Israel's Bank Leumi has set aside a further 476 million shekels ($122.2 million) to cover costs relating to an investigation by US authorities into whether the Israeli bank helped its American clients evade taxes.

Israel’s Bank Leumi has set aside a further 476 million shekels ($122.2 million) to cover costs relating to an investigation by US authorities into whether the Israeli bank helped its American clients evade taxes.

Bank Leumi said in its third quarter statement that it has now increased the total provision to 1,438 million shekels in total. The bank said that this provision does not constitute an admission of any claim against the group.

Bank Leumi has been in negotiation in recent months with US authorities to settle a probe into alleged tax evasion by its American clients and according to media reports earlier this week is close to a $400 million settlement.

The bank said in June that it had set aside 950 million shekels for the investigation, which would make it the first Israeli bank to settle a tax probe with the US.

The Leumi investigation is part of an ongoing crackdown on offshore tax evasion by the US government.

Bank Leumi logged a third quarter net profit of 677 shekels, up 22 per cent from 555 shekels a year ago.