Julius Baer Sets Aside $350 Million to Settle U.S. Tax Probe

ZURICH—Julius Baer Group AG said it is setting aside $350 million to settle a U.S. Justice Department investigation of the Swiss bank's alleged role in helping Americans evade taxes, indicating that a resolution of the long-standing probe may be at hand.

Zurich-based Julius Baer said in a statement on Tuesday that the amount reflects the current state of the bank's talks with the Justice Department, which have "now sufficiently advanced" to enable a preliminary assessment.

The provision will be charged to the bank's half-year results, which are expected to be reported next month.

Julius Baer is one of a handful of Swiss banks that remain under Justice Department investigation for allegedly aiding U.S. tax evasion by providing undeclared accounts once shielded behind Switzerland's bank secrecy laws. Last year, larger rival Credit Suisse Group AG settled its related probe by pleading guilty to conspiring to aid tax evasion and agreeing to pay $2.6 billion.

Until Tuesday's announcement, Julius Baer had said it lacked sufficient insight from its talks with the Justice Department to provision for a settlement.

Last month, The Wall Street Journal reported that Julius Baer could settle the investigation within two months, and may face a lightened penalty as a result of the bank's thwarted bid to voluntarily disclose its issues with undeclared U.S. accounts to the Justice Department in 2009. Julius Baer was prevented from making that disclosure by Switzerland's financial regulator, known as Finma.

The bank's six-year-old effort to step forward may be reflected in a statement of facts likely to be filed alongside the forthcoming settlement, people familiar with the matter have said.

Last February, analysts polled by a research firm employed by Julius Baer estimated that the bank would face a settlement of between 300 million Swiss francs ($321 million) and 850 million Swiss francs.

Julius Baer said on Tuesday that there is no "defined timetable" for a settlement. The Justice Department's investigation began in 2011.

Separate from those Swiss banks under U.S. investigation, dozens of other Swiss banks have entered a Justice Department self-reporting program for undeclared American accounts.

Roughly a dozen Swiss banks have now completed their participation in that program, which was unveiled in 2013 and offers them guarantees that they won't be criminally prosecuted for aiding tax evasion.

Write to John Letzing at [e-mail]

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