UPDATE 1-Israel's Bank Leumi takes charge on U.S. tax probe costs
* Leumi sees Q4 loss of 100 mln shekels ex Israel Corp results
* Leumi sees 2012 net profit of 1.09 bln shekels
By Tova Cohen
TEL AVIV, March 4 (Reuters) - Bank Leumi, Israel's second-largest lender, warned of a possible 42 percent drop in profits on Monday after taking a charge of 340 million shekels ($91 million) on the costs of a U.S. investigation into possible tax dodging by its citizens.
As a result of this expense and a provision for an early retirement programme Leumi said it expects to post a net loss of 100 million shekels for the fourth quarter of 2012 and a net profit of 1.09 billion shekels for the full year.
Leumi made a profit of 618 million shekels in the final three months of 2011 to give a total for the year of 1.89 billion shekels.
It said the estimates for 2012 exclude any contribution to be had from the bank's 18 percent stake in conglomerate Israel Corp, which has yet to report results.
Leumi also said that since it does not know for certain how much it will have to spend on the U.S. investigation, the final expense could be significantly higher.
The bank has urged U.S. clients to disclose information about their accounts to U.S. authorities, who are investigating Leumi and other foreign banks as part of a wide-ranging campaign to crackdown on Americans using offshore banks to avoid taxes.
The U.S. effort has been focused largely on banks in Switzerland, but it has been known that banks in other countries, including Israel, are under scrutiny.
In a Dec. 16 letter obtained by Reuters Leumi urged U.S. clients to join the Internal Revenue Service's voluntary disclosure scheme.
Leumi's fourth-quarter provision is to cover any expenses arising from the investigation, which relates to the period 2002-2010, including the cost of advisers hired by the bank.
"This provision is not an admission regarding any complaint that might be raised against the group by U.S. tax authorities," Leumi said in a statement.
Shares in Leumi were down 2.9 percent at 12.78 shekels in early trade in Tel Aviv on Monday.
Leumi is scheduled to report results on March 21.
- Tweet this
- Share this
- Digg this
- UPDATE 3-Tennis-Monte Carlo Masters men's singles quarterfinals results
- Anger mounts after bodies found trapped inside sunken South Korean ferry |
- Vice-principal of South Korea school in ferry disaster commits suicide |
- Special Report - How the U.S. made its Putin problem worse
- Pope Good Friday service underscores plight of the suffering