UBS shares slip on report of DOJ Russia-sanctions probe

By Scott Kanowsky

Investing.com -- Shares in UBS Group AG (SIX: UBSG) dropped on Friday after Bloomberg News reported that the Swiss lender is one of the banks facing a probe from U.S. authorities over whether financial professionals helped Russian oligarchs evade sanctions.

The Department of Justice has sent subpoenas to both UBS and smaller domestic peer Credit Suisse Group AG (SIX: CSGN), as well as other large U.S. banks, according to the report, citing people familiar with the matter. Bloomberg added that the subpoenas were sent out prior to the forced takeover of Credit Suisse by UBS last weekend. Shares in Credit Suisse also fell.

The inquiries aim to identify which employees at these banks were in charge of handling sanctioned clients and delve into how these clients were vetted, Bloomberg reported. These workers may then be further investigated if it is discovered that they have broken any laws, the report said.

Russian oligarchs have become a focus for DOJ sanctions, asset seizures and investigations since the outbreak of the conflict in Ukraine, with U.S. officials keen to prevent these figures from providing financial backing to Russian president Vladimir Putin.

UBS and Credit Suisse declined to comment to Reuters, while the Justice Department did not immediately respond to a Reuters request for comment.

Separately on Friday, analysts at Jefferies downgraded their rating for UBS to hold from buy. They argued that the Credit Suisse deal, while compelling over a three-year time period, is fraught with risks and uncertainty over the next 12 months.

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