Credit Suisse has agreed to pay France €238mn to settle claims that it broke laws on money laundering by luring wealthy clients to Switzerland.
The deal resolves one of the Swiss lender’s outstanding headaches ahead of a major restructuring this week.
It is the latest case to be resolved from a series of European investigations into undeclared Swiss bank accounts. In France alone, prosecutors have settled similar claims with HSBC and are pursuing penalties in court against UBS.
Monday’s settlement with Credit Suisse, which involves no admission of guilt, is one of the larger recent deals using a new French legal structure that tries to resolve investigations more quickly and avoid court cases that can last years.
The beleaguered bank is preparing to unveil a major overhaul under chief executive Ulrich Körner on Thursday and had been keen to clear the French probe beforehand, according to people familiar with the matter.
“We’re trying to reduce the litigation docket,” said one person close to Credit Suisse, which has been hit with a series of scandals and legal cases around the world.
Credit Suisse might have waited for the next steps in a parallel court case involving UBS “if this was a bank that was doing well and everything was fine”, but had opted for certainty in a probe that first began in 2016, the person added.
Another person close to the settlement said talks with Credit Suisse had taken two years and had been complicated by a changing parade of executives as the bank went through various crises.
Credit Suisse also reached a $495mn settlement with US prosecutors over a case related to financial crisis-era mortgage bonds last week.
Credit Suisse was accused by French authorities of encouraging wealthy clients in France to set up bank accounts in Switzerland between 2005 and 2012, which were then out of reach of French tax authorities.
Part of the investigation focused on the way the bank went about capturing 4,999 French clients, with assets under management amounting to a cumulative €2bn, according to the French judge who oversaw the settlement. The judge noted that Credit Suisse staff held client meetings “very discreetly, in hotels, in restaurants, and never in official buildings”.
In that time, Credit Suisse is estimated to have made €65mn in profit from those clients, who have since settled their individual French tax claims under amnesty deals, prosecutors for the state said.
Credit Suisse said in a statement it was “pleased to resolve this matter”. The sanctions imposed are split between a €123mn penalty and €115mn in damages and interest payments due to the state.
Credit Suisse had already settled a similar tax case in Italy in 2016 and it still has a probe pending in the Netherlands.
In 2017, HSBC reached the first settlement using the new legal format in France, which allows parties to avoid a guilty plea in exchange for immediate penalties, similar to some US legal arrangements. HSBC agreed to pay €300mn to resolve claims it had lured French clients to its Swiss bank.
Aerospace group Airbus has paid the biggest no-plea settlements of the 13 in France to date, with a €2bn penalty over bribery allegations. But some of the sanctions imposed have been much lower. Luxury goods group LVMH paid €10mn last year to settle allegations that a former intelligence chief had spied for the company.
UBS was ordered by French judges last year to pay €1.8bn for helping rich clients evade tax but the bank is now appealing to a higher court. UBS’s former top internal lawyer Markus Diethelm joined Credit Suisse as its general counsel this year.