RBS's Swiss bank Coutts & Co under investigation for client tax evasion

26th Feb 2015 12:44

Following the admission of "unacceptable" tax evasion practices at HSBC on Wednesday, the Royal Bank of Scotland's Swiss private banking arm has also come under investigation by European authorities.RBS, which is in negotiations to sell the wealth management business, said Coutts & Co in Switzerland was now being investigated by German regulators due to alleged tax evasion by its US clients."A prosecuting authority in Germany is undertaking an investigation into Coutts & Co Ltd in Switzerland, and current and former employees, for alleged aiding and abetting of tax evasion by certain Coutts & Co Ltd clients," the bank said as it unveiled £3.5bn losses in its final results statement on Wednesday.RBS's chief executive Ross McEwan told ITV that "if we find anything that's gone wrong in that business...we will take severe action."McEwan said the decision to sell Coutts was "moral as well as commercial".RBS was already under pressure to cut the sale price of Coutts International, with potential bidders having reportedly tried to force down the price of the acquisition due to the HSBC scandal and the recently sharp change in the price of the Swiss franc.On Wednesday, MPs of the Treasury Committee grilled HSBC two top bosses over the tax evasion practices at its Swiss private bank, with chief executive Stuart Gulliver acknowledging the scandal "had caused damage to trust and confidence in the company".Last week, HSBC's Swiss arm was searched by prosecutors as part of a new money-laundering investigation, amid reports the bank helped clients dodge significant amounts of tax but hiding funds overseas.