Credit Suisse Hit Hard As US Tax Net Tightens By $779 M

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Dallas, Texas 07/22/2014 (FINANCIALSTRENDS) – Zurich-based Credit Suisse has reported loss of $1.8 billion for the second-quarter. The loss comes in the form of a settlement with US authorities for criminal tax investigation. The fine imposed by US officials on the Swizz lending house is to the tune of $2.6 billion. In a statement, the bank’s Chief Executive Officer, Brady Dougan, reported that, “Our reported results for the second quarter and the first half of 2014 were impacted by the resolution of our most significant legacy litigation issue.”

He reiterated that the bank regretted its past misconduct related to cross-border provision violations. He announced that the final settlement extended to all of the previous issues as well. However, he also added that the long-drawn litigation was now in the past. He also appreciated customer support during the banks struggle to recover from the impact of the litigation.

He was emphatic that the bank had since ceased to operate in the commodity trading sector and to “further enhance capital and operating efficiencies.” But for the lending services provider the second quarter was definitely stung by the litigation, posting quarterly loss. The bright-side, however, was that the loss were lesser this year, over last year, with the losses down by 1.45 billion in Swiss francs.

The poor quarterly results, led to a fall in trading prices of the Swiss banker.

The litigation by US Federal authorities was against the role played by the bank in colluding with US tax evaders. The settlement will now lead to the Swiss bank paying fine to the tune of $2.6 billion.

Unfortunately for the bank, performance of the bank in other segments too was affected. Private banking as well as wealth management, which were key profit-making segments of the bank; were found to be loss makers, thanks to the massive costs of settlement with US authorities.

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