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20th July 2012
Credit Suisse result and capital raising measures
Credit Suisse reported Q2 net attributable profit of CHF788m (€656m £514m $803m ¥63.4bn Y5,114m) and half year of CHF832m (€693m £543m $848m ¥66.9bn Y5,399m). This represents a Q2 rise of 3% and a half year FALL of 56%. The poor Q1 2012 profit was largely due to fair value losses.
The bank achieved its target of CHF2bn expense reduction 18 months early and has now modified its savings target for the end of 2013bn seeking a further CHF1bn reduction. Despite this 'achievement' expenses rose year on year by 1% in the second quarter and were down by 1% only for the half year.
The bank has done what it was told by the Swiss regulator and put in place measures to increase capital by over CHF15bn. It had initially protested that it had no need to increase capital. The measures are expected to take the Swiss Core Capital ratio to 9.4% and CT1 to Basel III standard in excess of the 8.5% level set for Global Systemically Important Banks in the future. Existing investors Qatar Holding LLC, The Olayan Group and the
Norges Bank Investment Management are to be joined by Temasek in the purchase of Mandatory and Contingent Capital securities shortly. This was an exercise planned some time ago but had not been intended to be implemented until the middle of next year. Other measures contained within the first wave of capital raising include an accelerated exchange of certain hybrid securities that does not count under new CT1 rules, The issue of Tier 1 participation securities and the previously announced sale of the bank's remaining stake in Aberdeen Asset Management.
In the second phase of capital raising, to be completed before year end the bank is planning Employee equity investment through exchange offer for deferred cash compensation (APPA exchange), divestment and asset sales and other capital efficiency measures.
Income Summary Q2 to June 30th 2012 2011 Change
CHFm CHFm %
Interest and dividend income 7,044 7,082 -1%
Interest expense -5,430 -5,705 -5%
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Net interest income 1,614 1,377 17%
Commissions and fees 3,130 3,463 -10%
Trading revenues 1,156 1,116 4%
Other revenues 375 936 -60%
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Net revenues 6,275 6,892 -9%
Provision for credit losses 25 13 92%
Compensation and benefits 3,005 3,096 -3%
General and administrative expenses 1,673 1,652 1%
Commission expenses 441 491 -10%
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Total other operating expenses 2,114 2,143 -1%
Total operating expenses 5,119 5,239 -2%
Income/(loss) before taxes 1,131 1,640 -31%
Income tax expense/(benefit) 311 271 15%
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Net Income 820 1,369 -40%
Attributable to noncontrolling interests 32 601 -95%
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Attributable to shareholders 788 768 3%
