Sergio Ermotti : So in respect of what you mentioned, changes in the law and/or regulations around liquidity, I think I can only say that it’s pretty difficult to track all the rumors, speculations, and ideas that are coming up almost daily on the Swiss media. I think that I can only tell you that at this stage what stands is that even the finance minister took an official stance on the matter. I mean, those are speculations. I don’t believe this is going to be part of the package. I think that I’m convinced that Switzerland will keep its standards in terms of allowing the – responding to the crisis in March, not only the one in Switzerland, but broadly speaking with a following recommendation that will be set by the FSB and other bodies.
And in that sense, I don’t see us being particularly disadvantaged compared to any other jurisdictions in terms of liquidity ordinance. So I guess we will follow-up, and I think it’s going to still take months and months before the full analysis of what happened will translate into concrete actions.
Operator: The next question is from Adam Terelak from Mediobanca. Please go ahead.
Adam Terelak: Good morning. Thank you for the questions. I had one big picture question on revenues and then a follow-up on the operational risk RWA. Big picture, your revenues at the minute are annualizing to low $40 billion or so. Clearly your target has a number which is probably $50 billion plus. So, I just want to understand how you see the revenue bridge from here through to 2027 and what the key moving parts should be, particularly in the context of some of your GWM trends, which at the minute seem to be down before we go back up. And then secondly, on operational risk, I just want to understand some of the assumptions that are going into your Basel IV guidance there. Clearly, there’s some uncertainty around ILM. There’s a bit of uncertainty about what losses to use in that standardized calculation.
So what losses from the Credit Suisse business are you having to carry forward and how does that impact your operational risk RWA? And then finally, can I just clarify on the Basel III AT 1 finalization guidance, that 5% ex any moves in operational risk? Thank you.
Sergio Ermotti : Thank you, Adam. So in terms of revenues, I’m not so sure we ever indicated that we have a $50 billion plus revenue. I don’t know where this figure is coming from. What I remember saying back in August is that our targets, our ambitions for 2026 are not based on blue sky scenarios on revenues. So if anything, I guided to the contrary of that. So we are definitely focused on costs and we are definitely also focusing on the denominator. So we need to basically focus on managing and utilizing in a better way the resources and the risk weighted assets that we have right now. I have to go back to the critical point. The mission number one we have had in the last six months and in the foreseeable future is to restructure Credit Suisse, okay.
And then we’re going to talk about synergies and then we’re going to talk about growth. But before we talk about growth of the top line, we need to restructure and reset the basis. And in that sense, believe me, we are not counting on blue sky scenarios and that figure is not really our figures.
Adam Terelak: Can I ask for a better landing point then?
Sergio Ermotti : Well, the landing point you will see in February.
Adam Terelak: Thank you.
Todd Tuckner : Adam, on your second question in terms of op-risk RWA and modeling, as I mentioned, we did an initial impact assessment. It was quite dynamic. We’ve had only initial discussions with our regulator at this point in time, naturally ahead of the formal introduction of Basel III final for op-risk RWA. There will be much more extensive interactions with the regulator to agree on the particulars around the ILM. As you say, we made certain modeled assumptions for now, as well as the loss history. We made certain assumptions about the loss history and the roll off of certain legacy matters. So, it was a thoughtful analysis, a good initial view, but it’s going to be one that requires more work and more engagement with our regulator over the coming months. On the 5%, actually no, it’s not ex-op-risk, it’s inclusive. But given that op-risk, we’re saying, as I said in my remarks, we see that as broadly unchanged for now. The maths are the same either way.
Adam Terelak: Thank you very much.
Operator: Next question is from Flora Bocahut from Jefferies. Please go ahead.
Flora Bocahut: Yes, good morning. I’d like to talk about the net new money, especially at CS this quarter, because if I look at extrapolating the quarterly changes in net new money at CS that we’ve seen over the past two quarters, it seems to point to a run rate where you gain $20 billion $30 billion of net new money per quarter. But then if I try and reconcile just the month of September from what you had disclosed with Q2, it looks like there’s been a slowdown actually in net new money at CS with just $2 billion in wealth this month. So what should I consider as a more normalized level from here? Is it going to be still the pace we saw over a quarterly basis or there is a slowdown because the environment is tougher? You probably have visibility there with what happened on October.
And the second question is actually following up on this. I know you are going to provide us with the strategic update at the full year, but any hints as to what kind of assumptions you’ve made in your RoCET1 target towards 26 regarding the AUM level, especially considering the fact that the market effect is turning further more negative now? Thank you.
Todd Tuckner : Hey, Flora. Thanks for the question. So on the net new money for Credit Suisse Wealth, I appreciate you’re doing a fair bit of the extrapolation math, but a long time in this business tells me that extrapolating net new money trends is probably not necessarily the way to go, certainly not from a month or so. The point we’ve made is that we’ve stabilized the business. We’re seeing inflows after massive outflows. And that for us, as Sergio highlighted, was really objective. Number one was to stabilize the business and that we’ve achieved. Look, going forward in any case, we’re going to be reporting these metrics on a combined basis. We’re just giving an indication, because we talked about that in the second quarter.
We gave an indication even up to the late publication date towards the end of August. So Sergio and I wanted to follow through on that and offer that perspective. But the expectation going forward in any case is that wealth management, which is how we manage the business, will be providing a combined net new money plus dividend and interest figure going forward. And in terms of the ROCT1 assumptions, in terms of AUM levels, we’re doing that work now. Naturally, when we develop the landing zone targets that we articulated in the second quarter, we had a view on growth. But now we’re validating that in our business planning process. And we’ll come back and offer specificity around that in February.
