Credit Suisse underlying business – 2Q16 results

You can’t be much else than shocked by the dramatic revenue drops.

This is the unfiltered story, no PR-talk, no salesman talk, just facts and figures:

Credit Suisse
2Q16 1Q16 2Q15 Down
Net interest income 1’999 2’011 2’869 -30.32%
Commission and fees 2’796 2’675 3’259 -14.21%
Trading revenues 94 -271 498 -81.12%
Other revenues 219 223 329 -33.43%
   

Then compare it to expenses:

All small moves.

Compensation and benefits 2’734 2’482 2’914 -6.18%
General and administrative expenses 1’760 1’848 1’928 -8.71%
Commission expenses 352 387 406 -13.30%
Restructuring expenses 91 255 0

Further important problems:

  • Strategic Resolution Unit (SRU) is a huge black hole for revenues and at the same time costs a lot to run, especially “other operating expenses”.
  • Swiss Universal Bank (SUB) and International Wealth Management are running with decent margin, especially when compared to Global Markets which is very expensive to run. Probably to many “screen watchers” in London, NY etc…

credit-suisse-strategic-resolution-unit

What is an especially large challenge as an outsider; understanding what is in the Strategic Resolution Unit (SRU) and how is it performing.

Some info from the 1H16 report:

credit-suisse-strategic-resolution-unit-2

The bloodsuckers are

  • the investment banking portfolio which somehow manages to have negative revenue (always a good sign if your assets are working against you).
  • the funding costs

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