January 11, 2009 / 11:23 AM / 9 years ago

UBS expects $1.8 bln U.S. fine in tax case-paper

ZURICH, Jan 11 (Reuters) - Swiss Sunday newspaper Sonntag reported that Switzerland’s UBS (UBS.N) UBSN.VX expects a fine of some 2 billion Swiss francs ($1.80 billion) related to a U.S. tax investigation.

Another Sunday newspaper, Sonntagszeitung, reported without giving sources that the bank probably made a loss of some 8 billion francs in the final quarter of 2008, taking its full-year-losses to some 20 billion francs.

A spokeswoman for the bank declined to comment on the fourth-quarter result and called the report about an expected fine “pure speculation”.

UBS, the world’s largest wealth manager in terms of assets, posted a small third-quarter profit after losses of around 12 billion francs in the first half and warned it could take a multi-billion hit in the final quarter of 2008.

UBS will report fourth-quarter results on Feb 10.

“According to Sonntag’s research, a fine of about 2 billion francs is expected internally,” Sonntag wrote.

The bank is at the centre of a U.S. investigation into possible tax fraud for allegedly helping wealthy Americans to hide assets in Swiss bank accounts. It said at the end of November that it had found evidence of tax fraud in a limited number of cases.

    On Friday, the bank said it is closing all the offshore accounts of its U.S. clients.

    UBS, an icon of Swiss banking, is struggling to rebuild its once powerful brand after massive investments into risky U.S. assets forced it to make nearly $49 billion of writedowns, more than any other European bank.

    The Swiss bank received a 6.0 billion Swiss franc capital injection from the Swiss government and was able to hive off $60 billion of its illiquid assets into a separate, central bank-run fund.

    UBS had said that the transaction would lead to a charge of some 4 billion francs in the fourth quarter. (Editing by David Cowell) ($1=1.114 Swiss Franc)

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