UPDATE 2-Basler Kantonalbank to take 100 mln Sfr provision for U.S. tax

Thu Dec 19, 2013 10:32am EST

* Basler expects full-year profit to be halved

* Says dividend payouts not affected

* Credit Suisse took 295 mln Sfr provision in 2011

* Julius Baer has not taken any provisions for U.S. tax

ZURICH, Dec 19 (Reuters) - Basler Kantonalbank said it will take a 100 million Swiss franc ($112.74 million) provision against full-year earnings to cover legal costs and fines from a U.S. crackdown on tax evasion.

The Basel-based bank said it expected full-year profit to be roughly half the 255.7 million francs it reported 2012, but that its ability to pay out a year-end dividend to shareholders and its majority owner, the local government, is not affected.

The bank said the move is in response to the Swiss financial regulator telling all Swiss banks, either being investigated or coming clean in a government-brokered programme, to prepare themselves financially.

The programme, brokered by the Swiss and U.S. governments, is to allow banks to avoid U.S. prosecution for aiding tax evasion.

This could mean a wave of provisions from Swiss banks, which have until the end of the year to come forward if they are not already being investigated formally.

Many have done so, including Geneva-based Banque Privee Edmond de Rothschild, which came forward on Thursday, though EFG International is one of the few that has remained silent on its intentions thus far.

Swiss financial regulator FINMA denied that it called for Swiss banks to take provisions but said that it may issue recommendations later based on consultations it is conducting with trade bodies.

A spokesman for Basler Kantonalbank said the bank had nothing to add to its earlier statement.

The success of the scheme, open to a host of second-tier banks in Switzerland, is key for a future settlement for 14 larger Swiss banks being investigated. Among those under investigation are Credit Suisse, Julius Baer , Pictet, local government-backed Zuercher Kantonalbank (ZKB) and Basler Kantonalbank.

Credit Suisse, which took a 295 million franc provision two years ago, and Julius Baer, which has not set anything aside, declined to comment on Thursday.

The U.S. pursuit of tax dollars sheltered in offshore accounts has piled pressure on Switzerland, the world's largest offshore finance centre with more than $2 trillion in assets.

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