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Julius Baer to take $350 mln charge as end to U.S. tax probe nears

ZURICH (Reuters) – Julius Baer said on Tuesday it would book $350 million against first-half results towards an expected settlement in a U.S. criminal investigation into how the Swiss bank helped wealthy Americans dodge taxes.

The provision is far less than what most analysts had expected, with some estimates as high as 850 million Swiss francs ($909 million).

The Zurich-based private bank said discussions with U.S. justice officials had “sufficiently advanced” for it to make an initial judgement on the financial penalty it will pay to set the long-running investigation aside.

“Whilst there is no defined timetable for a final settlement, Julius Baer continues to work towards closing this regrettable legacy issue as soon as possible,” the bank said in a statement.

Asked whether Julius Baer would plead guilty to criminal charges like larger rival Credit Suisse did last May, a spokesman for the bank said U.S. officials had not requested it to do so.

A host of Swiss banks was swept up in the wake of criminal probes into roughly a dozen Swiss banks including Baer, Credit Suisse, and Geneva-based Pictet & Cie. This broader group has been striking their own deals under a Swiss government-brokered scheme for them to pay fines in order to avoid prosecution.

Baer said its total capital ratio would have been 20.9 percent and its Tier 1 capital ratio 19.6 percent had the provision been booked in April, levels that are still well above regulatory requirements.

($1 = 0.9348 Swiss francs)

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