UBS pays €300m to end tax row

Basel - UBS has settled a major tax evasion case in Germany and has agreed to pay a penalty of $403m, Switzerland's biggest bank said Tuesday in Zurich.

"The resolution of this matter is a significant step allowing UBS to move forward in this important market," board chair Axel Weber and CEO Sergio Ermotti said in a message to shareholders.

Prosecutors in Bochum had launched investigations against UBS on suspicion that it had helped German clients park money in neighbouring Switzerland to evade taxes.

The penalty put a burden on earnings in the second quarter, but UBS announced that its net profit rose 15% to 792 million Swiss francs ($876m) year-on-year, owing to a cost-saving programme.

Despite the settlement, UBS is still faced with similar but unresolved tax cases in Germany, Belgium and France. French authorities have demanded that UBS lodge a security payment of €1.1bn until the tax matter is settled.