Falcon Bank hit big loss for 1MDB scandal

Falcon Private Bank, one of the Swiss banks ensnared in the Malaysian corruption scandal surrounding the troubled 1MDB fund, lost 128 million Swiss francs ($130 million) last year, as it reported in the statement on Thursday.

Last October the Monetary Authority of Singapore (MAS) ordered the closure of its Singapore branch  due to anti-money laundering (AML) failings in connection with 1MDB. The bank paid a composition fine of $300,000  for breaches of AML requirements and the regulator told the bank to strengthen its controls. 

Malaysia's 1MDB is the subject of money-laundering investigations in at least six countries, including Switzerland, Singapore and the United States. Last month Coutts was ordered to return 6.1 million francs for its role in the scandal. 

"Clearly exceeding regulatory requirements, we had a consolidated Capital Adequacy Ratio of over 20% and a solid liquidity cushion (LCR) of around 140% at the end of January 2017. These solid capital and liquidity positions provide security for our clients and counterparties and underline our ability to meet all obligations at any time," the company noted.  It added that it has also taken steps to address legacy issues and to strengthen its compliance and risk framework. 

The Swiss bank appointed Christian Wenger as the new chairman of its board that will replace Murtadha M. Al Hashmi, who will take up to position of vice-chairman. "I am confident that Falcon will develop positively on its way to achieving long-term growth," Wenger said in a statement. "Aabar Investments, our shareholder, remains fully committed to supporting the group on its future path."

"We are convinced that the newly formed board of directors will bring together the necessary financial industry and Swiss banking knowledge as well as the expertise in new technologies required to drive our future growth," the group added.