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Credit Suisse to face war losses

The hits just keep on coming for Credit Suisse, with an announcement of an anticipated first-quarter loss for the bank, after taking a $210-million charge for exposure to the Russia-Ukraine war.

This, some weeks after stating that it had to reserve some $500 million related to the decision by the Supreme Court of Bermuda that went against a Bermuda subsidiary of the bank.

Credit Suisse had previously taken reserves against the matter and intends to pursue all available legal actions.

The bank said that the judgment is subject to appeal, which Credit Suisse Life Bermuda intends to vigorously pursue.

Georgian billionaire Bidzina Ivanishvili had alleged in the case that the bank failed to stop a rogue employee — later a convicted fraudster — from losing $400 million of his investments.

But the latest charge taken by the bank as a result of the war does not leave Credit Suisse standing alone.

Global banks have been forced to set aside billions of dollars because of expected losses related to the war.

The Credit Suisse statement on Wednesday said: “Credit Suisse Group AG announces today that its reported earnings for the first quarter of 2022 will be negatively impacted by a decision to increase litigation provisions relating to developments in a number of previously disclosed legal matters, all of which originated more than a decade ago, by approximately CHF 600 million, resulting in total litigation provisions for the quarter of approximately CHF 700 million.

“The group will announce its earnings for the first quarter of 2022 on Wednesday, April 27, and would expect to report a loss as a consequence of this increase in reserves.

“With regard to our exposure to the impact of Russia’s invasion of Ukraine both on our counterparties and on our credit risks, our results will be adversely affected by an aggregate of approximately CHF 200 million of negative revenues and provisions for credit losses.”

Russian exposure: Swiss bank Credit Suisse is taking a $210-million charge relating to the Russian-Ukraine war (File photograph)

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Published April 21, 2022 at 7:21 pm (Updated April 21, 2022 at 7:55 pm)

Credit Suisse to face war losses

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