The major Swiss bank expects a substantial loss if it loses a court case in the Caribbean island.
Credit Suisse's losing streak just keeps on giving. It announced late yesterday that a Bermuda court is expected to render a judgement against its local life insurance subsidiary Credit Suisse Life Bermuda.
The bank indicated that it could lose more than $500 million U.S. dollars as a result. Although Credit Suisse has made provisions for them, it also said that it will make a decision on whether further ones are necessary when releasing first quarter results on 27 April.
It also announced that it intends to continue to pursue «all available» legal action in the matter.
Decision on Lescaudron
This current profit warning comes on the back of last year's sizeable full-year loss.
Credit Suisse did not release any further details about the court case. The life insurance unit, however, is a big part of the Patrice Lescaudron affair. The former Credit Suisse banker, based in Geneva, was caught diverting funds from Eastern European clients from 2011 on. He was fired by Credit Suisse in 2015 and sentenced to prison in 2018. He committed suicide in 2020.
The bank has maintained that it was also deceived by Lescaudron and that he acted alone. In 2018, the Swiss Financial Market Supervisory Authority (Finma) reprimanded Credit Suisse for not having enough in the way of controls on the banker.
Preliminary Victory
The oligarchs that suffered the losses organized themselves as a so-called «CS Victims» group and asked for up to $1 billion in damages. They claimed that the Bermudas unit was also responsible for the losses.
The trial ended last November and a ruling was expected this spring. Right now, it looks like the oligarchs may have won an important, but preliminary, victory.
