Credit Suisse Makes $180M Provision for Major Litigation Costs

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Credit Suisse Group AG has made a 178 million Swiss francs ($180 million) provision for major litigation costs in the third quarter to help account for a long list of lawsuits and investigations that it’s trying to draw a line under following years of scandals and losses that eroded investor confidence.

The Zurich-based bank said in a statement Thursday that it’ll continue to take a “proactive approach to reducing our litigation docket, including through the settlements of legacy cases such as the French cross-border matter and the New Jersey Attorney General RMBS case, for which we were fully provisioned.”

The company has been taking steps to move on from its slate of major litigation around the world. It agreed to pay €238 million ($240 million) to settle a French criminal probe into allegations the bank helped clients stash undeclared funds. It also resolved a case related to its sale of residential mortgage-backed securities by paying $495 million and won a key class-action US lawsuit over allegations of price-fixing in the foreign-exchange market.

Credit Suisse to Pay $234M to Settle French Tax, Money Laundering Case

The provision comes after a litany of bad legal news for the Zurich-based lender. The U.S. Justice Department is now investigating whether it continued to help US clients hide assets from authorities, eight years after the bank paid a $2.6 billion tax-evasion settlement and pledged to tackle the issue.

In June, Switzerland’s top court handed the bank a guilty verdict in an historic case over money laundering. And in March, the bank was hit with $607 million in damages by a Bermuda judge who ruled that a Credit Suisse life insurance unit had turned a “blind eye” to the unusual practices of a rogue banker managing money for Bidzina Ivanishvili, the client at the heart of a trial in Singapore against a trust unit of the bank. The bank is appealing both those verdicts.

Photograph: An automatic teller machine (ATM) sign outside a Credit Suisse Group AG bank branch in Basel, Switzerland, on Tuesday, Oct. 25, 2022. Photo credit: Stefan Wermuth/Bloomberg