Coutts Says Is Co-Operating With Germany Over Accounts Probe

Tom Burroughes Group Editor London 27 February 2015

Coutts Says Is Co-Operating With Germany Over Accounts Probe

The bank says it is working with German authorities that are investigating allegations that it has aided tax evaders; the claims come at what has been a rough period for offshore banking.

German prosecutors are investigating Coutts for allegedly aiding tax evaders, while US authorities are probing similar allegations surrounding its Swiss operations, prompting the firm to state it is co-operating with authorities.

The comments from Royal Bank of Scotland’s chief executive, Ross McEwan, about its co-operation, come after RBS, as reported here yesterday, issued full-year results showing an overall rise in profitability for its wealth business.

“Coutts is currently co-operating with both the US and German tax authorities. We want to be very upfront on these issues but it is far too early to judge the outcome of those conversations as they have a process to go through,” McEwan said in a statement. “I want to be very clear, if we find any evidence on wrongdoing we will come down incredibly hard. It’s just not the type of behaviour we’ll have in our organisation,” he continued.

“We take situations like this, no matter how big or small, very seriously. It’s the reputation of our business and how we’ve acted. We’ve shown this year with how we’ve dealt with a number of issues, old or new, that we will go very hard and be very open,” he said.

Such allegations will be particularly toxic for RBS because it is still majority-owned by the UK taxpayer; the current coalition government has been pushing to get the banking group into shape so it can be privatised. Last year, RBS announced that it is offloading the non-UK private banking arm, which means Coutts’ operations in Asia and Switzerland could be sold. One report has stated that the bidding for these units now includes four potential suitors, but Coutts has declined to comment on who they are.

The report of the investigations also come at a time when Swiss private banking, in particular, has been under a harsh political and media spotlight in the UK following claims that HSBC’s bank in Geneva allegedly helped thousands of Britons to dodge taxes. However, these allegations come almost nine years after a theft of client data from HSBC, an event that has led to a court case in Switzerland. HSBC has apologised for any wrongdoing and said it has, since 2008, radically changed operations, including cutting the number of clients served out of Switzerland.

In Coutts' case, this publication understands that where clients haven’t been able to prove their compliance with tax laws, their investments have been liquidated and clients have been thrown out of the door.


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