Julius Baer Takes Proactive Approach, Agrees to Pay Fine

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February 6, 2012

�New York, February 6 (FinanceEnquiry.com) - Close on the heels of last week’s indictment of Swiss bank Wegelin by the U.S. as part of its crackdown on offshore bank accounts, Julius Baer has indicated that it is prepared to pay a fine instead of being probed by the U.S. Justice Department.�

In recent months, U.S. officials have been pressurizing Swiss private banks saying that they had helped wealthy American clients to evade taxes by stashing their money in offshore accounts. Switzerland’s oldest private bank, Wegelin, was indicted on Thursday by the U.S. authorities on these charges.

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Julius Baer’s stock dropped 4.8 percent to 37.05 Swiss francs at 1100 GMT in the backdrop of a 1.2 percent drop of the European banking sector index. Baer’s trading was at a significant premium to other banks at 1.7 times book value, against a sector average of 0.6 times, as per the analysts. They also feel that Baer’s offer of paying a fine for avoiding a probe could prove to be very expensive for the bank, which has a lot of problems at the moment.

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Baer said that it will have 900 million Swiss francs as excess capital for paying the fine after it pays 2011 dividend and repurchases shares. It reported 2011 net profit of 258 million Swiss francs ($280.72 million), down 27 percent on the year.

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