Credit Suisse APAC Profits Slip in 2020
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Pre-tax income at Credit Suisse’s Asia Pacific unit slipped in 2020 mainly due to higher credit loss provisions.
Pre-tax income for Credit Suisse’s regional business fell 10 percent year-on-year to 828 million Swiss francs ($921 million), according to a statement, driven primarily by higher credit loss provisions which were offset by higher net revenue.
Regional revenue grew 17 percent to 4.2 billion Swiss francs, accounting for 20 percent of the bank’s overall revenue with higher contributions from the Greater China region and strong collaboration with the global investment banking business. The region posted 8.6 billion Swiss francs of net new assets in 2020 which included a net outflow of 1.1 billion Swiss francs in the fourth quarter.
Assets under management for the region stayed flat at 221.3 billion Swiss francs compared to 2019’s 220 billion Swiss francs.
Globally, pre-tax income was down 27 percent to 3.5 billion Swiss francs due to increased provision for credit losses, major litigation provisions and an impairment to the valuation of a non-controlling interest in York Capital Management.
Questions & Answers
Q.What was the main reason for the decline in Credit Suisse’s Asia Pacific unit's pre-tax income in 2020?
What was the main reason for the decline in Credit Suisse’s Asia Pacific unit's pre-tax income in 2020?
The pre-tax income for Credit Suisse’s Asia Pacific unit slipped primarily due to higher credit loss provisions. These provisions offset an increase in net revenue for the regional business during 2020.
Q.How much did Credit Suisse's regional revenue grow in 2020, and what was its contribution to the bank's overall revenue?
How much did Credit Suisse's regional revenue grow in 2020, and what was its contribution to the bank's overall revenue?
Regional revenue grew by 17 percent to 4.2 billion Swiss francs in 2020. This amount accounted for 20 percent of the bank's total revenue for the year.
Q.Did Credit Suisse's Asia Pacific unit experience any net asset outflows during 2020?
Did Credit Suisse's Asia Pacific unit experience any net asset outflows during 2020?
Yes, while the region generated 8.6 billion Swiss francs in net new assets for 2020 overall, it recorded a net outflow of 1.1 billion Swiss francs specifically during the fourth quarter.
Q.What factors caused Credit Suisse's global pre-tax income to decrease in 2020?
What factors caused Credit Suisse's global pre-tax income to decrease in 2020?
Globally, the pre-tax income was down due to increased provisions for credit losses and major litigation provisions. An impairment to the valuation of a non-controlling interest in York Capital Management also contributed to the decline.
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