Swiss banks devising transfer plan for closure of BSI Singapore

A staff member blocking the media from taking photographs of BSI Bank's main office at Suntec Tower One. BSI Singapore said it is operating normally and working to ensure a smooth and quick integration with EFG.
A staff member blocking the media from taking photographs of BSI Bank's main office at Suntec Tower One. BSI Singapore said it is operating normally and working to ensure a smooth and quick integration with EFG.ST PHOTO: ALPHONSUS CHERN

Swiss private banks BSI and EFG International are working to devise a transfer plan that will allow them to effect an orderly closure of BSI's unit in Singapore.

The move involves Zurich-based private bank EFG taking over BSI, a deal that has been approved by Swiss and Singapore regulators and is expected to be completed by the fourth quarter.

The Monetary Authority of Singapore (MAS) will allow the transfer of the Singapore subsidiary's assets and liabilities to EFG in Singapore, or to BSI in Switzerland.

"Both BSI and EFG are currently working on a transfer plan to be submitted to MAS," it told The Straits Times.

EFG is also helping address staff morale in the wake of BSI's closure notice, an EFG spokesman said, but she declined to comment on the firm's plans for BSI's staff.

 
 

An MAS spokesman said: "Customers are however assured that BSI Bank would not be closing down immediately.

"The bank remains solvent and has the full support from its parent bank in Switzerland."

The moves come after MAS ordered the closure of BSI's Singapore unit over anti-money laundering rule violations while its Swiss parent faces criminal proceedings amid a deepening probe into troubled Malaysian state fund 1Malaysia Development Berhad (1MDB).

The MAS condemned poor management oversight and gross misconduct by some bank staff as it effected the first such shutdown of a merchant bank here in 32 years.

Although no deadline has been mentioned on the timing of the closure, Switzerland's Financial Market Supervisory Authority (Finma) approved the takeover of BSI by EFG on condition that BSI be completely integrated and dissolved within 12 months.

In addition, none of BSI's top management associated with its misconduct can take leadership positions in EFG. BSI Singapore said it is "operating normally" and working to ensure a smooth and quick integration with EFG.

BSI said in a statement yesterday: "The decision by MAS to withdraw the bank's status as a merchant bank will take place only at a future time given that MAS 'will allow the transfer of the Singapore subsidiary's assets and liabilities to the Singapore branch of EFG or the parent entity, BSI SA'."

The bank here is not affected by the financial penalties levied by MAS and Finma as they will be paid from BSI's general reserves.

Mr Renato Cohn, acting chief executive and a member of BSI's group executive board, is managing the Singapore operations in the transition.

EFG is controlled by the Greek Latsis family. Its purchase of BSI from Brazil's BTG Pactual will create Switzerland's fifth-largest private bank. BSI, which began in 1983, had net client outflows of 9.3 billion Swiss francs (S$13 billion) last year and its global assets under management declined 16 per cent to 87.7 billion Swiss francs. It has 1,900 employees worldwide, including over 200 here, while EFG International has a headcount of 2,200 worldwide, with 354 here.

A version of this article appeared in the print edition of The Straits Times on May 26, 2016, with the headline 'Swiss banks devising transfer plan for closure of BSI S'pore'. Print Edition | Subscribe