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.

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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.”

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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.