Credit Suisse Agrees to $5.3 Billion U.S. Mortgage Settlement
Credit Suisse has agreed in principle to pay U.S. authorities $2.48 billion to settle claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis, the Swiss bank said on Friday.
Credit Suisse (CSGKF) will also provide $2.8 billion in consumer relief over five years from the settlement, it said in a statement, adding the deal was subject to negotiation of final documentation and approval by its board of directors.
“Credit Suisse will take a pre-tax charge of approximately $2 billion in addition to its existing reserves against these matters. This will be taken in our 4Q 2016 financial results,” it added.
The final deal is in line with the $5 billion-$7 billion the U.S. Department of Justice (DOJ) had asked Credit Suisse to pay earlier in negotiations, as reported by Reuters on Monday.
The deals highlight the Justice Department’s efforts to hold European banks accountable for shoddy securities that contributed to the U.S. housing market collapse.
The department sued Barclays (BCS) on Thursday over similar claims.
Credit Suisse had paid a $2.8 billion fine in 2014 for helping wealthy Americans evade tax.
Credit Suisse in November said it had upped litigation provisions by 357 million francs ($348.29 million), mainly in connection with mortgage-related matters.