CoinShares International Limited Q1 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

  • Pre-tax Income: CHF 1.2 billion, up 13% YoY. Adjusted pre-tax income excluding credit provisions and market impacts was CHF 1.9 billion, up 66% YoY.
  • Net Income: CHF 1.3 billion, the highest quarterly result in 5 years, up 75% YoY.
  • Return on Tangible Equity (ROTE): 13.1%, the highest in 5 years (vs. 7.8% in Q1 2019). Adjusted for a normalized tax rate (20%-25%), ROTE would have been 9%-9.5%.
  • Operating Expenses: Decreased 6% YoY to CHF 4 billion. Full-year guidance maintained at ~CHF 16 billion.
  • Revenue: CHF 5.8 billion (reported), up 7% YoY; CHF 5.5 billion excluding InvestLab, up 2% YoY.
  • Capital Ratios: CET1 ratio at 12.1% (vs. 12.7% in Q4 2019). CET1 expected to operate around 11.5% in 2020 due to risk-weighted asset (RWA) inflation and drawdowns.
  • Liquidity: Strong liquidity with average LCR of 182% in Q1; Tier 1 leverage ratio at 5.8% (adjusted for central bank deposits).
  • COVID-19 Response:
    • ~90% of employees can work remotely, 70%-80% active remotely.
    • Launched a CHF 40 billion loan program for Swiss SMEs; CS issued CHF 2.4 billion in loans.
    • Executive Board and Chairman donating 20% of six months' base salary to COVID-related charities.

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Kinner Lakhani: 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 of our results, we refer you to the Credit Suisse first quarter 2020 earnings release and remind you that our first quarter 2020 financial report and accompanying financial statements for the period will be published on or around May 7. We would also like to remind you that our Annual General Meeting of shareholders will be taking place next week, on April 30. I will now hand over to our CEO, Thomas Gottstein and CFO, David Mathers, who will run through the numbers. Thomas Gottstein: Thank you, Kinner. Good morning, everyone. Thank you for joining our call this morning to discuss our first quarter 2020 results, my first as Group Chief Executive. Before I start with the slide presentation, allow me to make a few personal comments. As you know, I took office on 14th of February, little did I know then how the world would change within less than a month. During my first three weeks, I had the opportunity to meet with many colleagues in meetings in townhalls with key clients, investors, including most of our top 30 shareholders, analysts, regulators and journalists. These meetings took place in Switzerland, in London and in the U.S., and were very valuable for me personally to exchange views and discuss the strategic pri

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