Switzerland's second-largest bank has widened its loss for Q4 2016 and for the whole of the year as a result of litigation provision. It has also proposed boardroom changes.

Credit Suisse has had to increase its loss from what previously had been reported for the fourth quarter of last year and the whole of last year because of a SFr272 million ($274 million) rise in a charge stemming from a legal settlement around sales of residential mortgage-backed securities.

The adjustment increased 2016 net loss attributable to shareholders to SFr2.619 billion in Q4 2016 and SFr2.710 billion in 2016 compared to a net loss of SFr5.828 billion in Q4 2015 and SFr2.944 billion in 2015, according to the annual report, issued late last week, by Swizerland's second-largest bank.

Among other moves, the Zurich-listed bank proposed to pay shareholders a distribution out of capital contribution reserves, worth SFr0.7 per registered share for the 2016 financial year. "This allows Credit Suisse Group AG to pay a distribution to shareholders, while in respect of those shareholders electing shares retaining regulatory capital in view of the increased regulatory capital requirements," the bank said. It added that if shareholders at the forthcoming annual meeting do not support the rise in authorised capital to cover the scrip dividend, no dividend will be paid.

Credit Suisse's board proposed to set the level of authorised capital at SFr9.52 million, from the current SFr6.299 million.

Pay
The bank's board of directors proposed to approve a maximum compensation for itself of SFr12.5 million for the period until the 2018 annual meeting, and proposed for approval an aggregage amounf of SFr25.99 million for short-term variable compensation for the executive board for the 2016 financial year.

The board also proposed to give a green light to a maximum amount of SFr31.0 million for fixed compensation for the executive board for the period until the 2018 annual meeting and a maximum amount of SFr52.0 million for long-term variable compensation for the 2017 financial year.

The board of directors also proposed to appoint Andreas Gottschling and Alexandre Zeller as new non-executive board members, holding the roles for one year.

Gottschling was a member of the management board and chief risk officer of Erste Group Bank, Vienna, from 2013 to 2016. From 2012 to 2013, he was a senior advisor in the risk practice at McKinsey & Company, Zurich. Prior to that, he was with Deutsche Bank in London and Frankfurt.

Zeller was appointed chairman of the board of directors of Credit Suisse (Schweiz) from 1 October 2016. Prior to that, he was chairman of the board of directors of SIX Group from May 2013. After completing his studies at the University of Lausanne (Business Administration) and Harvard Business School in Boston (Advanced Management Program), he worked in international operational audit at Nestlé in Vevey from 1984 to 1987. He subsequently held various functions at Credit Suisse in Zurich until 2002, during which time he was appointed to the executive board of Credit Suisse Private Banking in 1999 and to the position of CEO Private Banking Switzerland in 2002.

Noreen Doyle and Jean Lanier, upon reaching the tenure limits, and Jassim Bin Hamad J J Al Thani will not stand for re-election to the board.

Chairman Urs Rohner and the other members of the board will stand for re-election for a term of office of one year.