The logo of Swiss bank Credit Suisse in Zurich, Switzerland. Picture: REUTERS/AMD WIEGMANN
The provision, for a dispute in New York with bond insurer MBIA as well as other potential cases related to residential mortgage-backed securities, is more than twice as high as the bank estimated as recently as December. It comes on top of a previously announced $450m impairment on a hedge fund investment that will also be booked in the fourth quarter.
“The drip-feed of negative news in the past two months has been unhelpful, but one would hope that Credit Suisse is now closer to drawing a line under this,” analysts at Citigroup led by Andrew Coombs wrote in a report.Switzerland’s second-largest bank had previously set aside $300m in connection with the US case.
Credit Suisse said its investment banking revenue in the fourth quarter is up more than 15% in dollar terms from a year earlier, compared with guidance given in December for an increase in the mid-teens. It reiterated a plan to buy back as much as 1.5-billion francs in shares this year.