Wegelin buyer Raiffeisen cuts US client ties

Sun Feb 5, 2012 10:17am EST

* Raiffeisen bought Wegelin's non-U.S. business

* U.S. charged Wegelin with helping Americans evade taxes

* Raiffeisen looking to get rid of U.S. clients

* Switzerland may present "clean money" strategy later this month

ZURICH, Feb 5 (Reuters) - Raiffeisen, the Swiss bank that bought local rival Wegelin after it buckled under a campaign by U.S. authorities against tax cheats, is cutting ties with its own U.S.-linked clients, its boss told a newspaper on Sunday.

Raiffeisen chief executive Pierin Vincenz told Switzerland's SonntagsBlick that foreigners only accounted for around 3 percent of Raiffeisen's customers, however.

"We decided last Autumn not to have any deposit relations with U.S.-Americans. Our business was never focused on them. We also don't give out any bank statements in English," Vincenz said.

"Still, we have 220 of such customers, which have close ties with Switzerland, and they have 58 million Swiss francs with the bank," he said.

"What is clear is that we are getting rid of all clients who have a link with the United States. This includes Swiss clients who have children studying there," Vincenz said.

At the end of last month, 270-year-old Wegelin said it had moved most of its employees, along with clients and assets of 21 billion Swiss francs, to Notenstein Privatbank.

Notenstein has in turn been bought by Swiss cooperative bank Raiffeisen for an undisclosed sum.

The United States has now indicted St.Gallen-based Wegelin on charges it enabled Americans to evade taxes on at least $1.2 billion in offshore bank accounts.

Switzerland and the United States have been locked in a tax dispute for years. In 2009, Switzerland's biggest bank by market value, UBS, paid $780 million to settle criminal charges and turned over the names of 4,500 clients to the United States.

The U.S. Justice Department is probing 11 Swiss and Swiss-style banks, including Wegelin, which drew the ire of U.S. authorities by taking on U.S. clients of UBS after their settlement.

The investigations are also focused on Credit Suisse and Basler Kantonalbank, among others.

Swiss finance minister Eveline Widmer-Schlumpf is hoping for a deal with the United States this year. She has also said Switzerland was discussing possible fines its banking industry will face to secure a global civil settlement with the United States.

Swiss media reported on Sunday that many of the banks involved in the tax dispute would be prepared to hand over uncoded data to the United States as soon as possible.

"We cannot wait until the (Swiss) Finance Department has perhaps by the end of the year negotiated a global solution with the United States. The risk is high that by then a second bank will be pushed into ruin because of a U.S. indictment," newspaper SonntagsZeitung quoted an unnamed banker as saying.

The SonntagsZeitung also reported that the Swiss government was hoping to come up with a "clean money" strategy by the end of February, which would require banks to ask foreign customers to prove that their money has been taxed, according to several sources.

Julius Baer is due to post its full-year results on Monday, and the focus is likely to be on the provisions it has made for a possible fine from U.S. authorities, with insiders putting this number at 150 million francs, Swiss newspaper Sonntag reported.

In an interview with Sonntag, the chief executive of Basler Kantonalbank said he had not received any indication that U.S. authorities were preparing an indictment against his bank.

"Neither the bank itself nor any of the individual employees are facing an indictment. A worse-case scenario in the sense of an indictment would limit our business, but it would not put the financial security of the bank in question," said Basler Kantonalbank chief executive Hans Rudolf Matter.

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