Credit Suisse posts $850m end-year loss amid higher provisionsEuropost
The leading Swiss bank posted a huge loss at the end of 2020 as the financial institution had to set aside funds to guarantee for the settlement of a big dispute in US. The total cash amount is estimated at some 850 million dollars.
Credit Suisse had already stashed some 300 million related to the settlement of the dispute linked to US residential mortgage-backed security. However the bank admitted in December it expected the valuation to rise further. “Although Credit Suisse previously set aside $300 million in provisions in connection with this case and continues to believe it has strong grounds for appeal, we indicated on 1 December 2020, that we would evaluate the need for additional provisions,” the bank said in a statement quoted by Reuters. “As a consequence of this increase, together with the expected impairment charge in respect of our non-controlling interest in York Capital Management that we announced on November 24, 2020, we would expect to report a net loss in 4Q20.”
The bank, which reported a net profit of 852 million Swiss francs ($962.28 million) in the fourth quarter of 2019, is due to report its fourth-quarter earnings on 18 Feb. In addition to the profit warning, the Swiss bank gave an update on its December trading, which it said had continued to run at levels similar to those it outlined at its investor day on 15 Dec.