Geneva-based Faisal Private Bank has warned it could face foreclosure on parts of its real estate portfolio unless investors provide the cash to meet requirements of lenders, according to Reuters, citing documents it has seen.

However, the news agency said investors are refusing to meet the requests for cash, which started in June this year. The Bahrain-owned bank is struggling to avoid a fire-sale of assets. The news service cited three unnamed sources.

The report is indicative of how financial turmoil has hit private banks in a number of respects, with the real estate market remaining a key source of financial pain.

Clients are concerned that the fund has not written down portfolio values sufficiently since 2006, the report said. They are also worried that, prior to an accounting change prompted by Swiss regulator FINMA and which took effect in 2008, payouts to clients may have been bleeding the funds of capital because they were not fully covered by income.

The sources reportedly said the high property valuations also meant investors might be paying more to Faisal in fees to manage their investment than was justified by the actual value of those investments.

Faisal, owned by Bahrain-based Ithmaar Bank via its Shamil Bank subsidiary, put its real estate investments at over SFr1.1 billion ($1.07 billion) in its 2008 annual report. It did not say whether this was the portfolio value, the news agency report said.