08.05.2017

Another scandal for BSI: italian branches will be closed?

400EFG International said Italy's central bank wants it out of Milan and Como in connection with alleged compliance weaknesses at recently-acquired Banca della Svizzera Italiana, or BSI.

The Zurich-based private bank, under Greek Latsis family control, referred it is in close contact with Banca d'Italia over the closing of its BSI acquisition, and  in a statement late on Friday, it said: "EFG International announces that BSI has received a notification by Banca d’Italia requesting the implementation of certain measures, which may result in a closure of the BSI offices in Milan and Como."

The bank rebranded itself following the deal, doing away with the BSI brand, a 144-year-old Swiss bank which was disgraced by its deep involvement in the 1MDB scandal.

Actually, italian offices manage less than 1 billion Swiss francs combined, EFG referred. Last week, when EFG International announced the full integration of the BSI branch in Luxembourg, it underlined the strategic importance of the Italian market.
The bank didn't elaborate on what exactly the Italian central bank has found fault with, saying only the measures «relate to alleged administrative weaknesses pre-dating the completion of EFG’s acquisition of BSI.»

Clients at the two branches can only withdraw funds or other passive services, but no client accounts have been blocked. The central bank is pushing for EFG to leave entirely.
BSI had been involved in the scandal swirling around the Malaysian state fund 1MDB in 2016. Former bankers of the firm were convicted for aiding in forging documents and failing to report suspicious transactions related to Malaysian financier Low Taek Jho, also referred to as Jho Low. 

In Singapore, the bank's regulator withdrew the license; in Switzerland, Finma allowed the sale of the bank.


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