UBS Building Switzerland
UBS Building SwitzerlandReuters

Swiss bank UBS said it has paid €300m to settle an investigation into whether it helped German clients evade taxes.

UBS said it booked provisions of about 120m Swiss francs in its second-quarter results to deal with the settlement.

"The resolution of this matter is a significant step allowing UBS to move forward in this important market," the bank said in a statement.

It added that it has boosted its tax compliance efforts in Germany. More than 95% of its German clients have either provided it with evidence of tax compliance or completed the voluntary compliance programme, according to UBS.

The bank is targeting to bring 100% of its customers under tax compliance by the end of 2014.

For the second quarter ended on 30 June, UBS reported attributable profit of 792m francs (£515m, €651, $875m), up 15% from the same period last year. Total operating expenses fell 7% to 5.9bn francs.

The bank's wealth management operation was down with profits having fallen 36% to 355m francs from a year earlier. That missed the 671m francs estimated by analysts. UBS set aside 295m francs in legal provisions at the division.

UBS has systematically scaled down its investment banking operation to concentrate on its core wealth management business. Profits at its investment banking unit were down 25% to 579m francs in the quarter. This was above the the estimates of analysts, which averaged 511m francs.

Profits from asset management operations were down 24% to 105m francs, while the retail and corporate unit posted a 6.1% decline to 354m francs.

"We delivered strong underlying results in a market environment that remained challenging for our clients and the industry. We also continued to actively address litigation matters, reduce our non-core and legacy assets and execute on our strategic initiatives," CEO Sergio Ermotti said.

UBS is also facing a probe in France. A French court last week demanded a security deposit of €1.1bn from the bank to cover a possible fine for laundering the proceeds of tax evasion in the country. UBS is planning to appeal the demand.

The bank has reached a settlement with the Financial Conduct Authority in the UK over currency market manipulation, according to Bloomberg. The FCA is expected to impose fines on the bank in the coming months.