Credit Suisse Group AG and Credit Suisse AG

The stable outlook reflects our view that remediating actions taken will allow the group to prevent longer-lasting reputational damage and impairments of its franchise and business stability. The stable outlook also reflects our expectations that, after the de-risking and proactive cleaning of larger legacy cases, the group will report less volatile returns over the cycle while keeping its strong capital buffer. We could lower the ratings on Credit Suisse Group AG, Credit Suisse AG, and operating subsidiaries over the next 12-24 months if recent events had a further material negative effect on the group's reputation and franchise, or if new litigation risks emerged that would materially dent the group's performance or capital. An upgrade is remote over the next 12-24

...A global franchise and diversified business mix, together with strong capitalization, are Credit Suisse Group's key rating strengths. We acknowledge the group's high and increasing share of wealth management activities and strong market position in Switzerland, which together contribute on average about half of the group's pretax income. We continue to regard Switzerland as one of the most resilient economies worldwide. Credit Suisse shows strong capital ratios, underpinned by our projection of its risk-adjusted capital (RAC) ratio at 14.0%-14.5% by 2023, which is higher than most peers' and provides a sizable buffer for tail risks. However, a series of recent risk events have shed light on the firm's risk appetite and culture, as well as on deficiencies in its risk control and compliance frameworks. Widespread changes to senior management amid a broader governance overhaul confirm the depth of the problem, although they also reflect a strong commitment to remediation. The group also needs...

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