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Credit Suisse To Pay $475 Mln For Legacy Issues With Regards To Mozambique

Swiss lender Credit Suisse (CS) announced settlements with US, UK and Swiss regulators for legacy issues with regards to Mozambique.

The total monetary aspect of the United States Department of Justice or DOJ and Securities and Exchange Commission or SEC settlements, taking into account various credits for overlapping penalties, is approximately $275 million.

In the resolution with the UK Financial Conduct Authority or FCA, Credit Suisse agreed to pay a penalty of approximately $200 million, and the bank has also agreed with the FCA to forgive $200 million of debt owed by Mozambique.

As a result, the company expects to take $230 million in charges in the third quarter 2021.

The company said the settlements resolved inquiries into the bank's arrangement of loan financing for Mozambique state enterprises and related securities transactions that took place between 2013 and 2016.

Credit Suisse also noted the announcement by FINMA that it has concluded its enforcement proceedings related to past observation activities. The bank condemns any unjustified observations and has already taken decisive steps to strengthen its relevant governance and processes.

In terms of loan financing for Mozambique, Credit Suisse Group has entered into a three-year Deferred Prosecution Agreement or DPA with the DOJ and consented to the entering of a Cease and Desist Order by the SEC. Under the terms of the DPA, Credit Suisse will continue its compliance enhancement and remediation efforts, report to the DOJ on those efforts for three years, and undertake additional measures, as outlined by the resolutions.

In the resolution with the FCA, Credit Suisse agreed that in respect of these transactions with Mozambique between 2013 and 2016, its UK operations had failed to conduct its business with due skill, care and diligence and to take reasonable care to organize and control its affairs responsibly and effectively, with adequate risk management systems.

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