Credit Suisse Group AG (NYSE:CS) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 02:15 am ET


Credit Suisse Group AG (NYSE:CS) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning. This is the conference operator. Welcome and thank you for joining the Credit Suisse Group's Full Year and Fourth Quarter 2019 Results Conference Call for Analysts and Investors. As a reminder, all participants are in a listen-only mode and the conference is recorded. You will have the opportunity to ask questions after the presentation. [Operator Instructions]

I will now turn the conference over to Mark Smart, Credit Suisse Investor Relations. Please go ahead, Mark.

Mark Smart

Thank you, operator. Before we begin, let me remind you of the important cautionary statements on Slides 2 and 3 including in relation to forward-looking statements, non-GAAP financial measures and Basel III disclosures. For a detailed discussion of our results, we refer you to the Credit Suisse fourth quarter 2019 earnings release and remind you that our 2019 Annual Report and audited financial statements for the year will be published on or around March 25.

I will now hand you over to Tidjane, who will run through the numbers.

Tidjane Thiam

Thank you, Mark. Good morning to all. I will present today for the 19th and final time our results as CEO of Credit Suisse. With me, I have David Mathers, our Chief Financial Officer and the whole Executive Board led by Thomas Gottstein our next CEO. We look forward to answering your question at the end of the session and discussing our results in more detail.

So let's start with Slide 5, please. This shows that we have delivered in 2019, a strong performance with a 19% underlying improvement. You will have noticed this morning that there is a number of non-operating items in our results, which I have put on the right side of the slide here with InvestLab, the SIX revaluation on the positive side and major litigation provisions on the negative side. So if you strip that out, reported PTI went from CHF3.6 billion to CHF4.3 billion which is basically 18% profitability improvement, which shows the progress made in the first full year after the end of our three-year restructuring. You can see the same thing on the next slide which shows you our net income. I have had the privilege of leading Credit Suisse for four full years '16, '17, '18, '19. We lost CHF2.7 billion first year. Lost close to CHF1 billion in the second. Made CHF2 billion in the third and more than CHF3 billion in the fourth year, with a return on tangible equity of 9%, which we believe is a creditable performance in the challenging environment for the industry that we experienced last year.

But let's look at '19 in more detail, and this is quite important to me. What we've done here is show you quarter by quarter the delta in revenue year-on-year, so '19 over '18. What you can see is how difficult 1Q was and that 2Q was a stabilization. Things improved in 3Q. And 4Q, I will recognize and admit that it was from a low base in '18, but 4Q shows a huge