U.K. and Australia Press Swiss Bank UBS on Cross-Border Services

After agreeing to provide authorities in the U.S. with details of 4,450 of its American clients the Swiss bank UBS has now received requests from authorities in the U.K. and Australia for information on its cross-border wealth management services.

The client details to be handed over to the American authorities are, confirms Reuters, related to the settling of a tax case in the U.S. And now it has been disclosed by the German-language Swiss newspaper Sonntag that tax authorities in the U.K. and Australia have their own ongoing investigations which UBS has indicated have led to a request for information on its offshore services. Other financial institutions, Swiss and non-Swiss, have been asked for similar information. In a note, apparently accompanying its third-quarter financial statement, UBS, the bank has its main headquarters in the Swiss cities of Zurich and Basel, said of the contact made with it by the British and Australian tax authorities:

UBS is cooperating with these information requests strictly within the limits of financial privacy obligations under Swiss law. It is premature to speculate on the outcome of any such inquiries

According to Reuters the adverse publicity generated by the U.S. tax authorities' investigation has led offshore customers to move their assets away from UBS, some 36.6 billion Swiss francs (£22 billion, $36.3 billion) being withdrawn during Quarter Three. During the third quarter UBS posted a net loss of 564 million Swiss Francs (£333.7 million, $550.6 m). The bank did actually make a pretax profit but large accounting charges turned that profit in to a loss. November 17 is a significant date for UBS as it is the day Swiss tax authorities disclose the criteria that will decide the client details the bank is to hand over to the U.S. authorities. It is also the day UBS reveals its new strategy, likely to include a greater emphasis on activities in Asia, to investors. UBS received further bad news this week from the Financial Services Authority in the U.K. in the form of an £8 million fine. The fine was imposed because of unauthorized trading by employees of the bank. Swisster reports that the bank has also been ordered to pay compensation of $42 million. From January 2006 through December 2007 four UBS employees used their clients' money for trading on the currency and metal markets. The clients concerned had no knowledge of their money being used in that way and had not given the activities their approval. The trading only came to an end when another bank employee notified the appropriate authorities. On some days 50 unauthorized trades would take place. UBS has now revised the internal controls at its international wealth management unit in the U.K. in order to prevent a repetition of what occurred.