Credit Suisse Group AG (CS) Q1 2017

posted in: Earnings Call, Notes | 0

Tidjane Thiam – CEO

A straight capital raise as opposed to IPO

”You will remember that the capital plan we presented in 2015 included a CHF 2 billion to CHF 4 billion capital raise in 2017, which was supposed to be done for an IPO of the Swiss Bank in the second half of the year. Today, our board of directors has decided to propose a straight capital raise for rights offering of CHF 4 billion and to retain full ownership of our Swiss Bank. This will significantly strengthen our capital position. ”

 

David R. Mathers – CFO

Positive currency effects

“​If we look at the overall year-on-year moves, there was an increase of CHF 7 billion from the appreciation of the U.S. dollar and CHF 8 billion from external methodology changes..”

Heightened IPO Activity

“We saw the strongest momentum in equity underwriting, with revenues of $103 million, an increase of 129% year-on-year, reflecting a significant pickup in IPO activity and rights issuances…we played a major role in some of the largest and most high-profile IPOs, including Snap and Mother Goose.”

Uncertainty on tax and elections in Europe weigh on investors

“…concerns over the timing of the outcome of the tax reforms in the United States, combined with the uncertainty relating to the elections in Europe, have weighed on Markets segment. Client activity has been more sporadic towards the end of the first quarter with the…M&A announcements decreasing sequentially. Nonetheless, we believe the market does remain constructive for both debt and equity underwriting.”

On Brexit and location
“…like other international banks, we’re obviously looking at the options for our access to the EU 27 countries in a post-Brexit-type-world. Clearly, the political environment continues to develop, I think that’s a fair comment. And I think it is likely, but it’s a decision that the board will have to make in due course, that we will probably look to increase our clearing and transaction activity within the EU 27 sites. I think you’ve seen similar move from other banks, but we haven’t decided finally on that, where or what size. I think that fits in on some of the options we have for our cost plans, so I don’t think you should see any deviation from our cost plan.”