Credit Suisse Group AG
) revised its 2013 results owing to a higher litigation reserve
related to an ongoing tax probe by the United States Department
of Justice (DOJ). The tax probe resulted in an after-tax charge
of CHF 468 million. DOJ is suspecting that the Swiss banking
giant has deliberately helped its U.S. clients to evade tax which
amounts to violation of U.S. tax obligations.
Notably, results also include the impact of CHF 275 million
after-tax charges which Credit Suisse incurred after the company
settled a mortgage-related dispute in Mar 2014 with the Federal
Housing Finance Agency (FHFA) - the conservator of Government
Sponsored Enterprises (GSEs)
Per the annual report 2013, the company now has made a total
provision of CHF 895 million relating to tax and securities law
Revised Q4 and 2013 Results
Credit Suisse restated fourth-quarter 2013 results with a net
loss of CHF 476 million. For full-year 2013, revised income from
continuing operations before taxes came in at CHF 3,504 million
versus CHF 1,888 million reported in 2012. Net income
attributable to shareholders finally stood at CHF 2,326 million
compared with CHF 1,349 million in the prior year.
Further, as of Dec 31, 2013, Credit Suisse's revised Look-through
Total Capital ratio was 15.7%, down from the previously reported
ratio of 16.1%, while Look-through Basel III CET1 ratio came in
at 10.0%, down from the previously reported ratio of 10.3%.
Revised Basel III CET1 ratio was 15.7% versus the previously
reported ratio of 16.0%.
CEO Pay Hike
Chief Executive Officer (CEO) Brady W. Dougan received an
approval for compensation worth CHF 9.79 million for 2013, per
the annual report. This reflects a year-over-year increase of 26%
from CHF 7.77 million in 2012.
The hike is a reflection of of Dougan's efforts in driving Credit
Suisse to book significantly higher year-over-year profit in
Though the litigation issues seem to be weighing on the company's
financials for some time, we remain optimistic about its efforts
in gradually resolving the legal disputes. The higher litigation
reserve indicates that the company is perhaps nearing a
settlement with the DOJ.
Credit Suisse currently holds a Zacks Rank #4 (Sell).
Banco Macro S.A.
) is a better-ranked foreign bank worth considering. It holds a
Zacks Rank #1 (Strong Buy).
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