Swiss and Singapore authorities have allowed EFG International to acquire its troubled Swiss rival BSI. But the reputational damage for the acquirer could be huge.
For several months the Swiss BSI bank has been caught up in a massive money-laundering probe of beleaguered Malaysian state fund 1MDB. Nevertheless, the Swiss private bank EFG International decided to acquire the company last February.
On Tuesday, the Swiss Financial Market Supervisory Authority (Finma) approved the combination, while the Monetary Authority of Singapore (MAS) allowed the transfer of the assets and liabilities of the Singapore subsidiary, BSI Bank, which is currently being shut down, to the Singapore branch of EFG Bank.
More Approvals Required
The process for obtaining the other regulatory approvals required for the transaction is also on track and is expected to complete at the latest in the fourth quarter of 2016, as originally announced, as EFG International explained in a statement on Tuesday.
Clients of BSI Bank Singapore are assured that both BSI and EFG are working for a «fast and smooth transition», BSI said in a statement on Tuesday. But for EFG International the unintentional involvement in this case is rather problematic. Nevertheless, the management at EFG International hopes to capitalize in the long-term on this deal.
Displaying Professionalism
«The approval of the transaction clears the way for a swift and orderly closing and will give comfort to clients, employees and other stakeholders. The transaction is in the best interests of clients and the Swiss financial sector. With the many employees that display professionalism, knowledge and integrity every day at both banks, I’m convinced we have a successful future ahead of us,» Joachim H. Straehle, CEO of EFG International, said on Tuesday.
