20 Mar 2020
Israel’s biggest bank, Hapoalim, (POLI.TA) said on Wednesday it expects to pay $870 million to settle a U.S. tax evasion investigation.
The bank said in a regulatory filing it will increase its provision for the tax probe in the fourth quarter to $259 million, in addition to $611 million it had already set aside.
For several years, U.S. authorities, including the U.S. Department of Justice (DOJ) and the New York Department of Financial Services, have been investigating accusations that the Israeli bank helped U.S. clients evade taxes.
“Recently, the bank group and each of the DOJ and bank regulatory teams handling the investigations have extensively negotiated the terms of resolutions, which, once approved by the U.S. authorities and the bank group and finalized, would resolve the investigations,” Hapoalim said.
The settlement would be a deferred prosecution agreement, the bank said. Its subsidiary in Switzerland will sign a plea agreement with the DOJ relating to its business with its American customers.
“The final sign off will pave the way (for) the accelerated growth of Hapoalim’s loan book, dividend resumptions and share buy-backs,” Barclays analyst Tavy Rosner said.
Hapoalim’s main rival, Bank Leumi (LUMI.TA), in 2014 agreed to pay $400 million to settle two separate investigations into whether it helped U.S. clients evade taxes. Mizrahi Tefahot Bank (MZTF.TA) paid $195 million a year ago to settle a five-year U.S. tax evasion investigation.
Hapoalim also said it expects to pay $30 million in a non-prosecution agreement, which it will provision in the fourth quarter, to settle a U.S. probe into alleged corruption involving officials from world soccer’s governing body, FIFA.
By Ari Rabinovitch and Tova Cohen, Reuters, 18 March 2020
Read more at Reuters
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