(Bloomberg) -- Credit Suisse Group AG signaled a $380 million fourth-quarter hit related to a long-standing legal case surrounding residential mortgage-backed securities, adding to the bank’s woes after it wrote down its stake in hedge fund York Capital Management.The Zurich-based lender is facing costs of as much as $680 million after the New York judge presiding over the case ordered the bank and municipal-bond insurer MBIA to submit estimates of damages related to the mortgages, issued in 2007, Credit Suisse said in a statement on Tuesday. It has already set aside $300 million to cover losses in the case.If Credit Suisse does not hear from the judge before year end, it plans to increase the amount it needs to set aside in the fourth quarter and any loss will be made public at the time of earnings in February, according to a Credit Suisse spokesman. The size of the provisions could still change, he said.The Swiss lender is among banks including Morgan Stanley, UBS Group AG and Nomura Holdings Inc. that are still defending themselves against claims on the sale of the securities that plummeted in value during the 2008 financial crisis, with billions of dollars at risk. Credit Suisse probably has the most exposure as it faces suits seeking more than $3 billion, according to Bloomberg Intelligence.MBIA is seeking $740 million in damages from Credit Suisse for the bank’s alleged breach of contract. The bond insurer claims Credit Suisse did not make good on promises to repurchase RMBS transactions sold by the bank and insured by MBIA in 2007. Over the last 10 years, MBIA also brought claims of material misrepresentations, fraudulent inducement and breach of contract.Switzerland’s second-biggest bank said earlier on Tuesday it still believes it has strong grounds for appeal. The lender said it would give an update on the expected impact on fourth-quarter results “in due course” because of the increase in provisions, without giving more details.Last year, Credit Suisse resolved one of its largest cases related to mortgage-backed securities with the state of New York, paying an undisclosed settlement well below the $11.2 billion sought in damages, according to press reports at the time. In 2017, the bank agreed to pay $5.3 billion to settle a U.S. investigation into the bank’s sales of toxic mortgage debt before the financial crisis.The pending verdict in the case with MBIA adds to a growing list of hits and impairments the bank expects to hurt fourth-quarter earnings.Credit Suisse said last month it expects to book a $450 million impairment on its stake in York Capital Management, as the U.S. investment firm founded by Jamie Dinan winds down most of its hedge-fund strategies in the wake of this year’s market upheaval. The Swiss bank agreed to take a 30% stake in York in 2010, offering to pay at least $425 million at the time to give clients access to alternative investments.(Updates to specify scale of additional provisions and background on legal case.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.