Credit Suisse Group AG (NYSE:CS)
Q1 2021 Earnings Call
Apr 22, 2021, 2:15 a.m. ET
- Prepared Remarks
- Questions and Answers
- Call Participants
Good morning. This is the conference operator. Welcome and thank you for joining Credit Suisse Group’s First Quarter 2021 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 Kinner Lakhani, Head of Investor Relations and Group Strategy and Development. Please go ahead, Kinner.
Kinner Lakhani — Head of IR and Group Strategy and Development
Thank you. Good morning, everyone. Before we begin, let me remind you of the important cautionary statements on slides 2 and 3 including forward-looking statements, non-GAAP financial measures and Basel III disclosures. For a detailed discussion, we refer you to the Credit Suisse first quarter 2021 earnings release published this morning.
Let me remind you that our first quarter 2021 financial report and accompanying financial statements for the period will be published on or around May 6.
I’ll now hand over to our Group CEO, Thomas Gottstein, and our Group CFO, David Mathers, who will run through the numbers.
Thomas Gottstein — Chief Executive Officer
Thank you, Kinner. Good morning. Thank you for joining our call this morning to discuss our first quarter 2021 results. Let me begin with some comments about the recent events. The significant loss in our prime services business relating to the failure of a US-based hedge fund is unacceptable. In combination with the recent issues around the supply chain finance funds, I recognize that these cases have caused significant concern among all our stakeholders.
Accountability is one of the core pillars of our corporate values. Together with the Board of Directors, we are addressing these situations through a series of decisive actions in the business and through two independent and thorough investigations, which are already under way.
The investigations will not only focus on the direct issues, but also broader consequences and lessons learned across the bank. We will work to ensure Credit Suisse emerges stronger.
Today, we successfully placed a mandatory convertible notes offering and I will go into greater detail shortly. This will enable us to further strengthen our balance sheet and support the momentum in our core franchises.
Credit Suisse remains a formidable institution with a rich history. We have thrived for more than 160 years through external crises and our own challenges. I’m confident for the future. At the heart of this confidence is the earnings power of Credit Suisse and the resilience and dedication of our roughly 49,000 employees around the world. I would like to take this opportunity to thank all our employees globally for their unwavering commitment to Credit Suisse and to our clients, which they have been demonstrating not only over the past few years, but particularly during the last few weeks, which were very challenging. They make me proud every day.
In testament to their perseverance and adaptability, our underlying first quarter financial performance across all divisions was not only resilient, but also strong. It was supported by solid results in Switzerland and very strong growth in APAC, strong growth in investment banking as well as asset management.
Net new assets for the Group increased strongly in the first quarter and Group assets under management grew to CHF1.6 trillion at the end of the first quarter.
With that, let me turn to the slides. Page 4 please. We reported a pre-tax loss of CHF757 million for the first quarter and a net loss attributable to shareholders of CHF252 million. This includes a pre-tax charge of CHF4.4 billion relating to the US hedge fund matter.
As David will highlight in his slides, excluding that charge, adjusted pre-tax income excluding significant items was CHF3.6 billion, reflecting the underlying strength of our business.
Our wealth management related businesses achieved 59% year-on-year growth in pre-tax income on an adjusted basis excluding significant items in the first quarter and a return on regulatory capital of 29%.
This was led by strong growth in Asia Pacific where we achieved adjusted pre-tax income growth in US…