Switzerland sold its stake in its largest bank, UBS, at the top end of its price range, a source said today, making a profit from last year's rescue deal.
The sale of the 9% stake comes a day after Switzerland agreed to reveal the names of thousands of UBS's rich American clients to Washington, settling a tax-avoidance dispute that dented its prized banking secrecy.
The US warned it was now setting its sights on other institutions and individuals involved in hiding assets from the taxman.
Swiss authorities said the sale of the 9% stake showed UBS had found a solid footing again after becoming one of the biggest victims in the credit crisis, and the markets reacted positively by pushing up its shares.
The Swiss sold 332 million shares at 16.50 Swiss francs each, the source said, at the top end of a 16 to 16.50 francs price range, with books being three to five times oversubscribed.
The Swiss National Bank said the government sale indicated the market was more confident in UBS, while Switzerland's financial regulator FINMA said it supported the sale since the bank now had a 'stable, sound capital base'.
Switzerland, like most other Western countries took over part of its banking industry after the credit crisis threatened a systemic collapse, but the sale now means it is ahead of some others in finding an exit.
Switzerland announced the divestment last night, saying a capital raising in June and the settling of a tax dispute with Washington had increased confidence in the bank.
Other Swiss banks, such as Credit Suisse, Julius Baer, Zuercher Kantonalbank (ZKB) and Union Bancaire Privee (UBP), are now fretting that the US taxman's spotlight could fall on them, the Wall Street Journal reported.
In February, UBS agreed to pay $780m and disclose about 250 client names to settle a criminal probe by US authorities. One former UBS banker testified that he smuggled a client's diamonds in a tube of toothpaste.
The country claims its banking secrecy remains intact, but some private bankers say it is no longer a selling point for its banks, which will need to offer other skills like legacy planning to attract clients.
