Credit Suisse said its net loss for the year was deeper than originally reported, after it added provisions to settle a mortgage securities mis-selling scandal in the U.S. late last year.
Zurich-based Credit Suisse said it would add 300 million Swiss francs in legal provisions to to resolve allegations it mis-sold mortgage securities in the run-up to the financial crisis of 2008/09.
This knocked 272 million off profits after tax, tipping the Swiss bank even further into the red: its full-year net loss widened to 2.7 million francs, from 2.44 million originally reported in February.
The litigation over mortgage securities was one of the last large chunks of litigation hanging over the bank – a vestige of the years before the financial crisis of 2008-09, when Credit Suisse was a Wall Street powerhouse.
Hit to Capital
The settlement also knocked 10 basis points off Credit Suisse's «hardest» form of capital, Tier 1. Under CEO Tidjane Thiam, this cushion has been a source of worry and the motivation behind strategy steps such as a partial spin-off of its reliably profitable Swiss unit or, more recently, a potential cap hike instead.
The bank's most important capital ratio slipped to 11.5 percent, from 11.6 percent originally reported last month.
