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Press Release

Update: RMBS-related provisions and 4Q20 financial performance

As has been previously announced, Credit Suisse and MBIA have been in a civil legal dispute in New York since 2009 in respect of warranties regarding a US residential mortgage backed security (RMBS) issued in 2007. On November 30, 2020, the judge presiding over this legacy case issued an order requiring both parties to submit estimates of damages in respect of these mortgages which could result in a judgment against Credit Suisse of up to approximately USD 680 million.

Although Credit Suisse previously set aside USD 300 million in provisions in connection with this case and continues to believe it has strong grounds for appeal, we indicated on December 1, 2020, that we would evaluate the need for additional provisions. This review is now concluded, and we expect to increase our provisions for the MBIA case and other RMBS-related cases by a total of USD 850 million. This charge will be reflected in our 4Q20 financial results. As a consequence of this increase, together with the expected impairment charge in respect of our non-controlling interest in York Capital Management that we announced on November 24, 2020, we would expect to report a net loss in 4Q20. These results will be published, as already scheduled, on Thursday, February 18, 2021.

Our trading performance in the final month of 2020 continued at similar levels to those summarized at our Investor Update on December 15, 2020. In the Wealth Management businesses, stronger year-on-year transactional activity, particularly in Asia, partly offset the adverse FX translational effect from the strengthening of the Swiss Franc and some pressure on net interest income. Our Investment Bank continued to perform well, with USD revenues in 4Q20 increasing by more than 15% compared to 4Q19.

As announced at our Investor Update last month, we intend to buy back a minimum of CHF 1.0 billion and up to CHF 1.5 billion of shares in 2021, subject to market and economic conditions. The program will commence on Tuesday, January 12, 2021.

Finally, in light of the ongoing COVID-19 pandemic and related restrictions and to ensure the health and safety of our shareholders and employees, the Board of Directors has decided that the Annual General Meeting of Credit Suisse Group AG on April 30, 2021, will be held without the physical attendance of shareholders. Shareholders will be requested to vote in advance by giving power of attorney and voting instructions to the independent proxy and can follow the Annual General Meeting via webcast.