Credit Suisse sees US sales up 80% YoY

Global investment banking revenues of US$2.4 billion were up 12% year-on-year, with fixed income sales & trading revenues, at US$921m, increasing by 10%, driven by higher client activity in securitised products, emerging markets and macro franchises.

Equity sales & trading revenues of US$588m were up five percent from the prior year period, reflecting higher trading volumes in the US and Asia. Equity derivatives revenues increased, boosted by higher corporate derivatives trading activity and significantly higher structured derivatives revenues, particularly in Asia, driven by higher volatility.

Cash equities revenues increased, as higher new issuance activity led to higher secondary trading revenues. Prime services revenues increased, primarily due to higher client financing in Asia.

Credit Suisse issued 1,203 structured products (excluding leverage and flow products) between 1 July and 30 September 2020, up 32% from the same period last year.

Almost 40% of the bank’s subscription-based products were issued in the US where it was the fifth biggest manufactured in the quarter, with a 9.85% share of the market.

The bank collected US$1.6 billion from 480 structures in the US, up more than 80% on 3Q 2019 when it accumulated US$915m from 452 products.

All but two of the US products were linked to equities, with the bulk of the sales coming from products tied to a basket of indices. The S&P 500, seen in 192 products, was the most frequently used index, followed by Russell 2000 (139) and Nasdaq 100 (106).

The main market for tranche products outside the US, was Taiwan, were the bank was the manufacturer behind 604 private placements that were distributed, among others, via BNP Paribas (105), E.Sun Commercial Bank (94) and Far Eastern International Securities (79).

Other markets where the bank was active during the quarter included its domestic market, Switzerland, where it issued 52 reverse convertible certificates, predominately on ‘worst of’ baskets of stocks, and Sweden, where it sold 15 products worth US$23.5m in collaboration with local distributors Garantum (nine) and Strukturinvest (six).

On 1 October 2020, in the individual civil action filed on 17 April 2018 in the Northern District of Alabama against Credit Suisse AG as well as Janus Index & Calculation Services LLC, plaintiffs voluntarily dismissed with prejudice their claims against Credit Suisse AG in a case relating to the Velocity Shares Daily Inverse Vix Short Term exchange-traded notes linked to the S&P 500 Vix Short-Term Futures Index due 4 December 2030.

At the end of the quarter, debt securities on the group’s balance sheet for trading assets and liabilities were worth CHF69.3 billion (end December 2019: CHF 66.9 billion) while fair value of derivative instruments included equity/index-related products with a notional of CHF858.2m.

‘Despite the Covid-19 pandemic and significant foreign exchange headwinds due to the strong Swiss franc, our performance in the first nine months of this year has been strong, delivering a five percent growth in net revenues year on year, and a pre-tax income of CHF3.6 billion, up one percent,’ said Thomas Gottstein (pictured), chief executive officer.

Click the link to read the full third quarter 2020 financial results, report and presentation.