HSBC is set to recognize a $1.1 billion provision in its third quarter results after a court ruling in Luxembourg related to the Bernard Madoff investment fraud case. The court denied HSBC unit’s appeal in respect of securities restitution, but accepted the appeal for cash restitution.

Bernard Madoff, the mastermind behind the largest investment fraud in U.S. history, defrauded clients of up to $65 billion over four decades. HSBC faces a claim of $2.5 billion plus interest in restitution from Herald Fund SPC, involving services provided to funds invested with Madoff.

The $1.1 billion provision will impact HSBC’s CET1 ratio by about 15 basis points. The bank plans to pursue a second appeal before the Luxembourg Court of Appeal and contest the amount to be paid if unsuccessful. The news comes ahead of HSBC’s results announcement.

Read more at CNBC: HSBC to recognize $1.1 billion in provision after court ruling in Madoff case