Sept. 19 (Bloomberg) -- Credit Suisse Group AG, Switzerland’s second-largest bank, said it reached an agreement with the Public Prosecutor’s Office in Dusseldorf, Germany, to end court proceedings against employees.
Credit Suisse will pay 150 million euros ($205 million) to be booked in the third quarter, the Zurich-based bank said today in an e-mailed statement. The agreement means that the entire proceeding will be resolved, according to Credit Suisse.
Bank employees were investigated in Germany for allegedly helping some German clients evade taxes. Dusseldorf prosecutors had searched the homes of some employees and offices last year after authorities obtained a disk with data that prompted probes of some 1,100 Credit Suisse customers.
“At least this fine closes the matter as far as Dusseldorf is concerned,” Peter Thorne, a London-based analyst with Helvea, said in a note to investors. “With the new German-Swiss tax treaty this sort of ‘tax driven’ business will not be the sort of business that Credit Suisse is looking to obtain.”
Marc Dosch, a spokesman for Credit Suisse, declined to give further details in a telephone interview.
Credit Suisse fell as much as 5.5 percent in Swiss trading and was down 4.4 percent to 21.72 Swiss francs as of 12:09 p.m. in Zurich. That valued the company at 26.1 billion francs ($29.5 billion) and brought this year’s decline to 40 percent.
Swiss private banks are under pressure following a crackdown on tax evasion in the U.S. and Europe. New tax accords with the U.K. and Germany that undermine the advantages of offshore accounts may prompt clients to move money back to their home countries.
Switzerland and Germany completed an accord on Aug. 10 to end their dispute over tax evasion by wealthy Germans holding cross-border accounts with Swiss private banks. Swiss banks will now levy a 26.375 percent withholding tax on interest, dividends and capital gains earned by Germans with offshore accounts. Revenue generated will go to the German treasury, while client identities remain secret.
Julius Baer Group Ltd, the 121-year-old Swiss wealth manager, said in April it agreed to pay a fine of 50 million euros to German authorities to end investigations against unknown employees over undeclared client assets.
“The sum paid by Credit Suisse should be viewed in this light,” said Helvea’s Thorne.
U.S. prosecutors told Credit Suisse last month that the bank is a target of a probe into its former cross-border banking services to American customers.
Larger rival UBS AG was charged in 2009 with aiding tax evasion by U.S. clients. The bank avoided prosecution by paying $780 million, admitting it fostered tax evasion, and giving the U.S. Internal Revenue Service data on more than 250 accounts. It later turned over data on another 4,450 accounts.
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