UBS shares soar after tax settlement
Swiss bank UBS's share price rose by more than five percent on Thursday after reaching a settlement with the US on tax secrecy.Geneva -- Swiss bank UBS's share price rose by more than five percent on Thursday after the banking giant and US authorities finalised an out-of-court settlement to end a diplomatically sensitive tax secrecy case.
No details of the agreement were disclosed in the deal announced at a court in the United States on Wednesday.
The US Justice Department was trying to force Switzerland's flagship bank to reveal the names of up to 52,000 Americans with offshore accounts who could face tax evasion charges.
On the Swiss Market Index, UBS's share price had risen by 5.2 percent to CHF 17.19 after morning trading (10h17 GMT).
But the lack of detail on the settlement was fuelling speculation about its long term and broader impact on Switzerland's banking secrecy, a foundation of the country's lucrative financial services industry.
UBS had argued that it cannot comply with the US demand without violating Swiss banking secrecy law, which would make it liable for prosecution in Switzerland.
Ivan Pictet, a senior partner in the self-named private bank said it was still unclear if the compromise deal was good for the Swiss financial services industry.
Pictet told the Swiss news agency ATS that he was waiting "impatiently" for the details, warning that the case was still embroiled in "a lot of speculation."
Key concerns included how many names might be handed over, respect for Swiss legal provisions on evidence of tax fraud and the customer's right of appeal.
Questions also surround the potential damage for the reputation of Swiss banking secrecy even if the rules are officially respected.
Meanwhile, the Swiss government is also concluding revised tax deals with several countries to meet tougher new standards on exchanging bank information in proven cases of tax fraud.
Swiss banks also face indirect pressure from tax amnesties announced in the United States, Britain and Italy that could lead to substantial withdrawals by foreign customers who return assets.
In its second-quarter results, UBS revealed that was struggling to stem a loss of funds as customers continued to withdraw assets, amounting to CHF 39.5 billion (EUR 25.8 billion, USD 36.6 billion) over the three months ending 30 June.
AFP / Expatica