ZURICH Dec 23 Credit Suisse had agreed
in principle to pay U.S. authorities $2.48 billion to settle
claims it misled investors in residential mortgage-backed
securities it sold in the run-up to the 2008 financial crisis,
the Swiss bank said on Friday.
Credit Suisse will also provide $2.8 billion in consumer
relief over five years from the settlement, it said in a
statement, adding the deal was subject to negotiation of final
documentation and approval by its board of directors.
"Credit Suisse will take a pre-tax charge of approximately
$2 billion in addition to its existing reserves against these
matters. This will be taken in our 4Q 2016 financial results,"
The final deal is in line with the $5 billion-$7 billion the
U.S. Department of Justice (DOJ) had asked Credit Suisse to pay
earlier in negotiations, as reported by Reuters on Monday.
The news came after Deutsche Bank agreed to a
$7.2 billion settlement with the DOJ over its sale and pooling
of toxic mortgage securities.
The deals highlight the Justice Department's efforts to hold
European banks accountable for shoddy securities that
contributed to the U.S. housing market collapse.
The department sued Barclays PLC on Thursday over
Credit Suisse had paid a $2.8 billion fine in 2014 for
helping wealthy Americans evade tax.
Credit Suisse in November said it had upped litigation
provisions by 357 million francs ($348.29 million), mainly in
connection with mortgage-related matters.
($1 = 1.0250 Swiss francs)
(Reporting by Michael Shields; Editing by Stephen Coates)