Turmoil rocks private bank

Turmoil rocks private bank

Turmoil rocks private bank Assets under management slumped as client outflows accelerated at one private bank that has been rocked by recent turmoil.

BSI, the Swiss bank that is being bought out by EFG International from Grupo BTG, saw outflows reach $9.7 billion during last year, while its assets under management dropped by 16 per cent by the end of December.

Bloomberg reports that BTG had recently faced a corruption investigation that saw chairman Andre Esteves arrested in November last year. The billionaire was released from prison in December but has remained under house arrest. Indeed there have been a host of investigations into a Malaysian government fund in recent times leading to inquiries at BSI which ultimately saw the firm’s Singapore unit’s accounts frozen and a host of staff departures.

EFG had announced an agreement to buy BSI back in February for 1.33 billion Swiss francs. According to the Bloomberg report, chief financial officer Giorgio Pradelli said the agreement includes legal protections and a “material” escrow to cover any legal risks. There has been no report on the amount held in escrow.

The Swiss company meanwhile expects to generate 185 million francs from the overlapping businesses.