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Switzerland: Credit Suisse in steep loss after US tax case

24 July 2014   (0 Comments)
Posted by: Author: John Heilprin
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Author: John Heilprin (Associated Press)

Credit Suisse, Switzerland's second-biggest bank, posted a second-quarter net loss of 700 million Swiss francs ($779 million) Tuesday after paying the largest penalty ever imposed in a U.S. criminal tax case.

The steep loss contrasted sharply with the profit of 1.045 billion francs ($1.16 billion) it posted in the April-June period a year ago. It resulted in what the bank called a final settlement of the U.S. government's case against the bank for helping wealthy Americans avoid paying taxes through secret offshore accounts.

The Zurich-based bank pleaded guilty in May to aiding U.S. tax evaders and agreed to pay about $2.6 billion to the U.S. government and regulators, allowing it to put the criminal investigation behind it.

"I want to reiterate that we deeply regret the past misconduct that led to this settlement and that we take full responsibility for it," Chief Executive Brady Dougan said in a statement. "The continued trust and support of our clients helped us mitigate the impact of the settlement on our business."

The bank took a charge of 1.6 billion Swiss francs ($1.78 billion) as part of its settlement over the U.S. tax evasion charges.

Credit Suisse announced it has exited commodities trading, a move that it says will allow it to transfer resources to shore up its private banking.

It also said it had trimmed its worldwide staff to 45,100 by the second quarter from 46,300 a year earlier, and has already cut costs by 3.4 billion francs out of a total 4.5 billion francs it plans to cut by the end of next year.

Shares of Credit Suisse AG closed down nearly 1 percent at 25.84 francs Tuesday on the Zurich exchange.

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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