UBS pays out in German tax case as lawsuits target private bank
By Katharina Bart
ZURICH (Reuters) - 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 (NRW).
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 percent.
Yet the charge is only one of a slew of legal issues with which the bank is contending. It hiked its provisions against future litigation to nearly 2 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 favor 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 U.S. 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 cooperating with inquiries.
Deutsche meanwhile said its renewed focus on investment banking had paid off as it reported a 16 percent increase in quarterly pretax income. Continued...