Coutts braced for hit from US tax inquiry into Swiss bank

Coutts said it was ‘taking a judicious approach to its involvement’ with the US Department of Justice settlement

Deputy business editor

The blue-blooded bank Coutts has set aside possibly as much as SFr100m (£68m) at its private Swiss banking arm to cover the potential hit from an investigation by the US authorities over tax evasion.

Coutts is owned by RBS, which has previously admitted the Swiss arm, Coutts AG, was going to take part in the US programme insisting all Swiss banks review whether their American account holders have evaded tax.

Reports in Switzerland suggest the potential US liability has stymied efforts by RBS/Coutts to sell the Swiss division, which also has branches in Hong Kong and Singapore.  Setting aside the provisions helped drive Coutts  AG  into a net loss of nearly Sfr50m, according to the Swiss financial website insideparadeplatz.ch.

Coutts confirmed it was “taking a judicious approach to its involvement” with the US Department of Justice settlement. It is, it said, in Category 2 of Swiss banks being investigated.

These are banks which, in return for not facing prosecution, have agreed to disclose any incriminating details about how they may have helped Americans evade US taxes. They could be hit with financial penalties equal to as much as 50 per cent of the value of any tax-evading bank accounts.

Goldman Sachs and Morgan Stanley’s Swiss businesses recently emerged as being in Category 2 along with dozens of others, and those found not to have aided US tax evasion will be shifted out and into Category 3.

Category 1 banks are those like HSBC’s Swiss arm, which are under criminal investigation and are not eligible for amnesty. The whole process is deeply unpopular in Switzerland, where it is deemed by many to be a gross infringement of sovereignty. 

The Department of Justice is expected to complete sifting through the information provided by Category 2 banks by the end of June.Coutts AG’s liabilities tothe US tax investigation are contained within a total of Sfr112m set aside under “other business risk” in its previously undisclosed 2013 financial statements.

The RBS chief executiv, Ross McEwan, has been looking at all of the bank’s businesses to decide which are “core” and which should be disposed of.

His review of the bank this year stated a commitment to focus on UK business, not international. But he said Coutts’ UK operations would now be working closer with RBS’s other wealth management and commercial businesses, which include the kind of entrepreneurs who would fit into Coutts’ core UK client base. Nothing has been agreed, however, on its Swiss-based international arm.

Start your day with The Independent, sign up for daily news emails
Voices
A recent rise in net migration has been considered bad news for the Government
voicesYet when we talk about it, the national media goes into a frenzy, says Nigel Farage
Life and Style
Miracle muffin: chemicals can keep a muffin looking good at least a month after it was bought
food + drinkThe alarming truth behind the chocolate muffin that won't decay
Arts and Entertainment
TV
Sport
Jonny Evans and Papiss Cisse come together
football
News
Approved Food sell products past their sell-by dates at discounted prices
i100
News
people
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers