Falcon Private Bank to make a withdrawal

Chris Hamblin Editor London 13 May 2020

Falcon Private Bank to make a withdrawal

Beset by rumours that the Swiss Financial Market Supervisory Authority has been hovering on the brink of forcing Falcon Private Bank to cease operating in Switzerland, the bank has nearly finished negotiating the sale and transfer of its client portfolio, front-office staff and subsidiaries to another unnamed Swiss private bank.

Falcon Private Bank, whose headquarters are in Zurich, issued a statement at the end of last month that said: “The board of directors and the executive committee of Falcon Private Bank are evaluating a number of options, in consultation with Aabar, the bank’s shareholder.

“One of those options includes exiting the private banking business. All options are being considered in a controlled and orderly process, in order to protect the interests of all stakeholders. Falcon will make further announcements as appropriate.”

This came hard on the heels of a Reuters report which quoted unnamed sources to the effect that the Financial Market Supervisory Authority might be on the brink of forcing the bank to cease operating in Switzerland. The newswire also spoke to people who thought that Falcon was working on compensation plans for employees who might be leaving.

A spokesman from FINMA, Switzerland’s main financial regulator, declined to tell our sister publication, Offshore Red, anything about the prospect of stripping Falcon of its banking licence. He merely stated: “We never comment on individual companies. If the rumours in the market are so bad that we have to intervene, if they’re really far-reaching, then we might.”

A fresh press release issued on Monday reveals a little more: "The cessation of banking activities will be carried out during 2021 and Falcon will continue to maintain its obligations towards its clients and stakeholders. Falcon intends to offer a fair social plan after consulting all affected employees in compliance with applicable laws."

Falcon is owned by Abu Dhabi’s state fund, the Mubadala Investment Company. Unnamed sources that spoke to Reuters have led the newswire to believe that it has failed consistently to meet the regulator’s requirements.

Falcon was turfed out of Singapore by the city’s central bank about four years ago after it said that it had found significant deficiencies in its anti-money-laundering controls, especially regarding its failure to deal properly with transactions connected to 1Malaysia Development Berhad (1MDB), Malaysia’s scandal-struck state-owned development and investment company. Another Swiss bank, BSI, also lost its Singaporean licence.

In February last year Falcon decided to discontinue its operations in the United Kingdom and agreed to sell the assets of its London-based subsidiary, Falcon Private Wealth Ltd, to Dolfin Financial (UK) Ltd. Falcon continues to provide custodial services there.

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