UBS says Swiss-US deal resolves "pressing issue" (Extra)

Aug 19, 2009, 15:04 GMT

Geneva - The bank at the centre of the Swiss-US deal reached on Wednesday said it welcomed the agreement which would see confidential client data handed over to Washington, in return for an end to the ongoing lawsuit against UBS AG.

'This agreement helps resolve one of UBS's most pressing issues,' Chairman Kaspar Villiger said in a statement.

'I am confident that the agreement will allow the bank to continue moving forward to rebuild its reputation through solid performance and client service,' Villiger said.

The deal, UBS highlighted, does not include a fine. Villiger had turned down a proposal earlier this year by the Swiss government that the bank pay instead of handing over data.

The stock on the Zurich exchange was down 2.07 per cent in the late afternoon, trading at around 16.57 Swiss francs.

The shares have, however, been rising in value since the two governments announced progress on negotiations, and have moved up from 12.63 francs in early July.

In February, UBS handed over data on 250 clients and agreed to pay a 780 million dollar fine. The next day it was hit with another suit for up to 52,000 names.

Villiger said the bank welcomed the fact that the deal was reached under the existing double taxation treaty between Bern and Washington.

The bank confirmed the number of accounts expected to be affected by the deal.

'It is expected that approximately 4,450 accounts will be provided to the SFTA in response to this treaty request,' UBS said, referring to the Swiss Federal Tax Administration.

'The SFTA will decide which of those accounts should be disclosed to the IRS, and such decisions will be subject to judicial review,' the statement by the banking giant read.

UBS, hit hardest of all banks in Europe by the financial crisis, saw massive outflows in its wealth management division and reported a more than 20 billion dollars loss last year, and saw negative results in the first two quarters of this year.

Analysts believe a close to the saga in the US would bode well for UBS.