Pictet profits down 25% after paying $123m to US authorities

Losses would have been shallower without its payment to the US Department of Justice for shielding client money from taxation

Department of Justice building sign with an American flag behind it

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Pictet’s net profit was down 25% in 2023 after the private bank paid out $123m (£97.6m) to US authorities in December.

The Swiss firm was found to have hidden $5.6bn of client’s money from tax in secret accounts between 2008 to 2014. Taxes worth $50m were avoided through these hidden accounts over the period, according to the Department of Justice.

Pictet blamed its drop in profit to ₣577m (£523.4m) across the year on this one-off payment – without this outgoing charge, net profit would have been down a shallower 9% in 2023, the firm said in its latest report.

In addition to its dealings with the DOJ, Pictet also listed the strengthening Swiss Franc last year as another headwind that “adversely impacted assets under management and operating income”. Overall, the group’s operating income was down a modest 1% to ₣3.2bn (£2.9bn) in 2023.

Renaud de Planta, senior managing partner at Pictet, was pleased with the outcome, stating that the “operating income was stable in 2023, despite the turbulent market conditions”.

He added: “2023 was a challenging year for the financial industry, accompanied by turmoil in some parts of the banking sector. Against this backdrop, Pictet confirmed its stability and commitment to quality.”

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