ZĂĽrcher Kantonalbank, the biggest Swiss cantonal bank, expects to pay a fine to US authorities as part of a deferred prosecution agreement for its alleged role in helping US citizens evade taxes, media reports said.

ZĂĽrcher Kantonalbank, the biggest Swiss cantonal bank,
expects to pay a fine to US authorities as part of a deferred prosecution
agreement for its alleged role in helping US citizens evade taxes.

“The bank will have to negotiate a DPA separately with the
American authorities, which will also contain a fine,” a spokesperson was quoted
telling Bloomberg.

The Swiss firm confirmed the story to this publication but did not elaborate on details.

ZKB may have to pay a fine of as much as SFr720 million ($744
million) to US authorities, the Swiss publication Tages-Anzeiger reported, but
did not give a source for the information.

Switzerland
has been in talks with the US
to resolve a Justice Department investigation of at least 13 financial firms
that allegedly helped US nationals hide money from the Internal Revenue
Service. A number of large Swiss firms, such as UBS, Credit Suisse and Julius
Baer, no longer provide offshore banking to US citizens.

One of the most dramatic developments has been the demise of
the Wegelin & Co name – the oldest in Swiss banking (dating back to 1741). In
January, Wegelin & Co pleaded guilty in New York City to conspiring to help conceal
client money from the IRS. The non-US part of Wegelin has been transferred to Switzerland's
Raiffeisen Group. In 2009, UBS settled criminal and civil charges of aiding tax
dodgers by a large fine and transfer of some client account data, seen as a
breach of Switzerland’s
decades-old bank secrecy laws.

As previously reported in local Swiss media, Finance
Minister Eveline Widmer-Schlumpf has said an agreement between Switzerland and the US was close to being completed.

In its annual report, Zürcher Kantonalbank reported that it “performed
well over the 2012 financial year”. Operating income rose 1.2 per cent on the
previous year, at SFr 2.1 billion, while group profit from operations was
slightly below the figure for the previous year, at SFr744 million (-3.3 per
cent) - prior to a non-recurring expense of CHF 150 million for the pension
fund.