Abu Dhabi Skyline/Bloomberg
The state-backed investment firm has invited bids for at least CHF 5 billion ($5 billion) of assets managed by Zurich-based Falcon.
Tuesday 19, March 2019
(Bloomberg) --Abu Dhabi’s Mubadala Development Company has revived plans to sell Falcon Private Bank in Switzerland as it seeks to distance itself from the 1MDB money laundering scandal, according to people with knowledge of the matter.
This follows unsuccessful talk with potential buyers last year.
Mubadala is seeking to move past the 1MDB scandal after Falcon Bank’s Singapore unit was closed by regulators for failing to adequately flag $1.27 billion in suspicious deposits linked to the Malaysian government fund known as 1MDB. A branch manager in Singapore was also jailed as regulators and prosecutors investigated how banks were used to funnel corrupt money.
Recently, Mubadala announced that it was halting new business with Goldman Sachs Group as it seeks damages from the bank for what it calls its central role in the 1MDB scandal.
The bank is accused of misleading investors when it helped 1MDB raise $6.5 billion through bond deals in 2012 and 2013, while allegedly knowing that the funds would be misappropriated.
Falcon hired Boston Consulting Group in the aftermath of the scandal to review its operations and identify revenue sources as part of its mandate. The lender has been pursuing a strategy based around cryptocurrencies and digital private banking.
Small Swiss private banks such as Falcon are struggling to boost revenues and margins a decade after the end of Swiss banking secrecy rules, as regulatory costs rise and compliance procedures grow stricter. The bank generated CHF 93.6 million in revenues and made a net loss in 2017.