<p> Credit Suisse (NYSE:CS), one of the world’s leading financial service providers, has reached a final settlement related to mortgage-backed securities (MBS) business conducted in the build-up to the financial crisis of 2007-2008, the company announced on Monday in a press release.</p><p class=”MsoNormal”>According to the Credit Suisse <a href=”https://www.financemagnates.com/terms/s/settlement/” target=”_blank” id=”2dc6d2c7-1626-4ecf-811e-4c1aabbdb280_2″ class=”terms__main-term”>settlement</a> terms, the bank is obliged to make a payment of $495 Million to fully resolve past and potential future claims connected with its “Residential Mortgage Backed Securities (RBMS)” business, worth more than $10 billion. </p><p class=”MsoNormal”>The settlement was signed with the New Jersey Attorney General (NJAG), which alleges more than $3 billion in overall damages in a case filed almost ten years ago. </p><p class=”MsoNormal”>“Credit Suisse is pleased to have reached an agreement that allows the bank to resolve the only remaining RMBS matter involving claims by a regulator and the largest of its remaining exposures on its legacy RMBS docket. The settlement, for which Credit Suisse is fully provisioned, marks another important step in the bank’s efforts to pro-actively resolve litigation and legacy issues,” Credit Suisse commented in Monday’s press release.</p><p class=”MsoNormal”>It is not the first, and nor the highest, settlement that <a href=”https://www.financemagnates.com/tag/credit-suisse/” target=”_blank”>Credit Suisse</a> has agreed to pay in connection with its sale of RMBS. In January 2017, the Justice Department of the United States (DoJ) announced a $5.28 billion settlement related to the bank’s activity regarding the sales, <a href=”https://www.financemagnates.com/terms/m/marketing/” target=”_blank” id=”48d4594c-de24-47ac-9f1b-aa2e0da8374a_1″ class=”terms__secondary-term”>marketing</a>, issuance, and securitization of mortgage-backed products between 2005-2007.</p><p class=”MsoNormal”>Credit Suisse Deepens Its Losses. Company Shares Tanks</p><p class=”MsoNormal”>Although the current settlement will probably not strain Credit Suisse’s financial balance, the latest reports present a rather unpleasant reality. <a href=”https://www.financemagnates.com/executives/moves/credit-swiss-names-ulrich-krner-as-ceo-q2-losses-deepen-to-16b/”>As reported by Finance Magnates in July</a>, the Swiss bank presented its financial results for Q2 2022. The reported net revenue slipped 29% percent yearly (YoY) to CHF 3.6 billion. <a href=”https://www.financemagnates.com/institutional-forex/credit-suisse-froze-assets-worth-106-billion-in-q1-2022/”>Compared to the previous quarter</a>, the results were 17% lower. </p><p class=”MsoNormal”>The net loss for the reported period stood at CHF 1.59 billion, while analysts expected a definitely more modest loss, around CHF 398.16 million.</p><p class=”MsoNormal”>Current problems and previous scandals are also clearly seen in the company’s stocks. Year-to-date (YTD) loss exceeded 50%; only this month CS shares tested and rebounded from a record low level of just $3.40 per share. The same shares were worth $14 before the Covid-19 pandemic.</p>
This article was written by Damian Chmiel at www.financemagnates.com.
