UBS says it is being investigated by US authorities over potential tax evasion

The Swiss bank made the announcement today as it published its fourth quarter results

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The Independent Online

UBS has said it is being investigated by the US authorities over whether it sold certain securities that potentially violate American tax law.

The Swiss bank made the announcement today as it published its quarterly results.

The Zurich-based bank said in its fourth-quarter report: "In January 2015, we received inquiries from the US Attorney's Office for the Eastern District of New York and from the US Securities and Exchange Commission, which are investigating potential sales to US persons of bearer bonds and other unregistered securities.

"We are cooperating with the authorities in these investigations."

It added: "Our balance sheet at 31 December 2014 reflected provisions with respect to matters described in this item 1 in an amount that UBS believes to be appropriate under the applicable accounting standard. As in the case of other matters for which we have established provisions, the future outflow of resources in respect of such matters cannot be determined with certainty based on currently available information, and accordingly may ultimately prove to be substantially greater (or may be less) than the provision that we have recognized."

UBS said it made 963 million francs ($1.04 billion) in the quarter, up from 917 million francs in the fourth quarter a year ago.

But its shares fell by more than 3 per cent after it warned over the impact of the surging Swiss franc and negative interest rates in Switzerland and the eurozone.

"The increased value of the Swiss franc relative to other currencies, especially the U.S. dollar and the euro, and negative interest rates in the eurozone and Switzerland will put pressure on our profitability and, if they persist, on some of our targeted performance levels," the bank said.

 

Results last year were hit by more than $1 billion to settle past scandals.

In November, UBS agreed to pay 774 million francs to British and Swiss authorities and a US regulator to settle a probe into the attempted manipulation of foreign exchange rates

And in July, UBS booked a near $300 million charge mainly to settle claims it helped wealthy Germans dodge taxes.

An investigation by the US Department of Justice (DoJ) into currency rate rigging continues and the DoJ is also examining currency-linked investments offered by Barclays and UBS, the Financial Times reported on Sunday.

UBS paid $780 million in 2009 to settle a DoJ tax-evasion probe, but said in its quarterly report that U.S. authorities had begun an investigation into the selling of certain securities that potentially violate tax law in the United States.

The bank said net profit for the fourth quarter of 2014 was 963 million francs, exceeding the 937 million francs analysts had forecast in a Reuters poll.

UBS said the earnings will allow it to pay shareholders 0.75 francs per share for the year in two separate payouts, three times more than the 2013 payout of 0.25 francs a share.

The bank had pledged to pay out more than half its profits once it reached capital levels that were achieved in 2014. The bank also completed a change in legal structure last year which allowed it to return excess capital to investors.

Additional reporting by Reuters

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