 Reallocation of resources to key growth markets and continued investment in Emerging Markets Increase in capital and leverage requirements Transformed regulatory capital and leverage framework which continue to evolve across the globe Achieved reduction in “look-through” leverage exposure of CHF 199 bn (14%) since 3Q12 and RWA reduction of CHF 84 bn (23%) since 3Q11 Largely completed extensive capital build and transformation measures including CHF 18 bn of CoCo issuance Committed to a “look-through” Swiss Total Capital Leverage ratio target of ~4.5% by end 2015 On track to achieve >10% “look-through” CET1 ratio by 2014 year end and clear path to long term target of 11% Long-term RWA target to remain at ~CHF 250 bn, on an FX-adjusted basis Total Loss Absorbing Capacity (TLAC) Regulatory focus on recovery and resolution, single point of entry ex ante solutions Proposal by the Financial Stability Board to increase loss absorbing capital requirements Holding company structure already in place; established legal entity program in 2012 to evolve Group’s structure to meet developing and future regulatory requirements Move to issue “bail-in” debt out of vehicle linked to the holding company First TLAC issuance expected to be completed over the next 12 months * October 23, 2014 Note: Regulations or proposed regulations referenced on the slide do not represent comprehensive list of regulations applicable to CS and are subject to change pending updates by the respective authorities. 1 Assumes assets managed across businesses relate to Strategic businesses only. 2 Represents fully loaded cost savings measured at constant FX rates against 6M11 annualized total expenses, excl. realignment and other significant expense items and variable compensation expenses. Proactive strategic response to evolving regulatory landscape
 
 
 
 
Financial results David Mathers, Chief Financial Officer October 23, 2014 *
 
 
 
 
in CHF mn 3Q14 2Q14 3Q13 9M14 9M13 Net revenues 6,287 6,309 5,693 19,126 19,451 Pre-tax income 1,622 1,775 1,416 5,341 5,712 Cost / income ratio 73% 71% 75% 72% 70% Return on equity1 11% 13% 10% 13% 14% Net new assets2 in CHF bn 8.8 11.8 9.3 36.6 32.6 Net revenues 6,537 6,433 5,449 19,439 19,297 Pre-tax income / (loss) 1,301 (370) 688 2,331 4,033 Pre-tax income ex FVoD and settlement impact3 983 1,232 842 3,703 4,131 Net income / (loss) attributable to shareholders 1,025 (700) 454 1,184 2,802 Diluted earnings / (loss) per share in CHF 0.61 (0.46) 0.26 0.68 1.55 Return on equity 10% (7%) 4% 4% 9% Return on equity ex FVoD and settlement impact3 7% 8% 6% 8% 10% Net revenues 250 124 (244) 313 (154) Pre-tax income / (loss) (321) (2,145) (728) (3,010) (1,679) Pre-tax income ex FVoD and settlement impact3 (639) (544) (574) (1,638) (1,580) 1 Return on Equity for Strategic results calculated by dividing annualized Strategic net income by average Strategic shareholders' equity (derived by deducting 10% of Non-Strategic RWA from reported shareholders’ equity). 2 Assumes assets managed across businesses relate to Strategic businesses only. 3 Excludes revenue impact from FVoD of CHF 318 mn, CHF 16 mn, CHF (154) mn, CHF 246 mn and CHF (99) mn in 3Q14, 2Q14, 3Q13, 9M14 and 9M13, respectively, and pre-tax charge of CHF 1,618 mn relating to the final settlement of all outstanding U.S. cross-border matters in 2Q14 and 9M14, in Non-Strategic and total reported results. Results Overview October 23, 2014 *
 
 
 
 
1 All data for Core Results. 2 Total reported figures excluding impact from FVoD of CHF 318 mn and CHF 246 mn in 3Q14 and 9M14, respectively, and pre-tax charge of CHF 1,618 mn relating to the final settlement of all outstanding U.S. cross-border matters in 9M14, in Group and PB&WM reported results. Total reported figures are as follows: Group return on equity of 10% and 4% in 3Q14 and 9M14; Group cost / income ratio of 79% and 87% in 3Q14 and 9M14; PB&WM cost / income of 69% and 86% for 3Q14 and 9M14. Key Performance Indicators (KPIs)1 Cost/income ratio < 70% Return on equity > 15% Group Private Banking & Wealth Management Investment Banking 3Q14 Cost/income ratio < 70% Cost/income ratio < 65% NNA growth (WMC) 3-4% through 2015 6% long-term -- 3% 69% 73% 11% 8% 80% 69% 79% 70% * -- 7% 83% 69% 83% 9M14 4% 69% 72% 13% 69% Strategic 3Q14 9M14 Total, excl. FVoD and settlement2 Results against Key Performance Indicators October 23, 2014 *
 
 
 
 
Private Banking & Wealth Management Strategic pre-tax income up 8% vs. 3Q13 October 23, 2014 1 Calculated using income after tax denominated in CHF; assumes tax rate of 30% in 3Q14, 2Q14, 3Q13, 9M14 and 29% in 9M13 and capital allocated on average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure. 2 Assumes assets managed across businesses relate to Strategic businesses only. Strategic results vs. 3Q13 and 9M13 Pre-tax income of CHF 872 mn in 3Q14, up 8% compared to 3Q13 with lower expenses and stable revenues 9M14 pre-tax income of CHF 2.7 bn, up 5% Net revenues stable compared to 3Q13 with strong collaboration revenues and solid brokerage fee generation (in a seasonally weaker quarter) despite continued impact from the low interest rate environment Expenses down 7% compared to 9M13 Excluding certain litigation provisions in 3Q14 of CHF 41 mn, the cost/income ratio would have improved to 68% Net new assets ahead of 9M13 result with strong asset generation in Asia Pacific and solid contribution from Asset Management Non-Strategic results in 3Q14 Increase in revenues includes a gain of CHF 109 mn on the sale of our domestic private banking business booked in Germany in CHF mn 3Q14 2Q14 3Q13 9M14 9M13 Net revenues 2,939 2,932 2,934 8,902 9,174 Provision for credit losses 26 30 13 73 55 Compensation and benefits 1,150 1,184 1,205 3,559 3,785 Other operating expenses 891 836 908 2,551 2,755 Total operating expenses 2,041 2,020 2,113 6,110 6,540 Pre-tax income 872 882 808 2,719 2,579 Basel 3 RWA in CHF bn 100 97 87 100 87 Leverage exposure in CHF bn 362 340 323 362 323 Cost/income ratio 69% 69% 72% 69% 71% Return on regulatory capital1 27% 28% 27% 29% 29% Net new assets2 in CHF bn 8.8 11.8 9.3 36.6 32.6 Assets under management2 in CHF bn 1,353 1,304 1,220 1,353 1,220 Net revenues 186 114 382 509 839 Total operating expenses 116 1,752 151 2,014 549 Pre-tax income / (loss) 71 (1,631) 210 (1,513) 237 Net revenues 3,125 3,046 3,316 9,411 10,013 Pre-tax income / (loss) 943 (749) 1,018 1,206 2,816 Basel 3 RWA in CHF bn 107 104 94 107 94 Net new assets in CHF bn 7.4 10.1 8.1 31.2 27.7 Assets under management in CHF bn 1,366 1,330 1,268 1,366 1,268 *
 
 
 
 
Strong inflows from emerging markets and continued momentum in Asset Management October 23, 2014 Before Western European cross-border outflows Asia Pacific by management region by customer domicile Emerging markets Core Investments 5.8 Private Banking & Wealth Management Strategic net new assets in 3Q14 in CHF bn Wealth Management Clients Asset Management Corporate & Institutional Clients PB&WM Strategic % Annualized net new assets growth rate Alternative Investments Eliminating double-count related to collaboration Western European cross-border outflows in WMC1 WMC = Wealth Management Clients EMEA = Europe, Middle East and Africa 1 Western European cross-border outflows of CHF 0.4 bn in EMEA and CHF 0.4 bn in Switzerland, and inflows of CHF 0.1 bn in Americas. 2 Additional Western European cross-border outflows of CHF 0.8 bn in Non-Strategic unit. 3 Assets managed by Asset Management for Wealth Management Clients and Corporate & Institutional Clients (assumes assets managed across businesses relate to Strategic businesses only). 4 Excludes Western European cross-border outflows. Americas 3.3 Switzer-land EMEA Solid Strategic net new assets of CHF 8.8 bn Wealth Management Clients with inflows4 of CHF 5.8 bn; net new assets were CHF 5.1 bn with significant contribution from Asia Pacific Strong inflows from emerging markets with more than two-thirds from the UHNWI segment Continued momentum in Asset Management driven by inflows in emerging markets and alternative products Total Western European cross-border outflows of CHF 1.5 bn, of which CHF 0.7 bn in the strategic business Mature markets 2 3 (1.5) 3% 4% 3% *
 
 
 
 
Continued strong profitability in Wealth Management Clients; Pre-tax income up 5% compared to 3Q13 October 23, 2014 1 Calculated using income after tax denominated in CHF; assumes tax rate of 30% in 3Q14, 2Q14, 3Q13, 9M14 and 29% in 9M13 and capital allocated on average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure. Compared to 3Q13 & 2Q14 Pre-tax income of CHF 536 mn, up 5% YoY; operating expenses include certain litigation provisions of CHF 41 mn Fee-based revenues increased 4%, driven by higher brokerage and higher collaboration revenues vs. 3Q13 Expense reduction of 3% YoY despite certain litigation provisions; expenses in line with 2Q14 when adjusted for litigation provisions and the US dollar appreciation Net new assets of CHF 5.1 bn, ahead of 3Q13; AuM increased CHF 34.6 bn or 4% compared to 2Q14, including CHF 25 bn due to the appreciation of the US Dollar Compared to 9M13 Pre-tax income of CHF 1.7 bn, up 6% Stable recurring fees; strong growth in collaboration and discretionary mandates revenues Operating expenses down CHF 344 mn or 7% Strong net new assets of CHF 23.1 bn at an annualized growth rate of 4%, ahead of 9M13 in CHF mn 3Q14 2Q14 3Q13 9M14 9M13 Net interest income 695 688 766 2,089 2,290 Recurring commissions & fees 744 728 747 2,202 2,214 Transaction- & perf.-based revenues 603 601 549 1,842 1,884 Net revenues 2,042 2,017 2,062 6,133 6,388 Provision for credit losses 17 17 21 50 60 Total operating expenses 1,489 1,431 1,532 4,400 4,744 Pre-tax income 536 569 509 1,683 1,584 Cost / income ratio 73% 71% 74% 72% 74% Net loans in CHF bn 164 157 150 164 150 Basel 3 RWA in CHF bn 51 51 46 51 46 Return on regulatory capital1 28% 31% 30% 30% 31% Net new assets in CHF bn 5.1 7.4 3.8 23.1 17.2 Assets under management in CHF bn 864 830 783 864 783 *
 
 
 
 
Wealth Management Clients business with strong inflows in emerging markets, particularly in Asia Pacific October 23, 2014 * 5.8 Americas EMEA Asia Pacific EMEA = Europe, Middle East and Africa. Emerging/Mature markets by client domicile while regional data based on management areas. 1 Excludes Western European cross-border outflows. 2 Western European cross-border outflows of CHF 5.2 bn in 9M14; additional Western European cross-border outflows of CHF 0.8 bn in Non-Strategic unit in 3Q14, and CHF 2.5 bn in 9M14. 3Q13 % Annualized net new assets growth rate Emerging Markets 3% 2% (1)% (2)% Western European cross-border outflows 19% 3% 2% Net new assets in CHF bn Switzerland Western European cross-border outflows (1)% reported 2 6.1 9% reported Inflows1 of CHF 5.8 bn and net new assets of CHF 5.1 bn Continued momentum in emerging markets with strong inflows in APAC, the Middle East & Latin America CHF 6.2 bn of net new assets from Asia Pacific Attractive 19% annualized growth rate Significant inflows across all major markets, and predominantly from higher wealth bands Net new assets from Asia Pacific of CHF 16 bn in 9M14 Growth in Latin America more than offset by a small number of large isolated outflows from US onshore clients Switzerland net outflows reflect seasonally lower second-halves of the year and a single large client outflow; 9M14 with solid inflows1 of CHF 6.1 bn Total Western European cross-border outflows of CHF 1.5 bn, of which CHF 0.7 bn in the strategic business Reconfirming expected annual CHF 10 to 15 bn of outflows during 2014 and 2015 relating to our efforts in achieving regularization of client assets Mature Markets (0.7) ( ) ( ) 3% 3Q14 16.0 6.1 1.8 4.4 28.3 Inflows1 9M14 3% 1% 3% 18% 5%
 
 
 
 
Net new lending to ultra-high-net-worth individual (UHNWI) segment in Wealth Management Clients in CHF bn Asia Pacific EmergingEMEA Latin America Other regions 1.4 1 Includes CHF 0.1bn of non-NNA relevant credit volume developments. Emerging EMEA = Eastern Europe, Middle East and Africa. Other regions = Western Europe, U.S. and Switzerland. 1.0 0.4 1.1 October 23, 2014 Sustained successful growth in UHNWI lending Net new lending up CHF 3.9 bn in 9M14 to CHF 36 bn 3Q14 with continued strong growth of CHF 1.1 bn 9M14 growth of CHF 3.9 bn vs. CHF 1.0 bn in 9M13 Realizing benefits from lending initiative in all regions over 9M14: Emerging markets: CHF 2.8 bn with Asia Pacific showing largest increase Other regions: CHF 1.1 bn, of which Western Europe CHF 0.6 bn and Switzerland CHF 0.4 bn Utilizing dedicated Sales and Trading Services platform and extended product capabilities for non-standard lending (e.g. real estate, hedge fund and other illiquid collateral) Key element of UHNWI growth strategy, as total UHNWI net new assets amounted to CHF 15 bn in 9M14, up 50% vs. 9M13 1Q14 2Q14 3Q14 9M13 1 0.2 0.3 0.3 0.2 UHNWI lending initiative with continued successful growth *
 
 
 
 
Wealth Management Clients with net margin of 25 bps in 3Q14 October 23, 2014 Net margin = Pre-tax income / average AuM. Gross margin = Net revenues / average AuM. Net margin on AuM in basis points Net revenues in CHF mn 39 38 28 105 34 36 29 99 33 35 29 97 26 28 2,062 2,017 2,042 Gross margin on AuM in basis points 45% 47% 48% 783 819 846 Average assets under management (AuM) in CHF bn Ultra-High-Net-Worth Individuals, share 27 6,133 6,388 48% 821 45% 787 32 37 39 34 36 30 108 100 Net margin of 25 bps in 3Q14 and 27bps in 9M14; excluding certain litigation provisions of CHF 41 mn, net margin stands at 27 bps in 3Q14 and 28bps in 9M14 Net margin reflects impact from 8% growth in asset values of AuM from 3Q13 to 3Q14 that is not fully offset by fee generation given continued low interest rate environment Transaction- and performance-based revenues stable with seasonally lower client activity, offset by considerable growth, in particular from emerging markets Recurring commissions & fees stable YoY and up QoQ including higher discretionary mandates fees, higher investment account and services fees and the US Dollar appreciation Performance in 3Q14 Net interest income decline YoY impacted by the low interest rate environment, QoQ revenues up driven by loan growth 25 27 *
 
 
 
 
* October 23, 2014 Stable net margin driven by cost reduction amid sustained low interest rate environment and accelerated asset growth Increased average AuM & change in client mix (2) Lower expenses +7 27 Measured at stable AuM1 Net interest income (3) 9M142 Fee-based revenues (1) Wealth Management Clients Average AuM in CHF bn 787 821 Net margin on AuM in basis points +4% 9M13 27 Pre-tax income in CHF mn 1,584 1,683 +9% Certain litigation provisions (1) 28 1,724 821 1 bp 1 Includes some impact also from client mix change. 2 Excludes certain litigation provisions of CHF 41 mn in 9M14. AuM = Assets under management. Adverse impact on net interest income from replication portfolio reached stability in the second half of 2014 Fee-based revenues continue to be under pressure as higher asset-based fees are offset by outflows of cross-border assets and lower retrocessions Investments in growth with focus on: Ongoing UHNWI lending initiative and specialized investment offering in combination with expanded product capabilities Comprehensive measures for a differentiated and enhanced digital client experience, initially in APAC Increasing sales effectiveness, coverage enhancements and pricing measures Significant upgrade of mandates offering suite (discretionary & advisory) to align with client demand Maintaining cost discipline with rationalization and reallocation of resources to growth areas and markets 9M14 (reported)
 
 
 
 
October 23, 2014 Corporate and Institutional Clients with good performance 1 Other revenues include fair value changes on securitization transactions. 2 Calculated using income after tax denominated in CHF; assumes tax rate of 30% in 3Q14, 2Q14, 3Q13, 9M14 and 28% in 9M13 and capital allocated on average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure. Compared to 3Q13 Slight reduction in net interest income related to lower levels of deposits eligible as stable funding, partially offset by increased loan volumes Stable non-interest revenues with slightly lower recurring fees partly offset by slightly higher transaction income Operating expenses down 7%; cost/income ratio improved 2 ppts to 49% Compared to 9M13 Revenues down 4% driven by reduction in net interest income and fair value changes on securitization transactions in 2Q14 Operating expenses reduced by 4%; cost/income ratio at an attractive 51% in CHF mn 3Q14 2Q14 3Q13 9M14 9M13 Net interest income 273 266 278 796 827 Recurring commissions & fees 113 113 117 348 343 Transaction- & perf.-based revenues 107 118 105 342 353 Other revenues1 (5) (22) (1) (31) (12) Net revenues 488 475 499 1,455 1,511 Provision for credit losses 9 13 (8) 23 (5) Total operating expenses 239 251 256 735 764 Pre-tax income 240 211 251 697 752 Cost / income ratio 49% 53% 51% 51% 51% Net loans in CHF bn 67 65 61 67 61 Basel 3 RWA in CHF bn 37 34 33 37 33 Return on regulatory capital2 21% 19% 23% 21% 24% Net new assets in CHF bn 0.9 0.6 0.5 1.9 4.8 Assets under management in CHF bn 267 261 241 267 241 *
 
 
 
 
October 23, 2014 Year-on-year strong profit growth in Asset Management 1 Calculated using income after tax denominated in CHF; assumes tax rate of 30% in 3Q14, 2Q14, 3Q13, 9M14 and 29% in 9M13 and capital allocated on average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure. Compared to 3Q13 Revenues up 10% driven by higher commissions & fees and improved other revenues Operating expenses down 4% Solid net new assets of CHF 3.3 bn driven by inflows across alternative and traditional products, including CHF 2.8 bn from a joint venture in emerging markets Compared to 9M13 Recurring commissions and fees 3% higher on increased asset base; recurring fee-based margin broadly stable Expenses down CHF 57 mn, or 6%; cost/income ratio improved by 7 ppts to 74% Net new assets of CHF 14.3 bn, broadly in line with prior year in CHF mn 3Q14 2Q14 3Q13 9M14 9M13 Recurring commissions & fees 292 295 285 874 848 Transaction- & perf.-based revenues 117 146 120 427 444 Other revenues 0 (1) (32) 13 (17) Net revenues 409 440 373 1,314 1,275 Total operating expenses 313 338 325 975 1,032 Pre-tax income 96 102 48 339 243 Cost / income ratio 77% 77% 87% 74% 81% Fee-based margin in basis points 42 46 45 46 48 o/w recurring fee-based margin 36 36 38 36 38 Basel 3 RWA in CHF bn 12 11 8 12 8 Return on regulatory capital1 40% 48% 28% 53% 46% Net new assets in CHF bn 3.3 4.1 4.4 14.3 15.5 Assets under management in CHF bn 391 377 349 391 349 *
 
 
 
 
October 23, 2014 in CHF mn 3Q14 2Q14 3Q13 9M14 9M13 Select onshore businesses 122 22 25 166 136 Legacy cross-border businesses 38 41 49 123 151 AM divestitures and discontinued operations 12 38 288 184 480 Other Non-Strategic positions & items 14 13 20 36 72 Net revenues 186 114 382 509 839 Provision for credit losses (1) (7) 21 8 53 Total operating expenses 116 1,752 151 2,014 549 o/w U.S. litigation provisions - 1,618 - 1,618 - o/w realignment expenses2 24 17 48 77 59 Total operating expenses excl. U.S. litigation provisions 116 134 151 396 549 Pre-tax income / (loss) 71 (1,631) 210 (1,513) 237 Net new assets in CHF bn (1.4) (1.7) (1.2) (5.4) (4.9) Compared to 3Q13 & 2Q14 3Q14 revenues included a CHF 109 mn gain on the sale of our domestic private banking business booked in Germany 3Q13 revenues included gains of CHF 146 mn on sale of ETF and CHF 91 mn on sale of Strategic Partners Compared to 9M13 Revenues and leverage exposure decreased reflecting the sale of businesses and the overall run down of our non-strategic business Note: Risk-weighted asset and leverage exposure goals are measured on constant FX basis and are subject to change based on future FX movements. 1 4Q13 RWA includes CHF 2 bn major external methodology impact in 1Q14. 2 Realignment expenses in PB&WM relating both to continuing operations and operations treated as discontinued at the Group level. Continued progress in winding down our Non-Strategic portfolio Leverage Exposure in CHF bn Basel 3 RWA in CHF bn (29%) 8 7 7 5 22 (3) 14 4 (71%) 17 (0.1) 1 *
 
 
 
 
October 23, 2014 * Note: Rounding differences may occur with externally published spreadsheets. 1 Return on regulatory capital is based on after-tax income denominated in US dollars and assumes tax rates of 28% in 9M13 for the Strategic business and 27% for total Investment Banking, and of 30% in 3Q13, 2Q14, 3Q14 and 9M14 and that capital is allocated at the average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure. 2 Includes provisions for credit losses, compensation and benefits and other expenses. in CHF mn 3Q14 2Q14 3Q13 9M14 9M13 Net revenues 3,419 3,380 2,749 10,339 10,315 Provisions for credit losses 29 (5) 7 24 3 Compensation and benefits 1,412 1,465 1,080 4,357 3,945 Other operating expenses 983 878 965 2,793 2,954 Total operating expenses 2,395 2,343 2,045 7,150 6,899 Pre-tax income 995 1,042 697 3,165 3,413 Basel 3 RWA USD bn 159 166 147 159 147 Leverage exposure USD bn 791 776 793 791 793 Cost/income ratio 70% 69% 74% 69% 67% Return on regulatory capital1 17% 19% 12% 19% 20% Net revenues (116) (38) (197) (278) (418) Total expenses2 363 252 271 792 712 Pre-tax income / (loss) (479) (290) (468) (1,070) (1,130) Basel 3 RWA USD bn 12 14 21 12 21 Leverage exposure USD bn 66 77 93 66 93 Net revenues 3,303 3,342 2,552 10,061 9,897 Total expenses2 2,787 2,590 2,323 7,966 7,614 Pre-tax income 516 752 229 2,095 2,283 Basel 3 RWA USD bn 171 181 167 171 167 Leverage exposure USD bn 856 853 886 856 886 Return on regulatory capital1 8% 12% 4% 11% 12% Strategic results vs. 3Q13 Strong 3Q14 strategic return on regulatory capital of 17% vs. 12% in 3Q13; overall return on regulatory capital of 8% vs. 4% in 3Q13 Strategic revenues increased 24% vs. 3Q13 reflecting significant client deals, e.g. Alibaba IPO: Particularly strong fixed income performance driven by Securitized Products and Emerging Markets Stable Equities results as robust Derivatives revenues were offset by muted trading activity Continued momentum in debt and equity underwriting Total expenses increased from 3Q13 as higher variable compensation, litigation and deferred compensation expenses offset cost reductions from infrastructure initiatives Non-Strategic results in 3Q14 Continued progress in winding-down non-strategic unit; reduced RWA by USD 2 bn, or 20% and leverage exposure by USD 11 bn, or 15% from 2Q14 Stronger 3Q14 Investment Banking profitability
 
 
 
 
October 23, 2014 * Strong Fixed Income results driven by robust client activity and continued momentum in diversified yield franchise Fixed Income sales & trading and underwriting – Strategic Revenues in CHF mn Note: Underwriting revenues are also included in the total Fixed Income franchise view. 1 Source: Thomson/IFR for ABS and MBS. 1,581 2,202 2,227 6,283 6,732 Fixed Income sales & trading and underwriting - Strategic revenues USD mn Compared to 3Q13 Substantial increase in fixed income franchise revenues of 42% reflecting more favorable trading conditions and higher client activity Significantly higher Emerging Markets revenues driven by robust client financing activity and solid trading results Continued strength in well-balanced and high-returning Securitized Products franchise; strong growth in top ranked asset finance business1 with consistent progress on strategic build-out Lower revenues in strong Credit business as higher origination revenues are offset by lower leveraged finance trading activity Improved Macro revenues, from very subdued levels, driven by higher client activity and increased market volatility; progress on Macro strategy yielded RWA reduction of USD 2 bn, or 12%, from 2Q14 Debt underwriting Fixed Income sales and trading
 
 
 
 
October 23, 2014 * Growth in trading and origination driving Securitized Products revenues Expanding strong US Credit franchise to new opportunities in Europe Strong Credit franchise with dynamic risk management and geographical diversification Resilient franchise performance with conservative risk positioning; reduced global leveraged finance primary commitments by 88% from peak levels in 2007 Further growth opportunities from continued expansion of strong Credit franchise into EMEA Strategy: Continuing to diversify yield franchises across regions, products and trading/financing to create a more balanced and non-correlated business mix Strong growth in diversified US Asset Finance franchise resulting in high quality, stable and consistent revenue stream; #1 rank2 in 9M14 reflecting market share gains Continued opportunities in Europe Asset Finance and Non-Agency driven by renewed interest in the asset class Client distribution of block portfolio transactions demonstrates Securitized Products franchise strength Diversified Securitized Products revenues 9M14 Revenue mix1 Strong Credit franchise 69% 9M14 Regional mix1 Non-correlated EMG business Non-correlated Emerging Markets business Revenues improved vs. 9M13 driven by strong client activity; significantly higher revenue growth across regions in 3Q14 driving turnaround in YTD performance Well-balanced EMG franchise with strengths in Latin America, APAC and Emerging Europe Asset Finance Revenue in USD mn1 Americas EMEA APAC 1 Revenues based on internal structure, i.e. primary revenue split between IBD and Fixed Income. 2 Source: Thomson/IFR. Global EMG Revenue in USD mn1 9M14 Regional mix1 Americas EMEA APAC Agency Non-Agency Mortgage Servicing Asset Finance +22% +6% +8% Global Credit Revenue in USD mn1 Focused strategies to diversify yield businesses contributing to fixed income franchise growth
 
 
 
 
October 23, 2014 * Stable Equities results reflecting higher origination and derivatives revenues offset by muted trading activity Equity sales & trading and underwriting – Strategic Revenues in CHF mn Note: Underwriting revenues are also included in the total Equity franchise view. 1,329 1,563 1,383 4,580 4,509 Equity sales & trading and underwriting - Strategic revenues USD mn Equity underwriting Equity sales and trading Compared to 3Q13 Total equity franchise revenues increased 5% vs. 3Q13; substantial increase in equity underwriting revenues of 66% offset 2% decline in equity sales and trading performance Increase in Derivatives revenues driven by growth in Private Bank distributed fee-based products, particularly in Asia Pacific Higher revenue in market leading Prime Services business resulting from growth in client balances and portfolio optimization initiatives Equity Underwriting revenues increased substantially driven by strong IPO activity vs. 3Q13 Revenues also reflect weaker trading activity and subdued activity in Brazil
 
 
 
 
October 23, 2014 * Higher Underwriting & Advisory results driven by robust origination activity Note: Underwriting revenues are also included in the views of Fixed Income and Equity franchise revenues on slides 21 and 23, respectively. 766 1,027 2,545 2,935 Underwriting & Advisory - Strategic revenues USD mn 975 Underwriting & Advisory – Strategic Revenues in CHF mn Equity underwriting Advisory Debt underwriting Compared to 3Q13 Significantly higher Equity Underwriting revenues driven by growth in APAC and EMEA; revenues declined vs. 2Q14 due to lower market volumes Robust Debt Underwriting results reflecting share of wallet gains across the franchise Higher Advisory revenues driven by an increase in M&A industry activity; higher CEO confidence in the Americas and restructuring opportunities in Europe to drive future growth Healthy forward calendar in Equity Underwriting and M&A; execution dependent on market conditions
 
 
 
 
Improved returns driven by continued momentum in market-leading Strategic businesses October 23, 2014 * % of 3Q14 IB capital base1 Improved market conditions to drive returns and profitability 14% (vs. 14% in 2Q14) 21% (vs. 21% in 2Q14) 65% (vs. 65% in 2Q14) Rolling four quarters return on regulatory capital3 High Credit Suisse market share position Low Majority of capital allocated to market leading businesses Strong returns in market leading businesses from continued market share momentum Optimize risk and capital utilization across the franchise 1 Percent of capital base (based on internal reporting structure) reflects hybrid capital which is defined as average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure at quarter-end 2Q14 vs. quarter-end 3Q14 for strategic businesses. 2 Global Macro Products includes Rates and FX franchises. 3 Presentation based on internal reporting structure. Bubble size reflects relative capital usage at end of 3Q14 Investment Banking Equities Fixed Income Return on regulatory capital improved vs. 2Q14 rolling four quarter return Return on regulatory capital declined vs. 2Q14 rolling four quarter return High * No indicator reflects stable return on regulatory capital vs. 2Q14 rolling four quarter return Cash Equities Strategic businesses (market share position vs. return on regulatory capital) Differentiated cross-asset macro platform to improve returns Improved cost and capital efficiency in macro
 
 
 
 
Continued progress in wind-down of Non-Strategic RWA and Leverage Exposure October 23, 2014 * 4Q13 Year-end 2015 target 2Q14 (50%) Basel 3 RWA3 in USD bn Business impact & other1 1Q14 3Q14 2Q14 Business impact & other (64%) Leverage Exposure3 in USD bn 1Q14 4Q13 3Q14 Year-end 2015 target Compared to 2Q14 Higher pre-tax income losses as 2Q14 included net valuation gains in the portfolio. 3Q14 results reflected: Higher RWA exit costs from unwinding concentrated portfolios; 3Q14 reductions estimated in-line with long term exit costs of 2-3% of RWA Higher litigation expenses from primarily mortgage-related matters Significant progress in winding-down capital positions vs. 2Q14; on-track to meet RWA and leverage exposure reduction targets by end-2015 Reduced RWA by USD 2 bn, or 20%, to USD 12 bn from 2Q14 Reduced leverage exposure by USD 11 bn, or 15%, from 2Q14 During 3Q14, Commodities trading was transferred into the Non-Strategic unit, including USD 1.4 bn of RWA and USD 5 bn of leverage exposure at end 2Q14 Note: Risk-weighted asset and leverage exposure goals are measured on constant FX basis and are subject to change based on future FX movements. Rounding differences may occur with externally published spreadsheets. 1 Includes business impact, internally driven methodology and policy impact and FX movements. 2 Includes provisions for credit losses. 3 Investment Banking RWA and leverage exposure restated for Commodities trading. Non-Strategic unit in CHF mn 3Q14 2Q14 3Q13 9M14 9M13 Net revenues (116) (38) (197) (278) (418) o/w Legacy Funding (35) (34) (95) (115) (287) o/w Other Funding (51) (47) (53) (148) (197) Total operating expenses2 363 252 271 792 712 Pre-tax income (479) (290) (468) (1,070) (1,130) o/w Litigation-related (227) (143) (163) (432) (459)
 
 
 
 
Solid return on regulatory capital from Strategic businesses October 23, 2014 * Investment Banking after-tax return on regulatory capital (USD-denominated) Note: Return on regulatory capital is based on after-tax income denominated in US dollars and assumes tax rates of 28% in 9M13 for the Strategic business and of 30% in 9M14 for both the Strategic business and total investment banking and that capital is allocated at the average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure. 1 Other includes impact of other revenues, other operating expenses and capital. Compared to 9M13 Stable Strategic after-tax return on regulatory capital of 19% for 9M14 Strategic expenses increased 7% from 9M13 as higher variable compensation, deferred compensation from prior year awards and litigation expenses offset cost reductions from infrastructure initiatives Wind-down of Non-Strategic unit to drive improved Investment Banking returns Strategic 9M13 Revenue impact Cost impact Capital reduction 9M14 Strategic IB Non-Strategic unit Total IB +<1% Litigation Funding (8%) Other1 Strategic
 
 
 
 
Continued progress on costs and capital October 23, 2014 *
 
 
 
 
On track to achieve > CHF 4.5 bn expense savings by end 2015 October 23, 2014 * Group expense reductions target in CHF bn 9M14 Achieved Expected by YE 2015 Total savings after 2015 > 4.5 > 0.9 0.25 > 0.2 0.4 3.6 1.45 1.45 0.7 Private Banking & Wealth Management Infrastructure Investment Banking 9M14 Achieved Expected by YE 2015 Total saving after 2015 >4.5 Direct cost savings by division Fully loaded cost savings by division > 1.65 0.95 1.85 Private Banking & Wealth Management Corporate Center Investment Banking Note: All expense reduction targets are measured at constant FX rates against 6M11 annualized total expenses, excl. realignment and other significant expense items and variable compensation expenses. Infrastructure includes Corporate Center, which is not allocated to the front office divisions. Fully loaded view consists of infrastructure expenses that are allocated to divisions. 1 Includes savings from adjustments to normalize for the immediate accounting recognition of early retirement eligible population.
 
 
 
 
Investment Banking 4Q12 3Q11 4Q13 Group Basel 3 "look-through" risk-weighted assets CHF bn 3Q14 Note: Risk-weighted asset goals are measured on constant FX basis and are subject to change based on future FX movements. 1 Includes PB&WM and Corporate Center risk-weighted assets. 2 Long term RWA target of ~CHF 250 bn was calculated at the prevailing FX rates at end 3Q13. (23%) 2Q14 Compared to 2Q14 RWA increase primarily driven by significant adverse FX impact with strong US dollar appreciation during the quarter Investment Banking: In USD, Strategic RWA decreased by USD 7 bn, with a further USD 2 bn reduction in Non-Strategic unit Private Banking & Wealth Management: Small RWA increase across businesses in the division Outlook Continued objective of limiting Investment Banking RWAs to end 2013 level Reiterate long term RWA target of ~CHF 250 bn, on an FX adjusted basis2 PB&WM IB FX impact +10 (4) PB&WM1 +1 October 23, 2014 * On track to meet long-term risk-weighted assets goal
 
 
 
 
Announced capital measures: Risk-weighted assets reduction to end 2013 level Execution of announced capital measures generated ~CHF 0.1 bn of capital in 9M14; expected to generate ~CHF 0.3 bn by end 4Q14, with remainder expected to come through in 2015 Organic capital accretion Long term “look-through" BIS CET1 ratio target of 11%; capital measures aimed at restoring >10% ratio by end 2014 October 23, 2014 * “Look-through” Basel 3 capital ratios Total Capital1 BIS CET1 High-trigger capital instruments Low-trigger capital instruments 4.1%5 Swiss Total Capital Leverage Ratio 3.8% 9.6% 3Q12 2Q14 Long-term Expected Credit Suisse requirements by 1.1.19 12.7%3 15.8%2 14.0%4 ~17.5% 13.0% 17.05%5 CET1 = Common equity tier 1. 1 Includes USD 3 bn Tier 1 participation securities prior to 4Q13 (with a haircut of 20%) and none thereafter. 2 Includes issued high-trigger capital instruments of CHF 8.3 bn and CHF 8.7 bn as of 2Q14 and 3Q14, respectively and issued low-trigger capital instruments of CHF 8.4 bn and CHF 9.0 bn as of 2Q14 and 3Q14, respectively. 3 Swiss CET1+ high-trigger capital ratio. 4 Based on expected Credit Suisse capital requirements. 5 Excludes countercyclical buffer required as of September 30, 2013. The progressive component requirement is dependent on our size (leverage ratio exposure) and the market share of our domestic systemically relevant business and is subject to potential capital rebates that may be granted by FINMA. For 2015, FINMA increased our 2019 progressive component requirement from 3.66% to 4.05% due to the latest assessment of relevant market shares, which leads to a total capital ratio requirement of 17.05% and a Swiss Total Capital leverage ratio requirement of 4.09%. 3Q14 12.3%3 15.3%2 3.7%
 
 
 
 
Rounding differences may occur. 1 Off-balance sheet exposures and regulatory adjustments. “Look-through” leverage exposure reduction of CHF 199 bn, or 14%, since 3Q12 to CHF 1,191 bn in 3Q14 Increase in “look-through” leverage exposure since 2Q14 primarily due to significant adverse FX impact from strong US dollar appreciation in the quarter Modest business increase predominantly driven by balance sheet usage from lending initiatives in PBWM and an increase in liquidity requirements across the Group FX impact on the leverage ratio (as opposed to the exposure) is neutralized by the equity base, as leverage exposure is approximately hedged to moves in USD by holding a similar currency exposure in our equity base “Look-through” leverage exposure average period in CHF bn 1Q14 1,390 Exposure add-ons1 Balance sheet assets (US GAAP) 3Q12 1,124 (14%) 1,145 2Q14 3Q14 1,191 “Look-through” leverage exposure progression October 23, 2014 * +25 FX Impact +21 Business and liquidity Impact
 
 
 
 
* October 23, 2014 End-2015 @ end 1Q14 FX CHF / USD: 0.88 Leverage Exposure Based on three-month average leverage exposure, in CHF bn Path to achieving Leverage Exposure of CHF 1.05 trn Based on three-month average leverage exposure, in CHF bn 3Q14 End-2015 Swiss Total Capital (CHF bn), Swiss Total Capital Lev. ratio (%) 3Q14 End-2015 @ end 3Q14 FX CHF / USD: 0.96 End-2015 Target “Look-through” Swiss Total Capital Leverage ratio target of ~4.5% by end-2015, consistent with consensus estimates1; plan includes full transition from Swiss leverage requirements to BCBS leverage exposure To achieve the leverage ratio target implies a “look-through” leverage exposure of ~CHF 1.05 trn by end 2015, equivalent to the previously announced leverage target of ~CHF 1 trn, adjusted for USD appreciation against CHF. Planned to be achieved through: Previously announced capital measures including reduction in the Non-Strategic units Structural mitigation and optimization of the balance sheet Business reductions of ~CHF 70 bn include several potential large structural reductions 4Q14 - 2015 Consensus retained earnings1 Planned reduction in Non-Strategic units HQLA optimization Business reductions 3.8% Consensus Target for end-2015 “look-through” Swiss Total Capital Leverage ratio ~4.5% Note: Swiss Total Capital, Swiss Total Capital Leverage ratio, and leverage exposure referenced on the slide are on “look-through” basis. 1 4Q14 net income based on analyst consensus 2014E net income of CHF 1.9 bn less 9M14 reported net income and dividend payout of CHF 0.3 bn; 2015 net income based on analyst consensus 2015E net income of CHF 4.2 bn less assumed 50% dividend payout of CHF 2.1 bn. Note: The consensus 2014E and 2015E net income and retained earnings referenced above are based on the Consensus Summary on the Credit Suisse website. Consensus data is used solely for illustrative purposes. Actual results may differ significantly. 27.9 30.4 CET1 capital
 
 
 
 
Summary Brady W. Dougan, Chief Executive Officer October 23, 2014 *
 
 
 
 
Supplemental slides Slide Group and divisional capital and return profile 36 Leverage ratios progression 37 Non-Strategic capital update 38 Non-Strategic run-off profile 39 Financial summary – Non-Strategic results 40 Total Investment Banking results in USD 41 Strategic Investment Banking results in USD 42 Investment Banking: Strategic Basel 3 RWA movement 43 Annualized expense savings through 9M14 44 Currency mix 45 Currency mix of capital metrics 46 Collaboration revenues 47 Shareholders’ equity and “look-through” CET1 capital breakdown 48 Reconciliation of return on equity, return on tangible equity and return on regulatory capital 49 October 23, 2014 *
 
 
 
 
Accelerated move to more balanced business mix and further operating efficiency to drive returns improvement October 23, 2014 * Strategic Capital end period in CHF bn All financials and return calculations above based on reported results. 1 Return on regulatory capital is based on after-tax income and assumes tax rates of 25% in 2011, 2012 and 1Q13 and 30% thereafter and that capital is allocated at the average of 10% of average Basel 3 risk-weighted assets prior to 2013 and the average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure from 2013 onwards. Return on regulatory capital is different from externally disclosed Return on Equity. PB&WM and Group returns calculated based on CHF denominated financials; IB returns based on USD denominated financials. Return on regulatory capital1 Private Banking & Wealth Management Capital end period in CHF bn Investment Banking Capital end period in CHF bn Return on regulatory capital1 Group Return on regulatory capital1 (2)% Strategic Strategic Strategic Strategic Healthy returns demonstrate effectiveness of repositioned capital-efficient business model 1,163 27% Leverage exposure Basel 3 RWA
 
 
 
 
in CHF bn 1Q14 Lev. ratio 2Q14 capital 2Q14 Lev. ratio 3Q14 capital 3Q14 Lev. Ratio CET1 Leverage ratio 26.4 27.9 Add: Tier 1 high-trigger capital instruments 5.8 6.0 Add: Tier 1 low-trigger capital instruments 4.5 4.9 BIS Tier 1 Leverage ratio 36.7 38.8 Deduct: Tier 1 low-trigger capital instruments (4.5) (4.9) Add: Tier 2 high-trigger capital instrument 2.5 2.6 SNB Loss Absorbing Lev. Ratio 34.7 36.6 Add: Tier 1 low-trigger capital instruments 4.5 4.9 Add: Tier 2 low-trigger capital instruments 3.9 4.1 BIS Total Capital Leverage ratio 43.1 45.5 Add: Swiss regulatory adjustments (0.2) (0.1) Swiss Total Capital Leverage ratio 42.9 45.4 Rounding differences may occur. 1 1Q14 leverage ratio reflect impact from the settlement of all outstanding U.S. cross-border matters, as if it had been applied at the end of 1Q14. As of end 1Q14 the reported “look-through” BIS Total Capital Leverage ratio and Swiss Total Capital Leverage ratio were 3.8% and 3.7%, respectively. 2 The progressive component requirement is dependent on our size (leverage ratio exposure) and the market share of our domestic systemically relevant business and is subject to potential capital rebates that may be granted by FINMA. For 2015, the 2019 progressive capital component was increased by FINMA to 4.05% (compared to 3.66% in 2014) due to the latest assessment of relevant market shares. 3.2% 3.3% 3.0% 3.1% “Look-through” CET1 Leverage ratio at 2.3%; “look-through” BIS Tier 1 Leverage ratio and Swiss Total Capital Leverage ratio continued to improve to 3.3% and 3.8%, respectively Committed to “look-through” Swiss Total Capital Leverage ratio target of ~4.5% by end 2015, implying a “look-through” CET1 leverage ratio of ~2.8-3.0% Leverage calculation “Look-through” 3.0% 3.1% 2 3.8% 3.8% 3.6% Leverage ratios within reach of 2019 requirement 4.1%2 2019 Swiss Total Capital Leverage ratio requirement: 3.8% 3.7% 3.6% Incl. settlement1 October 23, 2014 2.3% 2.3% 2.3% *
 
 
 
 
30 Private Banking & Wealth Management Investment Banking1 1Q14 RWA methodology change impact2 (IB, PB&WM) Non-Strategic capital update 4Q13 Year-end 2015 target 2Q14 (44%) Basel 3 RWA1 in CHF bn (66%) Leverage Exposure1 in CHF bn 20 10 24 100 85 26 28 3 Note: For Investment Banking’s year-end 2015 target, period end 3Q13 spot CHF/USD of 0.90 was used when the CHF target was fixed. Rounding differences may occur. 1 Investment Banking Non-Strategic RWA and leverage exposure restated for prior quarters for commodities trading exit. 2 Reflects major external methodology changes only. 3 Includes 2014 adverse model change. Continued progress in deleveraging, with a CHF 23 bn reduction compared to 4Q13; on track to achieve 66% reduction by end-2015 Continued progress in RWA reductions in 3Q14 despite adverse FX impact; targeting a further 44% reduction by end-2015 3Q14 18 4Q13 Year-end 2015 target 2Q14 3Q14 77 21 14 6 Investment Banking Basel 3 RWA USD bn 12 88 77 24 66 Investment Banking Leverage Exposure USD bn October 23, 2014 *
 
 
 
 
Non-Strategic run-off profile expected to significantly reduce pre-tax income drag over time Note: The ultimate cost of the relevant legal proceedings in the aggregate over time may significantly exceed current litigation provisions. 1 Includes CHF 21 mn and CHF 57 mn of legacy funding costs in Corporate Center in 3Q14 and 2013, respectively. 2 CHF 38 mn represents quarterly pro-rata cost savings of further CHF 150 mn of expenses to be achieved by end 2015. Illustrative reduction of Non-Strategic pre-tax income drag CHF mn Investment Banking Legacy funding cost reduction on track; expected to step down by ~50% from CHF 439 mn in 20131 and remain relatively stable until full run-off at the end 2018 Corporate Center Impact driven by volatility in own credit spreads, as well as the size of the portfolio carried at fair value Realignment costs and IT architecture simplification expected to continue through remainder of cost reduction program Includes the accounting impact from sale of domestic private banking business booked in Germany Corp. Center PB&WM IB Remaining pre-tax drag expected to be reduced by CHF 38 mn2 from incremental cost savings (target >CHF 4.5 bn by end 2015) ~CHF 200 mn predominately relates to FID wind down and Legacy Rates, which will be targeted for accelerated wind down Includes CHF 227 mn of certain legacy litigation provisions & fees; continue to work towards resolution of legacy litigation matters 1 Private Banking & Wealth Mgmt. Includes impact from sale of domestic private banking business booked in Germany Also includes small restructuring costs Corp. Center PB&WM IB October 23, 2014 *
 
 
 
 
Rounding differences may occur with externally published spreadsheets. 1 Discontinued operations reclassifications relate to revenues and expenses arising from the sale of domestic private banking business booked in Germany. 2 Total expenses do not include credit provisions. Capital CHF bn Reported Financials CHF mn 3Q14 Financial summary – Non-Strategic results Leverage Exposure Balance Sheet Assets Basel 3 RWA Net Revenues Total Expenses2 Pre-tax Income Investment Banking Non-Strategic unit Fixed Income Wind-down 22 12 5 (16) 32 (49) Legacy Rates 23 3 2 (52) 20 (72) Legacy litigation provisions and fees -- -- -- -- 227 (227) Legacy funding costs -- -- -- (35) 0 (35) Other Non-Strategic positions and items 18 8 4 (13) 77 (96) IB Non-Strategic results 63 23 11 (116) 356 (479) Private Banking & Wealth Management Non-Strategic unit Select onshore businesses 1 1 -- 122 39 84 Legacy cross-border businesses 1 1 -- 38 47 (11) AM divestitures and disc. operations 3 2 5 12 17 (4) Other Non-Strategic positions and items 9 9 2 14 13 2 PB&WM Non-Strategic results 14 13 7 186 116 71 Corporate Center Non-Strategic items Movements in credit spreads in own liabilities -- -- -- 318 (33) 351 Realignment costs and IT architecture simplification -- -- -- -- 138 (138) Legacy funding costs -- -- -- (21) -- (21) Discontinued operations reclassifications1 -- -- -- (117) (11) (106) Other Non-Strategic items -- -- -- -- (1) 1 Corporate Center Non-Strategic results -- -- -- 180 93 87 Total Non-Strategic results 77 37 18 250 565 (321) October 23, 2014 *
 
 
 
 
* Total Investment Banking results in USD October 23, 2014 1 Return on regulatory capital is based on after-tax income denominated in US dollars and assumes tax rates of 27% for 9M13 and of 30% in 3Q13, 2Q14, 3Q14 and 9M14 and that capital is allocated at the average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure. in USD mn 3Q14 2Q14 3Q13 3Q14 vs. 2Q14 3Q14 vs. 3Q13 9M14 9M13 9M14 vs. 9M13 Net revenues 3,560 3,766 2,773 (5%) 28% 11,160 10,615 5% Debt underwriting 562 544 461 3% 22% 1,631 1,521 7% Equity underwriting 229 302 140 (24%) 63% 737 527 40% Advisory and other fees 184 181 165 1% 12% 567 497 14% Fixed income sales & trading 1,547 1,610 905 (4%) 71% 4,825 4,372 10% Equity sales & trading 1,156 1,279 1,156 (10%) 0% 3,785 3,968 (5%) Other (117) (150) (55) 22% (114%) (385) (271) 42% Provision for credit losses 38 (6) 7 nm nm 32 5 nm Compensation and benefits 1,564 1,690 1,226 (7%) 28% 4,962 4,377 13% Other operating expenses 1,394 1,235 1,290 13% 8% 3,829 3,787 1% Total operating expenses 2,958 2,925 2,516 1% 18% 8,791 8,165 8% Pre-tax income 565 847 250 (33%) 126% 2,338 2,445 (4%) Cost / income ratio 83% 78% 91% -- -- 79% 77% Return on regulatory capital1 8% 12% 4% -- -- 11% 12% --
 
 
 
 
* Strategic Investment Banking results in USD October 23, 2014 in USD mn 3Q14 2Q14 3Q13 3Q14 vs. 2Q14 3Q14 vs. 3Q13 9M14 9M13 9M14 vs. 9M13 Net revenues 3,685 3,809 2,986 (3%) 23% 11,467 11,064 4% Debt underwriting 562 544 461 3% 22% 1,631 1,521 7% Fixed income sales & trading 1,665 1,658 1,120 0% 49% 5,101 4,762 7% Fixed income franchise 2,227 2,202 1,581 1% 41% 6,732 6,283 7% Equity underwriting 229 302 140 (24%) 64% 737 527 40% Equity sales & trading 1,154 1,261 1,189 (8%) (3%) 3,772 4,053 (7%) Equities franchise 1,383 1,563 1,329 (12%) 4% 4,508 4,581 (2%) Advisory and other fees 184 181 165 1% 12% 567 497 14% Other (109) (137) (89) (20%) 22% (340) (297) (14%) Provision for credit losses 31 (6) 6 nm nm 25 4 nm Compensation and benefits 1,523 1,651 1,173 (8%) 30% 4,836 4,231 14% Other operating expenses 1,058 990 1,047 7% 1% 3,095 3,168 (2%) Total operating expenses 2,581 2,641 2,220 (2%) 16% 7,931 7,400 7% Pre-tax income 1,073 1,174 759 (9%) 41% 3,511 3,660 (4%) Cost / income ratio 70% 69% 74% -- -- 69% 67% Return on regulatory capital1 17% 19% 12% -- -- 19% 20% 1 Return on regulatory capital is based on after-tax income denominated in US dollars and assumes tax rates of 28% for 9M13 and of 30% in 3Q13, 2Q14, 3Q14 and 9M14 and that capital is allocated at the average of 10% of average Basel 3 risk-weighted assets and 2.4% of average leverage exposure.
 
 
 
 
* Investment Banking Strategic Basel 3 RWA movement October 23, 2014 3Q14 QoQ Change 2Q14 3Q13 3 - 3 3 3Q14 QoQ Change 2Q14 3Q13 22 - 22 21 3Q14 QoQ Change 2Q14 3Q13 4 (1) 5 4 3Q14 QoQ Change 2Q14 3Q13 6 +1 5 5 18 (3) 21 13 13 - 13 12 4 +1 3 3 1 (1) 2 1 42 (2) 44 34 3Q14 QoQ Change 2Q14 3Q13 16 (2) 18 16 25 (1) 26 28 22 - 22 16 19 - 19 17 6 (1) 7 8 88 (4) 92 85 Basel 3 risk-weighted assets in USD bn Note: Rounding differences may occur with externally published spreadsheets. Figures reflect Commodities trading RWA transfer from Macro to Non-Strategic unit. 1 Includes Rates and FX franchises. 2 Includes Fixed Income other, CVA management and Fixed Income treasury. Equities Fixed Income Macro1 Securitized Products Credit Emerging Markets Other2 Strategic Fixed Income Cash Equities Prime Services Derivatives Systematic Market Making Other Strategic Equities Corporate Bank Corporate Bank Investment Banking Other Other M&A and Other IBD
 
 
 
 
October 23, 2014 Achieved CHF 3.6 bn annualized expense savings through 9M14 since expense measures announced in mid-2011 * All data for Core Results including expense savings from discontinued operations. All expense reductions are measured at constant FX rates against 6M11 annualized total expenses, excluding realignment and other significant expense items and variable compensation expenses. 1. Related to existing population. 2. Includes settlement charge of US cross-border matters of CHF 1,618 bn and other significant litigation items across both divisions. 3. Includes Corporate Center realignment costs and realignment Non-Strategic unit measures, and architecture simplification. 4. Includes variable compensation related savings on reduction of force, fixed allowance and def. comp / share delivery adjustments. 6M11 adjusted Group expense reduction achieved in CHF bn 9M14 reported 9M14 adjustments 20.5 annualized 10.2 9M14 adjusted Savings of CHF 3.6 bn Adjustments from 9M14 reported: Variable compensation1 (1,487) Certain litigation items2 (2,081) Realignment / AS3 (514) RRP (295) Other4 (139) FX impact 178 9M14 Total (4,337) Annualized (5,801) Adjustments from 6M11 reported: Variable compensation (1,034) Realignment costs (CC) (142) Other (across divisions) 50 Total (1,127) Annualized (x2) (2,253) annualized 17.0
 
 
 
 
Currency mix * October 23, 2014 1 Total operating expenses and provisions for credit losses. 2 Based on 9M14 and 9M13 revenue and expense levels, currency mix and average exchange rates, respectively. 3 Corresponds to pre-tax charge of CHF 1,618 mn. Net revenues 19,295 19% 55% 13% 1% 11% Total expenses1 15,263 32% 39% 6% 10% 14% CHF mn 9M14 CHF USD EUR GBP Other Contribution Net revenues 19,439 19% 55% 14% 0% 13% Total expenses1 17,107 27% 47% 5% 9% 12% CHF mn 9M13 CHF USD EUR GBP Other Contribution Sensitivity analysis2 A 10% movement in the USD/CHF exchange rate would affect 9M14 pre-tax income by CHF 277 mn and 9M13 pre-tax income by CHF 476 mn Excluding the final settlement impact of all outstanding U.S. cross-border matters3, a 10% movement in the USD/CHF exchange rate would affect 9M14 pre-tax income by CHF 439m A 10% movement in the EUR/CHF exchange rate would affect 9M14 pre-tax income by CHF 180 mn and 9M13 pre-tax income by CHF 170 mn Credit Suisse Core Results
 
 
 
 
* Currency mix of Group capital metrics October 23, 2014 Swiss Leverage Exposure Basel 3 RWA USD CHF EUR GBP Other USD CHF EUR GBP Other “Look-through” Common Equity Tier 1 Capital1 USD CHF EUR Other Sensitivity analysis A 10% strengthening of the US dollar (vs. CHF) would have a -10.0bps impact on the 3Q14 “look-through” BIS CET1 ratio (from 9.8% to 9.7%) A 10% strengthening of the US dollar (vs. CHF) would have a -3.2bps impact on the 3Q14 “look-through” Swiss Total Capital leverage ratio (from 3.81% to 3.78%) 3% 6% 5% Note: Data based on September 2014 month-end currency mix 1 Reflects actual capital positions in consolidated Group legal entities (net assets) including net asset hedges less applicable Basel 3 regulatory adjustments (e.g. goodwill).
 
 
 
 
Collaboration revenues Contribution to overall net revenues up 3ppts compared to 2Q14 Overall increase in the number of cross-divisional referrals Continued solid performance in providing tailored solutions to UHNWI clients Collaboration revenues target range of 18% to 20% of net revenues Collaboration revenues – Core results in CHF bn / as % of net revenues October 23, 2014 *
 
 
 
 
Shareholders’ equity and “look-through” CET1 capital breakdown October 23, 2014 * 3Q14 Shareholders’ equity breakdown in CHF bn Tangible equity2 (not B3 effective) Goodwill and Intangibles1 IB Strategic3 PB&WM Strategic3 IB Non-Strategic3 43.9 43.9 “Look-through” Common Equity Tier 1 Capital Total regulatory deductions and adjustments 3Q14 Shareholders’ equity in CHF bn PB&WM Non-Strategic3 3Q14 Shareholders’ equity 43,864 Regulatory deductions (includes accrued dividend, treasury share reversal, scope of consolidation) (669) Adjustments subject to phased-in (15,274) Non-threshold-based (13,174) Goodwill & Intangibles (net of Deferred Tax Liability) (8,497) Deferred tax assets that rely on future profitability (excl. temporary differences) (2,303) Defined benefit pension assets (net of Deferred Tax Liability) (1,838) Advanced internal ratings-based provision shortfall (619) Own Credit (Bonds, Structured Notes, PAF, OTC Derivatives) 118 Own shares and cash flow hedges (36) Threshold-based (2,099) Deferred Tax Asset on timing differences (2,099) Total regulatory deductions and adjustments (15,943) “Look-through” Common Equity Tier 1 capital 27,921 Reconciliation of shareholders’ equity to “look-through” CET1 capital in CHF mn 1 Goodwill and intangibles, including mortgage servicing rights, gross of Deferred Tax Liability. 2 Includes CHF 1.3 bn of Corporate Center regulatory capital. 3 Regulatory capital calculated as the average of 10% of RWA and 2.4% of Leverage Exposure at the end of 3Q14.
 
 
 
 
* Reconciliation of return on equity, return on tangible equity and return on regulatory capital 1 Calculated using income after tax, assumes tax rate of 30% and capital allocated on average of 10% of average RWA and 2.4% of average leverage exposure. 2 For Investment Banking, capital allocation and return calculations are based on US dollar denominated numbers.
 
 
 
 
October 23, 2014
 

 
 
 
 
CREDIT SUISSE GROUP AG
Media Relations
+41 844 33 88 44
media.relations@credit-suisse.com
  


Third Quarter 2014 Results Summary
 
3Q14 results reflect progress in the execution of our strategy and continued momentum with our clients across both divisions
 
Key Points
 
Reported results:
−  
3Q14 net income attributable to shareholders of CHF 1,025 million and return on equity of 10%
−  
9M14 net income attributable to shareholders of CHF 1,184 million and return on equity of 4%
 
Strategic results:
−  
3Q14 net income of CHF 1,115 million and return on equity of 11%
−  
9M14 net income of CHF 3,807 million and return on equity of 13%
 
Private Banking & Wealth Management: Results for strategic businesses reflect continued cost discipline and stable revenues; strong net new assets of CHF 8.8 billion from strategic businesses, with strong growth from emerging markets, particularly Asia Pacific
 
Investment Banking: Strong fixed income performance, driven by robust client activity; stable equities results and continued momentum in debt and equity underwriting, particularly in IPOs
 
Efficiency: On track to achieve end-2015 cost reduction target of over CHF 4.5 billion; delivered CHF 3.6 billion of adjusted annualized savings compared to 6M11 run-rate
 
Wind-down of IB non-strategic unit: Continued progress in winding down non-strategic unit with risk-weighted asset reduction of USD 2 billion and leverage exposure reduction of USD 11 billion
 
Capital:
−  
Look-through BIS CET1 ratio of 9.8% and on track to exceed 10% by year-end, including continued accrual of cash dividend for 2014
−  
Look-through Swiss leverage ratio of 3.8% within reach of the 2019 requirement of 4.1%, effective in 2015; targeting approximately 4.5% by the end of 2015
 
 
Third quarter 2014 results materials
 
Video interview with CEO Brady Dougan highlighting the key messages
 
Audio webcast of the results presentation with CEO Brady Dougan and CFO David Mathers at 09:00 CEST and presentation slides
 
Full earnings release including quantitative disclosures and time series data
 
Letter to shareholders from Chairman Urs Rohner and CEO Brady Dougan
 
Overview of Credit Suisse reporting structure
 
Credit Suisse and industry acronyms guide listing frequently used acronyms and abbreviations
 
Follow us on twitter

October 23, 2014 / Page 1
 
 
 
CREDIT SUISSE GROUP AG
Media Relations
+41 844 33 88 44
media.relations@credit-suisse.com
  



Quotes

Brady W. Dougan, Chief Executive Officer, said: “We delivered a good performance, with our strategic businesses generating returns on equity of 11% for the quarter and 13% for the first nine months of this year. During the quarter, our momentum with clients across both divisions remained strong. With a Look-through CET1 ratio of 9.8% at quarter end, we are executing our capital measures and are on track to exceed 10% by the end of the year.”
 
Commenting on Private Banking & Wealth Management, he said: “Our profitability benefitted from ongoing cost discipline, although margins remain subdued and revenues continue to be impacted by the low interest-rate environment. We generated net new assets of CHF 8.8 billion in our strategic businesses, driven by strong growth in emerging markets, particularly in Asia Pacific. This was partly offset by continued outflows from the Western European cross-border business due to the importance that we have placed on the regularization of our asset base. We saw sustained growth in our ultra-high-net-worth individual lending initiative and increased collaboration revenues across both divisions, which we view as a competitive advantage, particularly with this client segment.”
 
Commenting on Investment Banking, he said: “Investment Banking’s strategic results reflect substantially increased profitability, improved returns and robust client activity across many of our businesses. Our strong results in fixed income trading, especially in emerging markets and securitized products, and in equity underwriting were driven by significant client transactions. We continued to work towards increasing the capital and cost efficiency of our strategic businesses, reporting a return on regulatory capital of 19% and a cost/income ratio of 69% for the first nine months of this year. We also made further progress in winding down the capital positions in our non-strategic unit.”
 
On the outlook for the fourth quarter, he said: “We have seen a mixed start to October, with recent market volatility benefitting certain businesses across both divisions, while negatively impacting others. We have a strong advisory and underwriting pipeline, but the pace of execution in the fourth quarter will depend on market conditions.”
 

 
 
This Results Summary contains excerpts from our full 3Q14 Earnings Release that we believe are of special interest to media professionals. A copy of the complete 3Q14 Earnings Release, which has been distributed simultaneously and contains additional important information about our results and operations, is available at www.credit-suisse.com/results.
 
Investors and others should note that we announce material information (including quarterly earnings releases and financial reports) to the investing public using press releases, SEC and Swiss ad hoc filings, our investor relations website and public conference calls and webcasts. We intend to also use our investor relations Twitter account @creditsuisse (https://twitter.com/creditsuisse) to excerpt key messages from our public disclosures, including earnings releases. We may retweet such messages through certain of our regional Twitter accounts, including @csschweiz (https://twitter.com/csschweiz) and @csapac (https://twitter.com/csapac). Investors and others should take care to consider such abbreviated messages in the context of the disclosures from which they are excerpted. The information we post on these Twitter accounts will not be a part of any quarterly earnings releases, financial reports or any other documents that we excerpt in such postings.



October 23, 2014 / Page 2
 
 
 
 
SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.
 
   
CREDIT SUISSE GROUP AG and CREDIT SUISSE AG
   
(Registrant)
     
     
  By: /s/ Brady W. Dougan
Brady W. Dougan
Chief Executive Officer
Credit Suisse Group AG and Credit Suisse AG
     
     
   
/s/ David R. Mathers
David R. Mathers
Chief Financial Officer
Date: October 23, 2014   Credit Suisse Group AG and Credit Suisse AG