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UBS confirms it is being investigated in Swiss tax evasion scandal
REUTERS/Tony Gentile A new recruit of the Vatican's elite Swiss Guard gestures while holding a flag during the swearing-in ceremony at the Vatican May 6, 2014. Switzerland’s biggest bank forked out the largest payout to its shareholders since the credit crisis, doubling its dividend today, but its outlook isn't all rosy.
UBS confirmed that it is being investigated by US regulators for helping rich Americans evade taxes, which comes only a day after HSBC admitted to similar allegations.
The bank said it is “cooperating with the authorities in these investigationsâ€. UBS stock fell by over 2.2% to CHF15.73 in less than an hour of trading.
The US investigation centres around the Swiss bank selling “bearer bonds,†which enable investors to transfer ownership without registering who is in possession of these products when the process is done.
Not only do these products enable clients to potentially hide assets, bearer bonds are also illegal in the States.
UBS has already stumped up more than £656 million to settle a raft of scandals, including a foreign exchange market manipulation investigation in 2014.
Meanwhile, UBS unveiled better-than-expected fourth quarter net profit, up 13% to £683.9 million. However, it warned that volatile Swiss franc movements, following the central bank’s removal of the Euro cap, might hurt it.
"The increased value of the Swiss franc relative to other currencies, especially the US 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," said UBS in a statement.
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