Credit Suisse has warned of more provisions from prolonged legal tussle in New York, thereby marking its second write-down in two weeks.

Since 2009, the Swiss bank has locked horns with municipal-bond insurer MBIA over a US residential mortgage backed security (RMBS) issued in 2007.

The judge has now ordered the two firms to submit estimates of damages on the matter, with the Zurich-based bank currently facing up to $680m in costs.

This is over double the amount that the bank has already booked in relation to the matter.

Commenting on the decision, the bank said: “While Credit Suisse believes that it has strong grounds for appeal, it has already taken provisions totaling $300 million in prior periods in connection with this case, and would expect to increase its RMBS-related provisions as a consequence of this order.

“We will provide an update on the impact on our 4Q20 results in due course.”

The announcement of the RMBS provision coincided with the bank’s proposal to pick outgoing Lloyds Banking Group CEO Antonio Horta-Osorio as its new chairman.

Last week, the bank said that it will take a $450m charge for a stake in alternative investment firm York Capital Management, which intends to wind down its European hedge funds business.

Credit Suisse, which took a stake in the investment firm in 2010 for $425m, will take the charge in the fourth quarter of this year.

These provisions add to the worries of the bank, which reported a 38% year-on-year slump in net profit in Q3 2020, with the exclusion of a one-off gain that lifted the prior year’s performance.

Strong investment banking performance boosted Q3 figures, which was offset by slowdown in wealth management.