Credit Suisse comes with red figures for Q4 report


Credit Suisse will close the fourth quarter of 2020 with red figures. The second largest bank in Switzerland said it had to set aside $ 850 million to settle in the United States. That is another blow from the financial crisis and the rumblings of mortgages in the period around 2008.

The $ 850 million is much more than the $ 380 million that Credit Suisse had set aside for the matter. The blow is added to an earlier write-off of USD 450 million on the Swiss bank’s interest in York Capital.

Thomas Gottstein, in his first year as chairman of the bank’s board, has been dealing with a series of setbacks and has been unable to stop the bad news flow. This is the moment he wants to change the organization of the bank, including the investment bank. He also wants to review the asset management branch. Just last month, the bank warned that a major profit target might be missed due to the impact of the crisis.

The issue of the sale of high-risk mortgage investments in the US in the run-up to the financial crisis may still get a tail. Several parties still have claims against the bank.

For example, MBIA’s bond insurer claims $ 740 million in damages for alleged breach of contract, making false predictions and fraudulent dealings by the bank. Credit Suisse, among others, would have broken a promise to buy back transactions with junk mortgages sold by the bank. These were insured by MBIA in 2007.

By: Peretz M.

Peretz M. is an accomplished economist and financial journalist with a deep understanding of the global economy and financial markets. He is a regular contributor to EconomicInform, where he provides expert analysis and commentary on current economic trends and events. With a strong educational background in economics, Peretz has a talent for breaking down complex economic concepts for a general audience and is able to provide insightful perspectives on a wide range of economic issues.

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