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EFG flags far lower penalty to settle US tax probe
[ ZURICH] Swiss private bank EFG International said on Wednesday it expects a far lower than expected US fine after coming clean on helping wealthy Americans evade taxes, indicating it is close to ending the long-running investigation.
The Zurich-based bank's estimate of a 10.8 million Swiss franc (US$11.4 million) fine to make amends with US prosecutors is the most tangible sign yet that dozens of Swiss banks, shaken out after a separate criminal probe, may be nearing conclusion.
EFG, which is controlled by Greek billionaire Spiros Latsis with a 55.8 per cent stake, said its full-year profits were hit by charges and provisions of 30 million francs in total, stemming from the US programme.
A long-running investigation by US prosecutors into how Swiss banks offered wealthy Americans offshore accounts to avoid the Internal Revenue Service (IRS) has swept through Switzerland and cost its banks, including UBS and Credit Suisse , billions in fines. "Good progress was made with account remediation during the third quarter, which will likely reduce the final penalty, now expected to be around 10.8 million Swiss francs compared with 21.4 million francs provided for during the first half of 2014,"EFG said in its full-year results.
However, legal and other costs related to the US investigation will be higher than originally expected because it has lasted longer than the bank anticipated, EFG said.
A spokesman for EFG declined to elaborate on the status of the US settlement, or predict when the bank expected to conclude the investigation.
The bank said it would propose as its new chairman Joachim Straehle, a prominent former Credit Suisse banker who until 2013 ran Bank Sarasin, now called Bank J. Safra Sarasin after a deal with Brazilian-Swiss private bank Safra.