Credit Suisse said today it expects to book a net loss for its fourth quarter after increasing its provisions for a long-running dispute in the US by $850m. 

The bank had already set aside $300m in connection with the case which relates to a decade-long dispute regarding a US residential mortgage-backed security (RMBS), but said in December it expected the figure to rise. 

"Although Credit Suisse previously set aside $300m in provisions in connection with this case and continues to believe it has strong grounds for appeal, we indicated on December 1, 2020, that we would evaluate the need for additional provisions," the bank said in a statement today. 

"As a consequence of this increase, together with the expected impairment charge in respect of our non-controlling interest in York Capital Management that we announced on November 24, 2020, we would expect to report a net loss in the fourth quarter of 2020," it added. 

The bank, which reported a net profit of 852 million Swiss francs ($962.28m) in the fourth quarter of 2019, is due to report its fourth-quarter earnings on February 18. 

In addition to the profit warning, the Swiss bank gave an update on its December trading, which it said had continued to run at levels similar to those it outlined at its investor day on December 15. 

It said its wealth management business was seeing stronger year-on-year activity, particularly in Asia, which had helped offset the translational effect of the stronger Swiss franc and pressure on its net interest income. 

The investment bank continued to perform well, Credit Suisse said, with fourth-quarter dollar revenue rising by more than 15% compared with a year earlier.