Credit Suisse said Friday it was deceived by three former employees accused by US prosecutors of orchestrating $2 billion in dodgy loans to Mozambique, and pledged to cooperate with a US investigation.
Switzerland's second largest bank said in a statement that the suspects "sought to hide these activities from the bank" and stressed that Credit Suisse was not a target of the US Justice Department indictment.
"The former employees worked to defeat the bank's internal controls (and) acted out of a motive of personal profit," the statement said.
The three suspects, who were arrested in London on Thursday, have been identified as Andrew Pearse, Surjan Singh and Detelina Subeva.
London's Westminster Magistrates' Court has confirmed that they have been released on bail and are fighting extradition to the United States.
According to charges filed at a federal court in Brooklyn, New York, the suspects helped officials in Mozambique secure $2 billion (1.8 billion euros) in loans several years ago for a coastal protection plan.
The funds were then allegedly raided through various kickbacks and bribes.
Manuel Chang, who served as Mozambique's finance minister from 2005 to 2015, was arrested in South Africa last week and is also fighting extradition to the United States.
Lebanese businessman Jean Boustani, accused of helping coordinate the alleged fraud, was arrested at a New York airport on Wednesday.
Details of the dubious loans emerged towards the end of Chang's tenure and helped plunge Mozambique into its worst financial crisis since independence in 1975.
Debt soared to 112 percent of gross domestic product (GDP) by the end of 2017, forcing the country to suspend repayments and arousing distrust from investors.
Donors including the International Monetary Fund and World Bank suspended aid to the impoverished country after the government admitted it had secretly borrowed the $2 billion.
The Jubilee Debt campaign, which has been campaigning to erase Mozambique's debts amassed in the alleged fraud, applauded the arrests.
"This is another welcome step in holding those responsible for the debt crisis in Mozambique to account," the group said in a statement.
"The investigation is likely to reveal further evidence of how these loans were used to defraud the people of Mozambique."
The group also questioned why British courts had not taken action against the three former Credit Suisse employees, since the loans were facilitated from the bank's London offices.
"There has been a shocking lack of action taken by UK authorities" in the case, the statement further said.