Credit Suisse  (CS)  shares fell sharply in early trading Thursday after the lender added to its litigation reserves in the third quarter as more European lenders brace for potential fines from the U.S. Department of Justice.

Credit Suisse posted an unexpected Sfr41 million ($42.25 million) profit in the three months ending in September but set aside a further Sfr357 million to cover potential litigation, notably related to mortgage bond sales in the United States. 

Credit Suisse shares were quoted at Sfr12.80 in Zurich Thursday, down 3.5% on the session. The stock, however, has risen 25% in the past three months.

"Looking ahead, we expect market activity to continue to be influenced by geopolitical and macroeconomic uncertainty over the next several quarters and the outlook to remain challenging," said CEO Tidjane Thiam. "We still have a long way to go in our journey but we are fully mobilized to deliver in challenging market conditions on our key commitments to reduce cost, strengthen our capital base and drive profitable business growth."

The bank also said its core tier 1 common equity -- a measure of the amount of capital it has set aside to absorb business and market losses -- rose to 12% in the third quarter from 11.8% in the previous three-month period. 

Deutsche Bank (DB) said last week that it had scraped together a small €278 million ($303 million) profit in its third quarter,  helped in no small part by a 14% increase in revenue from its Fixed Income, Currencies and Commodities business. Its CT1 ratio was measured at 11.1% for the quarter and its litigation reserves were bumped up to €5.9 billion ($6.55 billion).

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