Julius Baer reached an agreement in principle with the U.S. Justice Department with respect to the offshore accounts of American citizens, increasing its provision for the expected fine.
Julius Baer, the Zurich-based private bank, has taken an additional provision of $197 million to supplement the preliminary $350 million set aside in June 2015, the company said in a statement today. The institute took the step based on the terms of the agreement in principle with the U.S. Justice Department.
The fine of $547.25 million is subject to the final approval by U.S. authorities. Baer expects to conclude the agreement in the first quarter of 2016, ending a four-year investigation.
Baer Expects Full-Year Profit
Baer will include the total provision taken in the 2015 results. The bank still expects to post a profit for the financial year 2015.
The private bank was one of about ten institutes in the so-called category I against which the U.S. opened legal proceedings in the tax dispute. Some observers originally expected a fine of as much as $1 billion.
With Baer's agreement in principle, hopes are that the Swiss financial community may soon be able to draw a line under the tax dispute. The category I also includes the cantonal banks of Zurich and Basel.
