The landmark settlement of the U.S. tax case against Swiss bank UBS — of which details are expected this week — should help the bank restore its image and open the way for the Swiss state to sell its UBS stake. Industry insiders told Reuters that the deal could be announced as soon as Wednesday after the first regular meeting of the Swiss cabinet following the summer recess. The world’s second-largest wealth manager will hand over details of about 5,000 client accounts, sources have said, after the signing of a deal agreed last week to end a dispute in which U.S. tax authorities originally asked for details on 52,000 clients suspected of tax evasion. “The (U.S.) Justice Department summons deal looks favorable for UBS and for Switzerland,” said Vontobel analyst Stefan Schuermann. “However, we remain cautious as long as we do not know the exact figures and details of the deal.” The reputational damage to UBS will take time to repair, and money outflows, which totaled nearly 40 billion Swiss francs ($37.21 billion) in the second quarter alone, will probably continue for a while, said Schuermann. The client accounts to be disclosed will likely belong to people suspected of committing tax fraud under the terms of a double taxation agreement that obliges Switzerland to provide help if Washington seeks it in a criminal investigation. It’s been reported 150 wealthy U.S. clients of UBS were likely to face prosecution by the Internal Revenue Service.
UBS Tax Settlement Should Help Bank Recover
The DOJ summons deal “looks favorable for UBS and for Switzerland.”
August 19, 2009