Zurich Cantonal Bank agrees to pay €5.7 million fine

The Zurich Cantonal Bank (ZKB) has reached an amicable agreement with the judicial authorities in Cologne in connection with untaxed assets of its German customers.

In return for dropping charges, Switzerland’s largest cantonal bank will make a one-time payment of €5.7 million euros (CHF6.1 million). The agreement is applicable to all 16 German states and includes the bank’s employees as well.

“The reorientation of international private banking, which was initiated in 2009, along with a consistent implementation of the bank's white money strategy was an important prerequisite for a consensual agreement with the German judicial authorities,” said a statement from the bank on Tuesday.

The bank’s international push for growth has led to other problems, most notably a criminal investigation in the United States into allegations that the bank helped US citizens evade taxes. Three of its employees are currently facing charges of helping nearly 200 US clients evade taxes on assets of at least $423 million (CHF435 million).

The bank reported an operating profit of CHF393 million in the first half of 2016, an increase of 8%. By the end of June 2016, it had CHF 260.2 billion of customer assets under management, compared to CHF 257.5 billion at the end of 2015.

In 2013, the Swiss National Bank declared the ZKB as a “too big to fail” institution.

Three other major Swiss banks, - UBS, Credit Suisse and Julius Baer - paid between €300 million and €50 million in 2014 and 2011 respectively.

swissinfo.ch/a.c