By Brian Blackstone 

ZURICH-- Credit Suisse Group AG posted a wider-than-expected loss in the fourth quarter because of a hefty settlement the Swiss banking giant agreed to pay to resolve crisis-era mortgage securities cases.

Zurich-based Credit Suisse said Tuesday that its net loss was 2.3 billion Swiss francs ($2.3 billion), versus expectations of a 2.04 billion franc loss, according to a consensus of analyst estimates compiled by the bank. During the fourth quarter of 2015, Credit Suisse posted a heftier loss of 5.8 billion francs attributable to restructuring costs associated with its pullback from investment banking. For 2016 as a whole, Credit Suisse posted a loss of 2.4 billion francs.

Credit Suisse said it is targeting job cuts of 5,500 this year, which should help reduce its expenses to under 18.5 billion francs by the end of 2017.

Still, the bank offered an upbeat assessment for early 2017, saying that the wealth management and investment banking units were off to a strong start and that there was a rebound in client trading activity.

In December, the bank reached a settlement worth roughly $5.3 billion with the U.S. Justice Department over toxic mortgage securities sold before the financial crisis. This included a $2.5 billion penalty and consumer relief payments of $2.8 billion over the next five years.

The fourth-quarter results included net litigation expenses of 2.2 billion francs, reflecting the settlement with U.S. authorities. The agreement removes "a major source of uncertainty for our future," Credit Suisse Chief Executive Tidjane Thiam said in a statement.

Its revenue for the quarter was 5.4 billion francs, and totaled 21.6 billion francs for 2016, a 7% drop from the previous year.

Credit Suisse said it suffered 6.7 billion francs in net asset outflows in the last three months of 2016, a result of the closure of a joint venture and of a flurry of clients either belatedly declaring their Swiss accounts to tax authorities or moving undeclared funds elsewhere.

Swiss rival UBS Group AG recently reported its own heavy outflows for the final quarter of last year. The billions of dollars in outflows for both firms came as Switzerland geared up for an international information exchange program designed to expose hidden Swiss accounts to authorities in several countries.

That program got under way at the beginning of this year. In addition, a number of countries in regions including Latin America have recently kicked off amnesty programs aimed at encouraging clients with offshore accounts to disclose them.

Credit Suisse cited particularly significant outflows related to clients in Latin America and Southeast Asia.

John Letzing contributed to this article.

Write to Brian Blackstone at brian.blackstone@wsj.com

 

(END) Dow Jones Newswires

February 14, 2017 03:18 ET (08:18 GMT)

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