‘Mubadala reviving plan to sell Zurich-based Falcon’

ABU DHABI: Abu Dhabi’s Mubadala Development Co is reviving plans to sell Falcon Private Bank in Switzerland as it seeks to distance itself from the 1Malaysia Development Bhd (1MDB) money laundering scandal, according to people with knowledge of the matter.

The state-backed investment firm had invited bids for at least five billion francs (RM20.35 billion) of assets managed by Zurich-based Falcon, said the people.

The bank had held unsuccessful talks with potential buyers last year, said people familiar with the matter.

Mubadala is seeking to move past the 1MDB scandal after Falcon Bank’s Singapore unit was closed by regulators for failing to adequately flag US$1.27 billion (RM5.17 billion) in suspicious deposits linked to 1MDB.

A branch manager in Singapore was also jailed as regulators and prosecutors investigated how banks were used to funnel corrupt money.

A spokesman for Falcon declined to comment, saying the management and board of Falcon focused on its current strategy. A spokesperson for Mubadala also declined to comment.

Mubadala also recently halted new business with Goldman Sachs Group Inc as it sought damages from the bank for what it called its “central role” in the 1MDB scandal, according to the fund.

The bank was accused of misleading investors when it helped 1MDB raise US$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, said people familiar with the matter last year.

The bank 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 93.6 million francs in revenues and made a net loss in 2017, said the people.