US Bancorp is to take a $125 million charge in the fourth quarter relating to a recent litigation settlement between Visa and American Express. The Minneapolis-based bank says it will also incur a $110 million write-down against depreciation of certain asset backed securities in its portfolio.
In November, Visa agreed to pay $2.25 billion to settle a lawsuit alleging Visa and MasterCard conspired to shut out American Express.
As a stakeholder in Visa, US Bancorp and other similarly-placed banks have been ordered by the Securities and Exchange Commission to recognise any potential losses arising from this suit in their financial reporting. The bank has already taken a $115 million hit against the settlement in its third quarter statement.
US Bancorp say it expects to more than make up for the charges when it cashes in some of its shares in the card scheme at Visa's forthcoming $10 billion IPO in the next quarter.