Credit Suisse Group AG
Q3 2015 Earnings Call Transcript

Published: 23 Oct 2015

[Urs Rohner:]

Good morning, ladies and gentlemen. Welcome to our Investor Day 2015 and many thanks to those of you joining us in London today to learn of our new strategy and plans. A warm welcome also to those of you following online in Switzerland and around the globe. Let me make a couple of brief opening remarks about the progress we've made with the new management team under the leadership of Tidjane Thiam and the vision we've set out this morning. Tidjane will take you through the agenda and the strategy in detail and will also hear from the new divisional heads who will be making their presentations in the afternoon. When we appointed Tidjane as CEO in July 2015, we wanted to go forward and engage with stakeholders inside and outside the bank to review our position and this is exactly what Tidjane and the team have done. We thank you a lot for your feedback which is very well made and we hope also very well received. We wanted a strategic review to focus on our strengths and to reposition Credit Suisse for the future to ensure its success in good and challenging times alike. I think it was timely to do a strategy review after a couple of years and in light of everything that was going on in our industry. We set out to find a path to make the bank faster, more agile and less operationally complex as we chart the course toward sustainable and profitable growth. The management team has worked extremely hard and closely over the subsequent months to be able to present the strategy here today in close collaboration with the Board. The Board has been engaged with preparation and the view of strategy, it was a very good and collaborative process and yesterday, the Board unanimously approved the strategy presented by Tidjane and the management team and took all the decisions necessary to implement them. During the rest of the day, I hope you'll take away five things on to focus and grow our home market in Switzerland. We want to optimize our resource allocation and focus on high-returning businesses with scale. We'll increase our resource allocation to APAC and other growth areas. We will significantly reduce our fixed cost base and we plan to strengthen our balance sheet by about CHF6 billion by two capital increases, a rights issue and a capital increase which we have launched this morning. This in light of the anticipated regulatory developments which I think have highlighted the need for additional capital buffers. I would hope you find the rest of the day informative and with most if not all of your questions being properly answered by our management team, we look forward to engaging with you further, after the day also as we plan our Extraordinary Shareholders Meeting on November 19, to approve the capital plans and thereafter we will continue our shareholder engagement to ensure good corporate governance which I as a Chairman look very much forward to. Enjoy the rest of the day. And now, it's a big pleasure for me to introduce and hand over to Tidjane who will present you the strategy in detail. Thank you very much for coming.

[Tidjane Thiam:]

Yes, thank you. Good morning, everyone. I am delighted to be here in London this morning for our Investor Conference. We're today presenting a new strategy for Credit Suisse. We will focus on creating a private bank and wealth manager with strong and distinctive investment banking capabilities that is able to grow profitably and generate capital through the cycle. We're mindful that the capital position of Credit Suisse has been a cause of concern over the past few years. So, it was a high priority for me as incoming CEO to address this decisively and early in my tenure to improve this position. Over the past few months, as the Chairman just reminded you, our management team has undertaken a thorough review of the organization, looking at strategy, cost and capital across geographies and business lines. So, during the course of the day today, we will provide you with a detailed plan with measures that we're taking to generate capital internally including as indicated on this page right sizing the Investment Bank and I'll come back to that in quite a bit of detail, increasing how we can better allocate capital and have a more disciplined capital allocation process, a reduction in our fixed cost and the transitioning of a number of businesses to non-core assets. To ensure that our Group has a strong capital position required support, the implementation of our strategy, we're complementing those efforts to increase the organic capital generation by raising external capital through a combination of a non-preemptive placement of CHF1.36 billion, with a rights issue of CHF4.7 billion, totaling around CHF6 billion of new capital. As a result of this, the group, the bank should have a ratio of 12.2%, CT1 ratio and 3.6% leverage post issuance. As our strategy is executed and with the new KPI which explained some of the confusion this morning, we're introducing an organic free capital generation KPI and we're saying it will be between CHF23 billion and CHF25 billion over the five years of which we will distribute a minimum of 40% to shareholders. So, I'm not talking about payout ratio on accounting profit, I'm talking about payout ratio on cash. For me, cash generation is below accounting profit, so 40% payout on cash is actually I think a very decent payout, I'm sure we'll debate that during the day, but I think it's a strong commitment. So again, it's 40% of free capital generation. So real free capital after operating. And of course and the last statement is possibly the most important, we expect to return any excess capital to shareholders. We have clearly changed our approach to managing capital. The penalty for having too much capital today is limited, the penalty for having too little in the banking sector is very material. So we're approaching this period of uncertainty with prudence and conservatism and we want to position ourselves in a place where we take basically capital off the table and we think that these set of measures achieves that. And if the turnout is more benign, then our conservatism assumes of course, will return any excess to shareholders. So, that's the global picture. Now, we have announced also today a new organizational structure which you see here. We believe that this is a more decentralized and more focused structure. We clearly increased the speed of decision making and also improved the quality of a decision made. I believe that to have a customer-focused organization, geography is a key ingredient. Every customer lives somewhere and he needs to be owned by people who are in the same geography and that needs to then drive the structure in a front to end approach, where the front is in the driver seat. And that's inspiration of the structure with Asia Pacific set up as a division, with Switzerland set up as a division and with what we've called international because there is no way to capture Middle East, Central and Eastern Europe, Latin America and Africa in one epithet. So we called it international, that's all the non-APAC emerging markets. All those nations are stuffed. We have also created two Global Investment Banking Divisions, one called Global Market which will group our ex-former equity business and our former fixed income business together under Tim O'Hara's leadership and one investment banking and capital market division under Jim Amine, who will work alongside supporting the three geographic divisions. The Head of Switzerland will be Thomas Gottstein and you'll have a chance to listen to him this afternoon. The Head of the International Wealth Management will Iqbal Khan who was previously CFO of the PBWM business and the Head of Asia is Helman Sitohang who will be familiar to many of you and they will have a chance to take you through their plans. So the one thing I should say also is that we're strengthening very much the central functions but we will come back to that during my presentation. So, what is our ambition? I said profitable growth. So, we're giving you profit growth objectives by division, for the new divisions in APAC which generated about CHF900 million of PTI in 2014. The target is to reach CHF2.1 billion by the end of year 2018, International Wealth Management to grow from CHF1.3 billion to CHF2.1 billion and in Switzerland to grow from CHF1.6 billion to CHF2.3 billion and we have detailed plans behind all these targets, we'll be very happy to present them to you. Now, just a word on cost, because it's important, we aim to realize CHF3.5 billion of cost reduction, so CHF3.5 billion of gross cost saving and to invest CHF1.5 billion in growth initiatives. I think as you look at your targets for total cost, 2017-2018, please ask yourself a question of whether this includes CHF1.5 billion of investment or not because that's the baseline. If you're on CHF18 billion, maybe, it's actually CHF19.5 billion that you have because if you have CHF18 billion without CHF1.5 billion of investment, so different base. So, please take that into account and also consider that this CHF19 billion, net CHF21 billion minus CHF2 billion, includes the NSU. So, some potential differences, some noise in the market this morning about that. We believe CHF3.5 billion starting from CHF21 billion is an aggressive target. We believe it's realistic. We have very detailed plans to achieve it and David later will take you in detail through that. So CHF3.5 billion reduction, CHF1.5 billion investment, CHF2 billion net should take us to CHF19 billion and we'll explain to you exactly what is in that CHF19 billion. It's not the strategic, it's the total. It includes the NSU, it's a total cost for Credit Suisse. So, building a strong capital position is vitally important for our future. Once this is established, the next step will be to optimize both the quantum of capital consumed and the return on that capital and then allocate that effectively to higher-return businesses. For instance, going around, I've spent quite a bit of time on the road, I've met relationship managers everywhere, we have been capital constrained and everywhere I go into a group, whether it's in IBD or in Private Banking, people tell me [indiscernible] these opportunities last quarter with a return of 90%, 100%. So what you have here is pent-up demand. And when you think about the growth we're talking about, a lot of it is a bounce back. So we're highly confident that this is deliverable because in every BU, when you talk to the people in the front line, they have ten ideas, but if you give them capital, they can go and execute immediately, coming out of a capital-constrained environment, you really do have a potentially, very strong bounce back. And that's embedded in these numbers. We have a number of management actions to underpin this and I would like to start by saying a few words about investment bank where we took on a right-sizing, this is an interesting slide. What it shows you on the left is basically the RWA by region. You see the Americas, you see EMEA, you see APAC and see Switzerland. And on top, the PTI/RWA confirms something that we all know Americas is both the largest and the most profitable investment banking market. So, however the natural intelligence of Americas have some structural reasons why American investment banks are more profitable. EMEA is challenged. As you can see here, part of that is London, because a lot of that is in London which is a high-cost location and it leads to relatively low profitability. APAC is I feel quite attractive and Switzerland, very attractive. So what we've done on the right is a different presentation from the famous bubble chart that we've discussed many, many times in the past. This is the worst approach to capital. So, for each business line, we've used the constraint. So, if it's leverage, we'd use leverage as a capital measure and a measure of return on capital. If it's RWA, we would use RWA as a measure and we've taken 3.5% leverage and basically 10% Basel III CET1 as a base. So this give you a sense business by business of whether they create value or not using the relevant constraint. So it's not the uniform chart. The constraint again will vary by business. And it shows you I believe quite clearly that you've two problems immediately to macro and prime services. So the reason why it is in so many sell side notes and the reason why we talk about it all the time is in this chart and we have focused on that and that's the next slide. And we have really come up with we believe what is the right plan. We plan to cut the RWA macro by 72% and leverage by 79%. And fundamentally, have talked a lot about binary measures, closing things down. We're closing down EMEA and APAC and keeping a small capability in the U.S. Experience is that it's one of the few ways, you have to make sure that the cost is also taken out because the activity is good and all the infrastructure that goes with this is good. For Prime and I will come back to that in more detail, you see that the numbers are more modest, a 50% RWA reduction and 25% leverage reduction. But we still in total have $87 billion reduction in leverage and $20 billion reduction in RWA. Another way which is really very high level to look at is under the other chart where we just put above cost of capital, below cost of capital, RWA leverage and we show you that fundamentally we cut by 63% the RWA and by 42% the leverage of the activities that we consider below the cost of capital. The next slide is a bit tricky, but it's something I quite focused on before coming and after coming, so okay fine. You want, there is a lot of discussion on how do you prove the unprovable basically, how do you prove that you've got enough? This is PTI per unit of RWA. And at the center, you have what we've done. We actually believe we're at the optimum and after that you get into diminishing returns. If you index on 100, your starting point, if you cut by 40%, you actually increase your PTI per RWA. But it's like everything in line, there is a point of diminishing returns and there is a lot of literature on where we should cut harder. We don't believe we should cut harder because you get a bank that is smaller and less profitable and that's what restructure is. If you had another 20 or 30 of RWA as is very, very often proposed, you destroy your economics. So, that's what we call an optimum. And I hope it contributes to solving the debate on have we cut enough, have we cut too much? We played with this, because it's achievable. We've looked at the scenarios, we looked at various combinations of RWA leverage cut, we believe very strongly that where we're is the optimum. The optimization under constraints of a complex equation with RWA leverage. You also have to add, we will come back to that later, but in the short term, you are leverage constrained. And as we will see, in the medium and long-term, you are RWA constrained and that's another complexity in optimizing this. So, it's not a simple problem as people often describe it. But we think this indicates very much where we'll end it. So where we're after this and this is really predicated in this plan. What we're doing is right-sizing and then staying constant. If you want to think about what we're trying to do here, we optimize the capital consumed by the IB and then we keep it flat. So, all these projections that you see in terms of PTI, et cetera, are predicated on this approach. And these are all included. [indiscernible] of the NSU. So, I don't believe if you own something, you should call it not this or not that. So, the non-strategic unit is now called the strategic resolution unit. I think it's not just a semantic change. If you are an investor in this company, you own all of it. We can't just tell you, well, ignore this, we call it not this and because you are owner of it. So, our commitment of delivery to value for you has to be on everything that you own. So, I absolutely refuse to call anything non this or non that, strategic resolution unit where we're putting things that we need to resolve and that's a commitment, we will come back to that, we will show you how it's going to go down. But it's in the chart, it's in the analysis, it's our approach. So, you see here that approach, both RWA and leverage, I think this is disciplined, cut down, optimize and then stay constant. So, the value pressure is going to come from getting the capital to work harder, not from re-risking the business and driving the leverage or balance sheet up. We go down, stay constant and then we make it work harder. That's the story. So, making it harder means improving the return on capital in every business, that's what we're going to do. I take here the example of Switzerland, our plan is to take the return on capital from 13% to 17% in three years. So, to add 400 basis points which will drive PTI up because fundamentally, you're using the same amount of capital. Now, there is a word about the IPO. I have some experience in my career of managing in an international company a big domestic beam. It is difficult to drive value creation. The reason why we want to have this company quoted is that, one, it's going to put a price on it. I believe that domestic universal banks focused on wealthy European markets, if they are well managed can trade on a high multiple. And that's what this is. And I prefer to own 80% of something that's more highly rated than 100% of something that's less highly rated. I believe that today, this is not visible in our valuation and I would like to crystallize that value. So, the primary reason for listing it is to give a transparency on the Swiss business that will allow you to price it correctly and then to have a lid across our read-through through our own share price, that's one. Two, because compliance costs are increasing, the fresh hold in terms of Assets Under Management and which you can be profitable as a Swiss private bank has increased materially. This means that a number of banks are not viable as they are. What we have in Switzerland, a platform that is fully compliant, that is modern, that works well, where we can very easily play the aggregation, consolidation game and I need a currency to do that. So, listing this company gives me a way to play the consolidation game which is going to create quite a bit of value which will end up in these numbers for a Swiss entity. It will also, frankly to be blunt, give me a currency to reward the management and align better the management interest and interest of a shareholder ultimately. And effectively, because today, unfortunately, capital is a big theme. It will, but let's see icing on the cake, deliver the capital benefit to [indiscernible], we have CHF2 billion to CHF4 billion. And frankly, yes, that's also present in our thinking because again, I say, our goal in this is to take capital off the table. So when you take CHF6 billion and you take this CHF2 billion and you take all the other measures of reducing the RWA, you get to a zone where we hope you can feel comfortable with our capital position. So that's for Switzerland, but we're also going to drive the return on capital in most of the other units. In Asia, it's marginal, but in international wealth management, it's quite material. [indiscernible] might have just talked about it any of the investment. As a result of the right-sizing I just mentioned. Actually return goes up quite a bit, because if you take out activities but don't earn much or are losing money and consume a lot of capital, really logically, your return on capital will increase, because you get a double-whammy, you don't really lose much profit and you increase your capital efficiency very much. So that's just mechanistic. And below that and that's a lot of what drives this increase in profitability that we're promising. The profits are going to increase because you're going to allocate the capital a bit more smartly to these business units as you increase their profitability. So, cost, as we go into cost, let's talk about self-help, let's talk about right sizing the investment bank, we talk about increasing the return on capital, the profits. Now, let's talk about cost. We've announced 3.5, 1.2 and we want to be transparent, those of you who know me, I'm just trying to be transparent, we don't want to claim credit for things that are already possibly baked in your numbers, that's why we made very clear that there is 1.2 of cost gain which is probably in various estimates. It's completion of a number of programs that we have underway with our extensive 0.9 there and also the rundown of the SRU portfolio or planned rundown in the NSU that we've communicated to you previously. We think that there is additional cost reduction. The big things there are you've read that we're basically transitioning our business, less private bank to Wells Fargo, that's CHF645 million of cost per annum. So that's 0.6 in that second block of 2.3 and I liked it, because it doesn't have any real cost to achieve. Fundamentally, these people will go and work for Wells Fargo and we're taking down the cost again is binary. This is something it's already happened actually last night. You have a lot of things in London where we have more than 4,000 basically back office people, half of which do not need to be co-located with our front office activities. We already have a good record of offering drugs, so we can offer all those drugs and there will be a material gain there and many of our ideas and I'm not going to steal your fun, David, it's got a lot of detail on that, it will take you [indiscernible] say this later, you'll have pleasure of going through that but what I would say about this, it's not -- I don't walk in and say, I want CHF3.5 billion of savings, what we did is for three months, hundreds of people literally across the company I've met every day and I've come up with detailed plans to deliver this. So we're not in a position where we announce the market 3.5 and then we have to scratch our head and say, where are we going to find them. This is a bottom-up process that has produced a number that we'll deliver into you and we're highly confident that we know how to achieve this, there is no plug like we're going to do budget and say, okay, you give me CHF20 million more, no. These are identified initiatives, there is right-sizing of London or the sale of the U.S. Private Bank that will deliver savings that are precisely identified. So we're very confident in that number. And then, we invest to grow because to be honest, this bank is a bit -- there is a cost-cutting fatigue, one thing I heard -- I've done hundreds of interviews since I joined. In every single interview is please, where are we going with this cost cutting? Is there a vision, is there a direction? The Germans say that the horrible end is better than horror without an end. People were feeling that they were having horror without an end and my commitment to them was I'm a growth person, I want to grow this company. Yes, we're going to take some pain, but this is a growth budget and we're presenting to you very clearly CHF1.5 billion. No, it's not a small amount but we believe is necessary to deliver the growth we've showed you in profit. So it's a mix of recruitment, we're going to recruit I think in total across region 1,100 RMs. We know with our productivity, we know how to on board them, that's going to generate more revenue, strengthening of controls, I've talked about decentralization. We're going to invest significantly in Asia to make sure that the risk management is controlled and we generate quality profits for you. And really technology improvement, et cetera, this is quite detailed again and that's what takes us to the CHF18.5 billion. So you can also if you wish think about the CHF18.5 billion as a CHF17 billion, okay, because it's really -- there is a discretionary element there, but we as management control, but we can also modulate depending on how well we do, how the economy behaves, et cetera, et cetera, but our commitment is for CHF3.5 billion and that we will deliver. So if you put all that together, what does it do in terms of profit, so we're starting from if you annualize our nine months and don't worry, I'll talk about Q3, I am not avoiding the topic, I'm just giving you a big picture of it before. We go to Q3, we know it was a bad quarter, but if you annualize our nine months on 4.5, how do we get to 9,10 and again, sorry probably this morning I read a lot of news. I think people are on 6 today. So 9, 10 is quite progressive compared to what's in most models. It's 3.5 that I've talked about, gross cost savings, the growth -- 1.5. We give you some granularity here on the growth by business unit and finally, there is also a negative contribution of a Strategic Resolution Unit. We believe this is achievable. You have at the top the return on tangible equity. We believe this will be accretive. We will go to about 14% of return on tangible equity and we'll have a lower cost income ratio. If you managed to implement, all these [indiscernible] successful. The other thing we're emphasizing here is really capital generation. So on the left, you have all the measures I've just talked about for a while. IPO disposals of our insurances, capital raised, you get to 9.9 to 11. We believe and we believe we'll show you that we can generate CHF23 billion to CHF25 billion of basically free operating cash flow for a company that's worth CHF40 billion and consider that's a material commitment and then you see the negatives. The regulatory blocks because there, we'll take you through all the uncertainties on that and why he's such a big bloke, but he's actually down to 25, 27 of which again we have said we would give back at least 40%. I believe I have a track record of distributing value. At Prudential, I doubled the pre-crisis dividends. So I'm not shy about returning cash to shareholders provided it's prudent and provided the value is really there. So that's our commitment to you. Now, Q3, it was not a good quarter. That's obvious, you've seen the numbers, various reasons to that, quite a few external. In the quarter, we had three months. We had two really very, very disturbed months in obvious with China in the second half and with the September 17 Fed issues, what we've seen is activity collapse and that has impacted negatively a number of our core activities. Asia has done well though in that context, 48% up year-on-year, year-to-date. Equities have done well overall, quite pleased with the performance there. All the pressures have been on fixed income. So we didn't fix this, but it just happens to be a kind of validation of the strategy and the direction of travel that we're taking which is to emphasize Asia, emphasize equity, de-emphasize fixed income. Still, there are some bright spots there of the [indiscernible] assets, CHF10.5 billion from the clients, I believe it's twice market expectations. So we were quite pleased with that and the capital basically I said what it is. But for me, it emphasizes the reason to change that business model. It is what it is and I'm also direct about that. We have not been bullish and in the outlook statement on Q4 and it is what it is, a difficult environment. So, to summarize all this, these are the targets we have given you, profitable growth, one target for each of the business unit, an absolute cost base target, a commitment to basically shrink the IB and then to be flat. So you can see that both RW and leverage in global markets which is equity plus fixed income stays constant and we will give you some more visibility on the SRU and what we're going to do to drive it down. This leaves us with a comfortable CET1 capital ratio and a comfortable leverage ratio and I'll come back to that too. So this morning, after me, you will have David who has -- if he manages to get three slides in one hour, I'll be impressed. He's got a very detailed presentation on financials, capital and cost, then hopefully we will have lunch and we will go through the BUs, each of the business heads has worked very hard to give the presentation for you and we will deliver that and then we will do a Q&A and try to answer all your questions. So I'm now going to probably go a bit faster, maybe give a few elements on the strategy. Let's just reiterate what we said, we want to capture our wealth management opportunity in emerging markets. We're going to give some color on that. Create a Swiss universal bank and right-size the investment bank. So let's start with the emerging market. Why do we like wealth management because wealth is growing, I mean you can get this in every type of metric. This is CHF31 trillion of added wealth; just in 2014, the number grew by CHF9 trillion. It is sensitive to growth but not that much. We think that whatever view you have on slowdown for an emerging market, there is clearly an opportunity there and it's significant. So it's good point. If you go to the next slide, about 60% of a wealth increase is expected to happen in emerging markets. Would it be 55, will it be 65, who knows, but it's material and that message doesn't change whatever assumptions you put in terms of GDP growth. The next one is more interesting. It says that emerging markets are by nature default. Most of the wealth growth is new wealth being created. Mature markets are stock markets, emerging markets are flow markets. It's all about capturing the flow, the new wealth being created. So, positive about that is that it's up for grabs. And it's relatively easier to gain market share compared to a mature market where moving 1 basis point is very hard. It is a game of nimbleness and being there and being able to grab, but additional wealth being created every year. So, the other thing we need to think about is who owns those assets or that wealth. It's sort of present reality, but in emerging markets, coefficients are not very attractive or this is very unequally distributed growth and one reason to concentrate on the top income categories that before you have a proper trickle down it takes decades. And that wealth is going to accumulate in the top 1%, that's just the fact of life. And this is really interesting, I think. It shows you who owns these, if you wish allocation of wealth, how is your wealth owned, first, second, third, fourth, fifth generation. Most of the wealth being created in Asia is first generation. Most of the people becoming billionaires in Asia are just being created. And this is why we talked a lot about the entrepreneurs banks, they these are entrepreneurs and that's where the money is. So, the reason why Helman and his team are so focused on this, I know he will elaborate it much more on this show you videos of his clients, it's very lively, it just shows the wealth is very, very constructive. That's a better world. We sure to get results that's enough to be strong. Very different from Europe, where 45% of the wealth, 31% plus 14% is in fourth and fifth generation. I was surprised by that, I would have bet on second, third, not fourth or fifth. This wealth had been created so long ago, 19th century, 20th century. It's not mobile. It's sitting there, very little flow, it just sits, very hard to get. And U.S. is sitting in the middle. Jim Amine will talk to you also this afternoon what he want to do with the old trusts in the U.S., it's quite an attractive market. We have quite a few business clients. But U.S. sits a bit in the middle. Good position in U.S., what I want to say here is please don't think that because we sold the private bank we have in the U.S., we have lost interest in the U.S. or we have lost sight of provide you in the size of U.S., we get that. So, growth will increase from 2014 to 2019, $7 trillion. So you know its material. We're interested in it. We have a credible strategy to get a share of that and we will. Japan, Helman will address in his presentation. But it's a very attractive market, it's a very peculiar interest rate environment there that creates opportunities for people with all skills and we're doing very, very well in Japan actually. He'll talk to you about that. The other point really is about Switzerland. We had the global wealth report, I think, last week which confirmed something we many of us know that Switzerland is per capita the richest country on earth and is way ahead of the number two which is North America. It's good to keep those numbers in mind. When we talk to you about doing more in Switzerland, it's not completely silly, we still happen to be in the second largest bank in that market to believe you can do more. If you can succeed our credit value as a bank in the wealthiest country in the world, I think you have a problem. So, we think Switzerland is important. This show us a big picture. Yes, emerging markets are growing in green, but the blue remains important. So, the lead out of it which is that we will take a balanced approach between emerging market and mature market. We're not saying it's one or the other, we're saying we're doing both and we have the ability to do both. So, that's on wealth management. Back to the investment bank, maybe give you more color on how we looked at this. We use free capital, three criteria. We looked at the connectivity to the wealth management business for each of our main investment bank activities. We looked at absolute and relative capital consumption and we looked at profitability. So, it gives you the picture you get on the next slide. Actually this is an intermediary step, but it's important. We have no showed you this before I believe. This tells you the revenue that we derive in the investment bank from the ultras -- the ultra-high net-worths. What do they buy from us? First thing is they borrow from us. And I know it's a paradox, but actually wealthy people borrow, because they need to monetize sometimes very complicated assets. So we do loan, borrow, we do all kinds of things. But it's a big revenue earned. When you get trading, they trade with our shares, funds, derivatives etcetera. And there is macro then, but you can see actually it's not that much, 2%. And actually, the first thing they do with us is ECM, DCM, M&A. So, it's kind of Jim Amine's territory and when prime services, where I'm going with this is something I feel very strongly about, I think it's a misconception for a private bank to think that it can have a long term business, a long term future with ultra-high net worth people or high net worth people, if he doesn't have good investment banking capabilities. This is why they come to us. If you don't have that, all you have is people taking them out to lunch, that's not a business model, long-term. I feel very strongly about that. Having a nice suit, taking people to lunch, maybe I'll pay something for that, not much. The work on the return on equities are going to be very high and you will be dis-intermidiated. If you are very good at equities, if you are very good at structuring loans against very complex assets, they work as intermediaries to trusts. So I'm sitting there, just waiting. Because I think that those who have made the choice will need to regret it. It doesn't mean you have to run a global investment bank and the huge contrary in every market in the world. But those capabilities are important if you ever to keep those customers. They will leave you if you don't have them. So connectivity to wealth management is important when you look at your investment bank inside of bank like us. So you've seen these slides. So, not to bore you, I've presented it differently. So, now it's bars. It's very clear performance we have. I read a lot, why do we only tackle micro and prime wealth, that's where we have a problem. Interest, we have much nice of a problem and I've showed you that to go after structured product and credit, it creates a real problem and completely destroys our economies. I think to hit the nail and go ahead and go to the next page please, you should look, that's what we do. IBD, I told you 21% of revenue that these people generate with us is vital. It's connected to wealth management. It's capital efficient, sitting on the top of the previous chart, very profitable. Equity derivatives, cash equity fine. So these are all kind of no brainers. EMG, those are the Emerging Markets Group, sitting at the border, plus London. It's London problem. That's why we're doing the London rightsizing, that's what it does. It takes about point up again. Because it has a profitability problem, it's an important business for our clients, it doesn't concern too much capital that is just not profitable enough. And then you go to the two ugly ducklings that nobody likes, securitized products and credit because they generate a lot of profit, but they consume a lot of capital. But personally, to generate 35% or 40% of return I don't mind burning some capital. To burn it, to generate eight or nine, yes, 35%, 40%, it has an incoming CEO in the company that doesn't have enough profit, not enough capital, that's all my top priority to tackle this. Then you get into prime and macro which are effectively connected to the wealth management, but consume a lot of capital and have a low profitability and you've seen what we're doing to those two businesses. We respect those who are working them. Next slide, we basically close down, we exit EMEA and APAC and we keep the U.S. because there is a minimum capability that you need to keep. What I didn't want to have in trended costs, so we're just closing down two over free and keeping one. Now, prime, you've seen the numbers, let's move on mainly to why prime is important. Just step back from all this, this is market cap as a percentage of GDP. What it shows is the equitization of emerging economies is an inescapable phenomenon. The reason why we're doing so well in those economies is that today and Helman will show you that, the wealth of all these people is frozen and it will end up in the equities market in one way or another through generational change, through need to IPO etcetera. So, really equities squeeze our core to emerging market franchise and Helman can give you the number, I think he has made CHF25 million in prime in Asia so far this year, it's a very profitable business and it's growing fast in Asia. So, it's strategic, the red line is prime revenues. It's very stable source of earnings if you compare to fixed income or equities. It's obvious on this chart and when actually this work has been going on for a long time. One of our first conversations I had with Tim O'Hara was about this, okay, what are you doing to clean up your prime portfolio, you're using too much of my balance sheet, I don't like it and he pulled out this chart and he went through his clients and they've been eliminating unprofitable clients for a long time. We made the last push in 3Q. You can see there we shredded in over $38 billion and we'll shed in over $15 billion, between now and the end of the year. I think this is basically and I'm looking at Tim here, this will happen, we're going to hit that number by the end of the year. And you can see down there the increase of return on asset. So that's the story, you've seen the slide. For us, that was restructuring of the investment bank and it leads you to next slide which is what we believe is our business to drive return on capital up. And we think is a credible restructuring that hinder a sweet spot. We don't believe but we need to go further, but we should go further. We think that would be very destructive. So, that's the investment bank. Now, let's talk about the businesses a little bit. Maybe I run through this a little faster, you will get plenty on that. How we're going to grow revenue in Asia and is better tool from the horse's mouth, but a lot of this is growing the credit penetration. We showed you there is a high demand for loans is growing that and again it's not very risky. Helman can take you through why expanding relationship managers is big recruitment program, we're going to invest in that and drive our productivity up. Also for digitalization and various tools that we have and really disintegration between the ID and PB in Asia is particularly successful and important. And then with China, where we don't really have a natural presence, we're doing these numbers, we have really a proper Chinese presence. So, that's an upside to our numbers. We have a good business in Hong Kong, but onshore China, we're not very present. We're going to open in China onshore and do more. We also want to increase our participation in our joint venture, the founders in China. Although profitable, India strengthening before -- didn't use to report to Asia. So, one of the changes we're making in this reorg is that India is not going to report to Asia. And Asia has been to focus quite a bit on the potential there and it's real in Korea we're quite selective, but we're doing interesting things and Japan is actually a very undersold opportunity for wealth manager, there are a lot of ultras there and high net worth. We're pretty unhappy to have their investment sitting and we have been attacking that with actually material success and Helman will talk you about it. So when we put all that together, we think that these numbers are achievable. If you look at what we've done in the last few years, we have grown the number like 21%, grew the assets under management by 70% toward increasing the productivity of the [indiscernible] and grown profits directly from wealth management in Asia 4 times in the last few years. And we think that these types of trends are achievable. Again this is a business that has been relatively starved for capital. First time I met Helman, he had this list of all the opportunities, yes, but because we didn't have enough capital. So I completely trust him, if I give him capital to grow and right value creating business. So let's move on to international, it's very similar. Under the label, the point really it's same types of customers to whom we sell exactly the same type of products. So the idea here is to replicate the type of success we've had in Asia which will drive revenue up. A bit of rationalization, we're going to close the number for our booking centers in Europe, have a much more effective hub and spoke structure around London and Luxembourg and also again digitize your services, etcetera and also recruit quite a bit, a big recruitment plan which we're going to implement which will lead then to a significant profit increase, very material. And don't forget also that we're going to -- regularization run its course and Iqbal has some charts that are quite telling. But we know pressure on margins and then returns of the business, that's not always fully understood. So, part of this is again a bounce back and return to normal, but we're very confident we can deliver because we're worried of a big drag on our performance on our numbers which regularization was. The Swiss Universal Bank, you will get also a very detailed presentation from Thomas on this, why we think we can do more. Again here we can lend more to the ultras, we haven't focused on that. On wealth management, [indiscernible] money transfer management, if you focus on things and they have happen, is just a number of those things have not been and explicit focus, there was no commitment to doing well. And actually frankly I can tell you a lot of that is already happening. People have started recruiting, people have started focusing on those things, amended penetration etcetera and we're growing because Switzerland is a very entrepreneurial country. We're going to transfer that entrepreneurs' bank concept to Switzerland and we're highly confident that these numbers are achievable. And after the IPOs [indiscernible] but we believe this will drive our profits up as you can see here. So again, big picture. We've showed you this one, how do you get from CHF4.5 billion to CHF9 billion or CHF10 billion. So really now switch to capital section of my presentation this morning. CET 1, you will know where we're sitting in the industry. It's not a comfortable place as I said because we fall behind, if you don't have enough capital. I personally believe this is a world in any industry where you need to increase productivity by 2% or 4% per annum if you want to stay in the same place. So, if you are not able to restructure, you are falling behind 12% per annum. So we've paid penalty for not having enough capital in many, many ways. So really changing that is vital and we should be willing to pay a price for that. So, no restructuring, limited transactions and also in the new post-crisis regulation, world have experienced that many times. How can I say this, the more capital you have the more fungibility. The more capital you have, the more you can reward your shareholders. The more capital you have, the more you can be confident that you will have a good payout ratio, because any CEO and I am one of them, we said in comfortable discussions with the regulator around stress testing and can you really pay this dividend. No, but if you're living with too little capital, you are living hand to mouth and you know every dividend is up in there and it may or may not get paid because depending on how the stress testing is done on your numbers, you may or may not be able to pay a dividend. So part of also raising capital is to be able to then give regulator a peace of mind but will let you then pay back to a shareholder the cash we generate which is the chart that David will cover in detail but what he tells is that, yes in the full-term it's leverage, with our big constraint and if the medium-term is RWA, because a full RWA recalibration. He will also tell you that we have good reason but TBTF will be announced officially imminently and that the assumptions we have taken here are 4% equity leverage, 5% Tier-1 leverage ratio are very much likely to contribution. The other big issue is the floors on the standard model that, but I will let David take you forward, but it has a big impact on the CET1 ratio. So, the strategy you get to above 13% by 2018, but then if you recalibrate, you fall about to 11%. And that's another reason for being proactive and conservative in setting the capital level. So, to summarize, October right-sizing of investment bank under internal capital generation, reallocation of capital, reduction of costs, transitioning non-core assets, let's say, costs us $4 million to gain. This is the picture of total cost for us. And really it's not we've worked very hard, but has been addressed very, very, very hard to drive this down. And this is why I initiated a few months ago an explicit effort to really go to the source, look at this for granularity and understand what's going on part of this and for raising this story. You know, but we've done those costs with the centers of excellence. In the library, you have the drugs that have been offered. To be blunt, the drugs have led the countries, the people, I'm not always left it to the company, that's what the stress tells you. So, you end up with a cost problem because you don't capture the benefit of having off-road, drug if you cannot let the people go. So that's not a very pretty picture, but again, it's not the most difficult problem to tackle once it's a 95 and if we try this systematically, we will create headroom and make sure that when drugs are off-road, the people did good job with the company. So I am going to skip this one because it's for David. We're giving you clarity here on the role of uprisk in this debate. Once you transfer the RWA to the SRU, what we're going to do is offload, wind down very aggressively the non-operational risk SRU, but you need to understand that we don't have much control on the risk part of that and that's part of the dialog with the regulator, that's again another reason to raise capital. Personally I can tell you the meeting when I was with a regulator, when I said [indiscernible] capital raise, I could hear the sigh of relief and the improvement in the temperature went up two or three degrees in the room. So I think we're very positive on our relationship with the regulators and then part of the story, we're telling today contributes to that improvement to be blunt. Leverage same thing, very strong reduction, let me say a word about U.S.PB, I don't know if you can see it, but our business is [indiscernible]. I'm not trying -- I need to say more. That's a cost-income ratio vertically and I'm not rude hear to anybody, but the issue with this business is -- there is nothing wrong with it, we're actually very happy to give it to Wells Fargo because that's more of our business model -- broker leader model and they will do I think very good things and there are some really good people in there and they are going to look after -- we wanted a solutions but in truth we look after our customers. So we're very pleased with the Wells Fargo transaction. It's just not in strategy. So talking about being selective about what we do I'm very pleased that within three months we've been able to actually make -- implement the transaction and it will save us CHF645 million per annum. I don’t know what multiple you want to put back on, but for me that's material in terms of that investment rational, we're also I mentioned that -- Western Europe we have a lot of booking centers, well we have this ID, critical to number of them. The reason we're not putting them on this page is that there is a lot of communication to do around it, the customers who are there, we need to manage the transition etcetera and we don't want to create a necessary worry but we know what they are going to deliver on material savings, again this might binary approach, always it's safe to close things down. The IPO I have talked about I don’t think I need to point and then there is the rate issue which again David will cover in great detail. So if you can just down the rate. I think, We think he is helpful. It limits the size of our right issue and we think this is the right approach. And the gentlemen . So back to really for me we relatively simple strategies, its capture of wealth management opportunity in the emerging markets creating right-size the investment bank and deliver for you free capital, we've and growing dividend. So the clear KPIs that you will -- you can hold us, really accelerate and creating value for our customers and I've talked to you quite a bit about them. We believe that what we have done on capital in various buckets, internal capital raise, external capital raise positions us well -- in an uncertain environment and the business model will clearly going forward will generate significant capital CHF23 billion, CHF25 billion, we hope to be able to reward the channel. So with this, I am going to let David to take over and continue the presentation. Thank you for your attention.

[David Mathers:]

Thank you, Tidjane and good morning. I'd like to talk over the next hour about three points. First, the financials and the capital plan. Second, the targets for our cost reduction program and third an increase of approximately 44% compared to last year. The second component of our strategy is to reallocate and optimize resources and capital to the high returning businesses with scale and to reduce the resources allocated to certain underperforming trading activities within the new Global Markets division. By 2018, the risk-weighted asset usage for the global markets function will be approximately one-quarter of the total risk weighted asset use of the group which I think is more proportionate to our capital usage. We'll allocate more resources to the growth businesses in our Asia-Pacific division to support our pretax income target of CHF2.1 billion by the end of 2018. We also increased resources to growth areas of an international wealth management division and a fee -- underwriting businesses within the investment banking and capital markets division. In costs, as Tidjane has outlined, we aim to achieve a total gross reduction in our expenses of CHF3.5 billion between the end of this year and the end of 2018. We also intend to invest CHF1.5 billion in our growth initiatives primarily in Asia-Pacific which results in a net cost savings of CHF2 billion. And to be clear, this will reduce our fixed cost base. Finally, we aim to strengthen our capital base and remove any residual concerns regarding the group's cash position. The capital raise we have announced this morning means that we will exceed 12% in terms of our CET 1 ratio and 5% in the total leverage ratio on a pro forma basis on our NGO targets. Going forward we'll build a buffer against the pending RWA recalibration changes that we expect in 2018 or 2019 and operate a CET 1 ratio of approximately 13%. If we go into some more details on the strategic initiatives, I'd like to take a moment though to go over the highlights from our third quarter results. And those are under the reporting structure that we've used in prior quarters. So slide 6, please. In the third quarter we achieved pre-tax income of 238 million Swiss francs. And that's excluding the positive revenue impact resulting from movements in the fair valuation of our net debt instruments which amounted to 623 million Swiss francs in this quarter. This significant reduction in pre-tax income compared to the prior quarter and prior year, was driven by lower results in the underwriting businesses and in fixed income trading which reflected the market environment we saw and that substantially lower levels of issuance activity. We also incurred expenses of $133 million in the third quarter in respect to the settlement related to credit default swaps which I think you're aware of. And this was partly offset by strong results in our equity trading businesses. The Group return on equity was 9% for the first nine months of the year or 6% including the FEOD [ph] gains, while the strategic business achieved return on equity of 11% in the first nine months of the year. Our businesses in the Asia-Pacific region continue to perform strongly. Pre-tax income totaled CHF1.1 billion in the first nine months the year, an increase of 48% compared to the prior year and that benefits from the continued momentum in our offering across the one bank franchise that we have in this area. Wealth management clients in Asia Pacific region saw 10% net new asset growth in the third quarter and 14% for the first nine months of the year. Our investment banking revenues in Asia Pacific increased by 15% and that was driven particularly by robust equity trading revenues that grew by 40% compared to the prior year. One highlight in the third quarter was the net new asset performance where we have CHF17.3 billion of net new assets of which CHF10.4 billion came from the wealth management client business. In terms of capital, I look through CET 1 ratio, but was 10.2% at the end of the third quarter, down slightly compared to 10.3% at the end of the second quarter and this movement was primarily driven by increases from model updates and methodology changes. In terms of leverage, as you may recall, at the beginning of this year we've set a target for the investment banking division of $600 billion to $620 billion. We achieved that target at the end of third quarter by reducing leverage exposure to $615 billion within the investment banking division. And as a consequence, total leverage ratio stood at 4.5% at the end of the quarter and Tier 1 leverage ratio at 3.9% and our CET 1 ratio at 2.8%. I stand up with divisional results on slide 7. While the private bank and wealth management divisions' steady results continued to benefit from strong net interest income, there was an adverse impact from weaker client activity in the third quarter. Strategic pretax income was CHF753 million equivalent to return on regulatory capital of 20%. Since the beginning of the year, the wealth management clients to business has grown its net interest income and recurring commissions and fees achieving a net margin of 28 basis points compared to 27 basis points in the prior year. Our corporate and institutional client business also benefited from higher net interest income, but did reflect increased credit provisions this quarter. Overall, all three businesses contributed to strong net new assets of CHF17.3 billion, while wealth management reporting CHF10.5 billion and we saw growth in all regions and a solid contribution in the ultra-high net worth client segment. As Tidjane mentioned, the client outflows which have been a drag on our earnings in this business have also declined with an outflow of CHF1.4 billion in the third quarter and continuing the trend which we mentioned last quarter. If we turn now to the investment bank results, strategic pretax income of $291 million was significantly lower than the prior quarter and prior year. As we mentioned, it's primarily due to weakness in fixed income underwriting and trading results. As I'll discuss further in the presentation this afternoon, this reflects the extreme uncertainty in interest and credit rate environment over the last three months which substantially reduces the levels of issuance across most asset classes in the period though particularly high yield. Aside from all of this, I just reiterate that all of our equity businesses continued to perform strongly, particularly the equity derivatives businesses and we saw higher advisory revenues and stable results in our prime business notwithstanding leverage reduction moves that we discussed already that have been implemented this quarter. Next slide please. So on slide 7, we show our results overview in the same format as we presented in previous quarters. The complete third quarter earnings presentation and its normal format is available on our website and for those of you here today, we do have some hard copies available at the back for distribution. Slide 10, please. So I'd like to spend some time now talking about the changes to our segment and our reporting structure which would be immediately effective and as a result will be applied to our fourth quarter earnings numbers. Once we complete the re-segmentation of our Group, we will provide historic restated financials in this new structure to enable to prepare for our fourth quarter earnings in this format, so you will receive them before we announce our fourth quarter numbers early next year. Our new financial reporting structure will present it to six segments. Co-results were comprised the newly found business unit divisions namely, the Swiss Universal Bank, International Wealth Management, Global Markets, Investment Banking and Capital Markets, Asia-Pacific and a much simplified Corporate Center. The corporate center will include all of our shared service costs, therefore, providing transparency on the total cost of our support numbers as well as the allocation of these costs to the respective business divisions based on usage. The residual items in the Corporate Center will be comprised therefore primarily of accounting volatility around the central treasury books. Strategic Resolution Unit, unlike the previous non-strategic units will be a standalone segment which own governance structure and reporting obligations and clear accountability for its primary objectives. These objectives will include and focus on the rapid wind down of the non-core assets assigned to it which will include those encompassed by the current non-strategic units and that will facilitate immediate rightsizing of the Global Markets division, as well as, the other exposures that do not fall in its stated goals of the business divisions. So, let me now, talk for a few slides which show the flow from our former divisions to the new reporting structure. Slide 11, please. On slide 11, we show the private banking and wealth management division. The retail, corporate and domestic investment banking businesses will be transferred to the newly created Swiss Universal Bank. The international operations including Swiss-based relationship managers service international clients, but excluding those based in Asia-Pacific region will be combined with the asset management businesses to form the new International Wealth Management division. The Asian-based operations we transferred to the new Asia-Pacific division and all the remaining non-strategic exposures will be transferred to Strategic Resolution Unit, as well as the U.S. Private Banking business which as we've announced last night is being sold to Wells Fargo and selected Western European branches that we will exit. Let's turn now to the Investment Banking division on slide 12. So first, all the strategic operations of the former investment banking division based in the Asia-Pacific region, we transferred to and consolidated under the new Asia-Pacific division. The fixed income and equity businesses will be combined at the globe markets divisions and the advisory and underwriting businesses will form a separate division to record Investment banking and capital markets. As Tidjane had outlined, a large component of our macro exposure as well as a component of our prime service exposure, there is no longer part of our strategy will be transferred to the Strategic Resolution Unit along with the remaining positions from the NSU of the former investment banking division. Slide 13, please. As we already mentioned, the corporate center will be significantly smaller in our new structure. Not only we're targeting for reduction a number of existing program in the Corporate Center as part of our cost structuring initiatives, but all realignment and restructuring charges will in future be carried directly by each of the new business divisions. Let's go to slide 14. So, as I've mentioned, we will provide a full restatement of our historic financials under the new reporting segments before we report our fourth quarter numbers early next year. But in the interim, we thought it'd be useful to give you a preliminary set of financials under the new structure. What we show here, all the numbers for the full year 2014 but if you look in the appendix, I've also included the numbers for the first nine months of 2015 under this new structure. So, if you look from left to right, you can see we have a Swiss Universal Bank with CHF1.6 billion of pre-tax income and return on capital calculated on the worst of basis the Tidjane outlined a few minutes ago, of 13%. The International Wealth Management business with CHF1.3 billion of profit and a 27% return. The Global Markets division with CHF2.4 billion of profit and a 10% return on capital. And investment banking and capital markets operation contributing a further CHF0.5 billion of profit and a return of 23%. And finally, our Asia-Pacific business made a profit of CHF0.9 billion in 2014 equivalent to a 14% return on capital. So we then have, as you can tell, a much reduced corporate center. In an operating loss of CHF0.5 billion last year offset by gain of CHF0.5 billion from FEOD movements. And last, we have the new Strategic Resolution Unit and the substantial loss in 2014 primarily reflects the cost of the settlement last year with the DoJ relating to our private banking activities. Just to reiterate, the definition of return of capital is on a worst of basis, 3.5% of leverage exposure and 10% [indiscernible]. And this clearly reflects an anticipation of the future. We've assumed the 3.5% on leverage ratio and a 10% CET1 requirement. Slide 16, so, let me just remind you, if we go into more detail of the five key components of our financial plan. Let me just start then with the cost on slide 17. If you look on the chart on this slide, you can see we have an entrepreneurs a total of CHF3.5 billion of gross savings to be achieved by 2018, of which approximately CHF1.2 billion relate to previously planned cost reductions and a further CHF2.3 billion relate to additional reductions in our fixed cost base. Just to summarize here and I'll go into more detail later on, approximately CHF1.3 billion of the CHF3.5 billion relate to the exit of certain non-core businesses within the Strategic Resolution Unit, a further CHF900 million of savings will be achieved from the transformation of our support and embedded services across the bank. After taking into account CHF1.5 billion of planned investments to facilitate our divisional growth initiatives, we expect to reduce our costs by CHF2 billion between the end of this year and 2018. What we outline here though is the restructuring program going forward. We expect to incur CHF1.3 billion of restructuring costs relating to our strategic initiatives, with the substantial majority of these costs to be incurred in the next 18 months. These restructuring costs will be disclosed in our quarterly earnings results and as I mentioned before, will be charged directly to the respective divisions incurring them. Of the CHF1.3 billion total restructuring costs, CHF400 million relates to business exits and reductions in the new Strategic Resolution Unit, CHF500 million we incurred from the London initiative which I'll comment to in more detail later on. The reengineering of our service support functions is expected to cost CHF300 million in restructuring costs while the infrastructure efficiency plan a further CHF100 million. Turning to slide 19, so on my previous slide, I've described those costs which are treated as restructuring costs as strictly defined by U.S. GAAP and we'll be reporting separately on that basis. However, I think there are three more financial impacts I'd like to mention in respect to this program. First, in addition to our peer restructuring costs, we would expect a further CHF0.7 billion to CHF1.2 billion of investment costs required to drive these cost savings, simplify infrastructure and reduce operational risk. The second point is whilst we redeemed the vast majority of our former Basel II instruments several years ago you may recall, there still remains certain capital instruments outstanding which are no longer effective under the Basel III regime. We would expect a negative pre-tax income of approximately CHF700 million, if we can redeem this, but this will be fully offset by an equivalent amount of savings over the next three years. And to be explicit, that is not included in our savings plan. So if we do retain this, this will be incremental to the savings targets we've outlined today. Finally, as we complete the restructuring and re-segmentation of the Group, I would expect that we take a substantial impairment charge in respect to the CHF6.3 billion of goodwill relating to Investment Banking division and that will be taken in the fourth quarter of this year. I'd like to point out that this impact will not affect our look-through capital ratios as goodwill is already fully deducted when calculating the CET1 using that capital and our leverage basis. Let me turn now to slide 20. So you've seen the slide already in Tidjane's presentation. On the left hand side, we begin with the full year pre-tax income of CHF4.5 billion based on an annualized year-to-date results. As mentioned before, we intend to achieve a net reduction of expenses of CHF2 billion by the end of 2018. In terms of divisional growth initiatives, a pre-tax contribution of approximately CHF3.5 billion, partly offset by CHF0.8 billion of remaining losses within the Strategic Resolution Unit. And that gives us some illustrative pre-tax profit for the Group in the range of CHF9 billion to CHF10 billion for 2018. Look at the bottom, in terms of tangible equity, this illustration would result in CHF35 billion at the end of third quarter, increasing to approximately CHF50 billion by the end of 2018. That includes the benefit from the capital raise. Overall, the achievement of our cost saving target, the successful wind down of the new SRU, as well as the implementation of the growth initiatives should lead to our current return on equity, tangible equity improving to approximately 14% and our cost to income ratio improving to approximately 66%. Let me turn now for the next few slides to take a closer look at the divisional targets. Slide 21 first. Thank you. As Tidjane has already mentioned, the new Swiss Universal Bank will focus on strengthening our position in Switzerland. This reflects a combination of specific growth initiatives focused on entrepreneurial high and ultra-high net worth clients and expansion of our small and medium-sized focus on corporates, as well as an optimization in the Swiss operating model. Our target is to achieve a pre-tax income of CHF2.3 billion by the end of 2018 compared to the CHFF1.6 billion achieved in 2014. And that would drive an improvement in return on capital from 13% in 2014 to 17% in 2018. Let me turn next to the International Wealth Management Division please. The International Wealth Management Division already generates some of the highest returns in the bank and we intend to invest further in several growth initiatives to boost pre-tax income from CHF1.3 billion in 2014 to CHF2.1 billion by 2018. That would drive an increase in return on capital to around 30% by 2018 through a combination of lending volume expansion, increased footprint in a number of locations and further expansion in emerging markets additional to and separate to the initiatives in the Asia-Pacific region. We're also exiting from a number of sub-scale platforms and that will improve our cost-income ratio from 73% to below 65% by the end of 2018. Let me turn now to Asia-Pacific. As Tidjane outlined this morning, the Asia-Pacific region is a core component of our growth strategy and we intend to achieve pre-tax income of CHF2.1 billion by the end of 2018, double that of 2014. If you look at our performance last year, we achieved a return of capital of 14% on a cost to income ratio of 70%. If you look at the nine months annualized, our return on capital has already increased to 26% and our cost to income dropped to almost this level. So our strategy here is to continue to build on the success that's been achieved in the Asia-Pacific region, adding incremental resources, both capital and investment in our front office and our related controls to drive this increase in returns. Let me turn to slide 24. We've discussed already some of our plans to right-size the Global Markets division. What we're doing is transforming further assets and balance sheet to the Strategic Resolution Unit in the fourth quarter in order to right-size the Global Markets division with an RWA of approximately $83 billion to $85 billion and a leverage exposure of approximately $380 billion. We intend to hold this level of resources flat over the next three years and the projections we show here show revenues flat at 2014 levels, but with the Global Markets division having the benefit of their share of $0.7 billion of the cost measures we've outlined already. This increases our pre-tax profit to just short of $3 billion by 2018, equivalent to return on capital of 16% and a cost income ratio of approximately 67%. But just to reiterate, this is very different from the strategy we pursued before. We will transfer these assets across immediately to the new Strategic Resolution Unit, the new Global Markets division therefore operates immediately with new capital resources. Let me now look further at the Investment Banking & Capital Markets division on the next slide. We're planning a number of initiatives which Jim will outline this afternoon for the Investment Banking and Capital Market division to leverage and strengthen our strong advisory and underwriting franchise. This should increase pre-tax income by approximately $1.1 billion by the end of 2018, driving return of capital of 25% to 30% range and a cost income ratio below 70%. Let me talk now about the Strategic Resolution Unit. We show here the major components that comprise this unit and I'll come to this in more detail at the end of my presentation. But the two main key points to take away, we've a clear plan and a clear target to reduce RWA in Strategic Resolution by 2018 by approximately 70%, excluding the operational risk issue which Tidjane mentioned before. And secondly, we intend to reduce the remaining pretax income drag to approximately CHF700 million by 2018. Let me turn now to capital usage and allocation. with the aim of continuing to operate the bank with total leverage exposure of approximately CHF1 trillion over the next few years. Let's turn to risk-weighted assets on the next slide. Our plan for risk-weighted assets has similar priorities as to leverage. Essentially, we've moved almost CHF60 billion of risk-weighted assets to Strategic Resolution Unit and we'll run down approximately half of that over the course of next three years excluding operational risk, approximately 70% of that. The resources released from this will be invested in Asia Pacific, International Wealth Management and Swiss Universal Banking divisions with a small component going to support the expansion of the advisory businesses in the Investment Banking and Capital Markets division. Just to point on previous slide, you can see there is a much more balanced and proportionate distribution of capital usage between the Global Markets division and the other divisions of the Group this plan. Let's turn to the next slide please. we assume that the major changes relating to risk-weighted asset is recalibration such as the fundamental review of the trading book and the proposed to impose floors against revised target models take effect from the beginning of 2019. And I just caution that the rules and the timing around these changes will remain uncertain and subject to change of plans from regulators. As we've said already, if we looked at this slide, the rules that have the most immediate impact would be new Swiss too-big-to-fail requirements which we expect to be announced immediately. We anticipate these to require at 5% Tier 1 ratio, of which 3.5% will be provided by common equity. And that means between now and 2018, the leverage requirement will be our primary constraint on capital or put it in a different way risk-weighted assets, there are a number of safest changes which are planned over the next few years. First, there is a new standardized approach to counterparty credit risk effective from January 1, 2017. What we do know, as we said before, expect the impact on numbers for this to be minimal. And of greater importance, we will have new rules relating to The Fundamental Review of the Trading Books and market assets. These rules are expected to be financed in the next six months to a year and then to take effect from the beginning of 2019. Although they are still not final we estimate that this change of our current understanding would dilute our CET1 ratio by approximately 50 basis points. Now the final change and this is potentially at the same time, but I would say this is still very early stages, the Basel Committee has proposed the imposition of floors against revised standard rules. Nonetheless, although this is several years away and may get pushed back further and is subject to revision, our preliminary estimate of the impact is that if the floor was imposed at 60% level, that would incrementally reduce our CET1 ratio by approximately 25 basis points to 100 basis points and between 100 basis points and 250 basis points if this floor was to impose at 70% level. Now, in the strategic planning review we've conducted over the last few months, we have prioritized those assets which are most affected by these changes. The FRTB changes which is the most imminent of these things, particularly impacts a number of aspects of our fixed income business, especially long dated derivatives which we see obviously predominantly in macro as well as in some other areas. And these positions have been prioritized in our plans and will be transferred to the new Strategic Resolution Unit for wind down prior to imposition of the FRTB rules. Now in terms of the impact of the floor, if this does come into effect in 2019, I would say that -- I just have to say this will impact both the Investment Banking and the Private Banking assets as it limits the benefits of current use of advanced models which effects both areas. So in summary, as a consequence of the capital raise, we would expect to exceed the new Swiss TBTF leverage requirements with immediate effect. And in addition and anticipation to the changes in risk-weighted asset rules, we will build a buffer in our CET1 ratio, operating approximately 13% which ensures that we should maintain a CET1 of at least 11% if these floors are imposed in 2019. Let's turn now to the next section. As Tidjane has outlined, a core component of our strategy is to focus on maximizing our free capital generation. Previously, we focused on returns and on growth in pre-tax income which are profit based metrics which have a number of inherent limitations. First, they exclude items that actually also impact capital generation such as other comprehensive income or changes in deferred tax assets. These metrics also fail to take into account increases or reductions in capital usage as some businesses can be net income generative but consume an amount of capital in excess of what they generate. With the introduction of operating free capital generation as a KPI, we will focus on moves that directly impact our capital base. This enables us to focus on where the operating capital is generated and where that is utilized and reinvested. Finally and perhaps most importantly, we would base our dividend distribution policy on the operating free capital generated with a loan to long-term goal of paying out approximately 40% of operating free capital as cash dividends to our shareholders. Slide 33, so if you look now at our projections from the end of 2015 to 2018, our pre-tax profit and that's after deduction of restructuring and cost to achieve should generate operating free cash flow of around CHF9 billion. In addition, the capital rates including the benefit of high utilization of our deferred tax asset threshold should add approximately CHF6.5 billion to our capital position. The minority IPO of our Swiss legal entity together with other management actions could potentially add a further CHF2 billion to CHF4 billion which leads us to total free capital generated of approximately CHF19 billion over the next three years. Of that, we would expect to consume or distribute about CHF4.5 billion in cash dividends. As we said already, we reduced our leverage exposure to approximately CHF1 trillion which will free our capital of approximately CHF1.7 billion. Against that, as we've said before, we're assuming that the minimal leverage requirement increases from the 3% we have assumed before to 3.5% under the new Swiss TBTF rules consuming approximately CHF5 billion of additional capital. That leaves us with about CHF11 billion in net free capital generated and increase in our CET1 capital of approximately CHF14 billion to CHF15 billion over the period. Slide 34, now if you look at 2019 and 2020 with the restructuring of the bank complete as well as the achievement of the growth targets we've summarized this morning in Asia Pacific, International Wealth Management and the Swiss businesses and clearly without the drag from restructuring costs, our operating free cash flow generation should increase to CHF14.0 billion to CHF15.5 billion over this period. Of that, as we set out before, we intend to pay a minimum of 40% of the operating free cash flow generated over the period as cash dividends which will represent about CHF6.5 billion of usage over the two years. We would also expect to reinvest some of the capital we generate towards growth tentatively scheduled between 15% to 20% of our free capital generation and then the final component here is the RWA recalibration that I summarized before. In the event that capital flow being set at 60%, we'd expect the impact to be approximately CHF20 billion to CHF30 billion from the FRTB change or about 50 basis points and the capital requirement of the floor being set at 60%, will consume approximately CHF2 billion, combining FRTB and that floor requirement together. So let me put this together then in terms of the impact on the CET1 ratio. So at the end of the third quarter, CET1 ratio was 10.2% and the leverage ratio was 2.8%. If we take into account the operating free capital generated in addition to the capital raise, the potential IPO of a minority stake in our Swiss legal entity and the netting off of the cash dividend accrued, our CET1 balance increases something in the range of CHF43 billion to CHF44 billion by the end of 2018. That equates to a CET1 position of around 13% and a leverage ratio in terms of pure common equity of around 4.3%. This surplus on our CT1 position then acts as a buffer against the recalibration impact that we're currently planning for at the beginning of 2019. And at a 60% floor, that would leave us with CET1 ratio of 12.0% to 12.5%. Clearly rolling this forward to 2020, the ratios improved to 13% to 14% at a 60% floor but I think you can also see with 70% flow we remain in excess of the 11% capital target that Tidjane laid out this morning. I think this capital plan shows that the combination of improvement in performance that we expect to achieve over the next few years, the other measures that we're implementing as well as the capital raise that we're announcing today, we will be able to operate with a capital buffer sufficient to anticipate these potentially future adverse regulatory requirements over the next few years. So let me then summarize on slide 36, the provisional KPIs for the Group, first to double our Asia Pacific pre-tax income from CHF0.9 billion to CHF2.1 billion. Second, to grow the International Wealth Management earnings to CHF2.1 billion and third, to improve the Swiss Universal Bank earnings to CHF2.3 billion. In terms of our capital ratio, we're targeting a CET1 ratio of around 13% pre recalibration and around 11% as a minimum, post. That would equate to a CET1 leverage ratio that will consistently exceed 3.5%. Our operating free cash flow generation is targeted at CHF23 billion to CHF25 billion and we intend to reduce our costs by CHF2 billion between the end of this year and the end of 2018. And last but not least, we'll operate the Global Markets business about CHF83 billion to CHF85 billion in risk-weighted assets and around CHF370 billion of leverage exposure over the next three years. In terms of dividend strategy, we intend to recommend to our Board and to our shareholders that we will pay out at least 40% of the operating free capital generated as a cash dividend over the five-year period. Until we reach the capital target, we will continue to recommend a CHF0.7 per share with a scrip alternative. We would discontinue the scrip though once we have clarity on the final regulatory requirements and litigation risks and as a commitment, we will not continue with the scrip beyond 2017 at the latest. So before I move to the final two sections of the presentation, I just like to speak briefly about the capital raise. So the combination of the placing to anchor investors of CHF1.36 billion and the rights issue of CHF4.7 billion will raise approximately CHF6 billion. Now if you include the higher deferred tax threshold, that boosts our CET1 position by approximately CHF6.5 billion. On our year-end targets therefore, that puts us at 12.2% CET1, 3.6% on our core equity Tier 1 leverage ratio and a Tier 1 ratio of 4.7% and a total leverage ratio of 5.4%. Just on slide 39 then, I'd like to just show here just a reference the plan timeline. We will hold an EGM to approve both issuances on November 19. Ex-rights trading subject to the EGM will begin on Monday, November 23 and conclude on December 1. And the rights issue excise period closes on the 3rd with the first trading day for the new shares on December 4. So let me turn now to the next section and talk in little more detail about our cost plans. So let's start on slide 45, I think you've seen this slide already and what this lays out is the major individual components of cost plan. Slide 46, please. There are three key initiatives. If we start on the left hand side, our Corporate Center initiative will contribute approximately CHF1 billion of expense savings and that's driven by the substantial completion of the major programs primarily but not exclusively relating to some of our regulatory improvements. Second, further CHF900 million of savings will be achieved through transformation of our embedded and support service functions across the bank. This will be delivered through rationalizing our service and support work force, optimizing our footprint in London and implementing further efficiencies in our technology usage. Finally, a further CHF1.6 billion of fixed cost reductions will be realized through the exit of certain businesses that are non-core to our strategy, are being transferred for run down within the new Strategic Resolution Unit. And that totals CHF3.5 billion. As we said already, approximately CHF1.5 billion of that will be reinvested but as Tidjane noted, clearly the timing and the quantum of that reinvestment will depend on how our plans evolve over the next three years. So it does give us some EBIT but I think we did want to caution in order to achieve these growth targets we will need to make some reinvest. But of that, 60% will be directed at the Asia Pacific region with the remainder allocated to the International Wealth Management and the Swiss Universal Bank divisions. Let's start first then with the Corporate Center initiatives. Of the CHF1 billion in gross savings that we intend to realize from the current Corporate Center structure, approximately CHF500 million will come from the completion of the legal entity program. The completion of other existing regulatory and realignment programs will deliver a further CHF400 million of savings by 2018 and we'll achieve a further CHF100 million of savings through reduction of other corporate items currently booked in the Corporate Center. So following the CHF1 billion of cost reductions as well as the allocation of the restructuring cost provisions under the new structure, the Corporate Center will have remaining costs of around CHF140 million by 2018. These reductions will reduce the current Corporate Center cost from CHF1.6 billion to CHF0.6 billion, a saving of CHF1 billion over three years. As we said already, the restructuring and realignment costs are then allocated to divisions under the new structure and these are likely the order of CHF400 million by 2018, leaving the CHF140 million number in the final Corporate Center structure. Now that clearly substantially reduces the drag on our pre-tax earnings that you've seen from the Corporate Center in recent years. Let me turn now to our plans for service efficiencies. We intend to transform our support service and embedded functions and save approximately CHF900 million by the end of 2018 and that will be delivered by three main initiatives. First, our workforce strategy will rationalize our service and support functions across the bank. We will further align the business specific functions to the demands of the divisions and increase the redeployment of our high cost functions to our lower cost Centers of Excellence in Eastern Europe, in Pune and in Raleigh. This workforce strategy will deliver approximately CHF400 million of saving by 2018. Our London initiative should deliver approximately CHF200 million in savings by 2018 through a consolidation of our office premises there and the alignment of our London presence to service and control staff that require close proximity to the trading and market operations of this entity and also to meet our regulatory requirements in the UK. Finally, we achieved a further CHF300 million of cost savings through further rationalization of the shared IT applications across the bank. Let me start on page 49 then with some more details on the workforce strategy. A key component of our workforce strategy is to identify duplication between front office support functions and our central service functions. We will align our business specific service functions with the respective divisions which will lead to a more simplified support structure as well as improved accountability to the owners of those divisions. Now we've undertaken significant deployment over the last five years to optimize our workforce but there still remains a large concentration of support functions in the high cost locations of London, Zurich and New York as Tidjane outlined earlier this morning and as you can see, we intend to increase the number of employees in our lower cost Center of Excellence from approximately 13% in 2015 to over 25% by the end of 2018. Now separate to our full-time employee base, we also have a significant number of contractors and outsourced workforce located in high-cost locations and by the end of 2018 we will shift approximately 3,000 of our high cost contractors to lower cost locations or to outsource functions. And as I said before, this will be achieved through a combination of expanding our centers in Eastern India as well as increasing our near-shore facility in Raleigh. Let me focus for a few minutes then on London. We currently have approximately 6,600 employees and contractors in the UK and 60% of those are in service and support functions. Our office in London are spread across five locations and we have significant amounts of surplus and empty space in our Canary Wharf headquarters. So, as part of the restructuring plan, we'll review the workforce to identify control and support functions that have to be located in London either for proximity of the front office or to meet the core regulatory requirements for our London entities. Our plan in London also involves consolidating the real estate that we have in Canary Wharf and releasing a number of key sites for subletting. The costs associated with this because there will be costs have been included in the cost to achieve estimates that I've given before. Overall though, the London right-size initiative is expected to deliver approximately CHF230 million in savings by the end of the period. Let me turn to technology on slide 51. I would like to highlight the efficiencies that we expect to gain through technology improvements. To-date, we've already achieved significant savings by rationalizing a number of applications we have and we intend to continue that program and drive a further CHF600 million of further savings by the end of 2018. A key component of this will be substantially to complete the optimization of our infrastructure, reducing operating costs and operational risk. We'll be targeting a further 500 of our applications for elimination and reduction in the next stage of this program. We're also going to continue to invest in our infrastructure to facilitate this rationalization program. We reduced up to 50% of our legacy infrastructure and move more of applications to a market standard cloud-based approach. Finally, we will continue to focus on innovation. We successfully launched the digital private bank in Singapore but we've also identified a number of digital opportunities through our global innovation lab and that will contribute both to our improved client service but also to increase efficiency. Now let me conclude then, looking at cost saving expected from the SRU and the other business disposals. Within the Strategic Resolution Unit, we're targeting CHF600 million reduction in our costs by 2018 from the divestiture of the U.S. Private Banking business. We achieved a further CHF500 million from the wind down of other businesses transferred into the SRU, including the Western European private banking branches and Investment Banking activities identified as non-core. Finally, we'll see a further CHF500 million of cost savings related to the rationalization of our front office footprint, to give us a target of the total CHF1.6 billion to be delivered through the Strategic Resolution Unit by the end of 2018. With that, I would then like to move to the third and final segment of my presentation, the Strategic Resolution Unit. I would just like to conclude then with an overview of the Strategic Resolution Unit. So, as I said already, this will be set up as a separate division of the Group and we'll consolidate the remaining portfolios from the existing non-strategic units as well as additional exposures that do not fit within our long-term strategy. This will ensure that the Markets division in particular is immediately right sized as we allocate the positions to rundown the new SRU and it will also then provide very clear focus on the accelerated remove all those positions as quickly as possible. Let's just look at the rationale there for establishing the SRU rather different than we have done before. The new Strategic Resolution Unit will have an independent management team with a direct reporting line to the Group CFO and that will be focused exclusively on winding down the capital usage and cost of team. Dedicated front office and control functions will report solely to Strategic Resolution Unit executive management and that will provide enhanced governance over the run-off of these assets and control these positions until they run off. In addition, we think this new structure will give more transparency and simplify the reporting of both the exit strategy of the non-core activities as well as the performance excluding the SRU of our ongoing business lines. The second reason to establish the Strategic Resolution as a subdivision is it will immediately separate the future platform needs from our historic activities. What's more, the existence of the Strategic Resolution Unit will help to protect the bank against the upcoming registrants I've highlighted already by reducing the consumption in businesses that are already that are basically currently deliver suboptimal returns on capital or will do so in light of these regulatory changes. And we'll talk briefly then about the composition of the Strategic Resolution Unit. I think the Strategic Resolution portfolio exposure was driven primarily by Investment Banking-related positions. As you can see the charts on the right hand side, 85% of the RWA in Strategic Resolution Unit relates to the current Investment Banking division and 87% of the leverage exposure as of the end of third quarter. Along with the entire remaining non-strategic unit within the existing Investment Bank structure, selected capital efficient business exposures as we've outlined already, will be transferred to Strategic Resolution Unit. From a current Private Banking Wealth Management division, the U.S. Private Banking business until the disposal is completed as well as selected West European branches which we've started to exit, Monaco, Gibraltar and Guernsey amongst others will be transferred to the Strategic Resolution Unit. All the outstanding non-strategic positions in the current Private Banking division will also be reassigned to Strategic Resolution Unit. Legacy funding costs, gains on sales of businesses and real estate and other smaller sized items which are currently included in the Corporate Center non-strategic results will be transferred to Strategic Resolution Unit. However, movements in credit spreads and loan liabilities which we tend to collectively refer to as fair value and debt moves will continue to be reported in the Corporate Center and you can see the impact of this in the first waterfall chart on the right hand side. The pretax loss in the first nine months is more than CHF1 billion higher than the former non-strategic units mainly because you do not have the [indiscernible] move in this position anymore. Now from a technical point of view, the other new additional item that were reflected in the Strategic Resolution Unit is the results of some entities in which we have no significant economic interest. And if you are a student of our accounts, you'll see those. They have no minority interest but they do have a pre-tax impact which is deducted before you get to the net result. That's not very material, but it's for completeness. Before we move to the financial overview of the Strategic Resolution Unit, I'd like to mention the operational risk associated with the Strategic Resolution Unit will be fully recognized in the unit, different to our previous approach. When we first established the non-strategic units within the business divisions, operational risk assets were transferred to the businesses. But as a separate reporting segment and given the increased size and scope of the wind down portfolio, the Strategic Resolution Unit will receive an allocation of the operational risk weighted assets reflective of this portfolio. So let's look at the wind down, please. What we highlight here are plans to accelerate the wind down of these new non-core positions. Between now and the end of 2018, we'll reduce risk weighted assets by 71% excluding operational risk and leverage exposure which is not affected by that, of course, by 73%. As you may already aware, we do require FINMA approval for reduction in operational risk weighted assets and we'll work hard to achieve such consent but we have not assumed it in our plan. So, we kept therefore operational risk weighted assets at the same level at the end of the third quarter through to 2018. So let's turn to slide 60. So the waterfall chart on this slide walks you through the major components that comprise our Strategic Resolution Unit. On the left hand side, we move from a pre-tax loss of CHF1.8 billion which is the annualized result for the first nine months of the year to a pre-tax drag around CHF700 million by 2018 and these exclude significant litigation expenses. Let's look at the key components of the Strategic Resolution Unit that we'll run off over the next three years. We begin funding costs associated with non-Basel III compliant legacy capital and debt instruments. We anticipate these costs to decline by approximately CHF310 million by the end of 2018 and remain at around CHF160 million beyond 2018. You may recall that early in my presentation, I referred to our plans to redeem our legacy asset. If we're successful in that, then that benefit will come through here and we'll see a much faster run-off in these funding costs, equivalent at least to the amount of the redemption cost. The next item represents shared service expenses attributable to Strategic Resolution Unit. Approximately CHF450 million are expected to roll off by the end of 2018 as a result of the realized Group-wide efficiencies and the reduction in unit size. We then have the direct expenses of the Strategic Resolution Unit and that would decline by approximately CHF1.3 billion by the end of 2018 as we actually complete the exit of the businesses we've discussed already and the rundown of headcount associated with managing these assets. Now, finally, there will be approximately CHF950 million of business revenues because there is revenues associated with some of these positions which would be forgone by 2018. And we're obviously exiting those businesses because they don't make much meaningful pre-tax contribution in excess of those expenses. The anticipated remaining 2018 pre-tax loss of approximately CHF700 million is driven primarily by some stranded remaining legacy funding, some residual shared service costs and direct expenses. We'd also expect some remaining exit costs to be achieved at that time. So, with that, I would like to conclude my presentation this morning. We have lunch now I think.

[Tidjane Thiam:]

Okay, thank you, David. Yes, we have lunch. I just wanted to put up this slide, because I didn't completely do it justice earlier, I was concerned about the time, I went too fast, but you're going to have a chance to meet the team which is the team that is going to deliver these results and I want you to continue the presentation and focus on the five businesses because we're on behalf of what I was talking about the functions of course are very important. You know David very well, he's the CFO. The CRO is Joe Oechslin, he'll be here. So, depending on your center of interest, I just want you to know who you should focus on during lunch. The Chief Compliance & Regulatory Officer, that's the new role, where we used to have Legal and Compliance together, we have Lara Warner, who is here. She was the CFO and COO of the Investment Bank. So, she is a seasoned officer in the company, highly lauded and she has accepted to this role and we're thrilled because this is a very important area clearly for us. Chief Operating Officer is Pierre-Olivier Bouee who is here and what he's going to do is take[indiscernible] to report to David and with the mission of pushing them down in the business and executing the decentralization. So, hopefully, if he does a good, he'll be out of the job soon. General Counsel is Romeo Cerutti. He keeps us out of trouble very effectively. And [indiscernible] and that completes the team. You must be hungry. Please join us for lunch and we'll reconvene at 2'o clock. Thank you.

[Thomas Gottstein:]

Okay. Let's start. Okay, ladies and gentlemen, my name is Thomas Gottstein. Before I go through my slides, I just wanted to quickly introduce myself, because I'm not well known to all of you. So I've been with Credit Suisse since 1999, so for 16 years. Actually joined Credit Suisse in the Investment Banking Department and sir, amongst my previous roles was also Co-Head of Equity Capital Markets for the EMEA region from 2007-2010 when I actually reported to Jim Amine and subsequent to that, I was Head of IBD Switzerland, coverage from 2010 to 2013. And then, I joined to the Private Banking Division in January 2014 to Head the Premium Client Switzerland, a Global External Asset Manager Department and was a member of the Private Banking Management Committee. I also wanted to take this opportunity to express my excitement about this new role that I was given. We have a strongly positioned business in Switzerland that has under 60 years of history. And I want to thank Tidjane and the Boards to have entrusting me with this role. I also wanted to thank Hans-Ulrich Meister for everything he has done for Credit Suisse and for handing over a Swiss business which is in very good shape. Nevertheless, there is much to do. There is an enormous responsibility on my shoulders that I'm aware of. And I'm looking forward to tackling the challenges with all my colleagues at Credit Suisse in Switzerland. Before we engage in the details, let me share the key messages with you upfront. First of all, Switzerland is absolutely core to the Credit Suisse strategy. It is not only our home market, but it offers attractive growth opportunities. We have strong market positions. And as you saw, it will contribute a substantial amount of PTI. In 2014, on a pro forma basis, it was roughly a quarter. Our four strategic priorities which I will cover in this presentation, are around simplicity, empowering growth, drive efficiency and to invest in the brands. We also heard about the IPO plans. A 20% to 30% IPO will not only crystallize value as it was also mentioned by Tidjane, but it will enhance the independence and accountability for the entire Swiss team. It will give us an acquisition currency and it will also have the secondary benefit of raising incremental capital for the Group to the tune of CHF2 billion to CHF4 billion. We're targeting attractive returns and we have clear financial ambition. We're targeting a 17% post-tax return on the regulatory capital and a 10% earnings growth with the target of PTI of CHF2.3 billion by 2018. I want to cover three main topics today. First, I want to talk about the Swiss market and the setup of the Swiss Universal Bank. I want to talk about our four strategic priorities and about our financial ambition thereafter. So let's start with the market. As it was already mentioned, the GDP per capita in Switzerland is the highest in the world. And if you believe all the external forecasters, it will continue to grow at healthy rates going forward, at least in line with Eurozone if not more. We have the highest [indiscernible] density with 30.5% and we've seen continuous growth in the corporate banking area and lending of 6.9% over the last four years. In addition, we have political stability and we continue to see ultra-high net worth individuals, high net worth individuals from the whole world to come to Switzerland. As you can see on this page, we have very strong domestic market positions to build on. On the Private Banking side, if you look at retail, if you include BANK-now, [indiscernible] and Swisscard, we're a leader. High net worth, we're Number 2; in ultra-high net worth, some see us as Number 2, some see us as Number 1, we're very close with our main competitor and the same is actually true for external asset managers. On the corporate institutional side, we're either Number 2 or Number 1 in the corporate banking side, with pension funds, institutions in Switzerland we're Number 1 and we have the Number 1 on IBD for many years. These are percentages over the last five years. If you look at the financials on a pro forma basis, as it was mentioned before, the Swiss business contributes roughly CHF1.6 billion in terms of PTI. As you can see on this page on the right side, this is well balanced between Wealth Management clients, corporate institutional clients and sales and trading services and Investment Banking with CHF1 billion, CHF0.6 billion and CHF0.2 billion respectively. As you also can see, the post-tax returns on average of 13% which is seasoned but clearly provides upside. Also want to mention that the underlying assumptions that go into this are in the footnotes and please note that some of these assumptions are still subject to further internal analysis and discussions with the regulator. Hence there may still be some changes in detail. But broadly, these are the numbers that you should use for your modeling. So if you look at the four strategic trusts, simplificity, this is really about refocusing on Swiss clients, but at the same time, we don't want to disrupt any teams, you don't want to disrupt any client coverage, it's about empowering growth, it's to drive efficiency and it's to invest in the brands. Let's start with the simplicity point. This chart shows you more or less how you should think about the business. The Swiss Universal Bank will cover private clients and this is everything from retail, credit card business all the way to ultra-high net worth business, Swiss corporates and entrepreneurs and Swiss institutions. In addition, we will provide the booking platform for all Swiss booked business in the other divisions, whether it's in international wealth management or whether it's in Asia. Over the last few months, we have conducted a systematic portfolio review considering several factors. We looked at market attractiveness, market positioning, prospective capital requirements. Each of the peer heads together with their teams identified a significant number of growth initiatives for each of their businesses. So for example, for myself for the Ultra-high Net Worth business and external asset manager, we identified for each one 12 growth initiatives. And the same is true for my colleagues, Christoph Brunner and Andre Helfenstein who runs the corporate business, each of us over the last few months has identified bottom-up a large number of growth initiatives. I've highlighted some on this page. So starting with Ultra-high Net Worth Individuals, this is actually the area where you see the biggest growth potential. First of all, our market share is slightly lower than some of the other businesses, but also this is the biggest, the revenue pie to really target. For example, we want to grow the number of RMs. We want to continue to increase cross-selling with our Corporate Investment Bank. We want to promote Credit Suisse Invest which was very successfully launched, but also other areas that you see on this page, whether it's mid and large-sized [indiscernible] SMEs. Ultra-high Net Worth Individuals, IBD and external asset manager, we believe we can grow above market. This is all about collaboration. We cannot win in this market if you don't work very closely between the Private Bank and the Corporate Bank and IBD. For example, if you have a healthcare company that wants to go public, many of them prefer the U.S. market. So we have to work with IBD. We have to work with our colleagues in the U.S. to take the company public. We have to work very closely. Within Switzerland, we have to work closely with our colleagues from corporate bank and IBD Switzerland. If it's an M&A deal, so we have to work very closely. This is absolutely key to be successful. In addition, we want to double our lending book in ultra-high net worth and we also want to grow there in terms of relationship managers. In external asset manager, we want to build on our strong position that we have and also on our strong platform. The client segments that you see on this page are also very important to us. But our growth ambitions are less pronounced, either because we have already very high market positions and/or they represent low-return segments. Nevertheless, also for these areas, we have clearly identified growth initiatives. And for retail, affluent, institution and largest corporates, we definitely wanted to grow with the market. In retail and affluent, initiatives include digital capability improvement, optimizing our branch footprint. In institutional, we want to work closely with the corporate bank, because it's our pension funds and they obviously work sometimes very closely with the CFOs and CEOs of the corporate side. And on the last two points, income-producing real estate and commodity trade finance, these are clearly businesses which are requiring more capital. And therefore, we have to be very selective in this business and only do it in situations where it makes sense for the overall client relationship. At the core of our ambition to grow high net worth and ultra-high net worth business in Switzerland, as well as the SME business, is our plan to build the bank for entrepreneurs. This is deeply rooted in our DNA. It started with Alfred Escher, 160 years ago, who founded Credit Suisse to support the Swiss industrialization. And it's still what think we do best. But it's also area where we think in the last couple of years, we could have done better and they really want to do the focus going forward. As I mentioned, we have to work much closer between the private banking side and the corporate banking side, whether it's on the high net worth or the ultra-high net worth side. We target to double our penetration and we have clearly identified certain initiatives like co-coveraging of clients between high net worth relationship managers and corporate relationship managers. We want to have colocation where they sit together and we have co-branding of client events. On the right side of this page, you have a real example of how we have developed the client. It started with lending and leasing. We then on boarded the founder on the private banking side. We then started to engage with their pension funds and continued to give them advice on M&A. There was a liquid event for the founder and it all ended in a very close relationship with the founder on the private banking side. These are just two more examples, one in the chemicals area, one in real estate. This is for kind of high net worth, ultra-high net worth. We also have -- I would love to talk about bigger deals as well, but unfortunately if I give the information, then Switzerland is a small place, you would know exactly what I'm talking about. But these are the type of situations, it starts with corporates or investment banking relationships and we going to private banking or the other way around. Okay here we go, on the ultra-high net worth side, this page shows you the way we think about our business. We see ourselves as a one-stop shop that can really provide all the solutions to our clients from traditional Wealth Management services with direct investments, private mandate, etcetera, all the way to the right side where we provide very complex solutions, be they private label funds, global custody service, access to our trading floor, investment banking research, corporate finance supplies and liquidity situations, specialty financing, can be private jet financing, ship financing, single-stop financing, etcetera. Only very few banks can offer this service and this is the only way in our view, you can really be successful with ultra-high net worth clients, not only in Switzerland, but globally. On the right side, I've summarized again some of the key initiatives. I talked about the increase of our footprint. We want to have deep penetration of Swiss-based single family offices. I think there is still could do better. In terms of increased mandate penetration, we're talking both about standard type of mandates, but also we want to introduce more CS Invest for ultra-high net worth individual where we, for example, go to the Investment Committee of family office once a month. We give them our house view on the markets. We give them our house view on strategic asset allocation, give switch proposals. If they have an affinity to a sector, we bring our research analyst from investment banking, etcetera. I do want to charge for that. And we're convinced that these type of clients, they are prepared to pay for advice, if they get the right advice. I talked about doubling the lending book, this is both mortgages, but also non-mortgages. It can be cash flow-based financing. It can be Lombard loans. It can be any of the other type of lending I mentioned before. And again here, it's very important that we're very close our experts from STS, who know exactly how to price these loans. Also, we want to be more visible around deals. And again, we can only do that if we were closely between private banking, corporate banking and investment banking. Last point which is very important in my view, the strict implementation of target operating model. You cannot cover an ultra-high net worth client or a family office with one RM like you do in high net worth or affluent. You need a team, you need a relationship manager, you need a solution manager, that takes the lead on really the asset allocation type of dialog or you need trade consultants, who actually execute deals on a daily basis. It is not only the only way to provide high touch coverage to ultra-high net worth clients, but it actually also is a question of control and it helps always to have four or six eyes on the same client and to ensure that you avoid any mistakes. On this page, I want to talk quickly about external asset managers and this is really only one aspect of the growth. As I mentioned, for each of the businesses, we identify 10 to 12 initiatives. An external asset manager for example, you want to grow our PLF business which is very important. We want to improve our IT platform, we will support external asset managers or independent wealth managers how we call them here with suitability and appropriateness tool which is based on our in-house tool but which will allow external asset managers to actually perform the suitability and appropriateness tests that they have to do. We want to also do this type of CIO offering, like I mentioned, we do on the single-family offices, we also want to do for multi-family offices and external asset managers where we go there once a month and actually advice them. And on this page, we also talk about another growth effort that we have in this area and that is really about the small banks in Switzerland. As you know, many of them are under pressure. They have capital requirements. They need to produce tax reporting for their clients. They have large infrastructure back office investments to do and therefore their margins are under pressure. And we expect continued consolidation, you have every year about 10% to 20% of a number of banks that merge or go another way, i.e. they will become an external asset manager or they keep their banking license which is to partner outsource box, the second from the bottom, where they keep the banking license, but some of their Services, they will actually outsource to us so we can support them on the external asset manager side. Credit Suisse is very well positioned to take advantage of this, we have a very strong and distinguished coverage model, consisting of relationship manager, investment advisors and we believe that with our IT platform, we're very well positioned. This is just the same point again. But obviously, this is not only an opportunity for our external asset manager business but also for ourselves. As a principle, there are about CHF230 billion of AUM managed by private banks in Switzerland, each of them is below CHF15 billion in AUM and all of these banks are asking themselves these questions now and we can either support them as an external asset manager or they could actually represent an interesting acquisition opportunity for ourselves. On the cost side, end-to-end accountability will really help. As you can see on this page, on average 40% of our costs of some shared services in my business area was actually 50% and we really want to be in control of our costs and I think this is very important. And through this new organization, it will allow us to be in control of our costs; direct cost to go up to 80% and shared services should go down to 20%. The move to Swiss specific shared services function into the Swiss Universal Bank and each of us will have our own budget. It will also allow faster decision making; for example, if you want to do a new IT project, we can decide and we don't have to wait for several months to get this done. Another area of cost savings, obviously, the digital private bank and on the left side of this page, you see some examples. We have introduced a new innovative app for our clients, online, mobile and tablet banking. Clearly, we still have some clients who are not that happy because it can still be improved, but the uptick is very good. For some sophisticated traders, they still prefer to go over the traditional computer, but the iPad solution is continuously improving and we're doing very well there. Also in terms of RM production tools, we have launched a tool recently and have supplied 1500 RMs within iPad. Going forward, there are several projects we have. We went through each business area with what our priority projects are and we have grouped them on the right side. So for example, enhancing self service capabilities for clients in the Lombard area or for example on the automation front to back processes. We're going to introduce digitalized application approval process for mortgages. As another effort to improve efficiency we're planning and but clearly, we think it's important to have the local connectivity. As you can see here, 85% of NNA generated by clients are living within 10 minutes of a Credit Suisse branch. So, this brings me to the financial ambition. And starting again with the IPO, I think most the legal entity into a good shape, but the plan is to do this in 2017 and we talked about all the benefits. So I don't think I have to go through them again. And this is based on increased revenues of CHF400 million which is 2% per annum frankly, I think this is a modest target and I'm sure that Tidjane will expect me to over-achieve that, at the same time, on the operating expense side, a reduction of 3% per annum we think is absolutely doable, especially if you consider that the non-recurring costs are essentially existing projects which we know we will double and over the next 12 to 18 months. And therefore this is a very realistic target. And we expect to increase the PTI by CHF700 million or 10% per annum over the next few years. To finish off my slides, the key ambition, 10% CAGR of PTI to CHF2.3 billion by 2018, cost to income ratio improvement from 68% to 56% and a post-tax return on regulatory capital increased from 13% to 17%. Thank you, Very much.

[Helman Sitohang:]

Good afternoon, everyone. related that are working them and hence has created very interesting opportunities and platform and growth that we have seen in the region and hence we're very excited about the opportunities in the region. Tidjane touched on earlier about the high net worth and the ultra-high net worth aggregate size in the market. I'll make sure we're just going to be focusing just ultra-high net worth size as of 2014 and the way the patent is expected to grow till 2018. As you can see, in 2014, it is estimated there is about CHF3 trillion ultra-high net worth wealth which is primarily entrepreneur-dominated that exist in the region. Now, just want to throw you one interesting data point. The total private banking AUM in the Top 10 players in the region as of end of 2014 only adds up to CHF1.2 billion, the smallest player out of the Top 10 roughly has about CHF55 billion. So you can see how much untapped opportunity actually exist in the region just in the ultra-high net worth sector alone and I think that's the beauty of the opportunity because we do believe and I do strongly believe with my management that actually the opportunity is vastly untapped. There are still many, many opportunities out there. Every time, once in a while and then, someone will work to my office and say, we just met this entrepreneur, we thought we know the market very well but suddenly come this guy and he is worth a billion, he comes out of nowhere, he does some traditional medicine business, he does other parts consumer products, he is not listed and hence obviously he is out of the radar but when we kind of understand and through the private bank intake because that's where the kind of the entry point is most of the time. So you start to see this opportunity and you start to realize that actually the opportunity in the ultra-high net worth is very much untapped and I think that's the beauty of our franchise being able to identify and to be able to on board through the private banking franchise and to create the platform for the clients to come with us, work with us and then obviously, see the service of the whole value proposition of the whole bank. So now if you see that even today it's CHF3 trillion and it’s still vastly untapped. By 2018, the number is expected to double roughly close to CHF6 trillion. And you can see how much opportunity exists for banks like ourselves, banks that they can deliver the whole integrated platform, banks that need it and the clients that need opportunities and the products from the private bank and as was the investment bank. Our private bank also has a very strong performance as you know. We're a top three player in the region, has been growing actually well ahead of the market and I think the growth is expected to continue. Tidjane also touched on the slide on the left which talks about the generation, the first, second and third generation involvement in the businesses. The beauty is, as you can see, roughly about 80% of the enterprise generation is managed by the first and by the second generation and that means basically roughly 80% of the first generation are still active, most of them are still very active and running the businesses, driving the businesses. The chart on this right side is actually something which we have developed internally and it shows roughly how much of the listed marketed capital in the region is managed by these entrepreneur families. And as you can see, we start from the Philippines, Singapore, I go all the way down to Malaysia, you have averages higher than 50% being managed by the families, by the entrepreneurs. So the decision maker when there is a business opportunity, when there is a transaction in the investment banking will come from the entrepreneur's side. Obviously when it comes to the ultra-high net worth and the private banking decision would be made by the same family member and that's a very interesting opportunity that lies within this space. Hong Kong and China; you see is low but as you know, Hong Kong and China 15 years ago mostly were state-owned enterprise dominated. This percentage is growing and as these – largest like Alibaba and so on has been coming in the last few years. This percentage will shift and we can – we see there is lot of entrepreneurs that are still in the private sector is privately held and the percentage will expected to shift to the higher percentage number. And for us, the most important part is that these entrepreneurs, they rely heavily on obviously relationship with our private bank, but also the relationship with the investment banking, the power of our collaboration and the power of us being able to connect the investment bank and the private bank is tremendous, and we have seen how us being deeply rooted and being able to collaborate between the private bank and the investment bank have generated many, many interesting and very sticky relationship across the cycles, and across the generation. So really our private bank and our investment bank have relationship with the first and the second generation who are obviously the majority as I said driving the business but even in some cases has gone to the third generation and I'll show you later one of the examples that how we have been able to work with the family which is a large family, which has various family members and it has several generations involved in the businesses. The other opportunities that exist obviously in the region is still the opportunity to the financial market deepening which is expected obviously to underpin the business growth and the investor flows. As you can see from here the average of the market depth in the region is still much lower than what you expect in the mature market. And as the economies and the GDP grow at a faster pace than the global GDP then you expect the opportunity to continue to grow, and as well as the percentage should get closer to the average selected mature markets which you see is obviously much higher. So obviously for us the opportunities to capture the flows, dealing obviously with the institutional investors like yourself; but obviously also taking advantage of the opportunity that exists in some of the capital market and transaction that exists working closely with the entrepreneurs. We are obviously, as you know a top three player and leading equity players in the region. Often have won various institutional investors research ranking. We are very strong in select countries, in places like Southeast Asia, we are the number one equity house for the last five years and we continue to dominate and be very strong in that market. And obviously as the market continues to deepen and become more liquid and the free flow increases, these obviously are present opportunity for us to grow with it and as we can – and if we can continue to outperform like we have been in the last few years then obviously we will be able to outperform the market in terms of the opportunity that presents itself. So how do we look at our clients in the region? We define our clients into three key brackets; into the high net worth, which is very dependent on obviously pretty much most of the private banking product. We have a strong – very strong brand and very strong trust, obviously full suite of our private banking products in the region, and has been growing very steadily – actually outperforming the market in terms of the growth in the region, and it's very deeply rooted in our Swiss Private Banking tradition. We continue to grow this franchise very well and we believe that we can continue to outperform the growth in the franchise that we have had over the last couple of years, going forward as well. I'll skid to the third one which is obviously the institutional investors like yourself which is very important part of our franchise which has been strongly growing and we have been outperforming again the revenue and the market through the institutional investor opportunities that we have seen with the growth of the market. But the more important part and the most interesting which is the second client base, which is the ultra-high net worth and the entrepreneurs. This is where we believe that we, as Credit Suisse, as a firm has a very unique proposition because with us being strong in the private banking products and in the investment banking product provides very interesting opportunity where the entrepreneurs when they come, they want to see the full suite of the products, they want to deal with the bank that is equally strong in the investment banking, as well with the private banking. And if you think about it, as the entrepreneur grows his wealth, his business activities, he would need advisory, he would need capital market solutions, at the same time obviously continue to develop their strong relationship that already exists with the private bank. And that's the power of our banking franchise, the Investment Bank and the Private Bank Franchise. But also it is important to equally – equally important to demonstrate that we have a strong collaborative culture because that's the most important part that the client look at it. The clients in the region frankly don't differentiate whether you are an investment banker or private banker. Well the client wants to see you come as an institution, and you come as an institution and you provide a comprehensive solution to the client needs. I've been in many situations; many meetings where the clients suddenly start switching from the investment banking discussion suddenly to private banking, and you need to be able to deliver the solution. Sometimes you may not be able to deliver yourself then obviously you need to bring in your team together, and the partnership and the collaboration culture; believe it or not the clients actually observe it. I've had many comments from the clients saying you know, Helman, actually your team has always demonstrated you guys have the best collaboration. I don't see you guys competing, I don't see like two three different people from different departments pitching kind of almost similar product or slightly different product and trying to outdo each other. You guys have well-coordinated, you know what you're talking about, and that's what we want. And this culture and this collaboration is actually the key for us to be able to capture the opportunities in the entrepreneur and the ultra-high net worth space. As I said earlier, the opportunity is vast, there is lot of opportunities there, there are still many entrepreneurs in the region which we haven't seen and the always every other week there is another entrepreneur which we haven't covered which is worth $0.5 billion or $1 billion, there is very interesting opportunity in this space. And as many entrepreneurs frankly, the interesting part is, if you deal especially the first, and even the second generation, they are very interested in just growing their business, they are not really thinking about wealth as much initially because they are just so focused on getting the business grow, making it big, making it successful. So sometimes even the private banking product comes later, so the investment products, investment banking product sometimes could be the lead and action many times will lead into the overall relationship. And if you don't have a good balance and good partnership between the private bank and investment bank then actually it's going to be very difficult to capture the opportunities because then you will forgo the opportunity when the opportunity exists because you just ignore the momentum that exists when the client really needs your product. And that's I think what it is very exciting about our proposition and we have seen this many, many times across the region. Now you would be surprised that opportunity actually exist pretty much through the whole Asia Pacific, even in mature markets like Australia, Japan, there is a lot of interesting opportunities. And I do believe actually a lot of the data and lot of the numbers out there are actually quite conservative, it's quite amazing to see sometimes when we discover and we work with this client, we're going to – how Under Cover and how – that you could low profile the number is. And that's why the beauty of our franchise is as well because through our private banking relationships you create connection between the investors – sorry, between the entrepreneurs and lot of time that's how you get the interaction. The entrepreneurs, 90% to 95% they are not interested in exposing themselves, they are interested in showing what's the value of their business, they want to really focus on the business and hence there is lot of time why it's very difficult to actually identify them very easily, it's actually I would say one of the various interesting segments which is very difficult to Uberize or Air BNB it or you know disrupt or whatever you call it these days because it's so under penetrated, it's so low profile, and the entrepreneurs themselves don't want to expose themselves, they want to work hard, they want to have a trusted bank relationship, they want to have someone that can solve their problems, both on the investment bank and the private banking side, provide a total solution, and that's where Credit Suisse plays it best. So for market positioning and if you kind of look at the client access, and then you look at the product access – we want to position ourselves in the higher end of the spectrum, that's where some of those solution becomes more important, that's where the collaboration becomes very critical, that's why the expertise in the product becomes very important as well. And I'll demonstrate later that we have done many very interesting transactions in the region. So we have all those tools, we have the tools to show that either in the private bank or in the investment bank that we can do the most complicated deals that more and more importantly we know how to work together, we know how to work and bring that right timing, right production solution to the clients and hence, the right corner, right top corner, that's where we want to play, the high value added, and that's where we have been playing actually from – for many, many years now. And as I'll show you later the results, you see the acceleration in the some of the profit and the revenue happen in the region, actually even one of the most difficult years which is this year for us and that shows the strength of the platform. If you want to kind of think about it we would like to position ourselves if you're in the common retail space, this is kind of where we want us to be the Her/Me, the Louis Vuitton kind of positioning versus kind of more lower margin retail products. And that is where Credit Suisse plays extremely well. I'm going to talk about one real-time example which I mentioned earlier. So this is a family, and this is a real example, like I played it at our Board meeting very recently. This is a family that we have relationship with the first generation, the second generation, and the third generation. And as you can see there are seven contact points within the family. The first contact point happened actually with the second generation which would then introduce us to the first generation. And then we spread out to other siblings and siblings-in-law. And also the third generation and in the third generation there is also third generation-in-laws. So it's very interesting, and if you can see, one of the last deals we have done actually come through a call from the second generation to one of our RMs and say, hey, my third generation, one of my third generation is looking to do a deal. They are thinking choosing between yourself and another global investment bank. After all they should choose you because you guys are the best, you understand our family, you know how it works, please talk to them. So the RM went to them, went to see the third generation, and few months later we penned a deal for them, he was very happy, and now he becomes the client both on the – and the deal by the way was an investment banking deal, was investment banking client but they're also a private banking client, and that's the beauty of the franchise. Now if you look at it, this client relationship, 8/10 years ago was just one or two contact points, today you have seven. And in fact I was just recently checking that there is another one or two just coming in. So it's a beautiful story and we have many stories like this, this is a real example of client and the profitability of this relationship if you look at it 7/8/10 years ago, today we are talking multiple X of that 5/7/8/10 years ago situation. And it's a consistent relationship and it keeps on coming. The beauty of that is as well, 70% to 80% of the deal comes without pitching, it comes because there is a trusted relationship between us, as a firm, and this client. And this by the way as you can see – and that's why I talk about how the introduction is also equally important because when you have a private relationship, the entrepreneurs talk among themselves. I know many of the large entrepreneurs in the region, and I'm very surprised how actually connected they are. And when they have a good experience with you then they see that you actually can understand and provide solution, the spoke solution across the Board, they actually recommended, and I've experienced that. And my team actually has experienced many of those situations where we actually got a referral from one of our existing very satisfied clients, and this is very powerful. The right hand side, we took a sample of selected ultra-high net worth clients who are – what we call one-bank client which means basically they are the private banking and the investment banking plan as well. And the beauty of this is, sometimes I heard comments, well ultra-high net worth's, are they sticky, they jump around. Actually you would be surprised how sticky the relationship is. The example on the left is an example as I said of seven-family members which has been with us for many years, and the relationship continue to grow, obviously the revenue continues to grow. The right hand side is the sample of ten large clients, that they talk – it's concerned name of the clients, so the client's name didn't change across geographies in the region. And over the last ten years – sorry, over the last three years; 2012, 2013, 2014; we have seen that the revenue continue to grow within this group. Again, they are all one-bank client, they are all private banking, and they are all investment banking client. Again, that's the beauty of the model because going forward you will see even more and more – as I said, earlier you have $3 trillion, it's going to $6 trillion. The $3 trillion is very largely untapped, so the opportunities are huge in the space. And this is where we're playing this with what we have been doing, and this will continue to expand at a much larger and much deeper scale. So these are actually real comments from our clients, these are comments actually I didn't prepare for this presentation, these are comments from clients. About six months ago at one of our Executive Board – my Executive Board colleagues remember this, I actually asked, hey, can you – I asked all of our RMs to give us input across the region, whether our clients – and I said, by the way please don't call the client to say, hey, write nice things about us. I want to see the truth what is it. So this is what came up, and this is what is interesting that these are comments that comes across the region whether it's China, whether it's India, whether it's Japan, whether it's South East Asia, whether it's Australia, we're very conscious to the message that our one-bank platform differentiates Credit Suisse from other banks. We have shown that we understand the personal needs and the business needs which means through the investment banking products we can develop solution which is aligned with my long term goals. The other one said private banking lending and distribution also helps investment banking which is also very interesting because some of the large investment – large ultra-high net worth clients has accumulated so much wealth so they become investors themselves, they become – and some of the family offices could be as large as some of the mid-sized hedge funds, and they need very structured solution, then we need very developed solution across the Board. And that's where again Credit Suisse Bank comes in a very strong way. The other one which I like a lot, Credit Suisse is my partner, as my business and wealth have grown, so they have grown with me. And this comment actually we have heard many, many times. And these are some of the clients – some of the newer clients that we have, we start experiencing the same experience that lot of these guys have and it will continue to grow with us. Obviously the Japan comment is very interesting as well; the Suisse stands for high standard position and discussion. And that's very interesting,, that's coming from a market which as you know is very – from some perspective people view it in the market, for us, it's actually been one of our very interesting market which we have developed very nicely. I'm going to play two client videos which I think will be again – and again, this has been recorded six months ago, so it was not prepared for this particular event. And it shows again, real feedback from our client, again without any prepping, this is a spontaneous video of our clients. [Video Being Played]. So those are the two videos and one is Charles Lu, who is CEO & Founder of China Auto Rental, the largest auto rental company in China. And as you can see, he is not afraid and he actually doesn't mind to be publicly stating that Credit Suisse – we are the main banker of him. The other one is Tolga, a company which is growing very fast in very interesting sector, out of Australia. And again, as you can see it comes from different geographies but very interesting and very similar comments. They like to talk about Credit Suisse, about the quality that we find the ability to drive solution and to be really able to deliver what the client needs, be very precise about that. One relationship which I also want to highlight which I think is most of you are very familiar it obviously is our Alibaba involvement. As you know, we were the last active leader of the Alibaba IPO last year which was the largest IPO in history. It was a very successful IPO and it was very interesting – would you cut a deal. But many don't know that this relationship actually has started many years ago, it's a relationship that's actually very deep rooted, it's very trusted. And as you can see from the number of transactions that we have done just between 2012 and 2015 alone, you have nine transactions there, and obviously they are all very large transaction. And you can see what the comment from the client, from Alibaba itself says; Credit Suisse is our trusted strategic advisor that understand our needs and business culture. And this particle part that understand our need comes again, again and again, and I think that's where the power is, that's where we are driving, that's where we have been driving and we're going to accelerate that growth, accelerate the attention to be able to understand the client needs on the one solution basis, and that's going to be very powerful going forward. And obviously being able to be involved and be assured the left active lead in the largest IPO also demonstrate one thing that we are able to handle as complex and as large transaction as anyone want, and this has been very important strategic deal to showcase our abilities to be able to deliver our need, not only in the Asia obviously but our capacity and our capabilities as a firm globally, and continue to demonstrate we have a strong connectivity but we also at the same time to be able to tailor the needs in the region so then when we kind of present the opportunity to our colleagues globally it comes in a much more developed from, it comes with the understanding what the client needs, how we want to structure it, and how we want to run the deal. So we talk about the opportunities which I think is clearly very interesting and it's very unique and very unique to us, especially because we are paying and that's very interesting segment, the ultra-high net worth, the entrepreneurs which I think is still largely untapped, especially when it comes with the opportunity that exists as to collaborate between the private bank and the investment bank. We talk about the clients where the clients talk about us; the clients need both, the private banking, as well as the investment banking. If the client is more near to our private banking product only and it comes into high net worth bucket we can handle that. If the client is – comes from the institutional side, like yourselves, then we can handle it, we have shown through various complex transactions and deals that we can handle that obviously have the right platform to be able to handle large volumes and large deals. And obviously the biggest opportunity lies in the ultra-high net worth, and especially the entrepreneur space. So this is our ambition for 2018, as John said, we are targeting to make $2.1 billion in 2018. If you look at our historical performance from 2013 and 2014 and to nine months 2015, you can see it's been very nice and very consistent growth in profitability and in revenues. We have looked at actually some of the samples in our global – the global banks or the regional banks, I actually can tell you, hands on heart, there is not that many banks that have demonstrated this kind of financial performance over last three years to be able to consistently grow on the top line, as well as in the bottom line, and at the same time deliver very strong return on capital. And that's where we play, that's the strength is and I believe that lot of this comes from the opportunity that we have been able to develop in the region working closely with our clients and position ourselves. If we think about it this year is actually not an easy year, the fact that we have a record nine months, I'm very confident we'll finish the year in the record term as well in one of the most turbulent times and one of the least active period in the region and to be able to achieve this kind of results, I think that speaks about the capacity or about our capabilities and also diversity of our client and geographical portfolio, and this is the results that we have achieved with that. On the right hand side we have – this is our NNA performance over the last couple of years. As you can see they have been consistently being able to grow. In 2013 it was $12.8 billion, 2014 we're going to $18 billion and we continue to have a target of to achieving upto $25 billion. We have been able to do that through active – our client acquisition, some of the referrals like I mentioned earlier has been very powerful and has been very instrumental in being able to grow the NNA. Also equally important is the capacity and the capabilities of the RMs to expand the geographical and also the client base, and this has been very instrumental. We have right now roughly about 520 RMs and we target to have 800 RMs by 2018. But to me the most important part is not only the number of the RMs but we also want to make sure that we have a good quality RMs that understand what the client needs as I said earlier, the know-how to work together that in the private bank itself to be able to sell more cross – more private banking products within the client, but also work together with the investment bank and to be able to deliver the one-bank solution because that's where the biggest upside is, that's where the big upside is that we're able to capture the growth. I'll tell you one example, this is few years ago we have been working – we have one relationship, it's not very large relationship in terms of AM, it's a decent mid-sized business. And there was a situation, it's a private business again, so worth couple of hundred million. And one of the family members who was a client of ours came to the private banking RMs and say, we have this some certain situation within the family, we want to see how we can resolve some of that while transition and how do we do it. So then, can you help me think about some idea? So the private banking a relationship manager obviously quickly realized she is not equipped to be able to advise on her own, so she went over and discussed it with their internal colleagues in the private bank and then they brought in the investment banker. And then they work together and then we come up with some solution that eventually we brought into the client, the client loved it, we eventually executed the transaction and the client loved the results and today obviously is a very happy private banking and investment banking client. Now if you look at from the revenues perspective, it could have been a small revenue over many years if the private banking didn't come to the opportunity and talked but the private banker come across, we discuss it, we come up with the solution, brought in and the client was very happy and it created very long lasting as I said trusted entrepreneur relationship and which will also obviously beneficial to the client but also generated very strong revenues which you wouldn't be able to generate through the typical private banking relationship which is kind of more steady and growing and create that enhanced value through a certain transaction and to be continuously thinking about how to add value to the relationship. That's going to be the key for us and we have many examples like that we have done but we can scale this up and the opportunities are tremendous, and this is where again as I said, it's going to be a huge opening for us to grow. So if you look at it from which sector the revenue would grow, clearly the ultra-high net worth and the high net worth, the entrepreneur space will grow much faster and much bigger from our target between 2014 to 2018, we roughly have to generate about 1.7 to 1.8 revenue delta between our forecast for what we think we can achieve this year till the 2018 but majority of that will come from the entrepreneurs and ultra-high net worth. They are also like the decent part as well but smaller part will come from the institutional investor's activity which basically comes through the market activity, be it through our market leading equity franchise but also through some of our credit – we spoke credit solution that we are very well known in the region for. So how do we going to grow the revenue tactically like – which products and how do we push it forward. So the first one – and I think is the most important part is we have a huge opportunity to grow and deepen the existing relationship. While we are still where we are focused on acquiring new clients, it is also interesting to see that as the clients come in because there is a lag period between the time the client walks into our office and they start the relationship. The first thing he is not going to do is buy like 5 or 7 products. It usually starts with one, may be maximum two, and it starts slow, when he starts thinking okay, yes, this bank is something that understands my needs, cares about me, then he will entrust you with more products. So the ability of the RM to deepen the relationship and understand and how to sell more products but at the same time the right products then you have the benefit of the clients, then you have a long lasting relationship is the critical part but that's where the opportunity is. So the chart on the left hand side demonstrate this is an absolute term, this is on our real terms like home – our leading ultra-high net worth relationship revenue on the right side, the leading sample. And then if you look at the average what we have today, they are all of the clients, and then the opportunity is very interesting, it's more than 2X. So the challenge of the average RM is to be the RM like the leading RMs, like we have plenty of those to be able and we use that example many times obviously minding client confidentiality, to be able to demonstrate how you bring value to the client, how do you demonstrate – provide solution, bring in the investment banking, bring in other private banking product experts, so then you can grow and deepen the relationship and that's just they saw for example. We estimate to achieve our revenue target – the 2018 target just on the private banking products – so if you look at it from the private banking product lines, we think by just focusing on the existing and deepening the relationship with the existing clients we should be able to achieve 70% of the target. So we don't have to get new clients and we just get to work with the existing clients, deepen the relationship, work with them closer, we should be able to achieve 70% of the target. We see also the target growth, the NNA that's coming, that's been the last few years trajectory and I think we will be continuing to accelerate that then which will bring new clients, then we start again the relationship and then starts multiplying again in the second and third tier and so on of the relationship, that's where the power comes in. Also like which is kind of the obvious consequence of the chart on the left hand side, you see that the asset production, the total AM per RM should be able to increase because as the client trusts you then he'll bring in more assets. So the RM relationship and ability to deliver trusted relationship, trusted products, trusted solution is also very critical. This part obviously talks about the intake onboarding of new clients as well, and this is very important. As I said earlier, we're going to target moving from roughly 520 RMs to about 800 by 2018. We have various programs to be able to onboard the RMs to make sure that there is a certain quality embedded when that intake happens, the onboarding quality of RMs but also existing RMs, and that's very important. The other part is obviously lending – ultra-high net worth lending is critical part but it's not the only part, obviously the lending comes as one of the products that the clients are looking at but we always focus on making sure that there is a complete – and there is broadest possible range of products that we offer to the client. I think this part is something which is very interesting as a consequence of our new structure. I think the empowerment and the regional empowerment is going to be tremendous in us being able. I think we will be the most regional empowered global bank in terms of ability to make decision locally, to be able to mention to upbring client needs to structure and to bring the point of execution, the closest possible to the client to where the client needs are, and this is going to be I think very powerful. We have been actually demonstrating that over working very closely with my other EHD colleagues but as we moved into this new structure, I think this empowerment and this ability to move much closer to the point of execution is going to be fantastic. I was just talking to my colleagues this morning, in the region everybody is super excited because I think they can deliver much more efficient solutions requirements, much more efficient products and structures to where the point of execution is, and that's going to be extremely powerful. Obviously we need to make sure that we continue to invest in the infrastructure, in the risk and control the compliance and so on, and we have been doing that over the last couple of years. We're going to continue to do it and make sure that with regional empowerment comes obviously regional accountability. We want to make sure we don't slip, we continue to do well and I think that's going to be – if you combine that with the existing business side which will be closer to the clients in terms of the ability to execute and to decide, and to be able to structure how do we look at the clients in the region, it's going to be very powerful. Just one quick one, we talk about the clients lends, we talk about the product lends but I think it's also important that one way we look at the region is also looking at it from the geographical spread out perspective. We have roughly six geographies in the region and it is very important to understand that each of them actually behaviors very differently. They have a very different set of regulators, you have a different set of client needs and different set of products, and I think one of our success has been in the region by being able to dissect the region and just kind of looking and when people say Asia Pacific, well it's not just Asia Pacific, it's very different. And you have to make sure that you have a right and clear strategy, both in the products and the clients in each of the geographies. And our strength has been able – that in all the six geographies we are profitable, we are growing, and we are deepening the client relationship across the board and this has been very powerful. Lot of times any multi-national firm struggle how to make sure that you can do well in the six geographies. Well, we have done it and I think it's very powerful because it provides also nice job geographical spread out and a portfolio balance when one region may not do as well because you always go in cycles, you have to make sure then the other region, and the regions as a portfolio deliver strong results. And this year has been the case; one interesting data point I can tell you, from the 2018 plan obviously we have built up trajectory 2016 and 2017. So three out of this six countries with the strong performance like we have are actually very close to the 2017 target as of today, and that's where we're powerful. You know why, because that demonstrates that our plan works. If three other of these six can make it or they are very close to the 2017 target, it means that we have the right strategy, that we have the right empowerment, that we have to looked at the regions and these countries in the right way, and with this empowerment and obviously the capital increase and also the commitment to grow the resources is going to be very powerful, and this is where I think growth – we can accelerate it very easily and we will be able to achieve the targets. So in summary, we talk about the opportunity. I think the opportunity is huge as we talked earlier, there is a vastly untapped entrepreneur space which is still pretty much wide open. It's not competitive at all, it's really up to us how do we able to deliver the one-bank solution. Obviously that's still very strong focus on the high net worth and institutional client side. Ability to work together, we have a strong trajectory of financial performance which we think is probably very unique and probably at this point we haven't seen anybody does better than us in the last couple of years, both in terms of revenue growth, PTI growth, and return-on-capital as I'm very confident that we can continue to grow, we can continue to accelerate, you have seen the client lens, you have seen the products lens, and you have seen the country lens, and all three we provide the balance, we want to make sure that all three are doing well. And with that, I'm very confident that we can achieve our 2018 targets and beyond. Thank you. G&A Iqbal Khan Good afternoon. My name is Iqbal Khan. I'm the new Head of International Wealth Management. I was the CFO of the combined division; Private Banking and Wealth Management for the last two and a half years. I joined Credit Suisse sort of like, almost in every nut and bolt if you like and understand the mechanics, specifically financially in very much detail and I'm sure this combined with my experience as a Managing Partner at Ernst & Young and actually doing a lot of client work brings the qualities that are required to run International Wealth Management. With this, I would also like to thank you John and Oars [ph], and the Board for my nomination, and for the trust that they gave me. What I would like to do today is give you a bit of an overview of International Wealth Management, the new division. I would then will like to talk about shifting gears; what are the strategic priorities, why can we grow now, what was our growth trajectory in the past, where are the respective initiatives that we can focus on, and where are the respective strengths that we can leverage upon? And I will conclude with the financial ambition. So let's look at the division, if you look at net revenues in pre-tax income we're talking about $4.8 billion of net revenues and $1.3 billion of $90 billion for asset management. This is a very, very strong business if you like, look at the return on regulatory capital, 27%, this is a very high returning business. It's a business that's been growing, and if you look at the private banking business, it's actually geared to ultra-high, 57% of client assets relate to ultra-high clients. If you then ask yourself, how much of these clients are upper high net worth clients, it's actually more than 90%. So in the time we've been repositioning Western Europe, we've done small markets, we've done small accounts in emerging markets, we've actually started to focus more and more on upper high net worth and ultra-high, that's exactly the sweet spot. You heard Helman in terms of where we differentiate ourselves as Credit Suisse, that's the spot where we differentiate ourselves and I would explain a little bit more about that. What is the potential of the region that this division covers; 40% of population, 40% of wealth, 40% of GDP, and 40% of global wealth [ph]. And we're talking about regions that are growing double digit, we're talking about regions where you do have first generation wealth, second generation wealth, yes, it also includes Western Europe and mature markets where you are really at the fourth/fifth generation wealth but it's a large wealth pool. And we do believe that we are very well positioned to be able to succeed in this market and we've proven that in the last couple of years as well. The clients that we focus on as I said ultra-high premium high net worth but also family offices, external asset managers, and I'll talk about entry level high net worth clients, and how we want to address them going forward and service them. From an asset management perspective, the private bank is one of the main clients. Then you've got institutional funds and third-party distribution. Let's start with the private banking part of international wealth management. What you see here is basically a cut of the emerging markets, the key emerging markets, and the mature market, Western Europe. You see the growth rate of 7% to 10% in emerging markets. more towards 4% in Western Europe. Look at our ranking, this is the Euro money ranking, even if you do it by asset size and we would take intro and information, we would still be very close to number one or number two in these emerging markets, and number three in Western Europe. If you look at the share in emerging markets of ultra-high clients, it's 66%. 66% of our asses are client assets and emerging markets are all ultra-high. If you actually then do the math in terms of upper high net worth, you're actually almost 95% plus. So a very, very large focus on upper high net worth and ultra-high clients. If you take Middle East, we're actually at almost 80% of ultra-high clients. So again, a very extreme focus towards ultra-high where as you really heard it very well from Helman, we do differentiate ourselves very well. In Western Europe, we actually have about one-third or more than one third in terms of ultra-high clients. If you look at upper high net worth, where and high ultra-high then we're more like 70%. When I'm talking about Western Europe, I think a question that keeps on coming up is regularization, and where we send regularization, T.John was referring to that specifically. Look at the regularization trend, this includes the former NSU in terms of outflows. We had our peak in 2012 with $13 billion. And you do see a reduction in outflows relating to the regularization of western Europe. One of the largest countries that remains to be finalized is Italy. And with that we should be then done with the western European regularization. I would not say that regularization will completely discontinue because we're going to be very focused on this agenda. I think Credit Suisse has been one of the first institutions focusing very much on client tax transparency and being very committed to the tax experience agenda. We will see outflows related those related to emerging markets as we go through this process. But keep in mind if you want to compare Western European outflows to emerging markets outflows, Western Europe has a much lower penetration of ultra-high upper high net worth. You had a lot of affluent clients, you had a lot of smaller clients who actually had these challenges as we went through that. You will see that less or to a lesser degree in emerging markets so you will see some benefits of the respective impact of or decreasing impact of regularization. Think about this, you take these $8 billion of assets in 2014 or roughly $9 billion, that equates to almost $100 million of revenues of which more than $50 million is recurring revenue. Now once you actually bring that drag down, you actually have a much better base to continue your growth. And I think that is something that should definitely help us as we work through our ambitious targets, specifically in international wealth management. Let me talk about asset management. Asset management is a business that is focusing strategically on specialized boutiques. It is looking to bring institutional quality services and focusing on performance for our clients. And last but not least, the differentiator is you're doing that as part of a bank governance. If you look at the assets, you've got $260 billion in traditional investments and $130 billion in alternative investments. What is interesting specifically here is, look at the line Credit Suisse's wealth client. What that line actually shows you is distribution through Credit Suisse's wealth management client businesses. Now this is 37% of those assets shown here in traditional investment or 21% in alternative investment that is actually distributed through the wealth management business. This is [ph] as well as international. If we look at the international number it's roughly half in both instances which actually equates to a AUM penetration, if you go back to the wealth management or private banking at AUM slide that I had before to roughly 15% of AUM penetration in traditional and below 4% in alternatives. Now clearly there is a huge opportunity there that we want to tap in terms of increasing that penetration and we think we can do that. Why? Let's look at our product suite. Now on the one hand side if you look left, you basically see traditional investments and let me talk about multi-asset class solutions, that's actually the mandate suite. Now we relaunched the mandate suite last year and since then we're actually seeing very, very positive successes. We've actually sold for example Credit Suisse in West one of our mandate solutions. I think roughly $25 five billion year-to-date this year. $20 billion in the Swiss business, and from a stock business and $5 billion in international wealth management. Those $5 billion have been sold in the first nine months after actually launching Credit Suisse Invest Later for the international wealth management businesses and it's only focusing on a couple of markets right now. So that continues rollout of Credit Suisse Invest also in international wealth management will help that penetration growth. Else in that I think we're going to be very much focusing on equities in fixed income in terms of need strategies and active strategies. We are number two in terms of traditional asset management swizzle because that is the key investment hub for us in management in terms of traditional investment and we are the largest institutional fund managers, so a lot of expertise and know how. On the alternative investment side, we're top three in real estate, we're leader in credit. If you look at the investment performance relating to some of our credit products, it is clearly top quartile. On the proprietary side, insurance linked strategies top two. So if you look at this product suite, there is clearly quite a lot of potential in terms of being able to distribute this as a wealth management channel. What I would like to talk about over the next couple of pages is how we're going to actually do that and what are the strategic priorities. The strategic priorities all center around the client, client value, client proximity, client time. I will spend the next couple of minutes explaining each of these respective strategic priorities in sufficient detail and give you also examples to bring it to life. So when we talk about client value, it is about consistent delivery. You heard Helman in terms of again what the special sauce is of Credit Suisse and it is really brain one-bank or Credit Suisse to the client. And that means integrated coverage, and where it works we are very, very successful. If we take the example again of international wealth management, and we take the example of Middle East, a very, very well run region within international wealth management, that is an example where you actually have multiple disciplines working very well together where you can actually compare that to the APAC model which is clearly very successful. We want to focus on investment products and portfolio of clients, why? Recurring revenue penetration is going to be clearly a focus with international wealth management and increasing that. And of course in financing needs because a lot of these clients that we have and with the ultra-high penetration, it's all about lending and financing, and specifically bespoke structured financing needs. In terms of client proximity, we want to capture the market share that we actually can address based on the growth rates that you saw at the beginning. Now, again you could be challenging me here and basically say well why didn't you do that before? We did not invest respectively in the sales force as you look at our relationship manager statistic, they are down. I'll speak to that in more detail and how we're going to change that. Enhanced proximity, we will build out and further emphasize the hub and spokes model that we've already initiated and are implementing and have been implementing in the last two years. And we will digitize the client experience for our lower World Bank clients. So you remember, I said a high proportion of our clients are upper high net worth or ultra but we do still have clients who are lower than $5 million and we want to digitize their experience and actually serve them through this new service model. Client time, two important pieces on client time. It is one, faster decision making, faster time to market which requires a delayering and simplification of organization. I'll speak to that in more detail as well and clients face time. It is not only about increasing the number of relationship managers. You heard Helman talk about productivity. Today, you will see that 40% of the RMs time or Relationship Manager's time is spent on client work and the rest is spent on administration. If you bring that number up to say 70%, you actually just created another 300 RMs without actually going and hiring 300 RMs. So very important terms of strategic emphasis. So let me start with capturing revenue potential to integrate a client coverage. We see a CHF200 million to CHF300 million opportunity per annum if we can replicate the APAC model across International Wealth Management. You see here on this slide, the Asia-Pac benchmark in terms of collaboration and you see the current average in terms of the International Wealth Management division. Building out this dedicated, fully accountable managerial platform for ultra-high clients, integrating coverage, focusing on client life cycle in terms of actually ensuring that you're getting those leads and I think Helman made that exact great example where he talked about the fact that the private banker can actually get you that lead because he or she will spend their respective time over a longer lifecycle or a longer time period with the client even if there is not a specific transaction, why? Because he or she is also earning on the Wealth Management services in the meantime. So basically, we want originate deals that are led through IWM coverage. Now, let me give you an example of that. We already piloted this in Israel, basically putting coverage together and we did that in 2014 and the output of that was CHF20 million more revenues, eight additional deals, why? Once again very simple, you are actually working as one team, everybody is incentivized, everybody is talking about the same risk taxonomy. So, if somebody is talking about credit risk methods A and somebody else would be talking about credit risk methods B, you will not get to anywhere with the client, because the client experience is not really very, very great. So you can really see with this pilot in Israel, we actually got to more revenue. That is just one market. So just think about the multiple across these markets that are growing that are also emphasizing entrepreneur focus in terms of this implementation. What we also want to do aside from one bank itself is institutionalizing the investment value chain. Again, one of the challenges that we've had generally as a business is increasing recurring revenue penetration. You saw Q2 and Q3 adjusted for regularization, recurring revenues are actually up in Wealth Management. So, you do see the positive trend, you see mandate penetration, etcetera. I do feel that we can do much more. So we have early positive signs and I think we can build on that. Let me give you two examples of integrated coverage and where coverage works seamlessly to create more value. One is actually an example between Asset Management and Private Banking, if you like where we made it possible for our client to buy a direct real estate position from a real estate fund which we refinanced as well. And we did not refinance it against the real estate, we actually refinanced it against his respective securities portfolio, which again created further revenues for us. And on the other hand, it also created much more stickiness in terms of client relationship. Second example, divestiture of a company, where we basically ensured fast execution. We sourced the deal and we lent against the collateral or the single stocks, if you like. And on that basis, we actually also offered respective investment opportunities to the client. When we talk about client portfolios, I think we need to focus on our investment engine. With Michael Strobaek coming on board, our Global CIO, we've actually very much institutionalized this process and I do feel that that has been the success of our increased mandate penetration, which did go up a couple of percentage points. And I think we can do much more around that. I think specifically if you think about these investment solutions, what is important? Clearly, the combination of relationship managers, investment specialists, but also respective investment content, research content and how you seamlessly deliver that to the front office and then to the client. But what is even more important is investment performance. If you think about our mandate performance, four out of five mandate classes are over performing benchmark. The only one that's not performing over benchmark is fixed income. And the only reason for that is the current interest rate environment and challenges post SMB decision. If you think about investment themes. So when I talk about investment themes, from our investment engine, we basically have investment themes, we then basically translate into investment products and investment ideas for clients that can be more on the trading side where we utilize our sales and trading services desk or it can be on the investment product side, where again we can of course utilize Asset Management. 7 out of 10 of these investment themes have outperformed the benchmark. If you think about direct investment ideas or direct investments, all of them are actually in positive territory except for one example. So if you look at this performance combined with a pipe that works and seamless delivery, this is something that can generate clear and more value. Again if I make the example of CS Invest, CHF25 billion sold in first nine months. We just launched it. CHF5 billion in International Wealth Management, which is only across a couple of markets and we only launched that in Q2. So, you do see the success and the focus on this investment engine that's coming to life and I think you can build on that. If you talk about Asset Management capabilities, clearly we need to talk about product suite expansion and I will do that on the next page. I talked about global institutional quality solutions. I think what is important here mainly is leveraging global reach directly, so the growth, for example, institutional investments on the Asset Management side is international. We already have a very strong position in Switzerland. In alternative investments, it's actually adding further investment opportunities for clients. If you think about alternative investments, we are top 5 if you look at assets under management globally. I think with the model that we have, we can also attract very top talent. And I think that itself is something that will clearly support building out our Asset Management capabilities. Let's look at the examples that I have here in terms of product suite expansion. I talked about Credit Suisse Invest. Let me talk about a dedicated advisory offering for ultra-high clients called signature managed accounts. We just launched this. What is this? This is basically a managed account structure, which enables a client to book over multiple destinations. It actually gives you a consolidated view, it allows the client to be more liquid because he is holding direct investments and it allows the client to actually have a managed relationship on a direct investment basis. So clearly, multiple positives for the client. If you look on the traditional side, I was talking about building out equities. We can do that with our HOLT framework and respective analytics around that. If you look at HOLT, over the last 20 years, it has had a very, very spectacular performance. If you look at alternatives, I think a good example is systematic market making group which itself also has had a very, very strong performance. So I think we have multiple investment products which have been a success and which you can build on. I already covered the mandate penetration opportunity. You see it here with 1.5 times in terms of the possibility to increase. The highest penetration we have today in terms of Wealth Management or private banking, if you like, a mandate is on the Western European side. So in the mature markets, we are actually close to 40% in terms of penetration, but where we can do more and clearly see upside specifically on the ultra-high side, but also with the mandates that we have launched, is on the emerging market side where we do see a lower penetration rate, and clearly in that sense upside. And again, the successes of the first nine months do show signs in terms of being able to leverage that success on a go-forward basis. Let me talk about financing and lending. Again, Helman was talking about this. Thomas was talking about lending and growing lending in ultra-high entrepreneurs, why? I think very simple, it's an anchor product. It brings you either new assets, it tightens the relationship with the client, it actually creates more stickiness with clients. A client that actually has a lending position with you is not going to move away that quickly, and actually if the client brings in assets respectively is going to be much more linked with the bank, it will create a more stronger relationship with the bank. It will institutionalize the relationship of that client with the institution, with the bank. If you look at our ultra-high lending initiative, which has been led by Yves-Alain Sommerhalder, who is the Head of Sales and Trading Services, that's growing 26% since 2013. So it's been clearly a success, this is not just normal lending, this structured lending, this is lending against single stock, this is basically lending that is very much focused on bespoke needs of entrepreneurs, of ultra-high clients, which logically also requires respective risk management. And I think what we can bring to bear to clients is proven expertise, structuring expertise, and risk management capabilities. We're going to invest CHF6 billion RWA additionally in this, we're going to broaden the range of collateral and we want to manage also lending on a multi-collateral basis, last but not least, I think one of the areas that we specifically, also in addition to ultra-high lending have a competitive advantage is shipment finance. We're probably one of the most successful shipment finance lenders, but we do it differently, we lend against balance sheet, it is basically cash flow lending. Two-thirds of these clients are ultra-high, two-thirds of our ship finance clients actually have an ultra-high background. Aviation clients are 100% ultra-high clients, now the key there is how do you make sure that these clients actually have assets with us and ensure that you can basically expand that relationship, it's in my view a super example in terms of differentiation that we can bring to the client as Credit Suisse. In this specific example you see that we are looking to grow 44% in terms of lending and that will be 15% in terms of lending penetration of AUM. So lending as a percentage of AUM. Let me give you a couple of examples in terms of lending. Structured lending on the left hand side is actually a Western European example. This is a, I won't go into too much detail on this example, but the key point here is this is a very structured lending deal that we did specifically for a very, very large client. We were pitching for this client for two years and the only way we got this client was with this bespoke tailored solution and it led to a substantial amount of assets that actually came to us. Without this solution and without building out this capability we would not have been able to attract this client. If you look on the right hand side, you see specialty financing which is aviation and ship. Again, we did two of these lendings, if you like, as examples CHF200 million of NNA, in one instance and another CHF200 million in the other instance. And if you look at the lending amounts, we're talking about smaller lending amounts in terms of AUM, and these AUMs are AUMs that actually drive margins. This is not -- we're not just talking about collateral, because you're actually lending in a different capacity. This is AUM that you are managing. Let's talk about capturing market share and wealth creation by growing sales force. On this graph in 2011, you see how much our sales force was on a pro forma basis, of course because this division did not exist in this way before, 1400. It actually went down to 1,100 in 2014, why? Repositioning of markets, repositioning of specific booking centers, regularization, small markets initiatives, small accounts, we actually reduced our sales force. The focus right now is actually growing the sales force again very much geared to emerging markets, we're looking to grow it by 25% specifically, not only in emerging markets, but more than 200 will be actually coming from emerging markets and we will be also investing in respective Western Europe in terms of key markets. Focus is as I said ultra-high and premium high net worth. Now you could clearly challenge and say, well, wait a second, why didn't you just hire more in the past? So, yes, you repositioned, fair enough. So you basically had attrition, you actually manage people out, why don't you hire more? We actually did hire quite a bit and we actually have a very strong hiring team, which is called strategic hiring, we have more than 30 specialists, they've been able to attract 1,800 RMs over the last 10 years. So we're going to build out that team to be able to get this growth, we are going to work in attrition in terms of RMs, of course as well, but grow your own and we're also going to look at additional pools, specifically in the emerging markets where you do not just have relationship managers walking around on a day-to-day basis, where you think you can clearly tap into the professional services industry, where if I look at some of our top performers today in terms of relationship managers, a lot of them actually have a professional services industry background, why? Because these guys can bring multiple disciplines together, because you're focusing on ultra-high clients, you are focusing on upper-high net worth, we're not talking about retail affluent or lower level high net worth individuals. Where we're going to focus on in terms of markets? If you look at the list, Middle East, Latin America, Russia, Western Europe and Sub-Saharan Africa, you see a couple of markets that are listed here because specifically the wealth pools and the growth, and the ultra-high share of these respective markets. Clearly a lot of the investment in terms of RM hiring will be focused on these markets. If you look in Middle East, we want to leverage our number one position, and we want to tap into new opportunities like Saudi Arabia. We want to go on-shore in Saudi Arabia. Latin America, we think that longer-term, the outlook is positive. Clearly, there are some challenges right now economically and macro economically. We think we have a leading position in Brazil on-shore, which you want to leverage, and build out. In Russia, we have a great franchise related to Russia. It's a strong franchise, clearly some of the times right now are challenging, but we do believe there is a huge opportunity to capture the potential of wealth globalization related to Russia. Western Europe, again I think here we have a solid footprint. Here, the focus is going to be really on markets like Germany that Tidjane also had specifically on his slides in terms of wealth pool and how large that wealth pool is; UK, Spain and Italy. And we want to actually focus more on Sub-Saharan Africa because this clearly is something that we see as an opportunity. Now, the wealth pool itself is not that large yet, but if you look at the ultra-high penetration and you look at the growth rate, it is actually pretty attractive and we are already present in South Africa and Northern Africa. We clearly want to focus now more on specific markets that we haven't done so in the past. So yet another opportunity that we see here in terms of extension of market. How we are going to do all of this in terms of our operating model? We are going to leverage hub and spoke. You must have heard about hub and spoke from us specifically if we've had any opportunity to speak, while I was the CFO of PB&WM. It basically means we're going to invest in specific hub booking centers, and run advisory offices or only satellite smaller booking centers with limited capabilities outside of these hubs, why? Because, this allows us to focus investments on these hubs. It actually also derisks the business and brings operational risk down, while it actually makes working across geographies very much efficient. If you look at Western Europe that's what we're going to do through UK, Luxembourg and Switzerland. We're going to do that in Latin America through Switzerland, Bahamas and we are repositioning currently the US booking center for LatAm purposes, which is very strategic in terms of LatAm build out as a market. If you look at Middle East, Africa, Russia and Central Europe, Switzerland, UK and Singapore, by the way, if you look on the right hand side in terms of the EMEA region as we had it before, we've been already implementing this. By the way on that side, guess what the cost to income ratio of that business is, that's a 60% cost to income ratio business. Almost 70% are ultra-high clients, it's a 60% cost to income ratio business itself, if you look at that as a region, why? Hub and spoke. More than 70% are ultra-high clients. It enables them to multi-shore, they get the respective capabilities in the booking center, you don't want to have 10 booking centers, you just need those key hubs, where you can actually enable them to actually have their services as required. This is global wealth, this is mobile wealth and hence hubbing is our strategy, which we feel is going to be very efficient. For our lower wealth band clients, again, below CHF5 million, it's digitalization. So digitizing the experience, offering a digitized value proposition for these clients, we've been actually building this already and we will be rolling it out, it will take some time to it is ready, we've already seen it in Singapore and APAC. It will be basically a multi-channel service, if the client is willing to pay for the relationship manager in addition. We will also link it to our overall offering in terms of investments. Why are we going to do this? Once again not only efficient, but it actually enables reach for the client. Clients that are below CHF5 million are not going to find these hubs. They will want to have this service provided on a digital basis. Simplifying delayering the organization. I talked about decision making time that needs to be shortened, I talked about the fact that we need to get decisions closer to the client. If you look on the left-hand side, that's like an illustrated version of what we might look like today. It's multi-layer, in some instances where sometimes distant from the client and sometimes we feel that we have limited accountability, where we are going towards with that Tidjane and Urs explained today in the morning is an integrated management structure across regions and businesses. It will enable faster decision making and decision making will be in the market on investments, on clients, and it will be much closer to the point of advice, which will not only bring accountability, but it will bring faster time to market. Now, aside from all of that, that is good for the client, good for the client advisor, good for the business, it's actually going to enable us to take out CHF200 million of costs. In International Wealth Management, we are investing CHF600 million, of which CHF200 million are going to be self-funded through this initiative. Increasing client face time. As I said before, an average 40% of the RM's time is spent on client work. The other stuff is really administration and other elements that you need to be focusing on. We want to get that up to 70%. How we're going to do that? If you look at our systems today, we clearly are going to be making investments around dashboards, working tools, workflows for the RMs which make it much easier today if an RM wants to do a couple of controls, he needs multiple sheets to look at. If you want to open an account, it takes more than 21 days. If you want to open an account, if you are a politically exposed person, it takes more than 90 days. Now you can see that as negative. How I see this as a huge opportunity, because again the region that I was showing you before were all growing by 5%, 6%, 7% in terms of NNA growth. They're all very successful business if you look at PTI. And we could do that with an infrastructure that probably is not state-of-the-art as of today. And with the respective investments that are going to be going into this, into digitalization, we'll be able to achieve that. Think about the example that I gave before. If you go from 40% to 70% in terms of client time, if increase client time by 30%, that 30% on 1,000 RMs equates to 300 RMs. So not only you are going to hire 300 RMs, but actually going to build more capacity in your sales force of 300 which is huge. So with that, I would like to conclude with the summary and then in terms of looking at the financial ambition. Again, I think in summary, we are a leading private bank, specifically in the regions that are covered in international wealth management. The emerging markets have growth potential that is between 7% and 10%, very ultra-high and upper high net worth individual focused. We are very successful in some of these regions. The focus now is really going to be on how do you integrate coverage, how can you invest more in terms of lending, bring that to the next level as well as actually focusing on client proximity through hub and spoke through digitalization and also freeing up time for Relationship Managers to actually be able to enhance the experience for the clients. Secondly, in terms of Asset Management, top 5 in AI, number 1 or number 2 asset manager in Switzerland, a lot of capabilities that we can bring to bear not only for third-party institutional distribution, but actually for the wealth management distribution itself. With this, we want to increase our PTI by 50%, revenues by 30% and the already very high return on regulatory capital of 27% to 33%. So even though, we are actually planning to put in CHF6 billion of RWA on lending, we are not looking to dilute the regulatory return on capital. We are actually looking to increase the regulatory return on capital. Thank you very much for your attention and I think we're going to a coffee break now. Thank you very much.

[Tim O'Hara:]

Good afternoon, everyone. My name is Tim O'Hara and I'm going to take you through the global markets presentation. But just before I begin, for who those who don't know me, I wanted to give you a quick history on my experience at the firm. I started my career at Credit Suisse just over 29 years ago. I worked in each of the divisions of what until now we called our investment bank, so the investment banking department, fixed income and equities, and for the last three years, I've had the privilege of leading our global equities business, and I am very excited to take on the new role of leading our global markets business. Let me start by reminding you the criteria that we've used in the strategy formulation exercise for rightsizing our investment bank. Tidjane took you through these earlier, but I want to just repeat them for clarity sake. First of all, what we're doing is a reduction, but it's not a generic approach across businesses in global market. We applied three criteria to determine businesses to be right-sized. First, connection with the international wealth management business. Second, capital usage and third, profitability. On connection across the CS divisions, our intention is to invest where these businesses directly support IWM. Where businesses have capital usage we can afford and are sufficiently profitable, we intend to protect some of those businesses including where they are connected to investment banking and capital markets. On capital usage, we are focused on what is our real binding constraint, which is either the lower of risk-weighted assets or leverage exposure and improving the productivity of that capital and on profitability, businesses must earn comfortably in excess of their cost of capital. So I just described the criteria for evaluating the portfolio, but let me also introduce another constraint, which is the overall percentage of the firm's RWA and leverage exposure that these businesses utilize. Today, these businesses use approximately 40% of Credit Suisse's risk weighted assets, and a slightly higher percentage, 43% of Credit Suisse leverage exposure. These figures are despite a lot of focus on reductions over the past several years, and in the past year especially. You can see the leverage exposure has come down from 48% at the beginning of the year, but these percentages are still simply too high relative to the group. This concentration also makes the global Credit Suisse Group earnings profile more volatile while crowding out areas of growth that require capital. I will show you later where we plan to take these percentages over the next three years as we execute our plans. The global markets product suite that we will invest in has medium to high connectivity to the international wealth Management businesses. So, back to that first criteria. We also intend to defend our highly profitable structured products and credit franchises. For IWM clients, these businesses together provide execution services for floor products, structured solutions in lending and access to investment products. This portfolio of businesses is already a meaningful contributor to IWM. As some who followed us for a while know, we have for some time reported One Bank revenues in the past. But the execution services provided by these businesses provide an even larger revenue base than the One Bank revenues alone and we intend to grow that revenue stream. Let me now talk more specifically about the individual products and products strategies. The products we will invest and defend is one with leading capabilities and we've noted here the market positions across the global markets product suite. To be profitable while also being meaningful to IWM, we have to be best-in-class in the products that matter. Our cash equities franchise is already well positioned as a leader in research and electronic and high touch trading. These products are a core capability for the International Wealth Management business. Equity derivatives is already a leader in providing products and solutions to our IWM and institutional clients. Our focus here has and will continue to be on growing structured notes and lending products with IWM, but also on products for the corporate client base covered in Investment Banking and Capital Markets. We will continue our strategy of shifting to more annuity like products and away from directional trading, especially in the Americas. We've seen a lot of success from this model in Asia and have hired a new Head of Americas derivatives from a competitor to drive the build. While not very connected to International Wealth Management, Prime Services is a core offering for us. The product suite in Prime provides a monetization vehicle for our significant investment in research and the product platform is key to providing investors with access to markets globally. We will discuss in a few minutes the progress on our optimization efforts here and our continued focus thereon. Securitized Products is one of the strongest client positions of any business in the firm while also being one of the most consistently profitable businesses within Global Markets. The outlook is we believe good for continued growth in this business. Our Credit Products business is well aligned with Investment Banking and Capital Markets and has significant client overlap with other parts of the business including the underwriting business in equities. We intend to continue to protect and defend our leading leverage finance capabilities as we believe despite the recent volatility in credit spreads, the leverage and acquisition financing business will continue to be vibrant over the next several years. We are, as you've heard, optimistic about the medium to near-term outlook for the emerging markets. So, we intend to maintain our emerging markets presence focused on local market credit and FX. We will speak more specifically in a few moments about our plans for macro, but this is a challenging business for us. While our interest rate in foreign exchange businesses provide a meaningful product execution capability to International Wealth Management, our business has suffered from the penal capital treatment afforded on collateralized derivates and our market positions have not be one of leadership. So these businesses have tended to make economic profit only in favorable market conditions. Our plan here is to maintain a risk facilitation capability for key clients and an execution capability for IWM, but to otherwise reduce the capital footprint of this business. Our focus within global markets is on building a more consistently profitable global markets business. So, let me talk about some aspects that really apply across the entire business. In addition to our partnership with International Wealth Management and leveraging our product capabilities with Investment Banking and Capital Markets, we will focus on systematically creating opportunities across the product set. Historically these businesses have been run separately divided between fixed income and equities. We will seek to consolidate some of the common features in these businesses. These capabilities include content creation and distribution, financial resource management, execution, operational and risk platforms and our approach to culture and clients. Each of these topics would require more time than we have here to address adequately, but let me give you a few highlights. With regard to resource management, we plan to holistically manage our client leverage exposures across products with a focus on allocating leverage to clients and businesses that are aligned to our strategic objectives. In terms of clients, we will implement a holistic cross-product view of the client of our key accounts. This strategy will facilitate our ability to focus our investment of resources like capital and research into the clients with whom we want to be strategic partners. We will also optimize collateral, secured funding and balance sheet exposures with the creation of the central collateral desk which will also allow us to create client opportunities stemming from new regulatory requirements. On culture and controls, we will adopt a consistent approach across traded products to the establishment of the three lines of defense. The three lines of defense framework clearly articulates the risk owners versus the risk managers versus the independent assurance functions. Enhancing our three lines of defense framework is essential to achieving the risk and control culture that Tidjane, Urs and the rest of senior management expect of us. Finally around our operating platform, we will drive efficiency front to back by streamlining our architecture across light products, aligning our work with the cost exercise that was laid out earlier by David. This work is already started. For example, we've been very focused on harmonizing our risk management infrastructure and have begun to leverage the Prime and Derivatives platforms more broadly across the bank. Extending these efforts further across global markets will help us to realize efficiencies and create a more controlled environment. All of this is focused on delivering excellence to our client. We believe a more integrated cross-product approach will allow us to unlock significant value for shareholders and deliver better to our clients. I promised to come back to the discussion on macro and prime. So, let me dwell on the two of those for a minute. First on macro. The challenges in this business to some extent don't need a tonne of elaboration given the comments I made earlier, and some of what Tidjane and David cover. Clients have found it a tough space to make money. Volumes have been volatile and the disintermediation of the traditional high touch trading has been broadly reported elsewhere. For Credit Suisse, this is a business where our client standing has at times improved in the last several years but the financial results have not been consistent. Over the 2013 and 2014 period, for example, the business was not cumulatively accretive to PTI. So, going forward, our strategy for Macro will be to be a niche player focused on the Americas. We will scale back our product offering and simplify our operating platform. Specifically, a couple of things that we will do will include exiting the European rates options business, relinquishing European primary dealerships, exiting secondary market making in European government bonds. We will focus on FX and non-cleared swap product with clients with whom we can trade in a capital efficient manner. Let me move to Prime. The Prime business is also one with challenges in its financial results. But unlike Macro, Prime has typically generated meaningful and consistent pre-tax income through a variety of market conditions. However, it has also typically used too much capital to generate that level of PTI, and it has been adversely impacted by the latest round of Basel leverage and liquidity rules. Also, unlike Macro, Prime has a close relationship with the business that has high returns on capital, the cash equities business. Two-thirds of our cash equity revenues come from clients who Prime with us. The monetization engine for the research department increasingly comes from the product stream of swaps and other access products provided by Prime Services. So this is a strategic capability for the overall Global Markets franchise. We've made significant progress and Tidjane reviewed some of this on optimizing Prime over the past couple of years. Since the beginning of 2013, for example, the Prime Services business has reduced leverage exposure by approximately 40% and the revenue generated on a dollar of leverage has increased by approximately 65%. We've also refocused on the selection of clients within the business while aligning leverage to key clients across the platform. We intend to remain an important provider of Prime Services to our key clients given the significant overlap with our equities cash business but we will also continue to optimize the capital in this business. This process will be largely completed by the end of 2015. Let me mention one other point related to the Prime Services business, which is what's happening with the client base there. The client base within Prime is one of the places in global equities that continues to grow at a time when a lot of managed money in traditional forms is actually declining in AUM. This client base has also grown pretty substantially over the last 10 years by roughly double-digit percentages. So it's important to the overall equities franchise for us to be able to serve that client base. So, especially given some of the third quarter market developments, I want to give some market context for our Global Markets businesses. First, with regard to equities. The last quarter saw quite a bit of volatility in equity prices in credit spreads, so I want to pause for a moment and reflect on our medium to longer term equity market outlook. Quantitative easing continues to be the policy in many markets around the world. Historically QE tends to promote nominal price gains in equities and increases in volumes traded, which you can more or less see on the left side of the chart. In addition, we believe that equity market capitalizations and Tidjane covered some of this are likely to grow in the medium term in both emerging markets and developed markets as a result of modest increases in global GDP growth. These trends plus growth in global investing and cross border flows that accompany it will we believe create growth in the equities industry and in our equities business. Credit Suisse has consistently been a Top Three trader of global stocks since 2010. So these trends are likely to help our business over the medium to long term. As such, it's important to us that we invest in our content and execution capabilities to defend and grow our equities franchise, in addition to having the capabilities to serve IWM. Let me turn for a moment to fixed income and specifically to some comments around credit markets. This past quarter was a difficult quarter in the credit space, so I also want to put that into context. The credit spreads are still elevated versus the levels we saw earlier in the year. We believe that given the still low level of defaults, this is not yet a longer-term trend and you can but the current level of defaults into context on the slide in the middle. Historically, we don't tend to see a sustained spread widening and persistent decline in new issue volumes until default rates rise significantly. The default rate is still not far from its cyclical lows. We show on this slide Moody's forecast represented by the red line, where they suggest that defaults over the course of the next year will remain relatively low. We don't know if that's right or wrong, but if that's true, we believe the conditions exist for a rebound in issuance in the near term. As you can see on the left part of this slide, we experienced a similar downturn for a couple of quarters in 2011 when the credit markets were especially concerned with the Europe breakup risk. Credit spreads widened, as represented by the blue line, issuance collapsed which are the grey bars and trading volumes fell, but the default rate, represented in red while elevated from prior quarters was still below the historical peaks. We believe the recent credit market volatility more closely resembles the 2011 slowdown in volumes and the widening of spreads, while default rates remain low. Issuance rebounded within a quarter or two. That suggest we could see a return to a more vibrant issuance in trading volume if the 2011 pattern recurs. Leaving aside market conditions, I think it's also important to note that we've reduced the volatility of our credit complex over the past three years. You can see on the right side of the page the number of trading day losses that we experienced in each of the securitized products and credit businesses and you can see that even in periods of movement in spreads, we brought down the number of negative days over the last couple of years. So earlier in the deck, I described our current utilization of firm capital through risk weighted asset and leverage exposure in the Global Markets businesses. By 2018, we expect to deliver Global Market business that accounts for closer to 25% to 35% of the RWA and leverage exposure of Credit Suisse as compared with the 40% to 43% and as high as 48% on leverage exposure that we have experienced now or earlier this year. We will achieve this mix through business reductions including the movement of certain products and businesses to the Strategic Resolution Unit combined with planned growth in other divisions of Credit Suisse. So the reduction in the level of RWA and leverage exposure takes place by the year-end 2015 and that combined with the growth in the other businesses brings that percentage down to 25% in RWA in 2018 and 35% leverage exposure in 2018. So, just to wrap and summarize, after having right-sized the portion of capital allocated to the Global Markets business, our goals are pretty simple. They're first to run a well-controlled and compliant business that creates significant earnings and superior returns, to deliver sustainable leadership positions in our key client businesses, and to be the employer that attracts and retains the best people in the industry. Thank you.

[James Amine:]

Thank you, Tim. My name is Jim Amine, I'm the head of the newly named Investment Banking and Capital Markets division. I've been at Credit Suisse since 1997. I started out my career in fixed income, in the high yield capital market space, and since 2012, I've been running the Investment Banking department. So, what I'd would like to do at this point is to go through and give you a description of the business. So first, let me began with a description of why the division is attractive and offers an opportunity for profitable growth. The business we have today has been optimized around profitability and returns by instilling a disciplined approach to capital to enhance the sustainability of our financial performance. As a result, Investment Banking and Capital Markets is profitable and as I'm going to show you in a few minutes, it has attractive returns. Notwithstanding the recent market volatility, we expect corporate activity to increase led by M&A which tends to have a multiplier effect on other products. Regulatory headwinds remain low for advisory and capital markets businesses. Our investment plan is centered around tailored client strategies. The required investment is selective and focus for Credit Suisse is well positioned to expand our coverage footprint. We believe our investment plan will continue to deliver results in excess of our cost of capital. Let's review the recent operating performance of the business. Historically, the business was managed to maximize gross revenue and share of wallet, which is the convention at all of our major competitors. In the years following the financial crisis, we had a top two ranking in Asia Pacific, a top four ranking in EMEA, and a top five ranking in the Americas. However, our profitability was low and our returns were below 10%. In order to address that, we shrank our coverage footprint, reduced headcount, shifted RWA to the highest returning opportunities and decreased our expense base breakeven by 27%. Our results are apparent on this slide. PTI increased by 39% from 2012 to 2014 and returns reached 27% on RWA and 30% on leverage. Capital is important to our clients and you've heard a number of the speakers today talk about increasing our loan book and increasing capital. During the past three years, we allocated our loan book towards transaction-related loans primarily for non-investment grade corporate clients as returns were typically higher than relationship loans made to investment-grade clients. This analysis shows that our capital efficiency and resulting returns are very strong relative to our peers. The returns are driven by disciplined client selection and adherence to minimum hurdle rates for lending. Capital is allocated down to the individual coverage groups globally which are measured on their capital efficiency to drive accountability and sound capital decisions. As a result, our returns are higher than the other banks as shown here. However, optimizing profitability and returns came at the expense of market share. Credit Suisse increased revenue, but as you can see on this chart, less than the market. Our footprint was focused almost exclusively on the most profitable and highest returning business. We invested less than our peers in coverage intensive products such as M&A and ECM, and capital intensive sectors such as real estate. Therefore, as the market shifted more to M&A and ECM, our competitors captured more growth albeit at lower returns. Let me talk a little bit about the market outlook for our business, because I think it is worth discussing. At present, our business benefits from actually two positive trends, a favorable market outlook in the medium and long-term and limited regulatory headwinds. Global year-to-date announced M&A volumes of $3.4 trillion are on track to match the 2007 peak of $4.5 trillion. We believe the current M&A cycle has at least two more years to run and favorable debt funding markets may actually extend that cycle. Importantly, cross border activity, which is a strength of ours is on the rise with volumes up 26% this year. Although recent equity market volatility that Tim discussed has impacted ECM issuance, the backlog across the industry is actually building. In addition, we expect to see a pick-up in activity in private placements, special purpose acquisition companies and permanent capital vehicles. The leveraged finance market has clearly been impacted by expectations of rising interest rates and reduced global growth forecast. However, the current low activity in new LBOs is expected to increase during the course of 2016 and we're going to talk a little bit about that later in terms of why we believe that to be the case. The outlook for investment-grade debt is expected to remain stable as it is supported by large scale M&A activity, share repurchases and increased issuance by financial institutions. Finally, activity in EMEA is likely to improve from low levels of activity seen this year as a result of favorable exchange rates, low interest rates, the continuation of quantitative easing and falling commodity prices. Now across all these products and regions, we benefit from a relatively stable regulatory outlook. Most of the visible proposed regulation has limited impact on the Investment Banking business. A number of the upcoming standardization rules, particularly regarding credit risk are relevant to the corporate bank. However, as currently proposed, we don't believe they will have a significant impact on RWA in the corporate bank or the returns to the business. Let me talk a little bit about M&A. As I said before, M&A has a multiplier effect on other products. Despite the recent Capital Markets volatility, the fundamentals for M&A remain positive. M&A as a share of the world economy is near its lowest level in 20 years. Transformational acquisitions will spur further growth as CEOs seek to offset slowing organic growth. Corporate cash holdings remain at record levels. Increases in announced M&A volumes have been driven largely by corporates as sponsor activity has lagged. However, we expect LBO activity to pick up as $450 billion of undrawn private equity commitments are put to work. In addition, as you can see from the chart here, sponsors will continue to monetize their large existing investment portfolios. We've developed a three-year growth plan that will enable us to grow revenue while delivering leading products and services to our clients. So let's turn to how we came up with the client strategy. To develop the investment plan, we reviewed our franchise footprint from a client and product perspective. As you can see, non-investment grade corporates are about half of the market with sponsors and investment grade corporates about the same size. Within each segment, we reviewed how much of the market we're covering as well as our share of wallet and product mix. We focused on where we are well positioned as a firm and on extensions and adjacencies thereof. In reviewing the incremental capital needs, we looked closely at each group's current returns and capital usage to measure the required investment against our return targets. Our plan is focused on clients. Let's start with investment-grade corporates. We believe investment-grade corporates will grow from 23% to 30% of the market by 2018. On the prior page, it was clear that our share of wallet with this segment has lagged our performance with non-investment grade corporates as well as sponsors. We cover two-thirds of the segment which is a positive, but we do not lend to approximately 40% of the companies we cover. This segment is also coverage-intensive particularly for senior bankers. Our plan is to focus on companies that we expect to be active in M&A, hire selectively to augment senior coverage and deploy additional capital to deepen our client relationships. We do very well with non-investment grade corporate clients. You can see here we have a 9.5% share of wallet with the companies we cover. This segment is significant, comprising nearly half of the overall fee pool from 2012 to 2014. Even as investment-grade corporates become a bigger percentage of the overall pool, these companies will remain very important. Within this segment, we are not covering as much of the market as we should. You can see that 30% of the uncovered market pays fees in excess of $5 million per year, a key threshold for identifying companies we can cover profitably. Therefore, our intention is to expand the number of non-investment grade corporates we cover, particularly in areas where we have strength such as technology, oil and gas, healthcare and media. We've just reviewed our plan for covering corporates. Now let's turn to financial sponsors. This is an excellent franchise for us and we've maintained a top three market position since 2012. The franchise in the Americas, which typically is about two-thirds of the global fee pool is ranked Number 1 and has had a 9% share of wallet in each of the past three years. In addition, we are confident we can expand our coverage footprint for European sponsors. During 2012 to 2014, leverage finance was 55% of the total sponsors fee pool. This year, we've seen that drop to 44% as M&A and ECM portfolio company monetizations have accelerated. As a result, our sponsors' coverage effort is a key element of our growth plan in M&A and ECM. Now, you've heard a lot about emerging markets today, but emerging markets plays a very important role in our business and in particular in M&A and ECM. As cross-border transactions accelerate, M&A activity in emerging markets is projected to grow by more than 50% in 2018. We anticipate that IPOs will grow in this region as emerging economies encourage pension growth and companies pursue cross border listings in the US and the UK. We remain very well positioned in these markets. In that, Latin America has been a leading franchise for 10 years with a strong presence in Brazil and Mexico, the two largest markets. Southeast Asia has been a Number 1 franchise, and one of the best examples of collaboration between Wealth Management and Investment Banking and Helman went through a number of examples there. Credit Suisse ranks top three globally with leadership positions in the most attractive markets. We have plans to expand our penetration in EMEA as activity picks up in those developing markets. Many of the corporates and financial sponsors we cover are led by ultra-high net worth individuals, and you've heard that mentioned a lot in all the previous presentations but it has a lot of relevance here as well. We've had very strong collaboration with our Wealth Management business over the past 18 months with nearly 100 referrals to Wealth Management and 125 referrals to Investment Banking in the Americas and EMEA alone. We have a closely integrated coverage approach between Wealth Management and Investment Banking in Mexico, Brazil, Russia and the Middle East. However, the US is a real opportunity for us because it has the largest number of ultra-high net worth individuals and because US billionaires control decision-making for an average of $1.6 billion in IBD Street fees each year. 90% of the fees paid to the Street by those companies are concentrated in four sectors which we intend to focus on. Our share of wallet more importantly with companies that have strong connectivity to the ultra-high net worth individual segment is 9%. So it tends to be very strong. Our plan is to offer traditional investment banking products and share base landing, as well as investment opportunities from our asset management platform. The client segment strategy will focus on M&A and ECM, given the current market cycle and the increasing demand for such products from our clients. As such, we're projecting a meaningful shift in our product mix with M&A and ECM growing from 41% of our revenue to 54% in 2018. The growth rates implied for each product include an increase in Street activity as well as some share gains by our firm. For M&A, two-thirds of the revenue growth is expected to be driven by an increase in Street fees. For equity capital markets, that same number is 50%. The key to our business plan is to drive revenue while continuing to maintain returns in excess of our cost of capital. As described earlier, we have selected industries and products for investments that should not dilute our returns over the next three years. Let me wrap up with a few final thoughts. Earlier in the day, Tidjane outlined the rightsizing approach for the investment bank. As I've described, Investment Banking and Capital Markets meets all three of these tests. In closing, we are all confident within the Investment Banking and Capital Markets division that we can grow our business in 2018 by $750 million, maintain attractive returns and increase our coverage of corporate clients and ultra-high net worth individuals. Thank you. I think at this point, we're going to bring up the speakers for Q&A.

[Tidjane Thiam:]

You are going to get rewarded for your patience, I hope. Thank you for sticking with us for hundreds of slides. This is where hopefully it gets more interesting. Just before we start, I just want to acknowledge Gael de Boissard [indiscernible], so I may have to call a new guy, hi, welcome. So, we'll move now to Q&A, you have the CFO and all the business heads on the stage and the team in the room. So really, any question you want to ask. So, why not we start here? And before you ask your question I'll make a comment, because I had coffees -- went for break and just earlier had a debate about the -- for organic or free capital generation of 40%. Just one opening comment on that. The way we looked at it is we said 40% minimum and I am sticking under your control, David, because you did the work, but we think that 20% of it is necessary for investment into business, and we have 40% as a buffer. So what you are looking at the distributable here is 80%, and when you look at the evolution, we've blocked a 60% in the first period up to 2018, whereas I would say a high probability of after 2018, we can go to at least a 60%, if not 80%. But there is no reason to think that in a [indiscernible] once we reach a stable regime, most of that could not be distributing. So I will just say that as an opening comment, and then we'll take your question.

[Andrew Coombs:]

Three questions from me, just two on the investment bank and then one is from investment spend. Firstly on the investment bank, CHF20 billion or CHF40 billion of RWA reduction over the second half of this year which you thrown out CHF20 billion from macro environment [indiscernible] and then furthermore, what is the revenue attrition do you expect associated with that both from first order and also second order effects. The second question with regards to the investment bank would be about the fundamental view of the trading book, standardized floors, there is nothing embedded into 2018 targets for that, which is understandable given the implementation time frame, but can you gives us an idea of how much you factored that risk into your strategic business decisions, and in particular, I'd ask that with respect to securitized products in credit because you highlighted it less with wealth management, but they are outright profitable for you at the movement, but my understanding is obviously there will be some missed impact in product area. So I'd be [indiscernible] there. And then the final question is just on the investments spend, thank you for the details you have provided on the cost savings. On the investment spend of CHF1.5 billion, you break it down to 60% APAC, 40% Swiss Bank and IBWM. You also mentioned some very punchy RM targets, I think 300 in RWN, another 300 in APAC, more in Swiss Bank, then at the back office on top of that two. Can you give us some color on that CHF1.5 billion, how it breakout where that spend goes.

[Urs Rohner:]

Okay, thank you. Is it possible to get the slides back up, Tidjane, I don't know? Can we have the slide 9 in my slides. So, fundamentally you are right, there is a CHF20 billion decrease. There is an over CHF20 billion coming out of what we called the above cost of capital businesses and I think the reason we did that was mostly risk management. Once you scale down, the macro and the prime, there is almost a homothetic adjustment to make to other businesses, from memory that was the logic, but anybody, Tim? So that's risk management for you. FRTB, David?

[David Mathers:]

So, we think about the FRTB numbers, so I think I said earlier that we would expect adverse impact from FRTB, the order about 50 basis points, which I guess if you blackout numbers something in the sort of CHF30 billion to CHF35 billion [indiscernible] to be exact and I was trying to summarize a little in my presentation I think you had enough of me for now before that's right about CHF20 billion for FRTB, about CHF5 billion for SACCR and about CHF5 billion for interest rate risk in the banking book. The CHF20 billion for FRTB is very much an optimized result, and I think in the numbers that Tidjane discoursed in terms of the reduced contribution in RWA usage for credit and securitized products that's why we have -- that's one means by which we actually mitigate the impact of FRTB, so that's been explicitly factored in the business plan here, clearly and very large component of the adverse impact from FRTB is being routed into the SRU that's been transferred on block, the secondary component really is the point that we discussed there.

[Urs Rohner:]

Okay and then on the spend, I can give you more color. Although in terms of analysis, it is of a different nature from the cost, because we know [indiscernible] 60% Asia, so call it CHF700 million and don't hold me to it, but earmark just kind of CHF400 million Switzerland and CHF400 million international is one way to think about it. If we have the 40%, it'll be 20% and 20%, and if you go inside effectively you are right just about the RMs. In total, I think from memory it's about 1000, if you add all the RMs across regions and then you also get support, if you add the support staff, it's about a 1000 in between, because you get people support those RMs, and then very sub-commission spending there. There is some IB spend in Asia to upgrade versus in terms of risk management at back-office etcetera. Those are the big headlines, I don't know if any of you want to jump in, but that's what I remember -- it's mostly people, bit of sales expenses, and that's also why we do say that this can be addressed in time depending on what events or markets, etcetera, it's not hard wired spend. Okay, let's move to the next one.

[Andrew Lim:]

A few questions, please. I am trying to understand how you get to a 14% ROTE target in 2018 with the figures that you presented from the new rates I can start of with, CHF9 billion to CHF10 billion pre-tax profit, from that should we [indiscernible] interest costs, some minorities, CHF700 billion let's say, maybe you can give us a bit more color on that, and then that's a whole loss of 30%. On a net profit basis we're looking at about CHF5.5 billion to CHF6 billion on the numerator and then on the denominator of the TNOW should be I think about CHF50 billion to CHF51 billion. So, that gives you something way short of 14%, I am just wondering what figures you have to get to that 14%. And then secondly, just trying to understand your rationale for IPO-ing the Swiss Universal Bank for captive reasons, the CT1 ratios specifically, you could delever some of the security product business, these are ROE much impacts, it is because the investment bank is higher. So, gives more often RWA reduction as IPO. And then just wondering why you did a private placement when there are four rights issue, which is fully underwritten.

[Urs Rohner:]

14% on key, let's correct page here, in order to move your hard. Do you want to take that?

[David Mathers:]

Thank you, sir. So If we just pick the mid-point of that, so CHF9.5 billion, the tax charge likely to be something in the 25% to 30%, so I would probably take that to be -- that takes you to right about sort of CHF7 billion mark deduction, then I [indiscernible] charge assuming that we complete the minority charge. the IPO of the legal entity probably towards 20% loan to that, that would be about CHF300 million, which gives me about CHF7 billion of post-tax profit on 15%s, so about 14%.

[Andrew Lim:]

And the AT1 interest charges, should we target that as well?

[David Mathers:]

They are actually above the lines, so they are taken in that pretax target.

[Tidjane Thiam:]

The IPO Andrew referred now then with entity, David, do you want to take that one?

[David Mathers:]

I think the primary rationale for the IPO, the reasons you've given Tidjane that essentially -- first is I think we obviously have a very successful business in Switzerland, we're growing it CHF2.3 billion of profits, we'll obviously make it immensely more valuable. I think it really provides a currency for consolidation and I think last but not least, it does give us some flexibility around the capital plan in terms of that. In terms of the regulatory impact of the different reforms on the Swiss Universal Bank, there clearly will be an impact because I think what we've said so far is, if we have a flow that would see dilution of between 50 basis points and 100 basis points, if the floor is set at 60% and between 100% and 200% is set at 70%. Now whereas the FRTB changes really affect only the investment banking assets, there is only a limited amount of market risk outside of that some, but limited, we would expect to see some adverse impact on the Swiss legal entity because of the imposition of floor against the advanced model which we intend to use for our return mortgage exposure. So, if you think around how much that might split between the different types of assets is probably going to be about 40% of that total FRTB in the, as you might say, in the private banking assets particularly the retail book and about 60% in what we might previously described in the investment banking assets.

[Tidjane Thiam:]

Can you take -- why did we do a non-preemptive front?

[David Mathers:]

I apologize. I think if you go back to our history, back in 2012, you might recall we actually raised CHF3.9 billion through a non-preemptive tranche to a group of current and future shares at that time. I think as we actually took a number of our shareholders over the world last week in terms of actually discussing this plan, it did become very clear to us, it was an appetite for a similar non-preemptive tranche. I think that was something we actually want to meet it seem done, the right thing to do in the circumstances. Whereas in 2012, we obviously did 100% in that formal, 50% -- 59% underwriting to be more correct, and 100% underwritten in that form. What we did this time is obviously a more balanced distribution between a non-preemptive tranche and a conventional rights issue. This time, it was the minority of the non-preemptive tranche. I think it's appropriate given our shareholder base and I think if we think in terms of the discount that the non-preemptive investors are actually taking, it's very similar to the options yield on the stock over the six-week period between now and the beginning of the rights period trading on the December 4.

[Tidjane Thiam:]

And they're are all committed to taking their rights on the non-preemptive?

[David Mathers:]

Yes. And the reason -- the six weeks essentially is, the investors in non-preemptive tranche have committed to actually locking up that non-preemptive tranche until December 4 and also committed to taking the rights up. So, hence the relevance of my comment about the options pricing over that period.

[Andrew Stimpson:]

On your costs, you got estimated cost target of CHF18.5 billion to CHF19 billion, that seems down slightly on the underlying 2014 cost maybe about -- CHF2 billion lower on the stated cost as you say. And you also want a cost to income ratio of 66%. So [indiscernible] revenues nearly CHF29 billion, it's about 11% lower than where consensus is for 2017, but obviously that's on a much smaller bank from what I can tell that's about CHF700 million lower revenues to come out from the sale of the US Wealth Management business. And I guess this should be some revenue losses from the IB wallets as well. So firstly, what was the revenues lost from the IB wallets and then depending on that, how do you get all the extra -- where we are gaining all the extra revenue growth from, is that some from the higher short-term rates that you are assuming for periods or is that part of your reflecting some acquisitions or we are all just -- maybe too bearish on all the revenue opportunities there?

[David Mathers:]

So, I think actually referring to the walk across from -- in the -- I think it's the one that shows the 66% and the CHF9 billion to CHF10 billion, I think that's how you calculated the revenues, if I'm not mistaken. Could we have that slide up? I'm sorry, I don't know what numbers it is.

[Urs Rohner:]

It has a revenue of CFH20 billion -- maybe CFH20 billion.

[David Mathers:]

So, I think I came to something in the sort of mid-28 space. So, not the similar to where you are, if you write that calculate that CHF9 billion to CHF10 billion at a 66% cost to income ratio. So, you then asked a number of specific questions. So firstly, one on the US revenue, yes, it's about CFH700 million of lost revenue, that's correct. Secondly, in terms of the assets which we are actually being moved across to the SRU, this is about CHF110 million of revenues which we are actually annualizing, which we actually lost in respect to that. I think that's an interesting stat because that employs about a 10% ROA on the -- if you compare the leverage that's been transferred to the revenue has actually been moved across, that may seem low. But I think [indiscernible] Tim may want to comment that if we actually look at the impact we've actually had on our revenues from the leverage reduction we've achieved so far, obviously we've achieved the 6.10, 6.20 target in the third quarter, we have achieved with minimal impact, no revenue cost. So, you still go a block of relatively low ROI assets which we are actually moving across, which is the balance of that. If we then actually flip through the other slides, I can probably give you some of the sources of the revenue growth which we have here. I am not going to give you all the revenue numbers, but if we actually start with the Switzerland market, you can see that the CHF2.3 billion, I think in Thomas' presentation, he talks a roundabout sort of CHF400 million of extra revenues from that. If we then move to the next one, the Asia-Pacific one -- International Wealth Management, Amine, anything -- if you want to comment in terms of your revenue projection?

[James Amine:]

It's just more than CHF1 billion of more revenues split between the private banking business and the asset management business related to the initiatives that are laid out.

[David Mathers:]

Then perhaps Asia-Pacific is next I think, Helman?

[Helman Sitohang:]

So, in terms of the revenue growth, we expect somewhere between about 1.7, 1.8 from -- are our forecast where we think we end up this year.

[David Mathers:]

And then finally actually on the two -- the global markets and the IBC in place. Global markets, Tim, but I think what we actually assumed here was revenues flat to 2014, so you see about CHF0.2 billion there. The rest of the growth in the PTI actually comes from savings. So, I think implicitly, we are actually assuming that the reduction in RWA from [indiscernible] is actually managed in that.

[Thomas Gottstein:]

And I think that's the reason, well, I mean you referenced this before that we've seen this in a number of businesses that are capital intensive that we've had some pricing power in those businesses. In Tidjane's slides and my comments earlier talk a bit about what we have been able to achieve on leverage exposure in prime, but I think that that dynamics was happening in number of businesses where we are both getting smarter on how to frankly reduce the capital costs at some of these businesses. For example, if you look at it circa two years ago, it used to be that the relationship between balances in prime and leverage exposure in prime was about 2

[Tidjane Thiam:]

So I think that does add up to something in the sort of mid CHF28 million type space actually.

[Jon Peace:]

Jon Peace, Nomura. So, my first question is you indicated free cash flow generation of CHF8.5 billion to CHF9.5 billion by 2018 and if I look also your CHF9 billion to CHF10 billion pre-tax profit illustration for 2018, it implies relatively little generation over 2016 and 2017. And if I compare that with the current consensus, it would appear that maybe you're allowing something like CHF5 billion for litigation provisioning over the next two years.

[Tidjane Thiam:]

I'm sorry. I was distracted. I was just handed a paper. I was looking at my watch because I was hoping that after 6

[Jon Peace:]

My question was if you look at the free cash flow generation of CHF8.5 billion to CHF9.5 billion by 2018 and the CHF9 billion to CHF10 billion you illustrated in pre-tax profit, you suggest relatively little free cash flow generation in 2016 and 2017 and if I compare with the current consensus it would look to me that maybe you're allowing for about CHF5 billion of litigation provisioning over the next two years. Now, I realize this is a very difficult subject to comment around, but could you maybe sort of give your outlook for litigation from here. And then I had a second question just around David's Basal IV guidance. He said at a 70% floor, the range could be 100 basis points to 250 basis points, and I realize again, there's uncertainty in the rules at the moment but what specifically would make it near 100 basis points versus near 200 basis points?

[Tidjane Thiam:]

Look, I think you've kind of answered the question when you said that it's a complicated topic to discuss. I think I'll take this one. The answer we can give you is that there is clearly a buffer in there, and the degree of prudent, and you can make your own view, take your own view on how big that buffer is and then allocate it to any uncertainty you see on the horizon. It's the most diplomatic answer I can give you at this stage.

[David Mathers:]

There are a couple of technical point which might also help. Just recall, operating free cash generation is not the same as the net prospect income. So there is a difference, and there are number of reconciling items. Now, when we actually report our forward quarterly numbers, we will provide everybody with reconciliation every quarter, so you can see how it works, but specifically over the -- and in the course, over the next few years that there are two or three things that you should be aware of. Firstly, there is actually hedging costs because we actually has to buy.

[Tidjane Thiam:]

--because we've had this question a lot. Can you just clarify for the room what are the items or at least for reconciling lines some of items from pensions mark-to-market because we get a lot of definitional questions and then we can move to the numbers.

[David Mathers:]

So the purpose of our operational free capital generation is to give a clear measure of what drives the CT1 movements in the bank. So it's how much capital we actually generate in any period. So if we start with our pre-tax income, that's clearly the start for this point, you obviously then have cash taxes which we have to deduct at that point. You will then have a number of other items. Now, a lot of that actually is swept up in the normal sense, other comprehensive income or OCI and then there are other moves within that. It's important to understand those items, because they can either be a source of capital generation or they can be a consumption of capital generation, and I think that's why we think operational free capital generation is actually a better metric than a net income type metric. And I think the most obvious example for that is deferred tax. If you recognize a substantial amount of deferred tax losses that would boost your net income, but if you have deferred tax in excess of what's allowed for under the Basal III rules, then that has no CET1 benefit whatsoever. So that's gives you an example of why operating free capital generation is a better metric than the net income or pre-tax profit by itself, leaving aside the reinvestment type arguments which are very sound. So just a few things, just to be aware of over the next three years, which was factored in that projection around the CHF9 billion operating free cash flow generation, we obviously do have to purchase shares to actually meet our deliveries. Now the cost of those shares is actually taken above the line and but we then have to purchase shares to extinguish them. I think [Technical Difficulty] seeing the noise in our CET1 ratios over the course of the last few years around that. Sometimes we have a better CET1 ratio than you might expect and sometimes we have a lower CET1 ratio to expect. Now at today's stock price, we actually do have a share buying requirement, which is actually in excess of what's been expensed. So that will cost us about CHF1 billion of operating cash flow over the period. So, Jon, I think -- it was a question from Jon, I think. So, about CHF1 billion of your reconciliation is explained by that. There is also a small amount of DTA usage we've actually assumed there which we can't recover and I think no one has asked me yet about pensions, but I think at this point, we've been very prudent and assume that we had some adverse impact from CET1 from Swiss pensions in the few CHF100 million type mark. I'll be able to give you a much better guidance on that when we actually report the fourth quarter, because it's obviously dependent on the final discount rates at the end of this year and all the other metrics I think you're aware around restructuring those pensions. So, Jon, you do you need to understand those components in terms of making that reconciliation. Nonetheless, I think if one were to step back, I have to say, you look at consensus of this measure and you deduct this, there is still a buffer and I think that gets to the point that Tidjane actually asked. So, that was .

[Jon Peace:]

The next question was, why do we have the range on the 70% floor and it's 100 to 250. What determines the limits of the range?

[David Mathers:]

I think it's primarily uncertainty around the rules as they stand today and what we actually did when we actually did this projection is we looked at every single one of our assets we have today. We looked at them by business unit, we looked [indiscernible] and we looked at the potential impact of moving to what we think and believe the new standard models might actually look like. We then look to what can actually done we done to actually mitigate that. So you've got really two big -- whole collection of uncertainties yet. One, we don't know finally what the new standard models will actually look like. Two, there's going to be a lot of nuances about how they're actually applied to those detailed positions, and three, the amount of mitigation steps we have to take. If we're talking about a rule set here which is essentially three to four years away, that's an awful lot of uncertainties, and that's really what we're expressing here. What we did, given that we're actually doing a capital raise, clearly, our Chief Risk Officer, Joachim was actually involved in this, but we also brought in a very experienced, should we say, external consultant you could probably guess the general experts in this space to actually review that and I think that was the kind of range at the end of that process we wanted to get today. Now, clearly, we would do our absolute best to ensure that, that dilution is closer to 100 basis points than 250 basis points and there's clearly a lot of mitigation that has to be done. But I think at this point when you're talking about an event with so much uncertainty around and so many years away, I think we have to be careful and give that range particularly as we're doing a capital raise today. To be clear, the FRTB process was all supposed to being finalized I think a year ago and we're still doing further quizzes now, the final rules in theory for FRTB was supposed to be outlined this year, I think that looks totally improbable and yet we're talking about something which is three to four years away. So, there are a lot of uncertainty around this, but I think we wanted our investors to be clear about I think conservatism and prudence we're actually building into our capital plan here. I think if you pardon me, Tidjane, we're taking a more dramatic and radical stance about this than perhaps we have done in the past, but I think that's the right thing to do.

[Tidjane Thiam:]

I think we were conscious that we will be in that kind of lonely space, because I don't think that our peers had given this degree of disclosure on this issue. So we are a bit exploring -- unexplored ground before but we thought we would just tell you things as they are, we'll tell you what we know, what we don't know and give you entries and if we're right, we're right but at least it gives you a sense of the uncertainty we are dealing with, and what the impact of various scenarios is on our numbers.

[Huw Steenis:]

Huw van Steenis, Morgan Stanley. First, thank you very much for your disclosure. You've given us an awful lot to chew on overnight. If I may, I'm going to ask question about the slide you haven't presented. So, Page 42 of David's part. He very helpfully gave a pro forma of what the returns would look like for the first nine months of 2015. I just want to explore one issue about the two of the legs of the Investment Bank. So I think it says that in the first nine months annualized, IBC had made 5% returns on capital and Global Markets made 10%. So if I understood that correctly, that's nine months annualized for 12%. Obviously, your cautious trading statements suggest Q4 is a bit tougher. So, if I take what the US peers are saying, that's to simplify Q4 the same as Q3, that would mean the profits would actually be 15% to 20% lower. In other words, the businesses are making 8% to 9% in Global Markets, maybe 3% to 4% in IBCM. So, two part question. First, to the cost cuts you've announced today, assuming you can get to a 12.5% hurdle rate without any growth from that level and then B, if it is growth, what sort of growth would you see from, given obviously what is a rather tough looking fourth quarter?

[David Mathers:]

Sorry, what's your first question?

[Urs Rohner:]

The first question is, when we--

[Huw Steenis:]

If the revenues are no better than nine months and Q4 is better than Q3, can you get to 12.5% hurdle rate on cost cutting alone that you've announced today?

[David Mathers:]

The 12.5%. You're are talking about 12%?

[Urs Rohner:]

I think you're using the cost of capital on the slide. Yes, we use 12.5% of average run. He's saying, what revenues did we assume to reach the leverage 12.5%.

[David Mathers:]

I think we are trying to extrapolate a little bit from nine months. I think what we actually gave in terms of the projection for the IBCM business and also for Global Markets was based on 2018 including the total cost cuts at that point. The IBCM business included some growth and Jim, you may want to comment on that? For the Global Markets business, we nearly assume CHF0.2 billion higher revenues by 2018 than we've actually annualized for the nine months 2015 which essentially gets us back to the level we saw in 2014. Now that does -- I guess to your point here, if in light of the cautious trading state we've actually given around fixed income, market conditions, the underwriting additions, that may imply that we have to have more of a step-up between 2015 and 2018. I think that's perfectly possible here, but I think that's going slightly beyond what we're doing hard and we're going to give a forecast to the fourth quarter but essentially the 2018 projection is that we get back to 2014 revenues. Jim, do you want to comment on the IBCM revenues?

[James Amine:]

Yes, why don't I talk a little bit. What I showed, if you look historically, we've achieved returns in excess of 20% and if you look to what's hitting us this year, it's obviously the primary activity. And what we're focused on in the three-year plan is backlog. So if you look at M&A announcements, they're running very, very high. If you look at our share of wallet on M&A announcements, we're improving our share of wallet. If you look at the backlog in ECM, it's high and some of the data I gave you around the undrawn powder in the sponsor space where we have a dominant franchise, those are all things we're looking at in terms of can we hit the three-year plan. So, from my perspective, I agree with you. October is a bit cautious, but we've got the backlog and the M&A announcements. You know the revenue tends to come nine months after an announcement when the transaction closes. And if you look at the types of transactions like the Dell, EMC and a whole host of $30 billion plus transactions where we're a lead on, I think we're expecting obviously a substantial pick up in things we can see today that we know will happen next year. Tim, I don't know if you want to add anything?

[Tim O'Hara:]

No, I think that's right. There is a nice drag along effect that happens in the Global Markets businesses as well from the activity in Jim's world because those are obviously JV between banking and the trading and sales businesses. So I think that some of that upside he is talking about would kick over to us, but I'll just repeat the point David made earlier though that a lot of what you see in the outlooks for the Global Markets businesses. I don't think it's that heroic in the sense that it's looking at a year that looks like last year and the big impact on income is the benefit of some of the cost savings programs that we're talking about. So I think internally, we'll probably have some goals that are maybe a little bit more ambitious.

[Huw Steenis:]

Tidjane, I think when we met with some of the shareholders last year, I think I echoed your comment and we were not given a specific revenue target for the Investment Bank -- for the Global Markets business because I think we both feel that target for a very volatile business, it doesn't make sense and what we have set as targets for where we have more organic growth.

[Tidjane Thiam:]

It is a relatively volatile cyclical business and targets there are almost a guarantee that you're going to write business at the wrong point in the cycle, just to hit your target. Sometimes you just don't want to write it. So, you need to keep that flexibility on how you run the IB.

[Fiona Swaffield:]

Fiona Swaffield, RBC. I have three questions. The first was on the Swiss Universal or the IPO, I'm still struggling -- I think David said CHF300 million potentially as being the opportunity cost. Could you explain how the legal entity profit differs from Swiss business unit because using the Swiss business you can get to a higher number and help us a bit more on why you think CHF2 billion to CHF4 billion would be the capital release, just the mechanics of how that could potentially work? The second issue is just coming back to your comment on 40% payout and how there is a buffer of 20% in there and then 40% for growth.

[Tidjane Thiam:]

No, it's reverse. Buffer is 40% and growth is 20%.

[Fiona Swaffield:]

Okay. And then the last thing is regularization, which was mentioned in IWM. Could we have -- what is that mean we are going to have a feet of negative [indiscernible] could be outside Western Europe in the next three or four years because on the net new money expectation for that business.

[Tidjane Thiam:]

Okay, now absolutely thank you. So, difference between the legal entity Switzerland and the managerial entity.

[David Mathers:]

And also the $2 billion to $4 billion -- so the capital benefit from doing the floats of our minority stake really comes in two components. It comes from the minority interest which the legal entity has at that point. And that basically is capitalized ceiling which is likely that 10% CET1 at that point. So as Urs said, the external investors interest bank counts towards CET1 component. And then the second component of it comes from the actual gain on sale which would depend obviously on the valuation of the business at that time. So, and then clearly the third component would be, how much we decided to sell at that time as well. I think clearly given that this is a very valuable stream of cash flows. I think beyond to that would be as little as we can. But I think you will obviously factor on the decisions over faxes given so far at that point. And how does the Swiss legal entity differ from the MIS entity, we've actually presented here. It is a different story. It was what you're actually talking about is doing an IPO in what you may have [indiscernible] which shows us the internal, it's legal entity Switzerland, which is the new standalone entity, which we're setting up in light of the Swiss government requirements about having a separate Swiss entity which has a retail commercial and private banking operations of Venice. So in terms of business mix, it has something in common, but I think there are going to be certain activities for example STS, so the trading businesses, which will not be in a legal entity, but we'll actually be provided by the group of global markets function as a service to that legal entity, so that would be different. And I think the capital requirements itself will be slightly different from what we have here because it will depend upon the discussion we have in the firm over the next two years. I have reasonable clarity on that feel, but I think there's still some points to be finalized. But technically, what you see here is an MIS segment, a reported segment on that basis. What is actually IPO is a minority stake in a separate legal entity, which will have some differences.

[Tidjane Thiam:]

Okay. just a clarification on the buffer. Is that okay, 40%, 20%. And when IWM and regularization outside Western Europe is going to be a drip of outflows due to regularization.

[Tim O'Hara:]

So basically, but let me just clarify Western Europe. For Western Europe we basically have one country that we are in progress, which is Italy which will basically be the last material and then we are done. Our target was to be done with us in Europe cross border regularization by year-end. In terms of emerging markets as we go through the whole process of tax transparency, we do expect outflows related to regularization, however we do expect them to be at a much lower pace and of lower significance than we saw here in the Western Europe. If you just look at the total number here until nine months 2015, you are a bit above CHF40 billion, and keep in mind that this amount relates to a client base that was more affluent, lower high-net worth, which you do not really have in the emerging markets segment where you to have two-thirds of ultra-high, you have upper high-net worth, so basically we assess that risk to be lower. However, we do expect continued regularization and outflow, related to that but in much lower pace more towards a number below CHF5 billion than what we've seen in the in terms of Western Europe. In terms of NNA or AUM growth. I think we are focused more on AUM growth and NNA per se, not saying that NNA is not a KPI, it will remain a relevant acquisition metric, but in terms of really calculating your revenues and your P&L, you had to have a AUM assumption, and AUM growth assumption is very much in line with the market growth that we've assumed, and when we look at the markets as I've shown them I think on page on former page, the AUM growth is very much in line with those growth rates. But that's AUM growth, NNA growth will be respectively lower but more between 4% and 6%.

[Unidentified Analyst:]

So just is taking some of the numbers here CHF9 million to CHF10 billion a pre-tax profit, CHF7 billion after tax estimate for the pro forma share count implies roughly CHF3.50 of earnings per share, stocks under seven times earnings before you included in cash dividends. This is the first that you appear in the rest of the management team profit targets for year profit targets at Prudential. What are the key compare and contrast the two situations, how are the challenges here compared what you faced coming into prudential?

[David Mathers:]

I just has to be in complicated positions here, easier to answer if I were still see your prudential. I have to be -- of that, if you take it at a high level. The thing that prudential with targets were driven was -- change of product mix. It was about growing the sales, but also having a richer product mix and that was after -- it was after a long period of growth. If I compare here most -- taking quite a different situation, talking about the pent-up demand or the missed opportunities we're actually, this has been renewed capital constraint business and you are very much talking return to normal when I look at, particularly in Asia and our business, when I went to Asia -- really good conversations, sorry. if I betray your confidence level on r about frustration of business that sees an enormous growth potential at relatively low risk, and which is frustrated against its power for not allowing to go after the business, and misrepresenting things. So I would say it's less, but I think it's less uncertain what I was facing at the Prudential it's very much about penetrating an existing client base, growth from prudential was two-third of the group was new customer acquisition, so that's lessons riskier, it is easier to sell more business to an existing client to go and acquire a constantly new customers. So this is predicated in Asia on really just penetrating the existing client base. We follow us, we know we have from lending, including the lending penetration getting more business we were settling more idea, so I if I take a sentence it's safer, -- in essence intellectually, the same problem, same type of customers center for business as it of replicating the Asian model transmissions worked reasonably well. Product securely maybe Switzerland is most unproven because we in Switzerland, there is an inflection, which is always something more difficult to doing business. We have not recently put an emphasis on Switzerland, and it is a more crowded and more mature market but I also think that we have more levers to pull there's a more mature business a bigger cost base, you can flex, what to due to the gross profit numbers or it's cutting the costs for pushing your revenue bit harder, but that's kind of how I look at it. I think it is achievable. I just hate anticipates making any statement about the future, that's what you get the from my answer, but I think it's achievable, what I like is that we have enough levers, I like profit targets because we have enough levers, really what I really don't like is revenue targets, but profits have enough levers to hit -- I know we are three years, I also know we have enough visibility, so I hope we'll do better than those targets. As I think you picked up from.

[Daniele Brupbacher:]

Daniele Brupbacher, UBS. Just on slides 11 and 12 from your presentation. David, if you could help me a little bit to understand APAC business. So when I look at 2014, it looks like APAC was sort of two-thirds, IB one-third private bank in terms of profit breakdown, if you could just talk about a little bit your expectations and thoughts towards 2018, how that profit mix could look like. And just in that context, in general, if I understand correctly, private bank will now be spread over three divisions, are you going to probably provide some KPIs to give us a bit of an understanding of how the overall private banking franchise looks like for all those who like some of the part, and then just in terms of consolidation opportunities in Switzerland, the universal bank I guess most of these potential targets will be also including offshore businesses just conceptually how that will work, would you guys have a split that business into your on-shore business in Swiss universal bank and put the rest into IWN business, or the APAC business or just how this is working?

[David Mathers:]

I think the page you're referring to is page 11 and page 12 and then I think your analysis is absolutely correct, because you see on page 11 what we actually say, is CHF357 million of PTI from the Private Banking wealth management to Asia-Pacific, and if you then look at the investment banking page, you'll see that we have CHF661 million of investment banking giant a Pacific Division. So, your analysis is quite correct and when you might want to comment in terms of how you see that mix shifting or even if that's the right way to think about that.

[Tidjane Thiam:]

Historically that's the number and I think as I was going through my presentation earlier, what we are going to do going forward. And this is part of the I think the beauty of the original involvement, that would give us the flexibility to align ourselves much more closer to the client segments, I had talk about it earlier the high net-worth, that ultra-high net worth entrepreneurs. And then the institutional side and I think if you look at it from that mix perspective, you kind reflect in what kind of the current composition is I would say that we will be much more a balance going forward in terms of the kind of the typical, if you look at it from product, because I actually look at it, from the current, the -- more products, you have the PB products and the IB product, so the way that's the way kind of set up, but I think going forward I also want to declined landscape, and high net worth, so today that's less than 50% net worth by 2018. Our target is to get much more bigger percentage more than 50% from those two.

[David Mathers:]

And I think on the acquisition question, if we talk about smaller acquisitions, we would probably not go through the effort to split it out. If we talk about larger acquisitions, we would certainly look at potentially splitting it up. But even in the existing business as we have presented it is not pure so that there is some non-Swiss client in there, they will probably not split up but this is a very small portion.

[Tidjane Thiam:]

You have to remember that the non-Swiss that we sold the business will still be in the legal entities return. It's always going to remain booked. So it's a managerial division, the split between IWR and Switzerland in any case. I am trying to case by case. I mean in terms of management, I think we will be safe.

[James Amine:]

And maybe one to your point, in terms of acquisition targets, they are not only private banks but they're also maybe some corporate banks potentially also around.

[Tidjane Thiam:]

I mean some real opportunity. I think in the growth of profits that we see in Switzerland, that's certainly something that's very real. Everybody in Switzerland sees there are possibilities to do this. And it's relatively uncontentions because you don't have huge post integration and things like that. You can really close it down and just take your thing, and migrate few assets. So, it's not mergers which has been of same sizes, is really small trends of business that you take. Maybe we will go to the back and then come here.

[Unidentified Analyst:]

Yes. Kian Abouhossein [ph] from JPMorgan. Tidjane, can you talk about your thinking about acquisitions, because clearly growing in non-IP part, CIB part in your earnings. Just wondering could you do that potentially through acquisition in the long term? And if so, what areas would you be interested and what geographies would you be interested? The second question is on the Relationship Managers of roughly 1,000 that you mentioned, would be very interested from international as well as from the APAC business that they talk about. How long is the breakeven point to takes on fees private banking advisors at this point. And is there is any concern that's building up in terms of cost of the devices or costs perhaps to. And the third question is regarding the IB. If I look at the IB, you make about CHF12 billion, CHF13 billion of revenues. I think including the legacy business, you've got 20,500 employees. It looks like a very big employee out there compared to your revenues. And I'm just, you haven't given an employee number for the IB and I'm just wondering if you give us an idea of how we should think about employees. I think some things operated similar staff numbers that make fixed income alone. And lastly in trading, I think you mentioned in the third quarter, minimal trading losses reflected in credit. And I just wondering what you did there.

[David Mathers:]

On acquisitions, look it is first not under table for a time being. I think we have presented a comprehensive set of initiatives and measures and I expect us to be quite busy in the coming months just trying to implement this successfully. So it's just not part of our -- that's the business that I can give you. I mean, once we have delivered some of these targets and valuation has improved as well, maybe, but at this point in time, it's just not an issue or an option. Then we are in -- wanted maybe Helman and Iqbal to talk about RM, the cost of hiring them, the ramp up, what's your breakeven.

[Helman Sitohang:]

Sure. Can we go onto the slide from my deck that showed the RM growth. It shows the revenue there is expecting over the next few years related to those hires and the respective asset accumulation. Half the asset accumulation of top of my head is CHF30 billion. And I don't have the revenues off to top of my head, except for the steady state revenues which is I think around 250 to 260 which is when they are fully operational.

[Tidjane Thiam:]

It was 18 in the Iqbal section.

[James Amine:]

Yes, on the left hand side right under the chart. Yes. Perfect. So you see there, right. Accumulative net new assets over three years with the ramp up of those 300 RMs is CHR30 billion and the revenues with the respective ramp up is roughly 230. In a steady state, it would be respectively higher, which basically means once they're fully operational typically from a business case perspective, you see an average of two years to be at full business case capacity in situations where and again that depends on how successful we are in hiring. I mean there are instances where relationship managers are very quickly productive. In other instances where it can go up to three years. It depends a bit on the complexity of the team, the complexity of the clients and how quickly they can move them. In terms of cost, it is very much dependent on what sort of RMs and where. In general terms what we've seen is, we typically hire on business cases. So we don't go out there and basically if we're hiring more senior relationship managers, if we are hiring teams of relationship managers, we will have a business case of production that they need to bring which is part of the entire remuneration package of those relationship managers. That is typically the case for such relationship managers, where you would expect a more higher price because otherwise the rest of the word from a bank's perspective would be suboptimal. In the instances where we're actually going in and hiring relationship managers that we're going to go into positions into respective positions over time, are also taking people front from a different industry. The cost of course in terms of competition or the price premium in terms of competition is of course lower, because you don't have the same competition on those teams. So I think that's a bit of the mix that I would see from an International Wealth Management perspective.

[Helman Sitohang:]

Yes, that's on the economics. I think it's the dynamics are very similar when you kind of just looking at it from the transition of private banking perspective. But as I was going through my presentation earlier, I think the beauty of our model is actually -- you've seen the high level of collaboration. Actually in a lot of these instances, the break, if you can call the breakeven or the kind of the payback on the hiring, it could be actually much, much faster and much more declared. So, for example, if the RM comes with the notion of strong collaboration and you already have that experience and obviously then works with our team for example, you actually generate revenues not only pay for him, but maybe for two or three teams that we have been looking at the same time. So I think from that perspective, there's actually that advantage and that's why we are very focused on that because we have seen that working in many instances and is just kind of -- as we have ordered the base platform is actually by just kind of on-boarding, obviously the new RMs and even the existing RMs as I was talking about earlier the and working obviously closer with the IB partners. In terms of the talent, I should think that there is a great opportunity now for us in the Asia and across one bank. As you know, there is lot of uncertainty, lot of other banks in terms of strategy across the Board. I think right now we are probably the most clear in terms of the message that we are, we have such strong performance and we have demonstrated that. So I can tell you like today, we have so much incoming inquiries from industry that want to work to us. We have recently hired somebody in Japan, very senior position in the banking side who done the referred talking to us about some other private banking opportunities, and we're talking to a few others quite senior across the Board. So, the talent I don't think is such an issue for us, is actually now for us to make sure that obviously the talent that we want to hire has the similar culture, has the similar belief, obviously has some complementary skills that we can add on. But actually I think from some time perspective, this is one of the most interesting -- has been the slowdown and why the slowdown happens. We actually continue to perform extremely well and the market sees it, the talent on the street sees it and they actually reverse talking to us and. Lot of the time that we see and talk to across the Board at your very high and we're top-notch talent. So, not much function about that.

[David Mathers:]

Yes, I think that's a general comment. I mean that may be publicly -- certainly how strong is to use to be quite supportive and quite bullish. This is what you actually do make a difference in times like these, you get your peak in terms of recruiting because those are retrenching. Same thing in terms of relationship, there is lot of time basically in Asia turning our customers and we'll support them in being supportive. So we have to bit count it cyclical way. I think that will pay off later in the cycle. Do we have too many people in investment banking for the revenue, we have. I guess we should find if you look typically, I think it was a just a little bit in somewhat David was showing and Tidjane showed in just some of the aggregate employee accounts within the firm, because I think if you go into -- has pretty good data front office employment levels look like across similar businesses, I think they will generally find therefore -- can speak to the BCM side, but for most of the business in markets we're going to generally show up out of the nine firms that are usually in the survey is somewhere in the bottom three -- bottomed four in terms of total head count. So I think it's sort of in fits better, we're very focused on cost reduction in those businesses as a source of upside it because says that we probably need to be productive with some of those infrastructure players. I also want to address you just had a point about the number of traded days, down days I think what you see for a variety of reasons, and it's a little related to my earlier comment on being more productive with capital, I think what you see generally in some of those OTC business is in the credit space is that we are trading similar or in some cases higher volumes today brokering bonds than we did a number of years ago, but with much lower levels of inventory which then makes the trading business much more subject to some of the downside that could occur when spreads widen out in this business is. So I think that's a big part of which you are saying, there is some RWA effects that promote that there is of course curve, but I think some of it is folks just learning how to be more productive with the resources they've got in using most of it. And even if I read that something you 56 so thank you for bringing those back to this. If you have 50% to 60% in my section, something out on the slide and actually kept it deliberately, this what on the right. In fact to me very important, it is as further cost savings intended beyond 2018, what we are presenting to you is a result of three months of work, and I think it's pretty material and I don't intend to disappear after this three months and the same energy that has gone into producing this plan will be applied and I'm highly confident, but they are being much more to come. So, but I don't want to start to promise we'll move, and this is what we're going to do in the next three years to get for reasonable come back on the road running after that starts real work, because I know everybody, I believe in process we design manufacturing but that's so much more take, here we've come up with quick big wins ideas having impact, give you a big number CHF3.5 billion like it, but I've said I believe in 2.2% improvement of productivity every year, and if you do that you will create enormously. So question is how you create a solution that's where we're really need big values. We need to buy time from you, so we can process redesign and taking the compliance costs down, as everyone I look from the outside in the industry, I see what we would call cost of non-quality everywhere, the armies of compliance, people of controls, it is obviously process and it costs a lot of money and if you design things properly take a blank piece of paper you sign street end-to-end to clean process high technology there's all the technology today to do that, you can buy a lot of the stuff of shelf. But seriously, I think there is not much mileage in talking about that. Today, we need to improve, we need to deliver it to see quarters -- and then we can talk about but that horizon, but to tackle the racing, which really how many people we have in that world really the real answer is deep process redesign, leveraging technology, digitalizing things, et cetera that's not going to happen overnight.

[Jeremy Sigee:]

Jeremy Sigee, Barclays Capital Just one follow-on question, if I listen to the logic transparency valuation market discipline, incentive management, access to capital you could to apply that logic to the investment banking operations, you could also apply to Asian and International Wealth Management's you've made quite strong cuts, I guess in both of those. So I want to -- did you consider those alternatives as part of the strategic process and other circumstances what you would?

[Thomas Gottstein:]

It's a fair question, but as a starting point, I think that so James I think Switzerland's only for at this point in time. So if you think about crystallizing value and capturing the potential that's not understood today, I would think the Switzerland comes as a candidates before Asia.

[Jeremy Sigee:]

Future would you consider?

[Thomas Gottstein:]

I never say, but it's not on the table today. I think the concrete area, we have Switzerland, and there are very good reasons for doing that is a real opportunity there, and already in recommend someone saying that some of the past doesn't work in banking, I don't agree with that. I see some domestic banks on multiples that are extremely attractive and I don't see why this bank -- universal noted for the same type of multiples, so there is a clear opportunity there to crystallize more value. If think collectively we believe relieved 80%, 85% revalued property will be worth more and what's in our price today. We're quite confident in that.

[Unidentified Analyst:]

I have three questions, please. The first one is how does that actually make that business, easier to manage to break up the investment bank into two sub units. The second question also relates to the US business, how are you going to address the US wealth management market going forward. I assume you're still trying to target ultra-high net worth and high net worth clients, what actually runs that effect and what is currently starting position in that business after you get rid of the business and the final point regarding if you will the pent-up and the capital constraints in the past it have created this missed sales if you will, have you actually tried to in the last couple of months to quantify how much you have left on the table in whatever metric you feel comfortable with, whether in terms of earn more, and more in terms of revenue of profits that would be very interesting.

[Thomas Gottstein:]

Sure, I'll take that one of the things about what we call the investment bank and capital markets businesses, it has very different dynamics than sales and trading businesses, and we think with a little more focus, we'll be able to grow that business more and manage it more efficiently, if you think about the presentations, we had today Thomas was talking about, we have an investment banking business there that he relies on that does a lot of collaboration. Helman was talking about in Asia Pacific, Iqbal in the emerging markets and it really touches all the different organizations within the firm. Tim, and I have worked together since 1997 and so we still view ourselves as partners in the IB, but we think managing the business separately will be better from control perspective, but also in terms of having the right KPIs on that business. So I'm actually very much in favor of it. I think what you'll see is we'll be one of the only firms that discloses is almost a pure play investment bank in terms of revenue and returns. So it'll be interesting to see what the others do in terms of disclosure going forward.

[Tim O'Hara:]

I'll just mention and in remind it's in the presentation, but that we are combining under one manager me the fixed income and equities businesses and I think there's been a healthy level of cooperation between those businesses for some time, running fixed-income and he and I work together in a variety of capacities over time, but it's clear to us the clients increasingly look at us across the product suite. They want to have a firm-to-firm conversation about what it is that we're doing for them and I think that this will enhance that quite a bit and I think that what's also happening one of other financial resources we don't talk as much in circles like about but it has become very important in regulatory context is liquidity and there are some obstacles when you separate businesses into a fixed income and equities construct of managing other liquidity constraints across those businesses. So I think that's what one of a number of places where I think that we'll be able to manage our financial resources better, not just we put out the clients, because we're managing against internal requirements better by having those businesses together.

[Helman Sitohang:]

And let me address your question regarding the ultra-high net worth opportunity in United States. So you saw my slides, we think there is a real opportunity there from a client segment. If you look at the concentration of wealth then the amount of fees they control, better traditional investment banking fees, we want to have a specific effort. So what we're going to be doing is putting together a team of balance some former RMs and some investment bankers to target that segment. But to be clear, what we're going to be selling is investment banking products, there will be some share based lending which is very popular in the other region. You've heard the other Wealth Management managers talk about that. But we think that product offering will be very well received. Last year we started looking at a couple of sectors. We looked at the technology sector, which we think is very right for this model and then oil and gas and we're going to be rolling out some other sectors, but we'll have a lot more to talk about in the weeks and months ahead. But to be clear, will be running out of the Investment Bank.

[Tidjane Thiam:]

I think it's very interesting just to follow up on that, we've been looking at this. If you look, depending on was $605 billion in the US, let's call it between $500 billion and $600 billion nobody renewals, but we think we work on -- we've high intensity for 93 between any secret here. So we already have a good market share among the unions in America and it's funny but we tend to be strong in sectors that are very entrepreneurial, we are, we are in tech and we're in oil and gas and that sounds like two sectors were really, really strong. So it's not just the buying the scale, idea of -- there's more we can do there. And when Jim says that we have and we look name by name to enable people to whom we've made relatively complicated loans against complicated collateral. It's gone out for very impressive this, but there is much more we can do because it was just a byproduct. It's got something we focused on. So you are asking who is going to do it, it's Jim. He is going to be accountable for that and we feel there is a luck to do that. It's a good opportunity. Pent-up demand. Have we quantified it? I think firstly we've started doing already I think since June, July is going after some of those opportunities certainly Helman has and has booked the table. There are some things -- but I can ask you, do you have a sense of how much more business there is to do there when we give you more?

[Helman Sitohang:]

Yes, well, if you look at, I think the forecast of the 2018 is actually I think reflection on that. So I mean, could we have done it few years earlier. I guess so. And I think that's kind of -- this I think they are kind of the reflection of the pent-up demand. So we have been obviously extremely constrained in that side. So actually the numbers that you see today, for example, actually was achieved with pretty much flat capital and balance sheet usage between last year and this year. So I guess that gives you the direction of the opportunity. We have been opportunity turning and that was one of the frustration that Tidjane mentioned. I guess, we've been turning a very highly profitable opportunities if you look at it from the current perspective where most of the market make returns.

[Tidjane Thiam:]

I have to say, it doesn't mean we're just going to grow and grow and grow. I mean -- but we had recently a case, we had a reputation risk committee, shares and when some of those opportunities come, we will scrutinize the way we've always done. We are not lowering our standards in other words to pick up that pent-up demand. It was really a question of just not having the capital. It's not about certainly changing our standards of quality or return. Just giving them the capital return business. I should have rolled you. The way we usually run this session, we go until there is no more question in the room. So, quite relaxed. There was no time limit.

[Unidentified Analyst:]

I mean it's a follow-up question on that. I was just thinking about the return on I guess the fresh capital, and obviously looking at the revenue numbers you gave in terms the incremental revenues, let's say, the CHF3.4 billion or CHF1.5 billion of investment on CHF6 billion of capital. Even if you some of that revenue growth, move revenue growth. The return implied on the new capital appears to be higher than the existing return on the capital within the group. So, I just wanted to understand that a bit better in terms of why there is pent-up demand is actually going to be a lot more profitable, we are not -- what business that currently exists?

[Tidjane Thiam:]

Yes, it's a good question. Trying to think of a few potential answers. It's a funny thing, but you -- I think really you have very attractive opportunities where [indiscernible] why is it that they haven't been taken and why there hasn't been a substitution of capital. It should have been business for a run growth, the less profitable business. Maybe, I don't really under speculating here. But most, if you close to actually be quite exceptional and they tend to be unusual situations and we are trying to be more profitable than your average one of the real thing. And when you really capital constraint in many facets of as soon as you want to do something but a bit out of the original. So that's too big. I think you've got raising returns on more complex and dealer transactions and more lumpy business and I think that's what we're talking about. If you functioning under constraints, you are going to slice your business, it got a cookie cutter and it just have a capital. We have to spread your activity, bringing very pragmatic. If you run a business, given 100, you know you can do a big chunk. Somebody comes on 20 or 30 of annual allocation, we just not going to give it to them. When I say it's too much, I still need to keep my teams working. You run that as a pipeline but you sliced and you do a lot of similar deals. Today, you've given more capital. You can go after things that are more ambitious, that are more complex. Where do we make businessman you think and you can make more money. So that's why I think when you release the constraint, you cannot be under higher return, higher quality business because you take a different approach to capital, but only that make sense.

[James Amine:]

Maybe just to build on that, if you look at 2014, you look at PBWM as it stands today. In PBWM we cut CHF10 billion of gross RWA to be able to fund growth. Now if on average, just mathematically you look at the return on capital in 2014 of PBWM just as a pool of assets. You've clearly had deteriorating return on capital, even if you're investing, are you making the right choices aside from what you just said. From a gross perspective just adding back that amount, not saying that we wouldn't be looking at optimization in any of the divisions in Thomson's case or my case. But generally, there was a constraint. If you're constraining a business like PBWM at a return of capital above 25% post tax to go and reduce CHF10 billion of RWA to be able to fund growth. I was just in one year. That's 10% of the RWA and PBWM.

[Tidjane Thiam:]

If you feel that there is a lot of commitment behind you, part of where I like public targets is because it gets the business to operate in that way. It gives a much higher priority to what you're trying to do and [indiscernible] your target becomes a good target and that give you the authority to cut through a lot of, sorry, but the other question anything that would stuff you before. And when you have more capital, you start thinking about your business differently. You have a, you can afford to wait. You can afford to wait until you are really with you. We really want to do for which we have enough capital and where we get more money. So, I only see positives in sort of reducing of little bit giving somebody like -- more room to maneuver. We can pick and choose and I'm convinced he is going to bring me a higher return on capital. Won't you? It works. So I mean, my comment about is no time leave it. Very effective. So, Thank you. We've started with a very, very early, so we are look at the channel around 4