Julius Baer Has Agreement in Principle in U.S. Tax Probe

ZURICH—Julius Baer Group AG said it has reached an "agreement in principle" with U.S. authorities to settle a long-standing probe of the Swiss bank's alleged aiding of American tax evasion.

Zurich-based Julius Baer said Wednesday that based on its new agreement with the U.S. attorney's office for the Southern District of New York, the bank has increased its provision for settling the U.S. tax matter to $547 million, from the $350 million announced in June. Julius Baer said it expects to reach a final settlement of the matter in the first quarter of next year.

The provision will be charged to Julius Baer's financial results for 2015, the bank said. Despite the charge, Julius Baer said it expects to report an adjusted net profit for the year.

In 2011, Julius Baer became one of about one dozen Swiss banks to come under U.S. criminal investigation for allegedly aiding tax evasion by providing undeclared accounts to Americans that were shielded by Switzerland's bank secrecy laws. Larger Zurich-based rival Credit Suisse Group AG settled its own related probe last year by pleading guilty to aiding U.S. tax evasion and agreeing to pay $2.6 billion.

In May, The Wall Street Journal reported that Julius Baer was proceeding toward a settlement with U.S. authorities, and that the bank could face a lightened financial penalty due to a previous effort to disclose details about its U.S. accounts to the Justice Department in 2009. That previous effort was blocked by Switzerland's financial regulator, Finma.

As recently as May, analysts were predicting that Julius Baer could face a penalty of as much as $900 million. However, in June the bank reset expectations by announcing that it was setting aside $350 million to settle the U.S. tax issue.

Write to John Letzing at [e-mail]

(END) Dow Jones Newswires

December 30, 2015 02:45 ET (07:45 GMT)

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