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Credit Suisse (CS) Might Pay $680M in Penalty for RMBS Suit
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Credit Suisse Group AG expects to pay about $680 million as penalty in order to settle a case with municipal-bond insurer MBIA Inc. related to residential mortgage-backed securities. The lender had provisioned for $300 million so far, thus, it may face a $380 million impact in the fourth quarter of 2020.
Per a Bloomberg article, a U.S. judge ordered both the parties i.e., Credit Suisse and MBIA, to submit estimates of damages related to the mortgages that were issued in 2007.
The bond issuer has accused Credit Suisse of not adhering to its promise to repurchase RMBS transactions sold by the bank and insured by MBIA in 2007. Further, over the decade, MBIA also brought claims of material misrepresentations, fraudulent inducement and breach of contract.
However, the article said that the bank “believes it has strong grounds for appeal”. Also, it will provide investors with an update on the expected impact on current-quarter results from the increase in provisions.
Last week, Credit Suisse had informed about a $450 million impairment charge it expects to incur for its stake in York Capital Management, as the latter is winding down its European hedge funds business.
Despite both the expected charges, the company is expected to pay a second and final dividend of CHF 0.1388 per share for 2019. This April, on a request from the Swiss Financial Market Supervisory Authority, amid the continuous spread of coronavirus in Switzerland, the bank had agreed to pay the dividend of CHF 0.2776 for the financial year 2019 in two installments. It had paid CHF 0.1388 in May.
Credit Suisse has been actively making efforts to strengthen its business globally. Also, the company announced plans to cut up to 500 jobs, which is expected to save about $110 million in annual costs. Further, the bank’s focus on enhancing its digital banking capabilities is encouraging.
Shares of Credit Suisse have gained 27.6% over the past six months compared with the industry’s growth of 21.5%.
Bank of Montreal (BMO - Free Report) has been witnessing upward estimate revisions for the past 60 days. Moreover, this Zacks #2 Ranked (Buy) stock has gained nearly 37.2% in the past six months.
UBS Group AG (UBS - Free Report) has been witnessing upward estimate revisions over the past 60 days for the ongoing year. The company’s shares have gained 25.3% over the past six months. It carries a Zacks Rank of 2 at present.
The Bank of N.T. Butterfield & Son Limited’s (NTB - Free Report) has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has jumped 24% in the past six months. It currently carries a Zacks Rank #2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Credit Suisse (CS) Might Pay $680M in Penalty for RMBS Suit
Credit Suisse Group AG expects to pay about $680 million as penalty in order to settle a case with municipal-bond insurer MBIA Inc. related to residential mortgage-backed securities. The lender had provisioned for $300 million so far, thus, it may face a $380 million impact in the fourth quarter of 2020.
Per a Bloomberg article, a U.S. judge ordered both the parties i.e., Credit Suisse and MBIA, to submit estimates of damages related to the mortgages that were issued in 2007.
The bond issuer has accused Credit Suisse of not adhering to its promise to repurchase RMBS transactions sold by the bank and insured by MBIA in 2007. Further, over the decade, MBIA also brought claims of material misrepresentations, fraudulent inducement and breach of contract.
However, the article said that the bank “believes it has strong grounds for appeal”. Also, it will provide investors with an update on the expected impact on current-quarter results from the increase in provisions.
Last week, Credit Suisse had informed about a $450 million impairment charge it expects to incur for its stake in York Capital Management, as the latter is winding down its European hedge funds business.
Despite both the expected charges, the company is expected to pay a second and final dividend of CHF 0.1388 per share for 2019. This April, on a request from the Swiss Financial Market Supervisory Authority, amid the continuous spread of coronavirus in Switzerland, the bank had agreed to pay the dividend of CHF 0.2776 for the financial year 2019 in two installments. It had paid CHF 0.1388 in May.
Credit Suisse has been actively making efforts to strengthen its business globally. Also, the company announced plans to cut up to 500 jobs, which is expected to save about $110 million in annual costs. Further, the bank’s focus on enhancing its digital banking capabilities is encouraging.
Shares of Credit Suisse have gained 27.6% over the past six months compared with the industry’s growth of 21.5%.
Currently, the company has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Bank of Montreal (BMO - Free Report) has been witnessing upward estimate revisions for the past 60 days. Moreover, this Zacks #2 Ranked (Buy) stock has gained nearly 37.2% in the past six months.
UBS Group AG (UBS - Free Report) has been witnessing upward estimate revisions over the past 60 days for the ongoing year. The company’s shares have gained 25.3% over the past six months. It carries a Zacks Rank of 2 at present.
The Bank of N.T. Butterfield & Son Limited’s (NTB - Free Report) has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has jumped 24% in the past six months. It currently carries a Zacks Rank #2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>