Credit Suisse Group AG (CSGN)’s earnings in the third quarter will be eroded by a charge related to the company’s own debt of about 1 billion Swiss francs ($1.08 billion).
The bank’s repurchase of some debt instruments during the quarter changed the composition of liabilities that have to be revalued every three months and also impacted the prices of bonds, Zurich-based Credit Suisse said on its website. The repurchase resulted in a benefit of 380 million francs to the bank’s common equity under Basel III rules, it said.
The accounting charge stems from a rule tied to the theoretical cost of buying back the bank’s debt as market prices fluctuate.
Credit Suisse is due to report third-quarter earnings on Oct. 25. The bank may report net income of 586 million francs, according to the mean estimate of 6 analysts surveyed by Bloomberg this month, compared with 683 million francs in the year-earlier period.
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