Credit Suisse Group Profile
Credit Suisse Group AG (Credit Suisse) operates as a global financial services company.
As of December 31, 2022, the company maintained 272 offices and branches worldwide, of which approximately 58% were located in Switzerland.
Effective January 1, 2023, reflecting the strategic announcement of October 27, 2022, the company is organized into five divisions – Wealth Management, Swiss Bank, Asset Management and the Investment Bank, as well as a new Capital Release Unit.
Wealth Management
The Wealth Management division offers comprehensive wealth management and investment solutions and tailored financing and advisory services to ultra-high-net-worth (UHNW) and high-net-worth (HNW) individuals and external asset managers. The company’s wealth management business is among the industry’s leaders in its target markets. The company serves its clients along a client-centric and needs-based delivery model, utilizing the broad spectrum of Credit Suisse’s global capabilities, including those offered by the Investment Bank and Asset Management.
The company serves its clients through geographic coverage business areas the Asia Pacific, Europe, Middle East & Türkiye, and Latin America, and client segment-specific coverage business areas for Premium Clients Switzerland, Private Banking International, and External Asset Managers. The company continues to exit certain non-core markets, while expanding its market leading UHNW and HNW franchises in priority markets.
Organizational Change
Effective January 1, 2023, both the Global Trading Solutions (GTS) and the Asia Pacific Financing Group (AFG) joint-ventures between Wealth Management and the Investment Bank were dissolved. Certain financing activities were transferred to Wealth Management. The Markets business within the Investment Bank continues to provide cross-asset investor products for Wealth Management clients, while AFG has moved to Wealth Management, with selective transactions moving to the Non-Core Unit.
In October 2022, the company announced the successful completion of the offering of its entire shareholding in Allfunds Group plc (Allfunds Group), which represented approximately 8.6% of the share capital of Allfunds Group, through an accelerated bookbuild offering to institutional investors.
In September 2022, the company signed separate agreements with The Bank of N.T. Butterfield & Son Limited (Butterfield) and Gasser Partner Trust reg. (Gasser Partner) for the sale of its global trust business (Credit Suisse Trust, CST). CST entities continue to operate with a limited number of clients. Under separate agreements, Butterfield acquired CST’s businesses based in Guernsey, Singapore and The Bahamas, while Gasser Partner acquired CST’s Liechtenstein business. The transaction with Butterfield is expected to close in 2023 and is subject to customary conditions.
Products and Services
The company offers a wide range of wealth management solutions tailored to the specific needs of its clients, working in close collaboration with its investment banking and asset management businesses.
Structured Advisory Process
The company applies a structured and technology-enabled approach in its advisory process based on a thorough understanding of its clients’ needs, personal circumstances, product knowledge, investment objectives and a comprehensive analysis of their financial situation to define individual client risk profiles. On this basis, the company defines an individual investment and financing strategy in collaboration with its clients. This strategy is implemented to help ensure adherence to portfolio quality standards and compliance with suitability and appropriateness standards for all investment and financing instruments. The company’s relationship managers, working together with its investment consultants and, where required, with other solution-specific experts, are responsible for the implementation and ensuring its ability to provide comprehensive advice to its clients.
Comprehensive Investment Services
The company offers a comprehensive range of investment advice and discretionary asset management services based on the outcome of its structured advisory process and the global House View of its Credit Suisse Investment Committee. The company bases its advice and services on the analysis and recommendations of its research and investment strategy teams, which provide a wide range of investment expertise, including macroeconomic, equity, bond, commodity and foreign-exchange analysis, as well as research on the economy. The company’s investment advice covers a range of services, from portfolio consulting to advising on individual investments. The company offers its clients portfolio and risk management solutions, including managed investment products. These are products actively managed and structured by the company’s specialists or third parties. The company applies environmental, social and governance (ESG) criteria at various points in the investment process with an active sustainability offering, which invests in line with the Credit Suisse Sustainable Investment Framework, and passive ESG index and exchange traded funds (ETF). The Markets business within the Investment Bank continues to provide cross-asset investor products for Wealth Management clients, while its Asset Management division provides a broad range of thematic or specific investment solutions for its clients. For clients with more complex requirements, the company offers investment portfolio structuring and the implementation of individual strategies, including a wide range of structured, alternative and private market investments. Discretionary asset management services are available to clients who wish to delegate the responsibility for investment decisions to Credit Suisse. In addition, the company’s clients benefit from its comprehensive expertise and services in wealth and succession planning.
Financing and Lending
The company offers a broad range of financing and lending solutions across all of its private client segments, including consumer credit and real estate mortgage lending, real asset lending relating to ship and aviation financing for UHNW individuals, standard and structured hedging and lombard lending solutions as well as collateral trading services.
Swiss Bank
Business Profile
The Swiss Bank division offers comprehensive advice and a wide range of financial solutions to private, corporate and institutional clients primarily domiciled in its home market of Switzerland. The company’s private clients business has a leading franchise in Switzerland, including HNW, affluent, retail and small business clients. In addition, the company provides consumer finance services through its subsidiary BANK-now and the leading credit card brands through its investment in Swisscard AECS GmbH. The company’s corporate and institutional clients business serves large corporate clients, small and medium-sized enterprises (SMEs), institutional clients, financial institutions and commodity traders.
Organizational Change
Effective January 1, 2023, the Swiss investment banking business moved from the Investment Bank division into the Swiss Bank division. Investment banking Switzerland serves corporate clients and financial institutions in connection with financing transactions in debt and equity capital markets and advises on mergers and acquisitions (M&A) transactions.
Business Strategy
The Swiss Bank operates in an attractive market with a resilient economy, leading multinationals and SMEs, and large institutional clients. The Swiss Bank has leading positions in each business segment: HNW, affluent, retail, consumer finance, credit cards, corporate banking, institutional banking, M&A advisory, equity capital markets and debt capital markets. The Swiss Bank operates a high-touch/high-tech business model, providing tailor-made solutions for HNW, affluent and corporate and institutional clients with sophisticated needs (high-touch), and an increasingly digitally led hybrid service model for retail and corporate clients with less complex needs and a preference for digital channels (high-tech).
The Swiss Bank operates a high-touch/high-tech business model, providing tailor-made solutions for HNW, affluent and corporate and institutional clients with sophisticated needs (high-touch), and an increasingly digitally led hybrid service model for retail and corporate clients with less complex needs and a preference for digital channels (high-tech). Across all businesses the company seeks to put a strong focus on disciplined risk management.
Products and Services
For its Swiss retail and small business clients, the company provides core banking solutions, such as payments, accounts, debit and credit cards, product bundles, as well as investment solutions and lending offerings, such as mortgages, consumer loans and lombard loans. In 2021, the company further strengthened its CSX digital brand, targeting younger and digitally savvy clients, and surpassed 300,000 clients by the end of 2022.
For its Swiss HNW and affluent clients, the company provides products for day-to-day banking needs and a wide range of tailored solutions for more sophisticated client needs. These include discretionary and advisory investment mandates, a variety of lending solutions, wealth planning services, as well as a dedicated offering for entrepreneurs. Apart from the aforementioned digital enhancements, the company continued to invest in its advisory process in 2022. This allows the company to offer its clients integrated financial planning services and more personalized offerings, which is intended to significantly enhance the client experience along their individual lifecycle.
The company further builds the strategic partnership with MoneyPark AG and PriceHubble AG to provide a fully integrated digital real estate offering to its clients, such as, for example an overview of the client’s property, including its valuation and further information about its surroundings integrated into its digital banking products and services.
In accordance with its ambition to position itself as the Bank for Entrepreneurs, the company provides corporate and institutional clients with a holistic range of banking solutions. The company’s value proposition in the Swiss market allows it to assist its clients at virtually every stage of their business life cycle.
For its corporate clients, the company provides a comprehensive set of banking solutions, such as payment services, foreign exchange, traditional and structured lending, corporate leasing, employee share ownership services (ESOS) and escrow services. For large Swiss corporations, multinational groups and commodity traders with specific needs for global finance and transaction banking, the company leverages Credit Suisse’s global investment banking expertise and provides tailored services, including large-scale financing and capital market transactions.
For its institutional clients, the company has a dedicated coverage model and offers a broad range of products and services. For pension funds and corporate investors, the company provides the full suite of Credit Suisse solutions institutional mandates and fund solutions from Asset Management; trading solutions from the Investment Bank; asset servicing solutions, including global custody, investment reporting and private labeled funds; cash products and payment processing; and investment strategy advisory, including asset-liability management.
For financial institutions, the company delivers various core products and services, such as Swiss franc and multicurrency payments; continuous linked settlement; execution/brokerage; Swiss and international custody; trade finance; and private label funds.
Additionally, the company provides the following investment banking products and services to its private, corporate and institutional clients, such as advisory on both the buy- and sell-side during mergers, acquisition and divestiture transactions; origination and execution of capital raises through equity and equity-linked instruments, secondary placements and equity derivative transactions; and origination and execution of bond offerings for Swiss issuers in all currencies and for international issuers in Swiss francs.
Asset Management
The Asset Management division offers investment solutions and services globally to a broad range of clients, including pension funds, governments, foundations and endowments, corporations and individuals, with a strong presence in its Swiss home market. Backed by the Group’s global presence, Asset Management offers active and passive solutions in traditional investments, as well as alternative investments. The company applies ESG criteria at various points in the investment process with an active sustainability offering, which invests in line with the Credit Suisse Sustainable Investment Framework, and passive ESG index and ETF.
Business Strategy
To deliver on this vision, the company plans to simplify, strengthen and invest in its asset management business.
Simplification is a key element in the years to come as the company plans to undergo a fundamental transformation of its business. This involves, among other things further reducing its non-core investment and partnership portfolio; and building one global operating platform for its core franchise, characterized by globally standardized, streamlined and automated processes with a view towards delivering scale and efficiency gains while simultaneously reducing operational risk.
While simplifying the business, the company also envisages strengthening the existing franchise across key dimensions of its five defined strategic pillars: distribution, products and capabilities, operational model and technology, risk and controls, and governance and legal entity set-up. Strategic actions include the introduction of a holistic and globally aligned coverage model for the company’s target client segments, a strengthened sales management team and the build-out of existing and new core investment capabilities.
The company also plans to invest with the primary focus on shifting its business into higher margin segments of the market by building out its third-party wholesale business and expanding its in-house Wealth Management connectivity; building a meaningful presence in attractive markets across Europe and the Asia Pacific region; and expanding its high alpha investment capabilities and developing its private markets offering.
Products and Services
The company’s traditional investment products provide strategies and comprehensive management across equities, fixed income and multi-asset products in both fund formation and customized solutions. Stressing investment principles, such as risk management and asset allocation, the company takes an active and disciplined approach to investing. Alongside its actively managed offerings, the company has a suite of passively managed solutions, which provide clients access to a wide variety of investment options for different asset classes in a cost-effective manner.
The company also offers institutional and individual clients a range of alternative investment products, including credit investments, hedge fund strategies, real estate and commodities.
Investment Bank
The Investment Bank offers a broad range of financial products and services focused on client-driven businesses and also supports Credit Suisse’s Wealth Management division and its clients. The company’s suite of products and services includes global securities sales, trading and execution, capital raising and advisory services. The company’s clients include financial institutions, corporations, governments, sovereigns, UHNW and institutional investors, such as pension funds and hedge funds, financial sponsors and private individuals around the world. The company delivers its investment banking capabilities globally through regional and local teams based in both major developed and selected emerging market centers. The company’s business model enables it to deliver high value, customized solutions that leverage the expertise offered across Credit Suisse and that help its clients unlock capital and value in order to achieve their strategic goals.
Organizational Change
The Investment Bank in its state continues to operate and is managed as one division. Effective January 1, 2023, the division is reorganized into Markets and Banking, with the latter to be carved out later as CS First Boston. Markets includes cross-asset investor products, equities, foreign exchange and rates trading and securities research. Banking includes capital markets, advisory and global credit products.
Business Strategy
On October 27, 2022, the company announced its strategy to restructure the Investment Bank to significantly reduce the risk profile and improve returns. The company’s Investment Bank strategy is to be a leading provider of cross-asset investor products, equities, foreign exchange and rates access for Credit Suisse clients, as well as to carve out its capital markets and advisory business.
The company’s streamlined Markets business includes the strongest and most relevant aspects of its trading capabilities, which are aligned with Credit Suisse’s strategic objectives, combined with differentiated securities research. While remaining fully committed to serving institutional clients, its leading capabilities in cross-asset investor products, as well as equities, foreign exchange and rates access are closely aligned with the Wealth Management and Swiss Bank franchises and are intended to support CS First Boston once it is created. In addition, to reduce risk and capital usage the company exited and reduced certain activities across the following businesses: Prime services, emerging markets financing, fund financing and foreign exchange high-touch international institutional.
The Investment Bank’s capital markets and advisory activities combined with global credit products are expected to be integrated into CS First Boston, which after a transition period is intended to become a leading capital markets and advisory business. The core product offerings of CS First Boston will include M&A, as well as capital raising solutions across equity capital markets, debt capital markets, leveraged finance, and equity and debt derivatives, the latter two in cooperation with Markets. In addition, the company’s credit sales and trading franchise offers clients a range of financing options, including but not limited to, collateralized loan obligation formation and repurchase agreements, providing integrated core market access and distribution capabilities. The future CS First Boston plans to attract third-party capital, as well as a preferred long-term partnership with other Credit Suisse businesses.
Products and Services
Capital Markets and Advisory
Equity capital markets originates, syndicates and underwrites equity in initial public offerings (IPOs), common and convertible stock issues, acquisition financing and other equity issues. Debt capital markets originates, syndicates and underwrites corporate and sovereign debt, including investment grade and leveraged loans, investment grade and high yield bonds and unit transactions. The company is also a leading provider of committed acquisition financing, including leveraged loan, bridge finance and mezzanine finance. Advisory services advises clients on all aspects of mergers and acquisitions (M&A), corporate sales, restructurings, divestitures, spin-offs and takeover defense strategies. Private Fund Group (PFG) is a fully integrated global placement agent and advisory group with a dedicated capital solutions team providing customized liquidity solutions and direct placement capabilities to clients.
Equities
Cash equities provides clients access to primary and secondary equity markets globally. The business is a market maker on numerous exchanges, trading in traditional single stock and equity-related securities, including American depositary receipts (ADRs). Cash equities operates five primary trading desks. Advanced Execution Services (AES) is a platform operated by the company to facilitate global equity trading. By employing algorithms to execute client orders and limit volatility, AES helps institutions and hedge funds reduce market impact. AES execution services are offered directly to clients and also to internal trading desks. Program trading provides execution of baskets, rather than single stock names. The desk engages in program facilitation trading, particularly around global index rebalancing and other major index events. It incorporates agency, facilitation, guaranteed VWAP (volume weighted average price), blind bids and risk trading. High-touch trading offers an interactive experience to clients, providing a higher level of client communication with sales traders on market color and trends. High-touch trading may be more relevant when clients are interested in trading less liquid products or contemplate more complex trades. ETF market making (Americas-only) provides liquidity to clients of the bank looking to transact in ETFs. Position traders stand ready to bid for or offer ETF or Index-based equities and may hold inventory for this purpose. Trades may be executed on an agency, principal (facilitation), or riskless principal basis. Systematic strategies (US-only) is a largely electronic business operating a range of process-driven liquidity providing strategies focusing on highly liquid cash equity, foreign exchange and listed derivatives through diversification and continuous risk recycling with a systematic approach to the development, implementation and risk management of electronic strategies. In addition, the company provides specific research and analytics and other content-driven products and services (such as HOLT). Equity derivatives provides a full range of equity-related and cross-asset products globally, including flow and structured products, systematic strategies and strategic equity solutions, as well as sophisticated hedging and risk management expertise and comprehensive execution capabilities to private banking clients, financial institutions, hedge funds, asset managers and corporations. Convertibles provides secondary trading and market making of convertible bonds, as well as pricing and distribution of Credit Suisse-originated convertible issuances. The company’s equities offering also includes HOLT, a differentiated and proprietary framework for objectively assessing the performance of over 20,000 companies worldwide with interactive tools and consulting services that clients integrated into their investment process to make better decisions.
Fixed Income
Global credit products is a client-focused credit franchise that provides expert coverage in credit trading, sales and financing. The company offers market-making capabilities in private and public debt across the credit spectrum, including leveraged loans, high yield and investment grade corporate bonds, and credit derivatives. The company offers clients a range of financing options for credit products, including but not limited to, repurchase agreements and collateralized loan obligation formation. Macro products includes the company’s global foreign exchange and rates businesses and structured macro solutions. The company’s rates business offers market-making capabilities in the U.S. cash and derivatives, European cleared swaps and select bilateral and structured solutions. The company’s investor products business manufactures rates, foreign exchange and commodity-based structured products for institutional and private banking clients. Emerging markets and structured credit include a range of structured credit products, including secured financing transactions and credit investor products, as well as onshore-trading in a range of local markets, including Brazil, China and India.
Other
Other products and activities include lending and certain real estate investments. Corporate lending includes senior bank debt in the form of syndicated loans and commitments to extend credit to investment grade and non-investment grade borrowers.
Research
The company’s equity and fixed income businesses are enhanced by the securities research function. Securities research offers differentiated content with and around the company’s leading single stock research (about 2,800 companies under coverage) leveraging proprietary insights through its industry immersion strategy, thematic research across public and private markets, insights through alternative data and analytics, and thought leadership in ESG across all its products.
Regulation and Supervision
Our banks in Switzerland are regulated and supervised by the Swiss Financial Market Supervisory Authority FINMA (FINMA) on a legal entity basis and, if applicable, on a consolidated basis.
The company’s banks in Switzerland operate under banking licenses granted by FINMA pursuant to the Bank Law and the Banking Ordinance. In addition, certain of these banks hold securities firm licenses granted by FINMA pursuant to the Swiss Federal Act on Stock Exchanges and Securities Trading, which was in effect at the time the license was granted.
The company’s securities firm activities in Switzerland are conducted primarily through the bank, under the supervision of FINMA, and are subject to regulation under the Financial Institutions Act (FinIA) and the Financial Institutions Ordinance (FinIO), which regulate all aspects of the securities firm business in Switzerland, including regulatory capital, risk concentration, sales and trading practices, record-keeping requirements and procedures and periodic reporting procedures.
The company’s asset management activities in Switzerland, which include the establishment and administration of mutual funds registered for public distribution, are conducted under the supervision of FINMA and are governed by FinIA, FinSA and the Federal Act on Collective Investment Schemes.
The company’s New York Branch is licensed by the New York Superintendent of Financial Services (Superintendent), examined by the New York State Department of Financial Services (DFS); and subject to laws and regulations applicable to a foreign bank operating a New York branch. Under the New York Banking Law, the company’s New York Branch must maintain eligible assets with banks in the state of New York.
The New York Banking Law authorizes the New York Superintendent of Financial Services (Superintendent) to seize the company’s New York Branch and all of the company’s business and property in New York State (which includes property of the company’s New York Branch, wherever it may be located, and all of the company’s property situated in New York State) under circumstances, generally including violations of law, unsafe or unsound practices or insolvency.
The company’s operations are also subject to reporting and examination requirements under the U.S. federal banking laws. The company’s U.S. non-banking operations are subject to examination by the U.S. Federal Reserve (Fed) in its capacity as the company’s U.S. umbrella supervisor. The New York Branch is also subject to examination by the Fed and is subject to federal banking law requirements and limitations on the acceptance and maintenance of deposits. The New York Branch is not a member of, and its deposits are not insured by, the Federal Deposit Insurance Corporation (FDIC), and it does not engage in retail deposit taking.
Fed regulations implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) required the company to create a single U.S. intermediate holding company (IHC) to hold all of its U.S. subsidiaries with limited exceptions. The company’s U.S. IHC is also subject to additional requirements under the Fed’s final Total Loss Absorbing Capacity (TLAC) framework for IHCs. The company is also subject to both the anti-bribery and accounting provisions of the U.S. Foreign Corrupt Practices Act.
The company’s U.S. broker-dealers are registered with the U.S. Securities and Exchange Commission (SEC) and its primary U.S. broker-dealer is registered in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. The company’s US broker-dealers are also subject to the SEC’s net capital rule, which requires broker-dealers to maintain a specified level of minimum net capital in relatively liquid form. Most of the company’s the U.S. broker-dealers are also subject to additional net capital requirements of the Financial Industry Regulatory Authority (FINRA) and, in some cases, other self-regulatory organizations.
The company’s securities and asset management businesses include legal entities registered and regulated as a broker-dealer and investment adviser by the SEC. The SEC-registered mutual funds that the company advises are subject to the Investment Company Act of 1940. For pension fund customers, the company is subject to the Employee Retirement Income Security Act of 1974 and similar state statutes.
One of the company’s U.S. broker-dealers, Credit Suisse Securities (USA) LLC, is also registered as a futures commission merchant and subject to the capital, segregation and other requirements of the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).
The company’s asset management businesses include legal entities registered and regulated as commodity pool operators and commodity trading advisors by the CFTC and the NFA and therefore are subject to disclosure, recordkeeping, reporting and other requirements of the CFTC and the NFA.
The General Data Protection Regulation (GDPR) applies to the processing of personal data in the context of the company’s EU establishments, as well as on an extraterritorial basis.
In addition to the GDPR, other jurisdictions in which the company operates have adopted or are proposing data privacy standards, for example the Federal Act on Data Protection in Switzerland, applicable U.S. data privacy laws, including the California Consumer Privacy Act of 2018 and the California Privacy Rights Act, the Thailand Personal Data Protection Act and the Data Protection Law DIFC No. 5 2020 in Dubai, some of which are similar to the GDPR or contain their own requirements more robust than the GDPR.
The Prudential Regulation Authority (PRA) is also responsible for approval of certain models with respect to regulatory capital requirements of the company’s U.K. (the United Kingdom) subsidiaries.
The company’s London Branch is required to comply principally with Swiss home country regulation. However, as a response to the global financial crisis, the PRA made changes to its prudential supervision rules in its rulebook, applying a principle of ‘self-sufficiency’, such that CSI (Credit Suisse International), CSSEL (Credit Suisse Securities (Europe) Limited), and Credit Suisse (UK) Limited are required to maintain adequate liquidity resources, under the day-to-day supervision of the entity’s senior management, held in a custodian account in the name of the entity, unencumbered and attributed to the entity balance sheet. In addition, the PRA requires CSI, CSSEL and Credit Suisse (UK) Limited to maintain a minimum capital ratio and to monitor and report large exposures in accordance with the CRR.
The U.K. Financial Services (Banking Reform) Act 2013, enacted in December 2013, establishes a more stringent regulatory regime for senior managers and specified risk takers in a bank or PRA authorized investment firm, and it also makes reckless misconduct in the management of a bank a criminal offense. These rules impact the company’s U.K. entities, such as Credit Suisse International (CSI) and Credit Suisse Securities (Europe) Ltd. (CSSEL).
The company’s London bank and broker-dealer subsidiaries are authorized under the Financial Services and Markets Act 2000 (FSMA) and are subject to regulation by the PRA and the U.K. Financial Conduct Authority (FCA). In addition, the company’s asset management companies are authorized under the FSMA and are subject to regulation by the FCA.
The U.K. legislation related to the recovery and resolution of credit institutions, such as Credit Suisse consists of the special resolution regime (SRR) and the PRA recovery and resolution framework, which implemented the EU Bank Recovery and Resolution Directive (BRRD) in the U.K.
The company is also subject, as a result of its operations in the U.K., to the U.K. financial crime legislation, including the Bribery Act 2010; the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; and financial sanctions imposed by the U.K. government.
Strategy
The key elements of the company’s strategy are to restructure the Investment Bank; integrate its wealth management division and simplify organization; grow systematically UHNW and accelerate HNW client segments; optimize footprint with a focus on priority markets; leverage its centralized lending and investment platforms; enhance client and relationship manager experience through technology and automation; and consistent risk management, enabling sustainable growth.
History
Credit Suisse Group AG was founded in 1856. The company was incorporated in 1982.
