PARIS, July 24 A 1.1 billion euro ($1.48 billion) guarantee demanded by French judges of Swiss bank UBS reflects the size of the fine it could pay if found guilty of helping French customers avoid tax, the French prosecutor's office said on Thursday.
"It was by assessing the fine that is potentially applicable that the level of the surety was fixed," an official in the prosecutor's office said.
The official said UBS would have to pay the difference between this amount and a much smaller 2.875 million euro guarantee already made in the case by Sept. 30, and in one single transfer.
Separately, a French Finance Ministry source said it had refused to try to reach an out-of-court settlement with UBS.
The Swiss bank said it was notified on Wednesday that a 1.1 billion euro guarantee would be set after it was placed under formal investigation in France on suspicion that it helped wealthy French customers avoid tax authorities.
In a statement, UBS said it considered the legal basis and calculation for the sum to be "deeply flawed" and announced it would appeal. (Reporting by Chine Labbe and Yann Le Guernigou; Writing by Mark John; Editing by James Regan)