By James Shotter in Zürich
Credit Suisse has set aside an extra SFr425m ($477m) to deal with a US Department of Justice probe into whether it helped clients dodge taxes, sparking suggestions that the long-running investigation may finally be approaching its denouement.
The news comes as Credit Suisse boosted the pay of chief executive Brady Dougan by 26 per cent although the bank missed some of its performance targets.
Credit Suisse now has SFr720m set aside to cover possible fines resulting from the DoJ inquiry.
The Swiss bank originally provided SFr295m in 2011 to deal with the probe, which began after the US fined Credit Suisse’s domestic rival, UBS, SFr780m for helping American clients evade taxes. However, the intervening years have seen little tangible progress, as the case became bogged down in a broader tax dispute between Washington and Bern.
But there have been signs of activity in recent weeks. On February 21, Credit Suisse reached a $196m settlement in a related tax dispute with the Securities and Exchange Commission. A few days later, several of its top executives, including Mr Dougan, were called to Washington to testify at a Senate hearing into tax evasion.
The provisions announced on Thursday to the second restatement of Credit Suisse’s results in barely two weeks after the bank agreed to pay $885m in the US to settle a case related to mis-selling of mortgage-backed securities.
The double restatement prompted analysts to speculate that the bank had made progress towards a settlement in that period.
“This suggests they’re very close,” said Chris Wheeler, an analyst at Mediobanca.
Credit Suisse declined to comment, while the Department of Justice did not immediately respond to requests for comment.