"The board is in the process of finding a replacement and will make an announcement in due course," a spokesperson is quoted as having said yesterday. Faisal Bank had not responded to enquiries from WealthBriefing on the matter at the time of publication.

Last week, citing documents it had seen, Reuters reported that the bank had warned it could face foreclosure on parts of its real estate portfolio unless cash injections were provided by investors. As such reports highlight, while the economic gloom may be brightening, real estate investments remain a real source of financial pain for many firms – private banks included.

According to the news agency's report, investors refused to meet requests for cash – which began in June – amid concerns that the funds' portfolio values had not been written down sufficiently since 2006. Clients were also reportedly worried that, before an accounting change prompted by the Swiss regulator came into effect in 2008, payouts to clients may have been bleeding the funds of capital as they were not fully covered by income.

The news agency’s unnamed sources also said that high property valuations could mean investors were paying more to Faisal Bank to manage their investments than was justified by their actual value.

In other developments, Faisal Bank’s Bahrain-based parent Itmaar Bank has reportedly appointed Prince Amr Mohammed Al Faisal as the new chairman of its board, replacing Khalid Abdulla-Janahi who becomes executive vice-chairman.