Swiss banking giant UBS will be unable to reach an out of court settlement with the French authorities over a recent €4.5 billion (approximately CHF5 billion) fine.
During the UBS annual shareholder meeting held in Basel on Thursday, Chairman Axel Weber responded to critics of the bank’s strategy to contest the French fine in court.
In February, a French court fined the bank €4.5 billion euros for illegally shopping for clients and laundering the proceeds of tax evasion. The bank has appealed the fine.
“In the past, we were able to resolve legal cases quickly and on acceptable terms, including by reaching settlements,” Weber told shareholders. “In the case of France, unfortunately, there was no acceptable way to settle out of court. Therefore, also in the interests of our shareholders, we had no choice but to go to court.”
Switzerland’s largest bank came under fire from shareholders for allegedly refusing a less expensive out-of-court settlement which would have cost around €1.1 billion. The top brass has always claimed that these were false rumours.
According to Weber, UBS has taken the decision to pursue legal action in the interests of shareholders, He remains convinced that the bank's arguments will convince the judges when the appeal is heard.
Drop in confidence
Shareholders also refused to approve the performance of the board of directors and management. Despite being a mere formality, only 41.7% of shareholders gave a thumbs up to the top brass compared to 89.7% last year. Although there were slightly more votes in favour than against, the necessary 50% majority was not reached.