Credit Suisse Group AG (CS) 2020 Q4 法說會逐字稿

Good morning.

This is the conference operator.

Welcome, and thank you for joining Credit Suisse Group's Full Year and Fourth Quarter 2020 Results Conference Call for analysts and investors.

(Operator Instructions) and the conference is recorded.

(Operator Instructions).

I will now turn the conference over to Kinner Lakhani, Head of Investor Relations and Group Strategy and Development.

Please go ahead, Kinner.

Thank you, operator.

Before we begin, let me remind you of the important cautionary statements on Slides 2 and 3, including in relation to forward-looking statements, non-GAAP financial measures and Basel III disclosures.

For a detailed discussion, we refer you to the Crédit Suisse Fourth Quarter 2020 Earnings Release, published this morning.

Let me remind you that our 2020 annual report and audited financial statements for the year will be published on or around March 18, 2021.

I will now hand over to our group CEO, Thomas Gottstein; and our group CFO, David Mathers, who will run through the numbers.

Thank you, Kinner.

Good morning, everyone.

Thank you for joining our call this morning to discuss our fourth quarter and full year 2020 results.

Let me begin, as I have since I became group CEO 1 year ago with some comments on the current environment.

We continue to monitor with full vigilance, the elevated levels of COVID-19 cases in Switzerland and all the countries around the globe where we operate.

In my first year, I'm very proud of what Crédit Suisse has delivered for clients, employees and shareholders.

For clients, we took a leading role in establishing Switzerland's successful lending facility last year and helped clients around the globe navigate turbulent economies and markets.

For our employees, we created a safe and productive environment while moving to a mostly digital footprint in a short period of time.

Our success is reflected in a survey last year that showed more than 90% of employees felt well supported and well informed by management.

For shareholders, we paid the full dividend with respect to 2019 and reinitiated our 2021 share buyback program early this year in January.

We stand ready to do our part for our communities and economies, be it here in Switzerland or elsewhere, through lending initiatives, donation programs and other measures.

In the challenging 2020 environment, we delivered solutions for our clients to help them seize opportunities and manage risks in turbulent times.

We addressed historic issues and invested in our businesses.

We launched sustainability, research and investment solutions, SRI, to put sustainability at the heart of our offering to private, corporate and institutional clients.

We entered 2021 with strong momentum, as evidenced by our best January in a decade.

Pretax income for the month was up year-on-year across all divisions.

Investment banking revenues are up substantially from the same period in 2020.

Notwithstanding the fragility of the global economy due to the pandemic, the growth strategy that I will discuss with you today puts us in an excellent position to build on our progress and to achieve our midterm ambitions that we set out at our investor update in December and which we reaffirm today.

With that, let me turn to the slides.

Let me start with Slide 4. Our step-by-step growth strategy builds on the work completed in the last few quarters.

This is supported by a strong balance sheet that allows us to invest by maintaining our disciplined approach to capital distribution.

A few weeks ago, in early January, we announced that we would have to record a pretax loss in the fourth quarter.

This is primarily the result of having addressed historic and other issues.

These included major litigation provisions of CHF 757 million, largely related to RMBS cases and impairment relating to York of CHF 414 million within our asset management business.

As a result, we recorded a fourth quarter pretax loss of CHF 88 million, and the net loss attributable to shareholders of CHF 353 million.

For the full year 2020, we reported pretax income of CHF 3.5 billion and net income attributable to shareholders of CHF 2.7 billion.

However, our adjusted pretax income, excluding significant items, was CHF 4.4 billion in 2020, up a healthy 6% from 2019 and we achieved this result despite CHF 1.1 billion of provision for credit losses and significant FX headwinds caused by the weaker U.S. dollar.

Let me say a few words about some of our challenges at the end of last year.

At our investor update 2 months ago, I spoke about my personal priorities and the importance of dealing with legacies and of accountability, which is one of the pillars of our refreshed code of conduct that we unveiled last month.

Some of the cases I mentioned date back many years.

Nevertheless, these cases have affected our results in 2020.

In light of the COVID-19 situation and resulting economic environment and together with our assessment of shareholder returns in 2020, we have decided, with the approval of the Board of Directors, to lower our overall bonus pool by 7% for 2020 compared to the previous year.

We are reducing short-term incentive awards for the Executive Board to an even greater extent.

This decision underscores to our employees, clients, shareholders and stakeholders that accountability and transparency are of the highest priority for us at Crédit Suisse.

As you can see on the left side of the slide, we executed 4 strategic initiatives to support our growth agenda.

These refinements are expected to generate approximately CHF 400 million and CHF 450 million in savings per annum from 2022 onwards.

We are targeting growth investments of CHF 300 million to CHF 600 million in 2021 across Wealth Management and the Investment Bank.

This is accompanied by investments in relationship manager recruitment, ESG products and private markets.

We intend to invest most of our marginal capital generated into Wealth Management to deploy into lending.

In 2020, we made a total capital distribution of around CHF 1 billion through our 2019 dividend and 2020 share buyback.

Our strong capital position, a CET1 ratio of 12.9% at year-end 2020, allows us to invest and capture growth opportunities while providing attractive capital return through dividends and share buybacks.

We recommend an increase of our dividend for 2020 of 5.4%, above our 2019 dividend.

We expect the total capital distribution of at least CHF 1.8 billion in 2021, subject to market and economic conditions.

Our resilient results came amid a challenging macroeconomic and operating backdrop.

Many developed economies have struggled to recoup output lost last spring, although the APAC region remained resilient.

This led to a prolongation of the lower-for-longer interest rate environment, driving strength in the Swiss franc, our reporting currency.

The low interest rate environment has been something that we have been dealing with in Switzerland for many years, but that all banks, which are active in the U.S. dollar market, have now had to conform to.

Equity markets have recovered, aided by COVID-19 vaccines, strong fiscal and monetary stimulus and the expectations for an economic rebound.

Next page, please.

The economic and interest rate backdrop was challenging for banks.

Credit losses were elevated in the U.S. and Europe by low interest rates weighed on net interest income.

Meanwhile, restrictions on bank dividends and share buybacks weighed on bank shares' prices in many jurisdictions.

Next page, please.

Despite this challenging macroeconomic and operating environment, we have recorded a 22% growth in pre-provision profit in 2020 year-on-year on an adjusted basis or 30% at constant FX rates.

We enter our growth phase with a lot of momentum, both in our Wealth Management businesses as well as in the Investment Bank.

Whilst 2021 remains somewhat difficult to predict, this should allow us to achieve our medium-term ambition of 10% to 12% return on tangible equity in a normalized environment, subject to market and economic conditions.

Next slide, please.

Developing and executing major strategic initiatives is difficult in the best of times.

Doing so amid the worst economic and public health shock in decades requires a monumental but necessary effort across our bank.

Notably, we created a single investment bank, which has provided scale and diversification.

It has spurred both cost and revenue opportunities as well as more flexibility with respect to capital allocation, the benefits of which are increasingly evident in the momentum of the franchise.

We launched SRI, combining research, investment solutions and products, impact advisory and finance, as well as marketing and branding.

We are integrating Neue Aargauer Bank into Swiss Universal Bank and launched our digital offering, CSX, to optimize our national branch network and drive digitalization.

We combined our risk and compliance functions.

These initiatives, along with other efficiency measures in IWM and the corporate center, are expected to generate gross savings of approximately CHF 400 million to CHF 450 million per annum from 2022 onwards.

We expect to invest these savings in growth opportunities across the group.

Next page, please.

Let me now turn to our global Investment Banking business, where our revenues saw a strong rebound last year, in line with many of our peers.

As you can see on the left of this slide, global revenues grew 19% in 2020 to USD 10.2 billion.

As you know, although Global Trading Solutions is housed in the IB division, some revenues are booked in the other 3 divisions.

If you were to include all of those GTS revenues, such growth would be even higher.

Therefore, this was only modestly below industry revenue pool growth of 24% despite our underweight position in macro, which contributed significantly to industry revenue growth last year.

This demonstrates the underlying momentum in our franchise, which are either strongly connected to the wealth management business, or our higher return businesses.

Our revenue increase was broad based across products in all 4 main areas.

We have leading positions across fixed income, equities, and capital markets.

As a former ECM banker, I'm particularly proud for being #1 in global IPOs in 2020, one of the biggest years on record for global IPOs.

Slide 10, please.

Our capital markets and advisory franchise has gained momentum and outperformed the Street.

Based on Dealogic data, we achieved a 37% year-on-year growth in fees for these franchises in 2020 based on global revenues, a faster rate of growth than our leading peers.

We grew market share from 3.7% in 2019 to 4.3% in 2020.

We achieved especially strong growth in equity capital markets.

Slide 11, please.

Our diversified, balanced and integrated Investment Bank division is poised to continue delivering sustainable returns with reduced earnings volatility.

We believe that our business mix is well positioned for the post-COVID-19 environment with an expected recovery in NNA and asset finance.

We believe that capital markets activity will be driven by IPOs and leveraged finance with a more tailored offering in macro.

We are growing connectivity between the Investment Bank and Wealth Management, with GTS as a gateway between the 2 businesses.

This delivers institutional-style solutions to Wealth Management clients.

GTS saw 31% revenue growth year-on-year in 2020.

As a result, we achieved a 70% growth in adjusted pretax income in the Investment Bank division last year, and grew our adjusted return on regulatory capital to 13%, well within our medium-term ambition of 10% to 15% RoRC for the Investment Bank.

Next page.

Our ambition is to be a leader in sustainability.

One of the most significant decisions that I took in my first year as group CEO was to create SRI at the Executive Board level, along with setting an ambitious target to provide at least CHF 300 billion in sustainable financing over the next 10 years.

We infused environmental, social and governance standards at the heart of research, advisory, Investment Bank and Wealth Management.

We announced additional initiatives at our investor update, including the development of science-based targets within the next 24 months and repositioning our portfolio to support client transitions.

Earlier this week, we have also announced a collaboration agreement with BlackRock Alternative Investors to co-develop products in the private and alternative space with ESG integration.

This allows us to leverage our thematic super trends capabilities as part of our House View.

The collaboration continues our strong focus on providing differentiated alternatives and private market solutions to our clients.

We are not simply applying ESG to our client solutions.

We are embedding them in our own operations as well.

These include our focus on diversity and inclusion, a clear purpose statement, a refreshed code of conduct and Sustainability Advisory Committee at the Board of Directors level.

We have received recognition for our engagement, including being upgraded to an A rating by MSCI, putting us in the top 15% of our peer group.

Next page, please.

A key initiative for our home market last year was the decision to integrate our 100% owned Neue Aargauer Bank subsidiary into Credit Suisse Schweiz AG.

The legal merger was completed in November 2020.

The operational integration is on track, which will result in unified coverage and enhanced client offering.

We have successfully retained business in the face of fierce competition, well above our base plan.

The integration of NAB is part of a broader adoption of our retail and SME business model and branch network to reflect change in client behavior around digitalization with a halving of the number of branches since 2013.

The implementation of cost synergies is on course, part of our roughly expected CHF 100 million in gross savings per annum in the Swiss Universal Bank from 2022 onwards.

We are also positioning ourselves as a digital leader in affluent and retail business with our newly launched digital offering, CSX.

Next page, Page 14.

The crisis confirmed the effectiveness of our risk management practices.

We navigated the peak of the COVID-19 pandemic last spring, in part because 87% of loans were collateralized.

60% of our loan book relates to the Swiss Universal Bank, and Switzerland has had historically low credit loss experience compared with other regions.

Our strategy is to accelerate growth in a risk-controlled way across the cycle.

We aim to keep our rigorous standards consistent with our performance over 2010 to 2020, which saw an average provision for credit loss ratio of under 10 basis points.

Our compliance organization has seen significant investments in people, systems, and technology over the last few years.

After this upgrade of our compliance and nonfinancial risk functions, we are convinced that combining the risk and compliance functions into one organization will further drive efficiencies and effectiveness of control at the same time.

It enables more consistent execution and delivery of our control framework across risk and compliance.

Slide 15, please.

As presented at our investor update in December, Wealth Management is our core business and continues to be one of the most attractive segments in financial services.

Global wealth is expected to increase by USD 25 trillion by 2024, a faster rate of growth than global gross domestic product.

Emerging market wealth is expected to grow 11% per annum, driven by entrepreneurs and ultra-high net worth is the fastest-growing wealth segment, both areas where we are especially well placed.

We are particularly focused on capturing growth opportunities in Asia Pacific.

With 56% of the world's population, Asia Pacific's growing middle class remains one of the biggest trends and drivers in the global economy.

The ultra-high net worth segment is growing about 11% as well, faster than the rest of the world.

APAC is absolutely core to Crédit Suisse and today, the region accounts for almost 20% of our total net revenues, and this includes the APAC portion of investment banking, which compares to only around 12% for many of our global peers.

Page 16.

Assets under management across Credit Suisse group increased from CHF 1.2 trillion in 2015 to CHF 1.5 trillion in 2020 at compound annual growth rate of 4%, including Wealth Management AUM growth of 5% annually.

On a U.S. dollar basis, the growth would have been faster per annum, namely 7%, with total AUM of over USD 1.7 trillion as per the end of 2020.

This highlights the attractive underlying growth momentum of our franchises.

Now let me dig a little bit deeper into assets under management because the AUM is only part of the picture.

On Page 17, I will go into more detail, what for me, is the more important element, which is the client business volume because when I look at our underlying Private Banking franchise from a quantitative perspective, I look at client business volume.

Our Wealth Management opportunity comes from a combination of assets under management, net loan as well as custody assets.

These custody assets, which includes lower profitability, unlevered client assets, such as single stock positions, gold or cash without any advisory mandate around them, provide us with dry powder to convert into AUM and loans as well as transactional revenues.

The vast majority of client business volumes in International Wealth Management and, notably, APAC are denominated in U.S. dollars or in currencies that are pegged to the U.S. dollar.

This is why we are showing the numbers on this page in Swiss francs for SUB and in U.S. dollars for IWM and APAC.

We have generated substantial client business volume growth across our Wealth Management franchises, particularly in APAC, which achieved 14% compound annual growth rate in U.S. dollar terms between 2015 and 2020.

We have also seen growth in IWM Private Banking client business volume, including and especially under the leadership of Philipp Wehle over the last 2 years.

Our ambition is to maintain or accelerate these growth rates going forward, with annual client business volume growth of mid-single digits for the Swiss Universal Bank, mid- to high-single digits for IWM and double-digit growth in APAC.

Slide 18, please.

Our central mission at Crédit Suisse is to provide solutions to our clients that help them find opportunities and manage risk in turbulent times.

Our House View added substantial value for our clients during the pandemic.

As you can see from this slide, we made key calls at critical junctures.

Most notably, our CIO and his team had the courage to go overweight on equities on March 25, close to the market lows.

Our discretionary mandates, which are based on our House View, outperformed 67% of clients in a nondiscretionary portfolio on a 3-year view.

Our decision last year to house Chief Investment Office within SRI allows us to better align ESG standards into our investment processes as well as into our suite of discretionary mandates.

Next page, please.

You may remember this slide from our December Capital Markets Day.

It shows our specific growth metrics for Wealth Management.

It is, other than revenues, which remains a key metric, how we measure ourselves, and it should also be the way you should measure us.

We are committed to accelerating growth in Wealth Management, building on the core principles under our unique bank for entrepreneurs' model, investing most of our marginal capital into Wealth Management.

Our growth strategy includes further development of our ESG solutions and our already successful collaboration with the Investment Bank and with Asset Management.

You can see our specific numeric ambitions on the right-hand of the page.

Let me highlight our ambition to grow our overall client business volume, which includes, again, assets under management, custody assets and net loans to the mid- to high-single digits over the medium term at the group level at constant foreign exchange rates.

This includes a medium-term ambition for double-digit growth in APAC, as previously mentioned.

Slide 20, please.

At our Investor Day, we also announced our ambition to grow Wealth Management related pretax income, which on an adjusted basis, excluding significant items, was CHF 3.8 billion in 2020 to CHF 5 billion to CHF 5.5 billion in 2023.

Today, we reaffirm our objective for an increase in RoRC to 20% to 25%, and we plan to invest most of our marginal capital generated into Wealth Management to deploy into lending.

We are deepening our onshore footprint in faster-growing markets, notably, China.

We will also continue to drive GTS, Investment Bank and Asset Management collaboration with the Wealth Management franchise, and we expect to benefit from a normalization in both credit provisions and asset management profitability.

Slide 21.

We expect to increase our capital return in 2021 compared to 2020, demonstrating the strength of our capital position and business momentum.

We achieved a total capital distribution in 2020 of around CHF 1 billion paid to shareholders.

For this year, we expect a total of at least CHF 1.8 billion, payable to shareholders through a 2020 dividend of around CHF 766 million, and the share buyback of between CHF 1 billion and CHF 1.5 billion.

As I said at the beginning, our strong balance sheet allows us to both invest for growth and provide attractive shareholder returns.

I will now hand over to David to go over our results in greater detail, and then I will make some concluding remarks before our Q&A.

Thank you.

Thank you, Thomas.

Good morning, everybody, and I'd now like to take you through our financial results in more detail.

And before I start, I'd remind you that whilst our reported performance remains our primary metric, given the combination of the restructuring measures that we announced last summer, the charges that we took in the fourth quarter and the movements that we've seen in some of our equity investments over the last 2 years, we will continue to give additional emphasis to our adjusted numbers.

This quarter is particularly complex, given that in addition to our restructuring costs, we have also absorbed the impairment related to our investment in York capital and the increase in our existing RMBS provisions and you will note that we reached a settlement with MBIA last week.

I would highlight 2 items that we've not previously announced.

First, the gain before tax of CHF 158 million on our equity investment in SIX Group; and second, the gain before tax of CHF 127 million on our equity investment in Allfunds Group, both of which were taken in the fourth quarter.

I'd also highlight, again, the adverse effect of the strengthening of the Swiss franc against many of the currencies in which we conduct our business.

On a constant currency basis, this translates into a reduction to our adjusted pretax income, excluding significant items for the fourth quarter, of CHF 108 million compared to the same period last year and for the full year, a reduction of CHF 287 million for 2020 compared to 2019.

Let me turn to Slide 23.

So as Thomas has already summarized, Credit Suisse delivered a resilient performance for the year.

Reported net revenues are flat year-on-year at CHF 22.4 billion.

On an adjusted basis, excluding significant items, net revenues were 3% higher.

In terms of business trends, we saw a strong performance from the Investment Bank, with heightened transactional activity across the group.

Clearly, our Wealth Management businesses suffered from weakness in net interest income, primarily due to the fall in U.S. interest rates and from the impact of the appreciation of the Swiss franc.

However, as I will discuss in more detail later on, recurring revenues have sequential quarter-on-quarter improvement in Swiss franc terms.

We believe that the adverse trends affecting our net interest income are now bottoming out at current exchange rates.

Overall adjusted pretax income, excluding significant items, increased by 6% for the full year from CHF 4.14 billion to CHF 4.38 billion year-on-year.

As I've said before, our reported numbers for the quarter were adversely affected by significant charges, which resulted, as we previously guided, in a pretax loss for the quarter, totaling CHF 88 million.

This did, however, mask a resilient underlying performance.

Adjusted pretax income, excluding significant items, was 10% lower year-on-year, but on a constant currency basis, 1% higher.

Our tax charge for 2020 was 23%, in the middle of the range that we'd set for the year.

I would note it was a little bit higher than I previously anticipated primarily due to the charges that we took in the fourth quarter.

With regard to 2021, I'd maintain our guidance for a level around the mid-20s, although I'd warn that the rate for the first quarter may be higher than this.

I'd once again caution that this assumes unchanged tax regimes in the countries in which we operate, with a particular caveat about whether the Biden administration will amend the U.S. federal tax rate later this year.

Reported net income attributable to shareholders for the year stood at CHF 2.67 billion, 22% lower than in 2019.

That equates to a return on tangible equity of 6.6% for the year compared to 8.7% for 2019.

I would note that this drop was entirely due to the year-on-year swing in the contribution of adjustments in significant items, which I'll show in more detail on the next slide.

As you can see here, although our reported pretax income was 27% lower year-on-year on an adjusted basis, excluding significant items, it was 6% higher as the impact of the items that I've listed here swung from a net credit of CHF 577 million in 2019 to a net debit of CHF 908 million in 2020.

I'd add that once you adjust further for FX movements, our adjusted pretax income, excluding significant items, was 13% higher year-on-year.

Let's just turn to the next slide, please, and just look at the CET1 ratio.

We finished 2020 with a CET1 ratio of 12.9%, approximately 20 basis points higher than at the end of the previous year and I'd reiterate my previous guidance, which is that we intend to maintain a CET1 ratio of at least 12.5% for at least the first half of this year.

I've mentioned the phase-in of certain Basel III reforms, primarily the SA-CCR change on a number of occasions over the last 2 years.

This change -- these changes resulted in a cumulative impact of CHF 11 billion of RWA inflation for 2020, slightly better than the guidance we've given before and clearly, this has been fully accounted for in our end period capital ratios.

In terms of capital distribution, we have, as you know, paid the 2019 dividend of CHF 0.2776 in full.

With regard to 2020, we intend to recommend a single payment of CHF 0.2926 per share, which, provided that is approved by our shareholders at our Annual General Meeting in April, will be paid in May.

You also know that last month, we initiated our 2021 share buyback program, and we've repurchased shares to the value of CHF 112 million as of the 16th of February.

Let's look at leverage, please, on the next slide.

Our exposure at the end of the fourth quarter stood at CHF 800 billion, excluding Central Bank reserves, down from CHF 824 billion at the end of the third quarter.

This decrease was mainly due to currency movements, particularly the depreciation of the U.S. dollar compared to the Swiss franc.

Our CET1 leverage ratio at the year-end was 4.4%, and our Tier 1 leverage ratio stood at 6.4%, both stable compared to the end of the third quarter.

I would remind you that the FINMA's temporary exemption of cash held at central banks ended on the 1st of January this year and if you look at these ratios, including Central Bank reserves, they would have stood at 3.9% and 5.6%, respectively, at the end of last year.

I'd once again draw your attention to our liquidity coverage ratio, which at 190%, is similar to the level at the end of the third quarter.

We continue to take a conservative approach to liquidity management, and this ratio remains amongst the highest of the major banks.

Let me touch briefly on tangible book value per share.

You'll see that our tangible book value per share was broadly unchanged at the end of 2020 compared to the end of 2019, standing at CHF 15.8 compared to CHF 15.88 12 months earlier.

Let me just run you through the changes.

Net income attributable to shareholders of CHF 2.7 billion contributed CHF 1.10 per share with the effects of our capital distribution program and share-based compensation awards, resulting in a total for the year, before own credit and FX movements, of CHF 16.94 per share.

As you know, tangible book value per share is influenced by movements in our own credit spreads and by FX changes, given that we retain a significant amount of our capital denominated in U.S. dollars.

Now with regard to our own credit moves, spreads widened in the first quarter and then subsequently narrowed, leaving a net impact of CHF 0.08 for the year.

However, the negative impact from currency move was much more marked, totaling CHF 1.27 for the year, of which CHF 0.49 came in the final quarter.

And next, I'd just like to update you on the progress of our restructuring program.

As a reminder, we said in July that we expected to spend approximately CHF 300 million to CHF 400 million on this program over the course of 12 months and that we expect to generate around CHF 400 million in run rate savings, with the full benefit being realized from 2022 onwards.

The key components of the restructuring were: bringing together our Investment Banking and Capital Markets and Global Markets businesses together into a single investment bank, together with APAC markets; creating a new function, sustainability, research and investment solutions; bringing together the risk and compliance functions; and integrating Neue Aargauer Bank into the Swiss Universal Bank.

You'll recall that we reported at the end of the third quarter that we'd spend CHF 107 million on restructuring and you can see that the total for the year was CHF 157 million, primarily taken in International Wealth Management, the Investment Bank and in the Swiss Universal Bank and primarily relating to redundancy expenses.

At this point, I'd expect our restructuring cost to total something between CHF 300 million and CHF 350 million, marginally lower than before and I would still expect to complete this program by the end of the second quarter of this year.

Now we continue to expect to achieve the gross savings that I mentioned in October, that's CHF 250 million to CHF 300 million for 2021 and CHF 400 million to CHF 450 million from 2022.

Let's just turn to the next slide, please.

Just look at credit provisions.

Including provisions for the CECL methodology, which, as you know, was implemented at the start of last year, we started 2020 with CHF 1.22 billion of allowances for credit losses.

In the course of the first half of the year, we took an additional CHF 864 million of provisions, split approximately equally between CECL-related and specific provisions.

Net write-offs of CHF 84 million and other adjustments took us to a balance of CHF 2.0 billion at the end of June.

If we look at the second half of the year, our CECL balance was more stable, with a net release of CHF 23 million, reflecting a broadly unchanged set of projections.

We did, however, see an increase in specific allowances and had net write-offs in the second half of CHF 241 million.

Factoring in the weakness of the U.S. dollar, the net provisions on the balance sheet of CHF 1.9 billion at the end of the year will split approximately equally between specific and nonspecific provisions and were clearly considerably higher than where we started 2020.

Let's move to the next slide, please.

I think if we look forward to 2021, I just caution, I think it's too early really to make forecasts for credit provisions for this year.

Clearly, 2020 was an exceptional year, especially as the pandemic coincided with the introduction of CECL.

Our provisions were almost 4x higher than our 11-year average of CHF 280 million per year.

That equates to an average provision for credit losses ratio that is the total taken relative to loans held at amortized costs outstanding of 9 basis points.

For 2020, that ratio leapt to 30 basis points.

Now of course, I would expect to see our provisions return to levels that are more normal over the next few years, with the difference dropping through to the bottom line, but the pace of that normalization does remain difficult to gauge.

Personally, I do not expect to see a comparable increase in CECL charges in 2021, given that I believe we're unlikely to see a repeat of the precipitous decline in the economic operating environment that we witnessed about a year ago.

However, against this, we do need to balance the risk of increasing corporate failures as we emerge from the pandemic, together with a corresponding requirement for heightened levels of specific provisions.

Next slide.

Now shown here, a version of this slide over the past few quarters.

And just as a reminder, it charts our allowance for credit losses on loans as a percentage of gross loans for our wholesale business across last year compared to 3 of our leading U.S. peers.

As you can see, we remain at broadly similar or indeed marginally more conservative levels to the other banks.

Next slide, please.

Now before we turn to the divisional overviews, I wanted to give you a summary of the revenue trends that we've seen in our Wealth Management businesses.

Let me start with the net interest income on the left-hand side.

Unsurprisingly, when looked at in Swiss francs, net interest income has dropped sharply since the start of the pandemic, from CHF 1.35 billion in the first quarter of 2020 to CHF 1.2 billion in the fourth quarter.

However, as Thomas has indicated, on a sequential basis, this downward trend has now stabilized and given the momentum that we're seeing in our lending programs, we would expect to see this trend begin to improve sequentially in 2021.

In terms of recurring commissions and fees, after the low point in the second quarter, primarily a result of the impact on portfolios of the market sell-off in March and April and compounded by the weaknesses of Swisscard, fees have increased steadily, notwithstanding the currency impact.

Transaction activity, as I mentioned before, has been strong throughout 2020, including into the fourth quarter and notwithstanding normal seasonal trends.

Our global trading solutions offering, providing bespoke institutional-style products to our ultra-high net worth clients, was a key driver of this growth in transaction revenues, with Wealth Management-related revenues in collaboration of GTS, 34% higher in the year compared to 2019.

And I would reiterate that this strength has been sustained so far in 2021.

I'll now turn to divisional slides.

Now before doing so though, I'd remind you that in the tables, we're showing adjusted key financials, excluding significant items.

Where appropriate, I will call out the points where FX moves have had a particular impact, and I've included in the appendix versions of the slides of IWM and APAC in U.S. dollars as well as full reconciliations with the reported numbers.

Let's start with the Swiss Universal Bank.

On an adjusted basis and excluding significant items, the Swiss Universal Bank generated net revenues of CHF 5.31 billion for the year, slightly higher than in 2019.

Operating expenses were slightly lower, at CHF 3.15 billion, reflecting our strong ongoing cost discipline.

However, the significant increase in provisions for credit losses, CHF 270 million compared to CHF 109 million in 2019, means that adjusted pretax income excluding significant items, was 4% lower year-on-year, at CHF 1.89 billion.

It's worth noting that CHF 75 million of the provision for credit losses was part of our CECL calculation, which, as you know, is based on an assessment of a range of macroeconomic factors and can be recovered if the outlook improves. .

Now if we look at the fourth quarter, as I said already, we have seen the pressure on net interest income stabilized compared to the third quarter, helped by an increase in net loans, which rose to CHF 176 billion, from CHF 174 billion.

Recurring revenues, albeit stable sequentially, still reflect the substantially weaker performance of our investment in Swisscard.

Transaction-based revenues were 5% lower in the fourth quarter compared to the same period last year, though they increased by 8% for the full year, driven by higher brokerage fees and increased revenues, both from GTS and from our Swiss Investment Banking business.

Credit provisions were still elevated at CHF 66 million in the fourth quarter, compared to CHF 43 million in the fourth quarter of 2019, although we didn't see any particular signs of stress in the period.

Now before we move to the next division, you will notice that in addition to showing a year-on-year comparison of some of the key divisional metrics for the quarter and include the full year total for these metrics for the last 5 years.

Let me now turn to IWM.

Our International Wealth Management division delivered net revenues of CHF 4.92 billion for the year on an adjusted basis, excluding significant items, 10% lower year-on-year.

Operating expenses were 2% lower than 2019, at CHF 3.62 billion, although provisions for credit losses of CHF 110 million compared to CHF 49 million in 2019, which meant that the adjusted pretax income, excluding significant items, was 30% lower year-on-year, at CHF 1.19 billion.

This total includes an adverse impact of CHF 104 million from FX movements.

The reported loss of CHF 12 million for the quarter was primarily due to the York capital impairment of CHF 414 million, the charge for which was taken in Asset Management.

Adjusted pretax income, excluding significant items, was CHF 321 million, 22% lower year-on-year, but up sequentially by 20% on the third quarter of the year.

Within Private Banking, we saw a record year for net new assets of CHF 16.7 billion for the year, of which CHF 4.3 billion for the fourth quarter was also a record, and it reflected strong inflows both in emerging markets and in Western Europe.

Asset Management saw CHF 15.5 billion of net asset inflows for the year against a challenging backdrop and improved inflows in the fourth quarter compared to the third, with net new assets of CHF 6.3 billion.

Let's turn now to Asia Pacific, please, on the next slide.

The performance of our Asia Pacific division reflected stronger market and client activity.

Full year adjusted net revenues, excluding significant items, were 5% higher year-on-year at CHF 3.09 billion, with operating costs on the same basis, 2% higher at CHF 2.09 billion.

Provisions for credit losses were CHF 236 million compared to CHF 55 million for '19, resulting in adjusted pretax income, again, excluding significant items, of CHF 769 million, 7% lower than in the previous year.

Now looking at the fourth quarter, adjusted net revenues and adjusted pretax income, excluding significant items, was stable year-on-year at CHF 746 million and CHF 201 million, respectively, and that resulted in a return on regulatory capital of 23%.

Transaction-based revenues made the most significant contribution.

They were 20% higher year-on-year at CHF 415 million, reflecting increased financing revenues, which included mark-to-market gains and higher origination fees from equity-related activity and strong client activity.

Net interest income fell by 27% year-on-year, mainly reflecting the low interest rate environment and lower lending volumes due to the deleveraging that we saw in the first half of 2020, whilst recurring commissions and fees were 5% lower due to unfavorable FX movements.

Total net new assets for the year was CHF 8.6 billion, equivalent to an annualized growth rate of 4%.

That included outflows of CHF 1.1 billion in the fourth quarter.

We've continued to see a reversal of the deleveraging in the first half of the year and a resumption of net loan growth on a constant currency basis.

Let me now take this opportunity just to advise you that as of the first quarter of 2021, we will be presenting the results of our Asia Pacific division in U.S. dollars in order to provide greater transparency on the underlying performance, given that much of our business is conducted either in U.S. dollars or in currencies that are pegged to the U.S. dollars.

Let me turn now to the Investment Bank.

The Investment Bank had another robust quarter to close out a year in which strong revenue momentum flowed through to higher profitability and improved returns.

If we look at the fourth quarter, adjusted net revenues were 19% higher year-on-year at USD 2.34 billion.

Adjusted operating expenses were 7% higher at USD 1.94 billion, primarily due to higher compensation costs.

Provisions for credit losses were USD million compared to USD 69 million in the same quarter last year, and that resulted in an adjusted pretax income of USD 357 million.

Now if you look at each business line, the strongest area was capital markets, in which revenues were up by 90% year-on-year, reflecting higher debt issuance activity and a threefold increase in ECM revenues.

Our fixed income sales and trading performance has been resilient, particularly as we're not materially exposed to the strongest and the most volatile subsegments in macro, having restructured and downsized our rates business some years ago.

Equity sales and trading revenues were 5% higher year-on-year with strong contributions from cash equities and equity derivatives, partly offset by defensive risk positioning in the second half of the year.

If we look at the full year performance, adjusted net revenues of USD 9.72 billion were 18% higher year-on-year, including growth across all products and accelerating momentum in capital markets, particularly in the second half.

Adjusted operating expenses were 5% higher at USD 7.35 billion, resulting in adjusted pretax income of USD 1.88 billion, and that was 70% higher than in 2019.

Now I'd just reiterate the guidance that Thomas has given.

The positive trends that we have seen in the Investment Bank last year have continued so far in 2021, with a strong capital market pipeline, augmented by a resilient trading performance.

And with that, I'd like to conclude my part of this morning's presentation and hand back to Thomas.

Thank you very much.

Thank you, David.

So let me wrap up on Page 46.

Our clear growth agenda allows us to deliver attractive shareholder value.

This includes our ambition to deliver pretax income in our Wealth Management-related businesses, of CHF 5 billion to CHF 5.5 billion in 2023.

We expect to deploy most of our incremental capital into Wealth Management and aim to drive positive operating leverage.

We affirm our ambition to achieve an RoRC of 20% to 25% for Wealth Management-related businesses and of 10% to 15% for the Investment Bank, with sustainable investment solutions at the core of our offering to wealth management, corporate and institutional clients.

These efforts should support our goal to achieve our medium-term ambition of 10% to 12% RoTE in a normalized environment, subject to market and economic conditions.

I will close my presentation with a few words about the start to 2021.

Investment Banking revenues year-to-date are up substantially year-on-year, driven by continued strong capital markets performance and trading activity.

We have a healthy IB pipeline across products.

We expect more normalized credit provisions in 2021, but with a wide range of possible outcomes.

We also expect a more normal level of Asset Management profitability.

As such, we saw our strongest January in a decade, with pretax income up year-on-year across all divisions, with notable strength in APAC and the Investment Bank.

However, this pandemic is not behind us, and we recognize that the broader economic recovery remains fragile and markets will remain somewhat unpredictable. .

Before I hand over to Kinner, allow me to thank you for your attention today and for your great engagement.

I look forward to seeing as many of you as possible this year.

In the meantime, I wish you all the best for you and your families and wish you a healthy and prosperous continuation of 2021.

Thank you.

And with this, I would like to hand over back to Kinner and we will then go, together with David, into the Q&A.

Thank you.

We will now begin the question-and-answer part of the conference.

Operator, let's open the line, please.

(Operator Instructions).

Your first question today comes from the line of Jeremy Sigee from Exane.

Two questions, please.

Firstly, on the bonus pool comment that you made, I can't remember, did you say that was in Swiss francs or in dollars that you reduced the bonus pool by 7% year-on-year?

And how do you see that move?

Is that a sort of one-off impact reflecting some of the one-off charges in the year or is that a sustained realignment of the profitability in that business in the direction that you need to go towards your targets?

So that's my first question.

The second question really was a slightly broader one on the Wealth Management side, about flows, where there was weakness in the Swiss business and in Asia in the quarter, but even just looking at the year as a whole, relatively modest flows, I'd say, sort of averaging around sort of 2.5% net new money.

And I just wondered how you saw prospects for flows in 2021, whether we can expect a little bit more growth than that in terms of inflows?

Yes.

Thanks, Jeremy.

I hope you can hear me.

Can you hear me?

Yes, absolutely.

Okay.

Very good.

Just wanted to make sure the technology works.

So bonus pool, yes, is 7% down in Swiss franc, which in dollar terms is probably about flat.

We clearly -- we paid up in the Investment Bank.

We paid down in some of the divisions outside Investment Bank or flat and corporate center somewhat down.

So overall, I think we have to pay for performance.

And we had kind of a mixed 2020 in the sense that we had a strong underlying performance.

If you look at our PTI, excluding significant items, we are up 6% despite higher credit provisions and despite FX headwinds, but on the other hand, we had some one-offs and -- especially in the fourth quarter, legacies to address.

And that's why, together with the Board, we came to a view that the minus 7% is the right number and we will continue to pay-for-performance going forward.

So this is not a trend or anything.

It's just the way we look at the bonus pool.

In terms of Wealth Management flows, look, I intentionally included slide -- Slide 17, which shows you more on the longer term, the client business volume.

And that's the way I have always looked at the business, be it in my old role as Head of the SUB division, be it now in the group role because this is really how you should look at the Private Banking franchise, namely asset under management, custody assets and net loans.

And as you can see that we've been growing 4% in Switzerland over the years.

And if you look at IWM and APAC, and these numbers here are in U.S. dollars, which reflect also the fact that 25% only, and I think it's only 4% or 5% in APAC, are in Swiss francs so -- in these 2 divisions, so it's much better to look at U.S. dollar.

We have been growing by 6% in IWM and by 14%, and that's why mid-single-digit is the right target for SUB.

Mid- to high-single-digit is the right target for IWM and double digit is the right target for APAC.

You can also see some deleveraging going on in Switzerland because you see the loan in Switzerland, we went from CHF 116 million to CHF 118 million.

But custody assets went up from CHF 43 billion to CHF 54 billion.

And for example, in Asia, we also had quite a lot of deleveraging, CHF 57 million to CHF 107 million in terms of custody assets, but net loans went down CHF 47 million to CHF 44 million.

So there was definitely some deleveraging going on, and that's, for us, an opportunity to grow and to increase our lending business in all 3 divisions, actually, but this is the way I think one should look at Private Banking businesses.

So you look at all 3 elements, AUM, custody assets and net loans.

We will take your next question and the question comes from the line of Andrew Coombs from Citi.

I'd like to ask the same 2 questions I actually asked at the Investor Day, just the updated thoughts.

The first on Slide 32, under the transaction column, you flagged 2 things, one is that you've got a very tough comp in first half '20, given the elevated transaction levels that we saw.

On the flip side, you suggest that you've seen a 34% increase in WM-related revenues in collaboration with GTS.

So I'm interested to know or how you think those 2 things will interplay going into 2021 as one is, obviously, somewhat of a headwind versus the second being a tailwind?

So that would be the first question.

The second one, I just wanted to return to the Investment Bank.

I know when we talked about it at the Investor Day, you talked about focusing on profitability and returns rather than market share.

You also made a point about your business mix, namely in equity, your overweight cash and derivatives and underweight prime and in fixed income, you've been underweight macro.

But when I look at Q4, there was obviously some degree of normalization in a lot of those business mix shifts.

Rates particularly pulled back and credit was actually stronger.

And yet for the third consecutive quarter, you've underperformed the peers pretty much in every business line, fixed income, equities and primary, so just that momentums kind of stalled a little bit there.

So perhaps you could just elaborate on your thoughts on Investment Banking more broadly into 2021.

Do you want to start with the transactional revenues?

And I will take the Investment Bank, David?

My pleasure.

I mean, I think your question, Andrew, was around -- in terms of how we see the comparables, I think.

And then obviously, the performance of GTS really because, obviously, we saw strong growth during 2020.

And I guess your question, Andrew, is, so what do we expect for '21?

Is it going to be up against that 2020 comparable given the structural growth or how does it come together?

Look, I think that was the point, but please correct me if I'm wrong, Andrew, but my answer to that would be we clearly have seen a strong start to 2021 in terms of our GTS businesses and that's what we're really reflecting, obviously, in terms of the comments we've made about the very strong January that we've had.

Clearly, those comparables will get more tough as we actually move into the -- as we now move into our 1-year anniversary of COVID and you saw the market volatility picking up in March, April and May.

So look, I think last year was very strong in terms of derivatives activity.

It was strong in terms of volatility, and it will become more difficult to show progression against that comparable, but it's certainly been a very good start to the year.

And I think there is clearly a fundamental demand by clients in a market where it's difficult to earn net interest income because interest rates are kind of 0 or negative in most locations.

And at that point, that's leading to 2 trades.

One, I think clients are looking to alternatives.

They're looking investments to actually make to generate those returns.

And clearly, many of our corporate clients are also concerned around hedging risk and how do they actually hedge some of the volatility.

It's still a very uncertain market.

And I think that does mean it's a favorable market for GTS and it's a favorable market for transactions across the Wealth Management division, but I'm not sure I definitely want to get into a forward-looking view for how I see the next 10 months of the year against the comparables we saw for 2020, but it's certainly been a very good start for the year.

As far as Investment Banking is concerned, if you look at one of the slides I presented, you can see that we were -- for the full year, up 19%.

And I said also that if you actually include the GTS part, we were up more than that, close to the industry of 24%, I think, is the industry.

So I think overall, we have -- despite the fact that we have less exposure to macro, for the full year, actually performed more or less in line with the market.

We had -- we outperformed the market in capital markets and in NNA, as you can see also in one of my slides.

Equities was somewhat slower, that's true, but we've also had probably less market share on the equity derivative side.

We have had a quite solid performance, with plus 12% in equities, and especially on the cash side, I'm quite satisfied, but also in equities, you should probably look at it a bit more holistically.

And if you include equity capital markets and look at the whole equity business, in the fourth quarter, for example, I think we were up 44%, 45%, very much in line with our U.S. peers.

So -- and from that perspective, I'm not worried at all.

Quite the contrary, actually, if I look at January, we've had a very strong start and as I said, it was the strongest January we had in the last 10 years.

Perhaps a follow-up on the latter point, given you said about looking at equity holistically and ECM.

Obviously, a lot of strength we've seen kick in, in the back end of 2020 and also in January, it's SPAC related.

Can you just comment on the sustainability there and how CS is positioned to benefit?

Yes.

We had a very strong year in 2020 in IPOs and within that, in SPACs, #1 in both.

I think year-to-date -- where this activity has been even stronger compared to last year, we think we are #4, #5 globally.

So far, we continue to see big demand for SPACs, not only in the use, but increasing -- in the U.S., but increasingly, also in Asia and to some extent, also in Europe.

So at least in the short term, we don't see this to slow down.

It provides an alternative to private equity and traditional IPOs, and it's something that is certainly here to stay.

Whether it is here to stay at these levels in the mid to long term, we'll have to see.

But I also think that if you look at the overall macroeconomic situation, there will be a lot of companies that will need to raise capital in the next 2, 3, 4 quarters as we come through this crisis and people see opportunities, some sectors have been harder hit than others.

So maybe there will be a switch or a shift somewhat from IPOs to more secondary offerings, capital market activities, but also, we see a stronger leverage finance market and from that perspective, we've seen that trend already in the first 6 weeks of the year.

Your next question comes from the line of Benjamin Goy from Deutsche Bank.

Two questions, please.

First on the buyback.

And then secondly, on the recurring fees.

On the buyback, as you mentioned, you're a bit above CHF 100 million.

So just wondering on the pace of the buyback, should we think like you aim for the CHF 1 billion and then when you have more clarity in the second half, it will depend or will that decide where you land within the CHF 1 billion to CHF 1.5 billion range?

And then the second question, on the recurring fee margin, I think they were good in IWM and also solid in APAC, SUB was down.

So just wondering what is Q3 all the numbers.

Just wondering how you see the outlook and the client risk appetite in terms of demand for products?

Benjamin, so just first on the buyback.

Yes, we obviously started the buyback in January.

I think what you said is exactly on the money.

I think as Thomas has already remarked, I mean, it's an uncertain 2021, COVID-19, we're still in the pandemic.

We don't really know yet what's going to be the extent of government support and stimuli.

And I think it's early to make forward-looking projections around credit provisions, although I do expect this be lower in '21 than '20.

I think it seems prudent, therefore, to aim for around about the CHF 250 million a quarter for the first quarter and then we'll see basically once we actually got the first quarter behind us, and we see how the second quarter is shaping up, at what level do we actually want to pace it?

But I think that's certainly our strategy for the first quarter in terms of how we see it developing.

Clearly, the first quarter start has been very promising, shall we say, and let that continue.

It's all I'd really point there.

I think in terms of recurring, I'd go back to my Slide 32, if you wouldn't mind, actually, Benjamin.

The point I wanted to make there is, if I look at recurring, there's -- obviously, you saw the first, as you might say, post-COVID quarter 2Q '20, which saw the drop, unsurprisingly because you saw sell-off in portfolios at the -- in March of 2020.

That flows through to recurring margins on a -- recurring fees on a month plus 1 basis.

So unsurprisingly, 2Q was the low point.

And then you've seen a steady increase since then, notwithstanding, clearly, the strengthening of Swiss franc against the -- some of the currencies we earn these revenues in, particularly APAC and IWM.

So I think it's been pretty good to see that actually heading up.

The other factor that we've been explicit for is clearly the Swisscard investment, which is booked as recurring revenues within the SUB.

I think, given the importance of foreign exchange fees to the Swisscard joint venture, I think it's unsurprising that, that remains depressed right through 2020 and today, basically.

So that's clearly a factor, which is very dependent on COVID-19, the balance is beyond that.

So -- but I'm pleased about the trends in recurring commissions and fees.

You can see why it stepped up, and if it hadn't increased, then I would be worried.

So I think a good trend there in terms of what we're seeing.

Clearly, on net interest income, I think whilst you can see that the bottom in recurring was 2Q '20, I think we would hope that the bottom in net interest income was 4Q '20, you could see the pace of decline is dropping.

That's obviously driven by both dollar interest rate moves, but also around the Swiss franc appreciation.

I would certainly expect to see that stable to up -- stable probably in 1Q, up later in the year as we expand our lending initiatives, on the basis that the Swiss franc remains around current levels, i.e., we don't see a further precipitous sell-off in the dollar or anything else.

That's just a slight caveat in terms of that.

But that's probably a fuller answer.

I think your question was more on recurring, Benjamin.

Your next question comes from the line of Magdalena Stoklosa from Morgan Stanley.

Can you actually hear me well?

Yes, Magdalena.

Okay.

Okay.

Great.

So I've got 2 questions.

One is on your lending franchise and another one is on the kind of pace and direction of investments.

So on lending, and I think I'm going to refer to, I think, Slide 17, so in 2020, the actual growth in -- the actual kind of lending growth was pretty kind of lackluster in quite a few places, not grown at all.

But of course, when you talk about the holistic business volumes, when you talk about the defense of NII from, let's just say, midyear this year, of course, the loan growth is a big part of that narrative.

So could you kind of let us know where do you see the opportunity, I suppose both geographically and on the product level and also whether you had to make any changes -- Thomas, I suppose it's a question to you whether you had to make any changes from the perspective of the organization of the kind of lending franchise across Credit Suisse to kind of prepare for that medium-term plans of kind of single-digit growth in lending across the wealth in particular?

And my second question is on your investment budget kind of -- but more holistically, could you tell us kind of where over the next 2 years, your investment budget is likely to get spent?

And I'm not only talking about the gross savings, which you will invest, but in general, when you think about where in the business, you will still continue investing because, of course, in late 2019, 2020, we, from an external side, saw the kind of big changes to the Swiss business overall and of course, with the launch of CSX as well.

So yes, so where is the investment?

Magdalena, so on lending, what we saw was, especially in the first 2 quarters, significant deleveraging.

We started to turn the corner in the middle of the year, but I still think that we have substantial upside in terms of our lending growth into 2021, actually, in all 3 divisions, and in particular, in Asia, where you can see, we have reduced our lending volume almost by 10%.

So -- and it's really across the board, whether it's traditional kind of mortgages here in Switzerland, whether it's single-stock loans, whether it's traditional lombard loans, whether it's corporate loans in Switzerland or also in IWM and APAC, where we have invested in our corporate franchise, and obviously, also in the U.S. and in our Investment Bank.

So it's partially also NNA related.

It's partially more traditional lending.

So the opportunities are across the board.

We have clear plans for every division, how to go after these opportunities.

And from that perspective, I'm optimistic that we can increase our lending growth, which we have been a bit more cautious about, let's call it, this way, in 2020.

On the investment budget side, again, we have clear plans in every division, starting with our group effort around digitalization, IT, online banking, digital offerings in every of the 3 divisions on the Wealth Management side, but also on technology and risk systems in the Investment Bank.

And then, obviously, it's about certain products, whether it's ESG products, whether it's private markets, whether it's in mandates.

And then, finally, expansion of footprints in certain regions, in particular in Asia and the Middle East, where we see significant opportunities, but also Brazil, for example, and in other areas where we have hired teams and relationship managers and where we'll continue to invest.

And Thomas, just to be sure that I understood correctly, the expansion of footprint is broad, is a wealth managed -- is it a Wealth Management trend for you?

Yes.

It's, in particular, the footprint in Asia, but also in the Middle East.

Just to give you an example, we opened a branch in Riyadh in Saudi Arabia.

We have 45 people there, which I visited recently from -- we went up from 20 to 45.

And we continue to invest in the region, whether it's in Doha, whether it's in Dubai, whether it's in other areas.

So -- and obviously, the China rollout for onshore private banking, but also our securities joint venture in Asia, Credit Suisse Founders, where we went to 51%, we will go to 100%.

We announced that already last year.

So the investments are not only pure-play Private Banking, but it's also Wealth Management related and also in Asset Management, where we continue to invest. .

Your next question comes from the line of Kian Abouhossein from JPMorgan.

First of all, very quick one.

Can you just confirm the cost ambition for 2021 of CHF 16.2 billion to CHF 16.5 billion, I couldn't see it in the presentation.

Just wanted to see if that's still intact?

The second question, very briefly, U.S. dollar, why not report in dollars now that you think you're talking about Asia going to be reported in dollars?

I'm just a bit confused how this will all work.

And in that context, if you don't want to report in dollars, why not start hedging some of your earnings?

And lastly, in terms of Slide 7, if I look at your phases, you're clearly now, as you say, in the growth phase, but you still produce adjusted profits.

And clearly, the slide is on adjusted profits.

And really, what we want to move to, post 2007, '08, '09 subprime crisis, really to a level of stated profit, clearly, as that drives the book value.

And I was wondering, will we see Credit Suisse focusing on stated book value as on -- as of 2021?

And if not, why not?

Okay.

Thank you very much, Kian.

I'll take those 3.

I should say profit to book value.

Okay.

Thank you, Kian.

Let me take the different points.

So firstly, in terms of cost ambition, we obviously ended 2020 at 16.6%, which was slightly above my guidance primarily because, I think, as Thomas has said already, given the generally strong trading performance we'd seen, I think it seemed relevant to keep the investments going.

These are important for us to deliver our numbers in '22 and beyond.

In terms of the '21 numbers, I think we said at the Capital Markets Day, the range of between CHF 16.2 billion and CHF 16.5 billion, depending on how much of the CHF 600 million of investments we actually choose to make, that very much remains intact.

And although, clearly, I think if we do see a continuation of the strong start to 2021, then I would expect to spend the bulk of that, given what we want to do in the Wealth Management businesses, but the guidance is intact, and those are the factors actually driving this.

I think in terms of FX and currency reporting, I think you know this as well as I do, Kian, we have reported the Investment Bank in dollars since 2015 and -- because the bulk of its revenues and its costs are actually U.S. dollar related.

So it's always been clearer to do that, and we've shown that, that way in our slides.

I think of the other 3 divisions, I think it makes -- would make no sense to report SUB in dollars.

It's a Swiss franc business, they have Swiss franc costs.

It's based here in our home market, whereas APAC does generate just over 2/3 of its revenues actually in dollar and dollar-linked currencies and also has the bulk of its expenses in the same expenses.

So I think it's probably easier to make the comparisons to show those numbers in dollars for everybody because I think then you can compare to peers more easily.

I thought a lot about IWM, but we have to remember, the bulk of IWM's costs are here in Switzerland as well, even though, essentially, it does have a much broader exposure to dollar and non-Swiss franc currencies than some of our other businesses and, therefore, is most exposed to the economic challenges that come from a strengthening Swiss franc and a weakening dollar or weakening euro, for that matter and that's why we're going to keep reporting that in Swiss francs.

So that's how we're doing the divisions, I think -- so it's more transparent, and you can make the comparisons to the peers.

That then begs the broader question, which is should we look again at moving our reporting from Swiss franc to U.S. dollars.

Look, I think we looked at it with the Board back in '19.

We decided not to move from that.

Switzerland is our home market.

We operate in Swiss francs and that was something that we did discuss with Central Bank and other people basically, and I think it was a decision that was very much supported.

It is -- I'm not sure it's a bad thing to report in one of the world's strongest currencies, it's a bastion of safety and it's something that's important to us and to our clients.

And I would just remind you the reporting currency doesn't affect the economics, it's just how you choose to present things.

At the end of the day, we are listed on the Swiss stock exchange, and we buy back our shares in Swiss francs.

So we have to generate Swiss francs to actually deliver this.

That then gets to your next question, which is, okay, what about the economics?

I think, generally speaking, as a bank, we're quite well balanced.

The only open exposure we have really is actually is to sterling because we do have a sterling cost base, but there's not these days, a great deal of sterling revenues in the world markets essentially.

So we generally do have a short sterling position, which has been, obviously, favorable post '16, marginally less favorable in the last year or so, and we'll see what happens next.

We have looked at hedging that occasionally but I mean, in reality, it's the economic base of the business, and hedging basically only smooths the FX effects rather than anything else.

And I don't think it really makes a great deal of a sense to do it, but it wouldn't make any sense for us to hedge the Swiss franc dollar, given our liabilities are ultimately in Swiss francs in terms of how we actually operate.

So I've given it some thought.

Clearly, as I said, I think the division that's most exposed to this economically is IWM, it's challenged in terms of the currencies and how they actually choose to work.

Your next question then, I think, was around adjusted as reported.

Look, a few points.

Firstly, our primary metric remains reported PTI.

If you look at the LTI metrics for the ExB, it's reported -- it's the reported RoTE that we actually report that [as owned] and that's how SD works.

The secondary metric, which is the tangible book value per share, is adjusted only for FX and on credit volatility because I think otherwise, you'd be creating incentive for Credit Suisse to have a lower credit rating, which would be not the right thing to do.

So that does remain our primary metrics.

When we announced the restructuring measures last July, we said, for the period of this time, it made more sense to focus on the adjusted numbers because otherwise, you'd see the reported trends disrupted by the restructuring costs.

Clearly, the restructuring program comes to an end at the end of the second quarter and there afterwards, I think it will be our intention to move back towards reported numbers.

But we did say, for this period while we're doing it, we'd actually look at the adjusted numbers.

And as I said, clearly -- as I said, in terms of your final point about adjusted tangible book value per share, the adjustments are purely for FX and for our own credit, there's no adjustment for restructuring costs.

There's no adjustment for litigation or anything like that in terms of how we see it.

Your next question comes from the line of Amit Goel from Barclays.

So I've got a question on the Wealth Management margin progression.

So I guess, just with -- I guess, so far, a large part of the AUM growth driven by the market performance.

Just wanted to understand a bit better what that means for the margin going forward in terms of the assets that you have, which don't really generate the kind of recurring fee margin, how that's growing relative to AUM, that does generate reoccurring fees and what we should expect clearly in Q4 for APAC?

And IWM, the margin was stable, but just curious what your thoughts are on that?

Well, look, just a few points, Amit.

I think we've made this point before that the banks do not have the same AUM definition.

We went through a number of changes back in 2012/'13, which I think you know as well as we did and we went for a very tight narrow definition in terms of what actually qualifies for AUM.

We limit the amount we give for lending.

We have restricted in terms of the amount of single stock positions, and we have a firm criteria around guidance and advice.

That's one reason why AUM is a smaller subset of our total client business volume than it might be for some of our peers.

I think that's right because essentially, that means that we're actually looking at assets where we're actually actively earning fees.

So you're not going to see the dilution of gross margin from actually recognizing more AUC in terms of this.

So that's just a sort of point in terms of comparison and myself or any of the IR team be happy to talk through.

This is something I review regularly with the Audit Committee.

It's an important control metric for us.

I think, then -- turning then to Page 32, really, I think rather than giving you a margin guidance because I think it comes down to the different trends of the businesses.

I'd just summarize what we think, which is I do think that we are at the bottom, so long as exchange rates don't move further downwards against the Swiss franc, i.e., the Swiss franc doesn't appreciate further in terms of our net interest income, particularly as we'll see lending growth.

And I'm just making that comment sequentially, clearly not year-on-year because you had a completely different FX rate in the first quarter 2020 but I think we -- sequentially, we've seen the bottom in terms of that.

Recurring, I think the things we're talking about are linked to the value of portfolios.

So that will come through on a -- and as you said, a month plus 1 basis, so typically flows through into the next quarter.

And transaction, we said what we said, I think our comments around the strong start to January should not be interpreted as just relating to the Investment Bank.

It's certainly true the Investment Bank had a good start.

It's certainly true, though, that our APAC business, and we are generally seeing transactions being strong across the bank.

So I think that's what -- but I -- but certainly, I'm not trying to guide you to lower net or gross margins.

Your next question comes from the line of Jernej Omahen from Goldman Sachs.

Yes.

Actually, I have only 2 questions left.

It's always tempting to look at operating performance and excluding all the one-offs, I guess.

But then it becomes problematic when these one-offs become recurring to an extent.

And I just went back and I looked at consensus estimates for the litigation charge at Crédit Suisse at the start of January of last year, and it was CHF 58 million and it ended up being CHF 988 million.

The consensus for this year is CHF 68 million.

And for '22, it's CHF 36 million.

And I was just wondering, so just 2 questions.

And I think to an extent, I go back to Kian's questions as well on stated versus underlying.

To what extent do you think consensus is accurately capturing what you expect for litigation and nonoperating charges more broadly for this year and next?

And then, Thomas, a question to you, to what extent were you surprised in your new role as CEO by the extent of nonoperating charges that keep popping up at Crédit Suisse?

And then the second question is just very basic.

So on Page 5, you quote low bond yields as one of the factors affecting or pressuring this year's results.

I think we can see from your chart very nicely now this trend is reverting and I was wondering if you see that as a potential tailwind to your results this year?

Okay.

I'll take the first one and then maybe, David, you can take the second one.

Look, it did only partially come as a surprise.

I think we said on various previous sessions review, for example, that we are looking at some of the positions in Asset Management.

And clearly, the situation about York was something that we had discussed previously and was something we wanted to address, I wanted to address in my first year.

And the legal expenses or the legal provisions around our RMBS docket was something that we knew at some point will materialize.

These legal cases sometimes have their own timeline and their own dynamics.

I'm very happy that we managed to address the MBIA case.

And I think it's also appropriate what we have done for the balance.

I'm not going to comment of whether consensus is right or wrong.

But I do definitely think that what happened in the fourth quarter was necessary, was right thing to do in my first year to address some of these historic situations.

And from that perspective, it didn't come a surprise, but it was also -- actually, it was interesting that both when we announced the York situation as well as the MBIA, the share price went up.

So I think actually, investors are appreciating that we follow through on our promise that we want to address legacies and work through them.

So from that perspective, I think it was the right thing to do.

It gives us a much better and clearer platform now for '21.

We have solid momentum in the first 6 weeks in all 4 divisions.

We are focused on growth in all 4 divisions.

And from that perspective, we can really now focus, not only, thanks to the -- addressing the legacies I mentioned, but also on the back of what we announced in the summer, namely putting the 2 investment banks together, putting risk and compliance together, creating SRI on the group level, addressing the Neue Aargauer Bank here in Switzerland and launching digital offering here in Switzerland, a new one, together with reducing the branch network.

These were all measures that were done in the middle of COVID-19 in the summer, which I feel very good about because now we can focus on growing the business on all dimensions.

So that's how I would answer your question on operating performance versus one-off and whether this was a surprise.

If I could just make a few supplementary points, Jemej, on this one.

I think, firstly, the reasonably possible loss disclosure at the end of the third quarter was $1.2 billion.

So -- and I think there's been very full disclosure around the RMBS docket and other litigation risks in all of our reporting.

I think the second point, the MBIA case, obviously went to trial last year.

And we obviously received adverse judgment on the end of November 31, and we made an appropriate ad hoc statement there afterwards around it.

I think that judgment was probably worse than we expected.

And therefore, it was not something we wanted. .

But I think we reacted appropriately, both in terms of the provision we took in respect of the MBIA case and the broader read across for the rest of the book, we actually took at the back of that.

And I think it's good, though, that actually -- I mean, if you go back to what we said in the first of December, we talked about a risk of $680 million in respect to MBIA.

You can saw we actually closed it out at CHF $600 million.

I think it's an interesting question, which we could discuss, has it been right to actually fight, these RMBS cases since they go back to 2005 to '07?

I think the answer is yes.

I think if you look at the assessments that were reached in some of these cases by other banks in the 2011, 2012 period, they were clearly a great deal higher than this.

So I think it has been the right things to do.

But I just would just caution, there's been no lack of disclosure around these positions and this risk in terms of that.

And I think we have, as Thomas said, made the appropriate read across to the rest of the book in terms of our fourth quarter provisions.

Secondly, I'd also point out that the significant item does include some positives.

Obviously, you've had the 2 tranches, the gains on Allfunds, and that does remain, I think, conservatively marked compared to some of the speculation we've seen around this asset.

And secondly, I think obviously, SIX continues to be a very well-run bank utility, and I think has generated gains for us, and that's come through as well.

So there are positives as well as negatives.

So I think the issue for '20 is, in 2019, you had a net credit from such write downs, whereas in 2020, you had a net debit in terms of that, just to make a couple of points.

So then the next point, really just in terms of long bond yields.

And I think we probably said as much on net interest income, which is I think we have -- we are at the bottom, and I think we should start to see it improve as we build lending sequentially.

Clearly, given the FX moves, I think that will be much more challenging on a year-on-year basis.

But if FX rates do remain at current levels, given the lending initiatives, I don't -- I think we probably won't see too much of a shortfall, maybe something in the CHF 50 million to CHF 60 million on a constant currency basis for 2021 compared to 2020.

So I think we're coming through the inflection point around net interest income trends.

Your next question comes from the line of Anke Reingen from Royal Bank of Canada.

Two, please, 2 follow-up questions.

The first is on the litigation on disclosure and why you just quoted the CHF 1.2 billion at the end of Q3, which went down to CHF 0.9 billion at the end of Q4.

And given the large charge expected -- taken in Q4, I guess it could have gone down more.

I just wonder, yes, I mean, is there too many moving parts?

Is the number just too theoretic and any sort of like more clarity on this point?

And then on the costs, I mean, should we see the fact that you no longer quote the CHF 16.2 billion to CHF 16.5 billion and the fact that you comment CHF 16.6 billion versus CHF 16.5 billion, but not really explain it much is a sign that you're sort of like moving away from the absolute cost guidance or deemphasize it, given it wasn't necessarily reiterated?

Well, that's the 2 points really.

I think we, obviously, did reduce the IPO by CHF 300 million, which, as you say, is not as much as the CHF 800 million increase in the RMBS provision.

And the reason for that, as I commented before, there were certain items in the judge's order of the November 31, which I think were adverse to us, and we looked both in terms of the MBIA case and in terms of the read across to the rest of the RMBS docket, and we wanted to reflect that fully.

It is what it is.

It's a matter of fact.

There's clearly a number of other cases and other appeals going on around that but that's why you see that balance basically.

I think the second point in terms of the expenses, I think I was asked the question earlier on, basically, by one of your colleagues.

And I think it was Kian -- sorry, Kian.

And just to reiterate, our guidance does remain CHF 16.2 billion to CHF 16.5 billion, dependent on the level of the CHF 600 million investments we identified in the Capital Markets Day we choose to invest.

At this point, given the strong start to this year, I think it would seem prudent to be making those investments to support the longer-term growth of our Wealth Management businesses in '22 and '23, particularly in faster-growing markets.

But clearly, that's a decision which is constantly under review, and we'll see how 2021 develops.

It is an uncertain year.

We're not through COVID-19 yet, but it has been a good start.

Your next question comes from the line of Adam Terelak from Mediobanca.

I want to just come back to costs.

Look, I think the trend this year is kind of hiding some big movements in different directions.

So if you go to SUB 69, the FX-neutral cost base is CHF 17.4 billion.

Now when we talked about expenses for 2020 at the prior CMD, the upper end of the range was CHF 16.9 billion in a good year.

So I'm just trying to work out where this additional spend has come from.

I know you're talking about investment budget going forward but can you think about that in a backward-looking sense, how much of this is investment in growth?

And how much of this is rectifying some control issues or anything like that?

And then what should the J-curve on this spend look like?

When will the revenues come through?

Are there any this year?

Is there any -- because clearly, the bonus pool is down, so it's not paying for performance.

So I'm just trying to get an idea of that and how that looks going forward.

And then just quickly, a clarification on the January trends.

Is that in Swiss franc or in U.S. dollar?

Clearly, you're flagging strong transactional and trading revenues, but clearly, the year-over-year FX headwind is fairly sizable.

Thank you, Adam.

There's a number of points there.

So I might come back to, just to clarify in case I've missed anything.

Firstly, in terms of the cost guidance, yes, it is complex because you will see in 2021, at current exchange rate, a further drop in expenses due to the FX moves, obviously, subject to how rates actually pan out.

But I think in terms of things that we chose to spend on, I think, firstly, we have talked before about the growth in China.

Thomas has talked about it.

That is critical for us.

But I think secondly, there is obviously everything else we actually want to do in APAC because it is our fastest-growing region and I think that's where a lot of the opportunities lie.

I think in terms of other things, yes, I think it's very important to maintain appropriately in terms of your control infrastructure.

There's plenty of risks out there.

And I think we're spending appropriately in terms of that.

So that's all I'd say at this point.

I think the expense walk we gave at the Capital Markets Day, I think, does very much remain intact.

Interest -- FX have moved a bit since then, but I think that's all I'd really say in terms of the costs, really.

I mean in terms of deltas on 2020, it's CHF 600 million versus the top end of the prior range.

I mean it's a big number.

I'm just wondering whether that's bringing forward investment or when the revenues attached to that could come through?

I probably would defer to Thomas.

I mean obviously, you stepped in as Chief Executive.

And I think you, I think -- well, let me just say, I would say, rightly, prioritize the growth in our Wealth Management businesses.

And I think the things we're spending money on are exactly the right thing for future, Thomas, but?

Yes.

Look, I think that it's important to address obvious cost reduction, structural opportunities, like we had with the integration of Neue Aargauer Bank here in Switzerland, closing down the branches and investing in CSX, our new mobile device, or putting together IBCM and Global Markets, which allowed us to take structural costs out or combining risk and compliance, which allowed us to take cost out.

We also addressed some structural opportunities in IWM and in other areas of the corporate center.

Real estate is another area where we see some opportunities.

But generally, I also think it's important to really manage, especially in the 3 private banking divisions, the cost base dynamically and in a cost income ratio basis and not absolute.

If we are investing, we are rolling out in China.

We are investing in the Middle East.

We are investing in Thailand, in Korea.

So we want to grow.

We see huge growth opportunities in private banking.

We made that clear at the mid-December Capital Markets Day.

This is a market that grows 7% globally and we want to grow at least with the market.

And if you open branches like we opened in Riyadh, or we -- roll out of relationship managers for onshore private banking in China, that costs money, but we are financing a lot of these investments with some structural moves, like we did in 2020, in the summer, that I feel very good about.

We didn't see the benefit yet of those, but it allows us to actually invest in growth and self-finance a large portion of that.

Adam, I think your second question was, is our guidance given in dollars or in Swiss francs.

Our guidance is given in Swiss francs.

Your next question comes from the line of Andrew Lim, Societe Generale.

So you've talked about in places how the impact of lower interest rates has affected interest income in CIC, for example, and overall for Wealth Management net interest income.

But could you elaborate more specifically about your sensitivities due to the shortened versus the long end of the U.S. curve?

Obviously, there's been quite a few shifts in the U.S...

Can you repeat that question, please?

Sorry, it was difficult to hear you acoustically.

Andrew, I think you cut out for a bit, I'm afraid, sorry.

All right.

Sure.

I'll repeat again, asking about the sensitivity of your net interest income to the shortened versus the long end of the U.S. curve.

Could you elaborate more on your sensitivities there and how we should expect NII to develop, given moves in the past 2 quarters?

I think -- I mean -- sorry, Andrew.

Did you have a second question, sorry?

Yes.

My second question really is on dynamics on recurring fees.

In Swiss franc terms, your AUM is at record high levels.

But if we turn to Slide 32, your recurring fees are edging down.

And maybe you can allude that to translation effects as well, but are there other dynamics happening there, which offset the record high AUM?

I think it sounds -- perhaps I take the first point, Thomas.

But I think in terms of the dollar interest rate exposure, we do run a swaps book and, therefore, we will benefit from the steeping of the dollar curve in due course.

But we'd normally seek to price out over the sort of 2 to 3 years in terms of this.

So we -- it tends to be a sort of medium-term type swap book to reduce interest rate volatility.

So we don't have the up or the down volatility that you see for some of the U.S. banks relative to the curve.

As I said before, I think -- I did give a general guidance a few minutes ago, which is if I look at the interest rate effect for this year, net of the FX move, I expect to be down about CHF 50 million for full year 2021 compared to full year '20.

Clearly, that would obviously change if we see another shift in FX, and that's across the entire bank.

On the recurring, if you exclude certain, I would say, abnormalities like Swisscard in Switzerland, which is our credit card business, which is equity-consolidated business joint venture with American Express, which all the revenues are in recurring, and clearly, credit card business was very difficult in 2020, but if you exclude that, there is a very clear correlation between assets under management and recurring revenues, which we have seen some degree of margin erosion, but at the same time, we are very much focused to increase our mandate penetration.

That's our clear strategy in all 3 private banking divisions.

I think with our performance we've had in our CIO office, but also with our efforts around ESG and new mandates, be it for high-net worth, but also ultra-high net worth, which would include also private equity investments, so platinum mandates, as we call them, we are offering new opportunities for our clients to have tailor-made mandates depending on their risk appetite.

And this is how we are planning to further increase our recurring revenues.

And as you can see on Page 32, whilst year-on-year, we are down, and there is also some translation element in there, we like the trajectory, and we definitely see an improvement in our overall recurring fees, even in Swiss francs.

Your next question comes from the line of Daniel Regli from Octavian.

First -- the first question is on net new money in Asia.

Can you maybe elaborate a bit more what led to the outflows in Asia, particularly since, obviously, your larger peers have reported quite strong new money numbers in Asia?

And then secondly, maybe -- sorry to come back again to this litigation thing, and obviously, I think there is a moral hazard because litigation tends to come with a huge time delay.

So normally not the managers who actually do the wrong things are paying for the wrong things, which have been done in the past.

What do you do to prevent this moral hazard?

Okay.

So on net new money, I mean, if you look at our Page 39, you see that for the whole year, 2020, we had CHF 8.6 billion.

We had, in 2019, CHF 8.7 billion.

If you were to translate that into dollars, we're actually up about 10%.

So I think overall, we have a good trajectory, very healthy NNA in the business, if you took it analyzed.

I agree with you that fourth quarter was a bit weak, but I don't look at NNA on a quarterly basis.

This is more like an annual basis, and it kind of shows some of the trends.

But again, I can just come back to my earlier observation that the way you should really look at the banking franchise, private banking franchise, is client business volume.

That really gives you the best sense of how the franchise is growing.

But the CHF 8.6 billion in Swiss francs is actually higher on a like-for-like basis than the CHF 8.7 billion we had in 2019.

Look -- and then with respect to the moral hazard, this is somewhat theoretical question.

We had the legal strategy at the time, in 2009, 2010.

You can argue whether it was the right strategy or not, but as David said, we chose that way.

And overall, probably was not the wrong strategy.

But I can also say that unlike others, we have settled, for example, the RMBS case, with the DOJ, that was done in 2016.

And from that perspective, some good efforts were made by my predecessors.

And some of these litigations have their own, as I said, their own tactical considerations with respect to when do you settle and then when do you actually go to court.

And each bank has to do that as they see fit, depending on the case.

So that's all I can say to that.

Your next question comes from the line of Patrick Lee from Santander.

I have a couple of questions on the Wealth Management-related businesses, mainly in referring to your disclosure on Page 17, where you split the client business volume as an aggregate of AUM custody assets and that I know is something that you've commented on before.

Two questions on this.

Firstly, on the especially strong growth in custody assets in APAC, and also to a lesser extent, in SUB compared to the steady performance in IWM for custody assets, is this primarily a reflection of the transaction nature of the businesses in APAC or whether we should expect custody assets to fluctuate around the transaction volatility?

Or can I look at another way, whether it could be a temporary parking space for the money with some expectation of this converting into a more profitable AUM at a later stage?

The second question relating to this is that if I look -- looking ahead, is it fair to say that you are steering us to focus on from AUM to this broader client business volume as a better reflection of your Wealth Management performance?

And I guess, I mean, in terms of gross margin, would it give us a better forecast or estimate if you think about it separately, like NII margin on loans, recurring fees on AUM and transaction on custody asset?

Would it give us a better view for FX?

Yes.

Thanks, Patrick.

Thanks for your 2 excellent questions.

So custody assets in Asia grew for mainly 2 reasons.

One, we saw some deleveraging, as I said earlier, but also there are quite a few of them, which are single-stock positions with performance, strong equity markets in Asia, obviously.

So we saw both trends.

In Switzerland, a bit similar, but with less, I think the equity exposure, single-stock exposure in custody assets is probably proportionally smaller.

There is also a lot of cash in there.

There's some gold in there, et cetera.

So these are single asset class positions where we have low or no revenues, which we define as custody assets.

To your second question, you could definitely make the argument that you should look actually at your margins in percentage of the overall client business volume.

Obviously, then we would deviate a bit from the industry standard, which is to relook at it in percentage of the AUM.

We are currently not planning to change that, but we are planning to be disclosing client business volume going forward because, as I said before, I think it's the right way to look at the franchise.

I think there's clearer indication of the number of assets, which the bank has relationship associations with.

So I think what was done very well in SUB over the years, essentially was to migrate some of these custody businesses into AUM as you build on the initial relationship with the clients.

So I think it's a very good leading indicator and very much worth looking at.

I will hand the call back over to you, Kinner.

Great.

Thank you very much, everyone, for all your questions this morning and your interest.

Of course, if you have any further questions, feel free to contact IR.

Thanks, all.

Thank you very much.

Bye-bye.

Thank you.

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