Credit Suisse Group AG (CS) 2019 Q1 法說會逐字稿

Good morning. This is the conference operator. Welcome, and thank you for joining the Credit Suisse Group First Quarter 2019 Results Conference Call for media. (Operator Instructions)

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conference over to Adam Gishen, Group Head of Investor Relations and Corporate Communications. Please go ahead, Adam.

Okay. Good morning, everybody. Welcome to our first quarter 2019 results. To those in the room and if you're on the call, as we say, usual custom. I will hand over in a second to Tidjane. He will take you through some of the messages that we've laid out already this morning on the analyst call and then be happy to take your questions.

So with that, I hand over to Tidjane.

Okay. Thank you, Adam. Good morning to all, and thank you for coming to our call. It's only 2 months since the last one because it was in February, February 14. So I'll update you on Q1 a bit like I did last time using, more or less, the same slides as with the analysts. And of course, we'll move to our Q&A afterwards.

So I'll start with Slide 5. Yes. So you're used to this slide. We've presented it on a number of times. So we're adding now 1 year to 2019 first quarter. So this is the reported PTI, and we said remember there was this discussion between adjusted and reported during the restructuring because we had all those charges to take. So we created the adjusted, which we thought would give you a better idea of the underlying, and we committed after the end of the restructuring to move to just reported. So that's what we're doing here, and that's what you will see now every quarter. So it was really a very unsupported environment, very challenging market. I will come back to that. But we think this is a solid performance in a very unfavorable market, and we think that many, many will have a lower profit in '19 than in '18, not a higher profit. So we managed to increase that, and we're pretty happy.

And then we look on the next slide at net income. This is an after-tax profit. You can see an 8% progression here, and you can see a return on tangible equity, which we rounded at 8% and which is exactly 7.8%. You have to remember back in '18, we did 5.4%. So in the discussion later, which I'm sure we'll have, about 10%, et cetera. 8% coming from 5.4% is a big step-up. So the improvement in profitability continues and continues very strongly.

Just a minute to talk about the environment in which we operated. Frankly, the beginning of the year was a bit of a shock. Q4 was very difficult, and the numbers in January were just -- we had a number of markets where activity was down 60% or 70%. That's a lot. If you look at the street fees, equity capital market, remember we had a government shutdown in the U.S. Basically, the SEC closed down. There were No IPOs, no activity whatsoever. Leverage finance, same thing, minus -- this minus 47% in ECM is after things improved. But back in January and February, you were down 70%. It was really, really bad. Same thing for leverage finance.

If you look at Europe, Europe was really bad, too. We just picked 4 numbers. We could have picked any of them. There were all uniformly bad because this is -- these numbers are after the March recovery. So you have to think where they were in January, February. This is after a very, very strong March. You end up down 25%.

Same thing in Asia. I'm sure we'll talk about the Asia results, but activity was down 24%. So really shocking across regions, across businesses.

So in that context, our revenues actually held up, on Page 8. Actually, this was one of the objectives of the strategy to make our revenues less volatile. We consider that when you're facing 40%, 20% decreases, a 4% drop in revenue is a very good outcome, okay? And faced with this, we also continued to be very disciplined in terms of spending and maintain what we call positive operating leverage defined as the difference between the movement in revenue and movement of costs, so we were able to decrease the costs more than the revenue and protect the profits.

So net income expenses, if you look at capital, measured by the CET1 ratio, we had an uplift from methodology and FX of where -- would cost us about 0.3%. We invested in the business for 0.1%. 0.1% is the net between investments, which were actually CHF 2.5 billion of RWA and some decreasing capital in other businesses, so we have to manage that balance. But if you look at the capital at that point, we are at 12.2%. And remember, there was a lot of discussion at Q4 when we said we want the ability to be able to go below 12.5%. That was exactly why. Because when you're sitting in February, mid-February, you've had one of the worst months ever, and you don't know if you're going to go back up, and you don't know how the quarter is going to turn out. And it was very important for us not to turn off for business, because for a franchise, that's very damaging. Your clients are real companies, maybe even in the real world. They don't have the option of going to their customers and say, "Oh, well, you just can't have a car this month because the banks don't offer that." So when you cut off return, the consequences for your clients are extremely damaging, and they remember.

I will say if we don't desert our clients in bad time, they will not desert us later. So this notion of protecting the franchise, supporting our clients and we can go back maybe in Q&A to example of transactions we did in that period. Between the 12.5% and that, we should -- the right decision was to say, look, if we can't hit 12.5%, we -- inside a quarter, we won't. But we're highly confident we can do that over the year, and we remain highly confident we can do that over the year. But to artificially stick to a number within every quarter is not reasonable. Then we did a lot to optimize, and it ended up being a pretty good quarter. So we had 0.3%, and we came back to 12.6%, which I think was one of the surprises for the market this morning that we had a clear beat on capital, and that's a good result.

The other thing we talk a lot about is the tangible book value per share because ultimately that's what drives the share price. The share price is highly correlated to tangible book value per share, and the period of dilution when we had to issue a lot of shares, which we took the tangible book value per share down a lot, of course, impacted the share price. And to go now on an ascending curve for share price, we must increase the tangible book value per share, i.e., not increase anymore the number of shares or rather decrease it and produce profits.

Actually, I forgot to mention one thing on the previous slide, which is important, which is the buyback. It's funny how quickly one can get used to things and to become a part of what we do, but we did the buyback during the first quarter. And that's actually very relevant to capital because to keep the same capital whilst investing and doing a buyback, buyback cost capital was actually a good performance.

So back to the tangible book value per share is going up. We added CHF 1 billion in 12 months, and that's the first time in a long time, and that's a very good trend and will continue. This is something our long-term investors, some of them we've been buying, look at very much. That's why they are in Credit Suisse when they say you guys can increase tangible book value per share, which makes it a very attractive investment proposition, right? Because if your share price is a function of this, your share price will go up with this. Actually, as what happened, you can -- you also get a multiple re-rating. And we got a multiple re-rating, and with growth in the tangible book value per share, then you get a very good return on investment.

So I'm just going to talk about the businesses a little bit, Wealth Management first and then Global Market. And there was a lot of discussion in the market on the fact that our Wealth Management revenues and profit are -- actually, there was a theory out there that they are very sensitive to markets, and we've been saying that they are not. And for us, we are quite vindicated by this. But the revenues of our Wealth Management went down 3% in the period. And the thesis was that the transaction revenue would drop. And actually, you can see here that it went up. It's actually on the net income and the recurring that we had a bit of pressure, and I'm going to give you some color on that.

If you start with the net income and recurring -- go back one, please. The dark blue is very correlated to the level of assets under management we have because fundamentally you manage wealth and people pay you for that fee. So here are 2, we have always said that our assets are quite sticky because if you have strong client relationships, broad client relationships, people don't withdraw their money just because markets went down. So we were impacted by the fall in market in December, but we saw no major outflows. We didn't see the money walking out the door, and that's very important and would I say stays with us. Part of the reason why is we -- because you lend and you're not going to take their money back because you have a really complex and broad relationship, which is also part of the strategy.

Then in January and February, we talked to you about we had already come back to November. If you remember February 14, we said that, that AUM had come back to -- had bounced back very strongly. You can see that in here, February, and then we reached a record AUM in March, which is very promising for our revenues because we bill people monthly. So basically, Q1 kind of ends late February. But what happens after will be reflected in the Q2 revenues, so that's promising and positive.

The other thing that is important for us is net new assets on the next slide, and it's always -- it's important because that allows you to grow your assets under management. The tricky thing is that I always think that you can't read too much in it from 1 quarter to another because all it takes is for 1 transaction to move by a few days, and your number moves a lot, especially if you're working on big transactions, which is what happened to IWM this quarter. We had several big transactions that slipped by a few days, and then you get a lower NNA, but it doesn't really mean much. The really very strong performance in SUB, very, very strong. This is, I think, the highest ever, Thomas, or the highest in a long time, CHF 3.3 billion. Asia also very strong in the environment I described earlier, CHF 5 billion, I believe. The others will publish their number and is good number and CHF 1.3 billion in PB.

One point I have to say here is that NNA, if you think about the bank, it's relatively easy, and that's why we don't -- we're not crazy about it as a metric because you can attract NNA by mispricing. If I say I'm going to pay you whatever, 2%, on your deposit, all the dollars are going to flow to me, and I will look great from an NNA perspective. I'll collect billions. So what's difficult is to attract NNA whilst being financially disciplined, and it's an easy place that banks go to when they're under pressure to just produce NNA artificially. The divisions could produce any NNA number if we did not impose the financial discipline on them, okay? They cannot just go and price a deposit off market just to get NNA. We don't reward that, then we lose profitability, which will hurt them. And that's not how we operate, so just a caveat. There's a lot of focus in the commentary on NNA, but people just need to keep in mind that it's easy to manipulate. So what you have to look at is over a long period of time. This is why we mentioned that we did CHF 100 billion of NNA in 3 years. That's significant because if you do that at off-market prices, it's going to affect your profitability so much, it's going to be visible. But over 3 months, it's possible to play those games.

I talked about the transaction revenues, if you remember, going up. A lot of that is thanks to ITS, and we talked about it a lot this morning. But we cannot overemphasize ITS. It's a joint venture between Global Market, so the Swiss bank and International Wealth Management. And we had this vision that the need of our ultra-high net worth clients are very similar to the needs of the institutions that ITS was serving and that we should encourage the ITS people to actually work with the wealth managers to meet their needs. And that was central to the strategy. That's part of the reason why we have such a big market operation and equity derivatives specialists and people who know how to structure a very complex financial product. And this is where this gets rewarded, and it's been a real success. First year revenue was up 8%, 11%. This year, it's up 24% (sic) [23%]. To be up 24% (sic) 23% in revenue in this environment, you really have to do something special. And we gave you some examples. If you take the one in Brazil, it's a very new venture between IWM and Global Markets. There was a call by our CIO that was positive on emerging market bonds. We knew at the same time, but the U.K. base has said, no, I actually wanted to raise capital for an emerging market fund. We had a client in Brazil who had an appetite for that, and it's really IWM and GM working together who convinced the fund to give them exclusivity. We then raised the capital to -- for the fund and then also hedged all these throughout so that we didn't take any major risk. We have institutions who had an appetite for this, and we got a very nice fee for that. And there's a lot of rules. There's a lot of rules. But that's -- -- anyway, yes, sometimes we are described as a large Cantonal bank. I think that's an exaggeration because I don't think Cantonal banks, with all respect, can do this for our Brazilian client. So we are different from what we were, but we apply very high levels of skills to satisfy very sophisticated clients, and we get paid for that. And that's really this whole concept of integrating the Investment Bank, the Global Market and risk. And it's -- I just have to give credit to the people leading those businesses. They have done a great job.

We show you on 15 the progression of the revenues associated with the ITS transactions for Private Banking clients. You can see the jump from when -- just we've indexed it because we don't want to give those numbers. But fundamentally, you're doing a 4.5x in 1Q '19 what you did in 4Q '17, and that keeps increasing. And that's without even touching Asia because, as you know, we're now creating a similar structure in Asia, which is a big upside. So, yes, we're very positive, very, very bullish about this.

So if -- in the end, all this has to translate into profits. So the profits were stable. You get movements. But overall, you have to look at this as a whole. We have a diversified footprint. It's important, and we like it. And in times like this, it does protect you a lot to have material businesses in different parts of the world: Switzerland, international, Asia. With all the movement, we end up more or less at the same level, and that's a good performance considering. So that's Wealth Management.

And a word on Global Market. At the Investor Day, if you remember, we used this slide. It was an important slide for us because we said we need to increase profits in Global Market. We have created a new platform. And now once you have a platform, your trend is to grow revenue. And we were absolutely convinced that, that was the right way to go. There was a lot of debate on this. And we said there's 3 things mainly to funding benefit because for various reasons, Credit Suisse have very high funding costs. If you remember, we paid down the CoCos before paying -- costing us 9.5%. That transformed our funding structure. And part of the problem before with Global Market is that people were comparing apples and oranges when they were comparing Global Market to their peers. The U.S. banks or the other banks were funded at levels materially lower than Global Market. So for the first time, actually this year, when you look at the Global Market numbers, we are normal Global Market numbers, i.e., Brian Chin has a normal cost of funding. And that's really important when you run a trading operation how much you fund yourself at. So that's about CHF 300 million of benefit in the whole year in '19, and we told the market that will improve, Global Market profitability.

ITS, I've talked a lot about already. But we thought, by 2020, it's $300 million to $400 million more of revenue, and we're on track with that. Progress is really on track with that and that we would continue our productivity efforts of 2% or 3%, and that was a strategy.

So what's happened is on the next slide, you see it's a 10% decrease in market revenue. (inaudible) out of environment was because that was very well received by the market this morning. The 10% drop is at only 10%. So really good performance from our businesses in a tough environment, 9% return on capital. But really, the key thing there is Equities because you read often Credit Suisse is a credit house. We have a very strong credit business, very strong credit culture and highly profitable. So when people would tell you GM has a low profitability, it's because actually Equities was not generating a lot of -- credit has always been doing very well. Even when it goes down, it goes down from a very high level. So our real challenge in Global Market has always been Equities. And that's also important because Equities are key. If you have a vision to be a leading wealth manager working in the growing economies of the world, any of the mature economies of the world, equity is at the center of the wealth creation. Somebody creates a company and it becomes great, if you can never IPO it or monetize the wealth that person has created, it doesn't work. So -- and as you see, as economies grow and the GDP grows, the size of the equity market as a percentage of the economy will continue to grow. So if you are -- it's very synergistic when you're a wealth manager to be a player in Equities. This is why we've never retreated from -- look, we just need to keep Global Market, and we need to turn this around because, in the end, we will lose our position as leading wealth manager if we can't have a viable Equities capability. And that's why we're so excited about this result because we're starting to see the fruit of that. That's 2 years we've invested in the teams, in the technology. We're now ready to get to a good point. And our Equities business, we're pleased to say, we think, has certainly outperformed versus the U.S. banks, which is not something we could have said 2 years ago. And you see that on the next slide.

I need to explain this one a little bit. So in trading, you have the primary activity, which is the assurance, basically, [of paper] IPO. The secondary activity is the trading of securities that have been issued, and it's important to separate the 2. And this makes it quite easy for you to compare us to the U.S. peers because they all publish like this. So what you see in the first quarter is that the underwriting has been hit very hard. This is us, okay, minus 39% year-on-year, minus 54% for Global Markets, minus 36% in IBCM, minus 24% in APAC. That's the kind of trauma I described earlier about the beginning of the year. But what's important is you've seen in pure trading how well did we do. And there, you see that Global Markets is up 4% in Equities and down 2% in fixed income, and that's way better than the market than all the Americas who have published so far. So it's a really creditable performance. And in APAC, in line. We told you market was down. Activity was down 24%. That's what you see here, a 24% decline. And actually, in fixed income, we did well. So overall, minus 5% in equity, minus 2% in fixed income is us gaining market share, and it's been a good performance.

And only, I think, 2 more slides. The outlook because that's a question we get. Q1, that's fine. Q2, what's going on? IBCM, you saw, has had a tough quarter, but they have a very good pipeline. They had some really major wins. The Chevron bank-Anadarko that was announced maybe, what, 10 days ago, Jim, a week ago?

About 2 weeks ago.

Yes. And was sole adviser, which is really great and a great position to be on a $50 billion transaction, so credit to the IBCM teams. Worldpay is another very big one where we are also exclusive. Mellanox and NVIDIA was many. And IPOs, we've done Lyft. Nexi is a big one in Italy, and we're there in Stadler in Switzerland with Thomas and his teams. So all that is encouraging for future. And what we're saying is that the primary market has come back to life, and our benefits that are exclusive to these will benefit over time.

And this slide, I think, very much interested in the market before. And what we did here is we've just showed something we usually don't show, which is a month by month. And it shows you what I was saying in January. When you get to a drop like this between '18 and '19, you really wonder what's going on. So January was one of the worst months ever. And when you get to March, which is our second-best month in 39 months. So we had in the same quarter, one of the worst months ever and one of the best months ever, which made the -- if you wish, any forecast and also management during the quarter quite complicated. But the point with this picture is that there is some positive momentum. We've seen that a bit prolonged in April, but -- and that will be the conclusion of my next slide. We think we've had a decent performance in a very challenging environment, but Wealth Management has held up, which was a big question mark on the strategy. But Global Market, which we've talked a lot about during the last 3 years, has had a very decent performance, and we think market -- done better than this market. But we're growing the tangible book value per share, which is key in this story and that the share buyback is on track. And so we are cautiously optimistic on 2Q. If March and April are confirmed, it will be a very good quarter. But if they're not, it will be what it is. So we are sitting on the fence, but the whole purpose of the strategy is to make sure that we are profitable under all scenarios. And in that, we maintain -- we have lowered the cost. We have lowered the risk. So you've seen in tough markets like in Q1, we still make a profit. And if markets are better, we'll have a very, very strong performance.

So I think I'll stop here, and we'll take your questions as usual. Thank you for your attention.

I have a question regarding costs, if I may. Costs increased compared to the first quarter of 2018. And what are you planning to cut costs going forward? And also, I would like to know if you are planning any more -- further job cuts this year and the following years?

I want you to know we're very focused on costs. Clearly, it's been an important part of a turnaround. We have a slide, Slide 27. Maybe I misheard you, but I thought I heard that the costs have increased?

Q4.

Q4.

Yes. Okay. We don't do across-quarter comparisons because they are really not the right way to look at it. You have to -- there is a lot of seasonality in banking. So structurally, in every bank, Q1 is much higher than other quarters. So to compare the evolution of the costs you have to look really at Q1 versus Q1. You really can't -- I mean we just can't cross different quarters. So if you look at Q1 '18 versus Q1 '19, the costs have gone down, and we think that's a very good performance. As I explained, revenue is down 4%. Cost is down 6%. We'll see what other banks show because we were first to present, but we think it's a good performance. And we've showed a good ability to manage cost whilst continuing to produce revenue. So no, I think there's no worry there on cost.

Are you planning any further job cuts?

No, no. We've done with the restructuring, 3 years, and we are now aiming to grow. And so...

And I think, Tidjane, we've been very clear. We think that banks like other corporates should generate year-on-year productivity savings in the order of 2% to 3% by optimizing our technology, optimizing our business practices. And that's what we're focused on achieving. I think large-scale restructuring, as Tidjane said, we completed the end of '18. And in many ways, it's the sort of thing you shouldn't be pushed into doing. Good planning should be continuous improvement.

Brian Blackstone with the Wall Street Journal. There seems to be more talk these days about consolidation in the European banking sector. Is Credit Suisse interested at all in terms of something out there to buy and something to sell? Or do you see yourself kind of on the sidelines on that? And my second question, maybe more for David, is it seems like a lot of the improved mood in the financial markets in the first quarter was due to the Federal Reserve and expectations for easier monetary policy. The flip side of that is kind of an expectation of a continued negative interest rate policy by the ECB by the Swiss National Bank. Is that something that is going to be kind of a headwind for you guys for a long time to come now given that this seems to be the reality for years down the road?

No. Thank you for your question. The consolidation, I think, we are in a kind of long piece of work to try to get the markets to bifurcate its understanding of Europe. Switzerland is geographically and technically a part of Europe, but it is not in the Eurozone. And when financial market people say Europe, generally they mean Eurozone. And we're trying to encourage people to be more precise and separate the 2 because it creates a completely different background. We really want to convince investors that all the Swiss banks are based in Europe. We are not Eurozone banks. It's a hugely important statement. Switzerland is a high-performing economy. We are lucky to have a base here. The Swiss Universal Bank is performing very well, and there's a high correlation in banking between success and having a strong domestic and profitable domestic banking market. You can -- you see that with the U.S. banks. You see that with the Swiss banks. It's not a coincidence that both UBS and CS are successful internationally. So we are not part of the Eurozone issues. Here, the budget is in surplus, unemployment is 2%. Growth is strong. It's a very well-managed economy again where we do very good business, and we can rely on that to expand internationally. So I'll say this, our appetite for the acquisition of a Eurozone bank is limited. We just don't think it's the best use of our capital. We have much more attractive investment opportunities across Switzerland and also abroad. So yes -- no. We don't find that proposition attractive. We have plenty of growth organically. I said we added more than CHF 100 billion of assets in the last 3 years, and it makes the bar for any acquisition very high. It would have something that is more attractive than this growth we can acquire.

And the other big consideration in my mind on acquisition is compliance. We've worked very hard to improve our compliance and manage our compliance risk. The bigger known in any acquisition is what legacy you're buying and can you actually do due diligence to a level where you know you're not buying a $5 billion fine because that will destroy the value of any acquisition. So I like that we control our legacy risk. We own it. And our appetite to buy legacy, that is very limited, very limited. There's another question.

Another question was on Swiss interest rates, but I think your question was around the Fed. And I mean, I think what's clearly happened is the Fed has moved from a timing bias to a more neutral bias, of course, in the course of the first quarter. But I think the drivers in terms of Swiss interest rates is more the slowdown that we've seen in the outlook for the European economies, not the Swiss economy, but the European economies, which I think reflects, a, the macro weakness in the EU-27, and, b, quite clearly, the disruption that's being caused by Brexit, which is adversely impacting both the U.K. and the EU-27.

And it's certainly true that I think the comments from the ECB were to originally towards tightening in the summer of this year. The Swiss National Bank monetary policy is quite closely tied to the ECB policy. And therefore, I think we do assume that we're dragging, moving away from tightening in the summer. That obviously shifts the curve, and we've seen that in the Swiss franc interest rate curve.

I mean I think for Credit Suisse, we, as I said this morning, have pushed out negative interest rates to our corporate institutional and pension fund clients in the C&IC business. We have not pushed it out by product clients here in Switzerland. We've shielded them from that. So I think it's an environment which we are broadly adapted to and I would assume is likely to remain that case for 2019.

If I may add just something, too. There's a lot of debate among economists, as you know, on whether there are structural causes for level of long-term interest rates. And back to Eurozone, a lot of people think that it's demography driven and that you have a glut of savings for -- to a few investment opportunities and interest rates, the clearing price between kind of supply and demand for savings.

So the reasons why interest rates are low in the U.S. is -- are cyclical. The worry -- because the demography in the U.S. is very positive. The worry about the Eurozone is that reasons for interest rate being so low are structural. I mean you see all the central bankers quite concerned about that, from Marc Carney to officers have made official statements about that. And that is effective to your concern, especially for the banking sector in those countries.

Patrick?

Patrick Winters from Bloomberg. First, a question about ITS. When are you going to start breaking out more numbers around ITS because obviously it's a huge success?

He's looking at you, so he doesn't want to...

It's a huge success for the bank, as you guys have said. And the percentage keeps increasing, right, which looks good as obviously a big part of Global Markets in the future. So when are you going to give us more information there? And second question is on trading. How much of the trading beat versus the American banks is due to currencies to the fact that you're still reporting in Swiss francs and due to the comparison of a year ago?

Okay. No, no. Thank you again for your questions. ITS, as I -- I can't -- let's say, as I put an anecdote when we did the launch of ITS in London. But it boils down to, yes, if you spend all of your time arguing about how you're going to split an opportunity, it may go away.

So the philosophy has been really let's work together, and that was a challenge for the organization between SUB Switzerland, IWM and Global Market and make sure we keep the pie growing and not fight too much around the allocation. And then frankly, in that debate, we found that not showing those numbers has been helpful. Now it's not a position forever. But in this phase of development of a concept, we found it a positive not to disclose more.

Anyway, it's in the numbers you see if you add -- those people -- I assure you ITS is in there. We just won't tell you exactly where because, yes, for the time being, it's a source of motivation. Everybody is incentivized to make it bigger and bigger. And as I said, maybe it will get so big one day that we don't have a choice than to disclose it. But at this stage, I think it's -- I understand the frustration it creates. I'm sorry.

But we give you indications about the revenue. We also know the profitability, and it's very good. And it's gone up a lot, but we haven't given the number. And because it's -- frankly, it's also easy -- not easy. We don't want to be -- okay. If we say too much, the risk of being copied is also quite significant. So we always have to walk a fine line between informing you but also keeping things that are competitive or competitively sensitive inside.

They all know -- we always said that I read all the slides of all the banks, and I'm always surprised by the things I find. So we try not to fall into that trap of revealing too much because it's a very transparent game. But yes, thank you for saying. It's a good success. We're transferring it to Asia. And actually, that's an interesting point because there's a lot of talk about global wealth management.

Our philosophy is start small, produce something that works. And if it works, transfer it elsewhere. So we don't have a global wealth management. But when we have something that works somewhere, we transfer it. And in the end, it works for us. So ITS has worked very well in IWM. And so now, we're transferring it to Asia. There's no need to have a global wealth management to do that. We like the kind of pragmatic small-scale experimentation approach and then transferring it elsewhere. So it's almost a philosophy for us. Trading currency...

Currency. So I think if you actually look at the financials presentation on Slide 33 for Global Markets, we actually give the comparison year-on-year actually in dollars as well as in Swiss francs. So you'll see on Page 33 the dollar numbers if you see. Look at the MD&A, you can see we actually gave the numbers in Swiss franc terms. So -- and then there's a slide actually in dollars is a tougher view. It's minus 10%. That's what we're talking about, and that's what we're talking about compared to our peers in terms of the outperformance, which was I think on the basis of the U.S. banks reported so far is quite material. I think that's English for quite a lot. And -- sorry. I mean, clearly, in Swiss francs because the move in currencies, it's even more material. But we actually do show the, as you might say, the more pessimistic like-for-like view on our slides. The MD&A has numbers in Swiss franc terms.

No. It's a good question, and we discussed it that we made a choice a while ago now to go dollars for GM. So all the numbers that we put on the slides for GM and IBCM are in dollars because all business is fundamentally dollar. Their peers are dollar, so it makes a comparison easier I think.

So if I may just follow up then. Will you basically say the main part of the trading beat was not because of reasons like easy comparison for banks? Is it because of taking market share?

We believe we've taken market share in Q1, yes. Whether it's going to happen every quarter or not. But this quarter, we're confident that we've taken market share. If we look at equity derivatives, when we see what the others have said about their performance, we did much better. And cash and prime are better than they were for us in comparison. So yes, we think all the indication from clients, et cetera, are positive.

We did mention this morning the fixed income comparative for 1Q '18 was boosted by very strong securitized product numbers, so the business has actually got a tough comparable on the fixed income side.

It's quite complicated transaction. We announced it was big, big in Q1 '18, so in comparative. Yes.

We have about time to take 2 more questions. We'll start with Daniel and then go to Stephen at the back.

[Daniel]. I have 2 questions. These huge swings you have in this first quarter from January was very bad to March was very good. I mean are you worried about this? I mean it's a business environment which is not, I mean, anything else than perfect for our banks. So I mean, what are you doing? I mean, are you happy with your cost base and the -- for this environment? First question. Second one, you said you gained market share. So from which bank? I mean, does that mean that Deutsche Bank is more or less out of the business at the moment? Or what's your perspective on that?

Okay. Thank you. Thank you again for that question. No. Look, yes, I am worried. Absolutely. It's very difficult to manage in an environment like this. What do we do? It's what we've said kind of since the beginning of this. You have to lower your cost, lower your fixed cost base, and we've talked a lot about that. There's a fixed cost matter so that you can take the swings in a highly volatile revenue. You also have to change your business mix so that it's less volatile when you see. When we were kind of 59% markets and trading, you can imagine what this would have done to our P&L. We shifted from -- our capital allocation went from 59 -- 60-40 to 70-30. That's what we did in 3 years. So we've moved to a business that's much less volatile. If we can show a 4% revenue drop after a quarter like this, it's because we've completely changed the revenue mix to make it more resilient. And also, we have de-risked -- I mean technically we would say de-risked in the tail. But really, when you think about risk, what matters very often is what happens when you have very extreme scenarios. And we have really eliminated -- most recently, that cost us a lot. We've presented you the losses quarter after quarter. But you can see now, we have a clean P&L. When you have the swings, I'm not here -- we have 0 idiosyncratic losses. I'm not going to say, oh, my god, the market went -- we've lost CHF 100 million here or CHF 200 million there, knock on wood. We have none of that. That's because we really cleaned the balance sheet. So you lower your cost. You de-risk. And after that, you're opportunistic, and you just continue to drive the strategy because there are also opportunities in this market. And I've have talked about a big restructuring we did in Indonesia for the Riady family. Lippo is quite public, a huge transaction. When was it announced? I think it was a few weeks ago.

Few weeks ago.

Yes. And so a great deal for us, great transaction, good for the clients, completely restructured their group. We made a good profit. Also, we did it before the election. Now if the outcome of the election is good, and we took some shares, and Helman is smiling because we have a nice profit on that. So -- but that's what -- we have to be risk-takers. When I say de-risk, it's not we take 0 risk. We're selective in the risk we take. In the end, we are bankers. We have to take risks, but we choose which risk, and we have to be appropriately priced. And that's how we make money. But that environment means banks have to be, yes, nimble, low cost, low risk and quite flexible.

Market share. I think you'll have the answer in a few -- maybe in 2 weeks once everybody has announced. Today, I just don't know. I just don't know. We've taken market share. We have to see the other banks announce their results, and then you have a better idea of how well people have done in equities. At this point, we don't know, and I don't want to speak on it. All we know is that compared to the ones that have announced, our performance has been better. But...

Okay. Last question. I think, Stephen, you had one.

Stephen Morris from the Financial Times. We'll end on a nice one. This is for David. Do you think this quarter vindicates your board's decision to award you both double-digit pay raises last year?

Look, I -- thank you for a very nice question. I -- no. Look, I'm -- we are both -- I can answer on your behalf, please. We're both busy enough every day trying to run the bank. And for remuneration, we have a very -- I understand why you have to ask the question, but we have a very explicit process and a decision-making process that goes through the Compensation Committee and the board to determine our compensation. So I'm afraid you have to address that question to the board if you want an answer. But it's not for us to say.

Okay. That wraps it up. Tidjane, maybe any last remarks?

No. Look, it's -- I want to leave that note because I'm cautiously optimistic. I mean, we are really not here saying all is good. It's a tough environment out there. Will there be challenging quarters again in the future? Certainly. We had reasonable results in Q1, but I want to stay reasonably subdued. I always say we're never as good as they say, never as bad as they say. The truth is in the middle somewhere. We've done a reasonable job restructuring the bank. We think now the bank is in a good place. Frankly, this is where we wanted to be, but we actually talk about business. We love getting all these questions about clients and markets because we're not over the SRU eliminating past losses and paying multibillion-dollar fines. So we're really happy that there is a normalization and that we can now hopefully as a team show you what the franchise can produce in the coming quarters.

So thank you for your patience and your questions and your interest. And if you have more questions, you know where to find us. Thank you very much.

That concludes today's conference call for media. A recording of the presentation will be available about 2 hours after the event. A telephone replay function will be available for 10 days.

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