Credit Suisse to pay $885 mn in mortgage-backed securities litigation

Case relates to securities purchased by Fannie Mae and Freddie Mac

Credit Suisse said it would pay $885 million to settle a litigation relating to mortgage-backed securities (MBS) purchased by US government controlled mortgage companies Fannie Mae and Freddie Mac between 2005 and 2007.

The settlement will allow it to resolve all claims in two pending securities lawsuits filed by the Federal Housing Finance Agency (FHFA) against Credit Suisse, the Swiss bank said in a statement on Friday.

Credit Suisse will incur an after tax charge of 275 million Swiss francs in respect of its fourth-quarter and full-year 2013 financial results. Preliminary results reported on February 6 had to be adjusted accordingly, resulting in a fourth-quarter net loss of 8 million Swiss francs, the bank said.