Credit Suisse : 2Q23 Earnings Media Release

Media Release

Zurich, August 31, 2023

Ad hoc announcement pursuant to Art. 53 LR

Credit Suisse AG, a UBS Group company, reports a 2Q23 pre-tax loss of CHF 8.9 bn, a pre-tax loss of CHF 4.3 bn excluding acquisition-related effects*, and an adjusted* pre-tax loss of CHF 2.1 bn

Credit Suisse AG

			in / end of		% change
	2Q23	1Q23	2Q22	QoQ	YoY
Credit Suisse AG results (CHF million)
Net revenues	(528)	17,630	3,687	-	-
Provision for credit losses	135	82	63	65	114
Compensation and benefits	1,873	2,140	2,083	(12)	(10)
General and administrative expenses	4,969	1,808	2,440	175	104
Commission expenses	212	207	254	2	(17)
Goodwill impairment	1,045	1,301	23	(20)	-
Restructuring expenses	112	279	75	(60)	49
Total other operating expenses	6,338	3,595	2,792	76	127
Total operating expenses	8,211	5,735	4,875	43	68
Income/(loss) before taxes	(8,874)	11,813	(1,251)	-	-
Income tax expense	455	310	394	47	15
Net income/(loss)	(9,329)	11,503	(1,645)	-	467
Loss attributable to noncontrolling interests	(26)	(14)	(1)	86	-
Net income/(loss) attributable to shareholders	(9,303)	11,517	(1,644)	-	466
Statement of operations metrics (%)
Cost/income ratio (%)	-	32.5	132.2	-	-
Return on tangible equity (%)	(72.3)	102.5	(14.5)	-	-
Balance sheet statistics (CHF million)
Total assets	483,735	538,568	730,295	(10)	(34)
Risk-weighted assets	216,776	242,531	273,651	(11)	(21)
Leverage exposure	585,681	655,439	869,272	(11)	(33)
Assets under management and net new assets (CHF billion)
Assets under management	1,213.3	1,250.6	1,451.4	(3.0)	(16.4)
Net new assets/(net asset outflows)	(39.2)	(61.1)	(7.6)	(35.8)	415.8
Basel III regulatory capital statistics
CET1 capital (CHF million)	45,542	54,244	42,443	(16)	7
CET1 ratio (%)	21.0	22.4	15.5	-	-

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Media Release

Zurich, August 31, 2023

Results excluding certain items included in Credit Suisse's reported results are non-GAAP financial measures. Management believes that adjusted results provide a useful presentation of Credit Suisse's operating results for purposes of assessing Credit Suisse's overall and divisional performance consistently over time, on a basis that excludes items that management does not consider representative of Credit Suisse's underlying performance. Provided below is a reconciliation of Credit Suisse's adjusted results to the most directly comparable US GAAP measures.

On June 12, 2023, UBS Group AG (UBS) completed the acquisition of Credit Suisse Group AG, which resulted in changes that had significant impacts on Credit Suisse's US GAAP results for the second quarter of 2023. These acquisition-related effects, which are excluded in Credit Suisse's adjusted results, included CHF 2,204 million of fair valuation adjustments, CHF 1,836 million impairments of internally developed software, CHF 286 million of integration costs, CHF 240 million of acquisition- related compensation expenses, a CHF 38 million write-down of intangible assets and CHF 13 million of other acquisition-related adjustments.

Reconciliation of adjustment items of Credit Suisse AG

		Credit Suisse AG
in	2Q23	1Q23	2Q22
Results (CHF million)
Net revenues	(528)	17,630	3,687
Fair valuations	2,204	-	-
Write-down of additional tier 1 capital notes	0	(14,113)	0
Real estate (gains)/losses	0	(1)	(13)
(Gains)/losses on business sales	4	(726)	1
(Gain)/loss on InvestLab/Allfunds Group	0	0	168
(Gain)/loss on equity investment in SIX Group AG	32	0	19
Write-down of intangible assets	38	-	-
Adjusted net revenues	1,750	2,790	3,862
Provision for credit losses	135	82	63
Total operating expenses	8,211	5,735	4,875
Goodwill impairment	(1,045)	(1,301)	(23)
Restructuring expenses	(112)	(279)	(75)
Litigation provisions 1	(1,345)	(22)	(434)
Impairments on internally developed software	(1,836)	-	-
Acquisition-related compensation expenses	(240)	-	-
Cancellation of contingent capital awards	408	-	-
Expenses related to real estate disposals	(35)	(3)	(6)
Expenses related to Archegos	(7)	(6)	(13)
Integration costs	(286)	-	-
Other acquisition-related adjustments 2	(13)	-	-
Adjusted total operating expenses	3,700	4,124	4,324
Income/(loss) before taxes	(8,874)	11,813	(1,251)
Adjusted loss before taxes	(2,085)	(1,416)	(525)

1 Reflects major litigation provisions as previously disclosed, and all litigation expenses post-acquisition date.

2 Includes various acquisition-related items that are not reflected in any of the above categories.

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Media Release

Zurich, August 31, 2023

Credit Suisse AG 2Q23 results

This media release provides certain preliminary unaudited financial information for the second quarter of 2023 that is derived from management accounts and based on the information that Credit Suisse has available to it at the time of publication. Credit Suisse is publishing its information now in conjunction with UBS' publication of its financial results for the second quarter of 2023. Credit Suisse's financial information is subject to change, including as a result of any normal quarterly adjustments in relation

to the financial statements as well as any changes in strategic direction of UBS. There can be no assurance that the final results for the second quarter of 2023 and the first half of 2023 will not differ from this information, and any such differences could be material. Credit Suisse expects to publish its 6M23 Financial Report, including financial statements for the six months ended June 30, 2023 and management's discussion for the period pre- sented, on or about September 29, 2023.

Credit Suisse reported a loss before taxes of CHF 8.9 billion for 2Q23, which was impacted by a number of significant items discussed further below, and an adjusted* loss before taxes of CHF 2.1 billion. Our results were also affected by a slowdown in business volumes and client activity, particularly in the Investment Bank.

>>Refer to the UBS financial results - second quarter 2023, for the combined results of UBS and Credit Suisse and further information.

In 2Q23, litigation provisions of CHF 1.3 billion were recorded related to developments, including settlements and new information in a number of previously disclosed legal matters.

Due to asset under management outflows and the projected impact on the profitability of the Asset Management reporting unit, Credit Suisse concluded that the estimated fair value of the Asset Management reporting was below its related carrying value and as a result a goodwill impairment charge of CHF 1.0 billion was recorded in the quarter, resulting in a goodwill balance of zero for that reporting unit.

2Q23 was also impacted by the cancellation of the prior-yearcontingent capital awards (CCA) resulting in a credit of CHF 0.4 billion.

The acquisition of Credit Suisse Group AG resulted in changes that had significant impacts on Credit Suisse's US GAAP results for the second quarter of 2023. These acquisition-related effects included fair valuation adjustments, impairments of internally developed software, integration costs, acquisition-related compensation expenses, write-down of intangible assets and other acquisition-related adjustments.

As a result of the acquisition, in 2Q23, Credit Suisse recorded fair valuation adjustments of CHF 2.2 billion, reflecting changes in exit strategies and principal markets, alignment to UBS policies, balance sheet reclassifications, certain specific equity impairments and changes of intent in connection with UBS's plans and intentions for underlying positions or portfolios, including CHF 1.5 billion in the Capital Release Unit.

As a result of the acquisition, a detailed review of internally developed software applications and an assessment of their fair value has been performed reflecting the usability and useful life for UBS. Following this assessment, which included a number of applications that were found to be overlapping with UBS sys- tems, an impairment of CHF 1.8 billion was recorded.

2Q23 was further impacted by certain compensation-related developments in connection with the acquisition. Credit Suisse recorded integration costs of CHF 0.3 billion primarily related to compensation and benefits. As a result of the alignment of certain Credit Suisse processes and policies to those of UBS, including the variable incentive framework, acquisition-relatedcompensation expenses were CHF 0.2 billion.

Credit Suisse reported negative net revenues of CHF 528 million in 2Q23 compared to net revenues of CHF 3,687 million in 2Q22. On an adjusted* basis, net revenues of CHF 1,750 million in 2Q23 decreased 55% compared to CHF 3,862 million in 2Q22 resulting from lower revenues across all businesses reflecting the uncertainty about Credit Suisse in the first part of the year. Lower net revenues in Wealth Management and the Swiss Bank were primarily driven by lower net interest income, mainly reflecting lower loan and deposit volumes. Lower net revenues in the Investment Bank reflected a substantial reduction in activity, due to uncertainty about this business and challenging market conditions. The Corporate Center included CHF 540 million of funding costs from the use of liquidity facilities from the Swiss National Bank.

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Media Release

Zurich, August 31, 2023

Reconciliation of adjustment items

					Capital			Credit
	Wealth	Swiss	Asset	Investment	Release	Corporate	Adjustments 1	Suisse
in	Management	Bank	Management	Bank	Unit	Center	AG
2Q23 (CHF million)
Net revenues	762	872	(32)	(84)	(1,620)	(486)	60	(528)
Fair valuations	20	37	283	304	1,527	33	0	2,204
(Gains)/losses on business sales	4	0	0	0	0	0	0	4
(Gain)/loss on equity investment in SIX Group AG	16	16	0	0	0	0	0	32
Write-down of intangible assets	0	0	0	0	38	0	0	38
Adjusted net revenues	802	925	251	220	(55)	(453)	60	1,750
Provision for credit losses	21	81	1	11	19	1	1	135
Total operating expenses	2,003	922	1,337	1,857	1,143	990	(41)	8,211
Goodwill impairment	0	0	(1,051)	0	0	0	6	(1,045)
Restructuring expenses	0	(9)	(1)	(44)	(38)	(31)	11	(112)
Litigation provisions 2	(428)	0	(8)	(7)	(311)	(737)	146	(1,345)
Impairments on internally developed software	(594)	(270)	(55)	(621)	(289)	(7)	0	(1,836)
Acquisition-related compensation expenses	(75)	(42)	(8)	(113)	(6)	4	0	(240)
Cancellation of contingent capital awards	91	28	21	215	64	(11)	0	408
Expenses related to real estate disposals	(6)	0	0	(24)	(5)	0	0	(35)
Expenses related to Archegos	0	0	0	0	(7)	0	0	(7)
Integration costs	(42)	(15)	(10)	(167)	(2)	(50)	0	(286)
Other acquisition-related adjustments 3	(1)	6	(3)	20	(34)	(1)	0	(13)
Adjusted total operating expenses	948	620	222	1,116	515	157	122	3,700
Loss before taxes	(1,262)	(131)	(1,370)	(1,952)	(2,782)	(1,477)	100	(8,874)
Adjusted income/(loss) before taxes	(167)	224	28	(907)	(589)	(611)	(63)	(2,085)

1 Adjustments represent certain consolidating entries, including those relating to entities that are managed but are not owned or wholly owned by Credit Suisse. 2 Reflects major litigation provisions as previously disclosed, and all litigation expenses post-acquisition date.

3 Includes various acquisition-related items that are not reflected in any of the above categories.

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Media Release

Zurich, August 31, 2023

Contact details

Investor Relations, Credit Suisse

Tel: [phone]

Email: [e-mail]

Corporate Communications, Credit Suisse

Tel: [phone]

Email: [e-mail]

*Refers to results excluding certain items included in our reported results. These are non-GAAP financial measures. A reconciliation to the most directly comparable US GAAP measures is included in this document.

This document contains select information for the second quarter of

2023 that Credit Suisse believes is of particular interest to investors and other stakeholders. More comprehensive information about our results and operations for the first half of 2023, as well as important information about our reporting methodology and some of the terms used in these documents will be published in our 6M23 Financial Report on or about September 29, 2023. Please also refer to the UBS financial results - second quarter 2023, for the combined results of UBS and Credit Suisse and further information.

Credit Suisse AG includes the results of its five reporting segments, Wealth Management, Swiss Bank, Asset Management, Investment Bank and Credit Release Unit, as well as the Corporate Center and certain adjustments. The adjustments represent certain consolidation entries, including the elimination of results of Credit Suisse Group AG until the acquisition date, and other entities managed but not owned or not wholly owned by Credit Suisse AG. The results of these entities are included in the reporting segments and the Corporate Center. For purposes of this document, unless the context otherwise requires, the terms "Credit Suisse" means Credit Suisse AG and its consolidated subsidiaries.

Credit Suisse has not finalized its 6M23 Financial Report and Credit Suisse's independent registered public accounting firm has not completed its review of the condensed consolidated financial statements (unaudited) for the period. Accordingly, any subsequent review may result in changes to the financial information contained in this document.

The expected benefits of the acquisition of Credit Suisse Group AG by UBS or the successful execution of UBS's strategic plans related to the acquisition may not be achieved. The success of the transaction, including anticipated benefits and cost savings, will depend, in part, on the ability to successfully integrate the operations of both UBS and Credit Suisse rapidly and effectively, while maintaining stability of operations and high levels of service to customers of the combined franchise. UBS's ability to successfully integrate Credit Suisse will depend on a number of factors, some of which are outside of its control, including those discussed in UBS's public filings. In addition, the combined group will be required to devote significant management attention and resources to integrating its business practices and support functions. The diversion of management's attention and any delays or difficulties encountered in connection with the transaction and the coordination

of the two companies' operations could have an adverse effect on the business, financial results, financial condition or the share price of the combined group following the transaction. The coordination process may also result in additional and unforeseen expenses.

For more comprehensive information about risks that could adversely affect our results of operations and financial condition, please refer to the information set forth in "Risk factors" in I - Information on the company in our Annual Report 2022 (references to "Credit Suisse," the "Group," "we," "us" and "our" in such risk factors are also related to the consolidated businesses carried on by Credit Suisse AG and its subsidiaries, and therefore should be treated as references to Credit Suisse AG and its consolidated subsidiaries, to the extent relevant following implemen-

tation of the acquisition). Please also refer to the "Risk factors" section in the Form 6-K filed on August 31, 2023 by UBS Group AG, UBS AG and Credit Suisse AG for further information on risks that could adversely affect UBS's businesses, results of operations and financial condition.

In preparing this document, management has made estimates and assumptions that affect the numbers presented. Actual results may differ. Annualized numbers do not take into account variations in operating results, seasonality and other factors and may not be indicative of actual, full-year results. Figures throughout this document may also be subject to rounding adjustments. All opinions and views constitute good faith judgments as of the date of writing without regard to the date on which the reader may receive or access the information. This information is subject to change at any time without notice and we do not intend to update this information.

Return on tangible equity, a non-GAAP financial measure, is calculated as annualized net income attributable to shareholders divided by average tangible shareholders' equity. Tangible shareholders' equity, a non-GAAP financial measure, is calculated by deducting goodwill and other intangible assets from total shareholders' equity as presented in our balance sheet. Management believes that return on tangible equity is meaningful as it is a measure used and relied upon by industry analysts and investors to assess valuations and capital adequacy. For end-2Q23, tangible shareholders' equity excluded goodwill of CHF 472 million and other intangible assets of CHF 358 million from total shareholders' equity of CHF 45,588 million as presented in our balance sheet. For end-1Q23, tangible shareholders' equity excluded goodwill of CHF 1,540 million and other intangible assets of CHF 428 million from total shareholders' equity of CHF 55,947 million as presented in our balance sheet.

For end-2Q22, tangible shareholders' equity excluded goodwill of CHF 2,939 million and other intangible assets of CHF 340 million from total shareholders' equity of CHF 48,445 million as presented in our balance sheet.

Assets under management comprise assets that are placed with us for investment purposes and include discretionary and advisory counterparty assets. Net new assets include individual cash payments, delivery of securities and cash flows resulting from loan increases or repayments. Assets under management and net new assets include assets managed by consolidated entities, joint ventures and strategic participations. For further information, please refer to Assets under management" in II - Operating and financial review in the Credit Suisse Annual Report 2022.

Investors and others should note that we announce important company information (including quarterly earnings releases and financial reports as well as our annual sustainability report) to the investing public using press releases, SEC and Swiss ad hoc filings, our website and public conference calls and webcasts. We also routinely use our Twitter account @creditsuisse (https://twitter.com/creditsuisse), our LinkedIn account (https://www.linkedin.com/company/credit-suisse/), our Instagram accounts (https://www.instagram.com/creditsuisse_careers/ and https://www.instagram.com/creditsuisse_ch/), our Facebook account (https://www.facebook.com/creditsuisse/) and other social media channels as additional means to disclose public information, including to excerpt key messages from our public disclosures. We may share or retweet such messages through certain of our regional accounts, including through Twitter at @csschweiz (https://twitter. com/csschweiz) and @csapac (https://twitter.com/csapac). Investors and others should take care to consider such abbreviated messages

in the context of the disclosures from which they are excerpted. The information we post on these social media accounts is not a part of this document.

Information referenced in this document, whether via website links or otherwise, is not incorporated into this document.

In various tables, use of "-" indicates not meaningful or not applicable.

The English language version of this document is the controlling version.

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