UBS Group AG (NYSE:UBS) has ended a legal fight with the Internal Revenue Service, agreeing to hand over records on an American client's account in Singapore as US authorities seek to move beyond Switzerland in their fight against offshore tax evasion.
The case involves information that the IRS sought on the account from 2001 to 2011 for Ching-Ye Hsiaw, a US citizen living in China. On Feb. 23, the agency filed a petition asking a federal judge in Miami to force UBS, the largest Swiss bank, to produce account records on Hsiaw. The IRS said it needed the records to determine Hsiaw's income tax liabilities from 2006 to 2011.
After reaching an agreement, the bank handed over records on May 31 and June 10, the Justice Department said Tuesday in a court filing dismissing the petition.
"The Department of Justice and the IRS are committed to making sure that offshore tax evasion is detected and dealt with appropriately," Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division said Wednesday in a statement. "One critical component of that effort is making sure that the IRS has all of the information it needs to audit taxpayers with offshore assets."
The US has focused largely on Switzerland since 2008 as it has fought offshore tax evasion. More than 80 Swiss banks, including UBS and Credit Suisse Group AG, have agreed to pay a total of about $5 billion in penalties and fines. The question is where the IRS and the Justice Department will turn next as they sift through a trove of data gathered from Swiss banks and from more than 50,000 US taxpayers who disclosed their accounts to avoid prosecution.
"UBS confirms that it complied with the summons based on client consent in accordance with Singapore law," Marsha Askins, a UBS spokeswoman, said in an e-mail.
UBS Group Equity Analysis
UBS Group AG (USA) (NYSE:UBS) opened trading today as $13.95 and is trading in the range of 13.92-14.28 today. UBS Group's current market cap stands at $51.90 billion.
Compared to other peers in the Foreign Money Center Banks sector, UBS Group hasn't performed in terms of quarterly revenue growth year over year at -0.23 vs. the industry average of 0.23. UBS Group's earnings per share is currently at 1.34, which is below then the sector average of 1.81.
UBS Group is currently covered by 1 Wall Street analysts. The mean target price is $13.82 according to First Call. This presents a solid downside to the current price of the equity. The Mean Recommendation sits at 4.0.
The most recent analyst actions consisted of Societe Generale downgrading the stock on May 13th and Macquarie initiating coverage with a downgrade rating back in February.
The current quarter EPS consensus estimate is .29 with revenue estimates of 6.98B. Sales are expected to drop at a 10.70% rate. UBS Group reported actual earnings last quarter of 0.26 which fails to beat the .29 consensus estimate, a 10.30% surprise.
UBS Group AG, together with its subsidiaries, provides wealth management, retail and corporate, asset management, and investment banking products and services worldwide. The companys Wealth Management division provides financial services to wealthy private clients. This division offers investment management solutions and wealth planning and corporate finance advisory services, as well as a range of specific offerings. Its Wealth Management Americas division provides advice-based solutions and banking services through financial advisors to ultra high net worth and high net worth individuals and families. This division operates domestic United States and Canadian business, as well as international business booked in the United States. The companys Retail amp; Corporate division offers financial products and services to retail, corporate, and institutional clients. Its Global Asset Management division offers investment products and services comprising equities, fixed income, multi-asset and currency strategies, as well as alternative investments, including hedge funds, real estate, infrastructure, and private equity funds to third-party institutional and wholesale clients, and clients of wealth management businesses.