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Swiss private bank to exit private banking in 2021

Falcon Private Bank has changed its name after confirming it will cease its core activities next year after a strategic review of the business.

The move comes years after the bank was caught up in the scandal-hit Malaysian sovereign wealth fund 1MDB.

Following a “far-reaching restructure and a complete repositioning three years ago”, Falcon Private Bank said it had made “encouraging progress in various areas”, including digital assets.

But its core private banking operation was earmarked for sale.

As a result, the company has “changed its purpose and is renamed Falcon Private”.

It will continue to be subject to banking regulation and Swiss Financial Market Supervisory Authority (Finma) supervision including meeting its capital requirements.

It will also continue to provide banking services to its clients during the transition period and maintain its obligations towards its clients and stakeholders.

Sale

Falcon also announced that it is in “advanced negotiations concerning the sale and transfer of its client portfolio, front-office staff and subsidiaries to another Swiss private bank”.

Further details will be announced in due course when an agreement is reached.

It said: “Falcon intends to offer a fair social plan after consulting all affected employees in compliance with applicable laws.”

The firm has already offloaded its UK business Falcon Private Wealth after London-headquartered wealth manager Dolfin agreed to buy it in 2019.

According to its website, Falcon still has a private wealth business in Dubai and a Luxembourg-based fund management operation.

Current environment

Roberto Grassi, chairman of the board of directors at Falcon Private Bank, said: “Three years ago, we gave Falcon Private Bank a new profile through innovative ideas and unconventional solutions.

“However, after a strategic review and evaluating various options, we have concluded that, especially in the current environment, the controlled cessation of Falcon’s banking activities is the best way to protect the interests of our stakeholders.

“We remain committed to providing our clients a high level of service quality during this transition period and we appreciate the financial support of the shareholder.”

Historical issues

In 2016, the Monetary Authority of Singapore (MAS) shut down Falcon Private Bank in Singapore for serious failures in anti-money laundering controls and improper conduct by senior management at the branch, as well as the head office in Switzerland.

Also, in 2016, Swiss watchdog Finma found that Falcon violated money-laundering regulations by failing to carry out adequate background checks into transactions and business relationships associated with 1MDB.

While in 2017, Jens Sturzenegger, the former manager of Falcon Private Bank in Singapore, became the first westerner to be charged in connection with the 1MDB scandal.

He pleaded guilty to six of the 16 charges levied against him.

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Robbie Lawther

Robbie is a reporter for International Adviser, covering global news stories about the financial services industry. He joined Last Word Media in October 2018 after nearly two years working at...

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