The Department of Justice reached the [Credit Suisse] deal after years investigating more than a dozen Swiss firms, including Julius Baer Group Ltd., the nation’s third-largest wealth manager. Many of the companies are close to settlements, said Andreas Brun, an analyst with Zuercher Kantonalbank in Zurich.
“I expect resolutions in the next couple of weeks,” he said.
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Julius Baer, which had 264 billion francs ($296 billion) of client assets worldwide at the end of April, may achieve a better deal than Credit Suisse as it has no business operations in the U.S.
“I can now see Julius Baer settling rapidly as well,” said Alevizos Alevizakos, a London-based analyst with Mediobanca SpA. In this bank’s case, four analysts polled by Bloomberg News estimated fines ranging from 400 million francs to 2 billion francs.
Julius Baer dropped 0.8 percent to 39.4 francs as of 3:21 p.m. in Zurich today, extending the stock’s decline this year to 9 percent.
“Removing the overhang of these tax disputes will be beneficial for any Category 1 bank,” Alevizakos said, using a Justice Department term for Swiss banks under investigation before it opened a voluntary disclosure program. “A speedy resolution in the coming weeks or months would be marginally positive for Julius Baer.”
Julius Baer CEO Boris Collardi, 39, said in February that the firm is looking to reach a settlement this year with the Justice Department. Assets managed for Americans were a “single-digit number” in the bank’s asset base, the CEO told investors in 2012, after the cross-border U.S. business was closed.
“There is no reliable basis for making provisions” for a potential fine, Jan Vonder Muehll, a company spokesman, said yesterday.
Patrick Humphris, a spokesman for HSBC Holdings Plc’s private bank, wouldn’t comment on settlement talks. In February the London-based lender reported regulatory provisions of $352 million at its private-banking unit, without saying why the money was set aside. While the terms on which the probe will be resolved are uncertain, it’s “possible that fines and/or penalties could be significant,” HSBC said.
Spokesmen for Zuercher Kantonalbank and Basler Kantonalbank, which has set aside 100 million francs to cover potential fines, also wouldn’t discuss the status of the investigations. Other Category 1 banks include Pictet & Cie. Group SCA and Neue Privat Bank AG.
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Neue Privat Bank expects to reach a “reasonable solution” with the Justice Department, according to Andreas Hildenbrand, a spokesman for the firm. “With Credit Suisse having been settled, we all think that this will now accelerate the process for all the others.”
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Negotiations with these Category 2 banks are “on track,” Jacques de Watteville, Swiss state secretary for international financial matters, said yesterday. The category includes banks that applied for non-prosecution agreements under the Justice Department program.
Banks in both categories will probably face severe financial penalties, Martin Naville, head of the Swiss-American Chamber of Commerce in Zurich, said in an e-mailed statement.
Arno Endres, an analyst with Luzerner Kantonalbank, described Credit Suisse as a special case, one with political overtones. He said he doubts the deal will inspire similar settlements any time soon.
“There will be other forms of resolution,” he said. “My guess is this will take more time.”
Banks are cooperating after a Justice Department probe forced Wegelin & Co., the Swiss bank established in 1741, to plead guilty to helping U.S. taxpayers hide assets in January 2013 and close its doors to clients. Bank Frey & Co., based in Zurich, renounced its banking license last year.