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Credit Suisse forecasts 4th-quarter loss on higher provisions for US case

Credit Suisse on Friday said it expects to book a net loss for its fourth quarter after increasing its provisions for a long-running dispute in the United States by $850 million

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Credit Suisse

Reuters  |  ZURICH 

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ZURICH (Reuters) - on Friday said it expects to book a net loss for its fourth quarter after increasing its provisions for a long-running dispute in the United States by $850 million.

The bank had already set aside $300 million in connection with the case which relates to a decade-long dispute regarding a U.S. residential mortgage-backed security (RMBS), but said in December it expected the figure to rise.

"Although 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 December 1, 2020, that we would evaluate the need for additional provisions," the bank said in a statement on Friday.

"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 Feb. 18.

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 Dec. 15.

It said its wealth management business was seeing stronger year-on-year activity, particularly in Asia, which had helped offset the translational effect of the stronger Swiss franc and pressure on its net interest income.

The investment bank continued to perform well, said, with fourth-quarter dollar revenue rising by more than 15% compared with a year earlier.

 

 

($1 = 0.89 Swiss francs)

 

(Reporting by John Revill; Editing by Christopher Cushing and Karishma Singh)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Fri, January 08 2021. 12:22 IST
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