The bean counters at Switzerland’s UBS will have to wait a little longer to find out if they need to dive behind the sofa cushions to pay a record fine if the bank’s appeal is overturned.
On Monday, the Paris Court of Appeal stated that its deliberations have been extended and a decision is now expected on 13 December.
The banking giant has only set aside €450m to pay the €4.5bn (£3.8bn, $5.3bn) penalty that was handed down after it was found guilty of aggravated money laundering and illegal bank soliciting by a French court in February 2019.
The Zurich-based bank was found to have sent UBS employees to solicit wealthy executives and athletes at sporting and music events in France, urging them to place their money in Switzerland.
Between 2004 and 2012, it concealed assets worth €10bn in the Alpine country on behalf of French clients.
UBS has consistently denied any wrongdoing.
A perusal of the bank’s Q2 financial report, dated 20 July 2021, shows that it is sticking to its guns.
“UBS believes that based on both the law and the facts the judgement of the court of first instance should be reversed.
“UBS believes it followed its obligations under Swiss and French laws as well as the European Savings Tax Directive. Even assuming liability, which it contests, UBS believes the penalties and damage amounts awarded greatly exceed the amounts that could be supported by the law and the facts.
“In particular, UBS believes the court incorrectly based the penalty on the total regularised assets rather than on any unpaid taxes on those assets for which a fraud has been characterised and further incorrectly awarded damages based on costs that were not proven by the civil party.
“Notwithstanding that UBS believes it should be acquitted, our balance sheet at 30 June 2021 reflected provisions with respect to this matter in an amount of €450m.”
Given the potential range of outcomes, UBS said the sum “reflects our best estimate of possible financial implications”.