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Credit Suisse Warns of $380 Million Fourth-Quarter Legal Hit

  • Bank plans to set aside more funds to cover mortgage case
  • U.S. court ordered Swiss bank to submit damage estimates
Credit Suisse Group AG CEO Tidjane Thiam Interview
Photographer: Stefan Wermuth/Bloomberg
Updated on

Credit Suisse Group AG signaled a $380 million fourth-quarter hit related to a long-standing legal case surrounding residential mortgage-backed securities, adding to the bank’s woes after it wrote down its stake in hedge fund York Capital Management.

The Zurich-based lender is facing costs of as much as $680 million after the New York judge presiding over the case ordered the bank and municipal-bond insurer MBIA to submit estimates of damages related to the mortgages, issued in 2007, Credit Suisse said in a statement on Tuesday. It has already set aside $300 million to cover losses in the case.