Credit Suisse (CS) - Get Report said Friday that it has agreed a $5.3 billion settlement with the U.S. Department of Justice over allegations of mis-selling mortgage bonds into the global financial crisis.
Credit Suisse will pay a civil penalty of $2.48 billion and provide customer relief for a further $2.8 billion, paid out over five years, the company said in a statement. The penalty will cause the bank to take a pre-tax charge of around $2 billion, the bank said.
"This settlement would release Credit Suisse from potential civil claims by the DOJ related to its securitization, underwriting and issuance of RMBS," the bank said in a statement. "This settlement is subject to the negotiation of final documentation and approval by the Credit Suisse Board of Directors."
Deutsche Bank (DB) - Get Report also said Friday that it has agreed a $7.2 billion settlement with the DoJ to settle civil claims in connection with the bank's mortgage bond activities in the run up to the global financial crisis.
The Frankfurt-based bank will pay $3.1 billion penalties and provide $4.1 billion in customer relief, the bank said in a statement, a figure that falls significantly short of the expected $14 billion penalty first made public by the DoJ earlier this year.
Credit Suisse shares fell 1.33% to Sfr14.93 each in Zurich Friday, trimming the gains since the November Presidential elections to around 15%, largely in-line with the 14% gain for the Stoxx 600 Europe Banks Index.