UBS slapped $281m claim settlement charge
Zurich, July 30, 2014
UBS AG booked a near $300 million charge in the second quarter mainly to settle claims it helped wealthy Germans to dodge taxes, the latest in a string of lawsuits that have targeted its private banking business.
The Zurich-based lender's offices in Germany were searched last year as part of a probe sparked by a CD with details of UBS clients that was purchased by the German state of North Rhine-Westphalia, reported the Gulf Daily News, our sister publication.
UBS, which faces a separate probe in Germany and similar probes in Belgium and France, took a 254 million Swiss franc ($280.8 million) charge and said it aimed to have all its German clients come clean by year-end, from more than 95 per cent.
Yet the charge is only one of a slew of legal issues with which the bank is contending.
It raised its provisions against future litigation to nearly two billion francs but warned this might still not be enough to cover possible fines and charges.
The bank has taken a strategic decision to scale back its risky investment banking operations in favour of private banking and asset management, but remains under threat from possible past market transgressions.
Underscoring that risk, it said in its quarterly results statement US regulators were probing its off-market share trading venue or dark pool, an area where Germany's Deutsche Bank also said it was under scrutiny. UBS said it was co-operating with inquiries. The bank yesterday reported a quarterly net profit of 792 million Swiss francs from 690 million francs a year earlier. – TradeArabia News Service