Credit Suisse pays $885m to settle US mortgage case

Credit Suisse has agreed to pay $885m (£536m) to settle claims it mis-sold mortgage-backed securities in the US before the financial crisis.

The Swiss bank was accused of misleading US government-backed mortgage giants, Fannie Mae and Freddie Mac, over the quality of the products.

The two mortgage firms, which received government bailouts in 2008, will be paid $234m and $651m respectively.

More than $10.1bn has been recovered from banks in similar actions.

The Credit Suisse settlement is the ninth that the Federal Housing Finance Agency (FHFA) has reached over some $200bn in mortgage-backed securities - an investment product at the centre of the global financial crisis.

Since 2011 the FHFA, which oversees Fannie Mae and Freddie Mac, has filed 18 lawsuits against banks over the products.

Credit Suisse said the settlement resolved its biggest remaining mortgage-related lawsuit.

It covered $16.6bn of securities sold to the two mortgage companies between 2005 and 2007.

The bank said it would reduce previously reported 2013 annual earnings by 275m Swiss francs ($311m; £188m) as a result of the settlement.