Falcon Private Bank is doing its best to bury the 1MDB scandal, expanding its business structure. The Swiss private bank has taken yet another former Credit Suisse banker for its top management.
Zurich-based Falcon Private Bank now has a Chief Risk Officer: the Abu Dhabi-owned firm on Wednesday hired Bruno Meyer (pictured below) from Credit Suisse, according to a statement. Meyer begins with Falcon on July 1.
The bank's management is a who's who of former Credit Suisse top executives: Chief Executive Walter Berchtold ran Credit Suisse's private bank until 2012; private banking head Erich Pfister was Credit Suisse's head of U.K. and international markets, and product chief Arthur Vayloyan held senior roles including head of Swiss private banking.
No Risk Head – Until Now
Newly-hired risk chief Meyer most recently ran risk analysis and communication at Credit Suisse; he is also head of the Swiss Risk Association. The only top Falcon executive not to have graduated from Credit Suisse is finance chief Urs Zgraggen: the former Swissair pilot began his banking career at UBS and then later EFG International, moving to Falcon eight years ago.
Falcon said Meyer is an ideal complement to Falcon's top management, which has done without a risk chief thus far. «His appointment is crucial in our strategic repositioning and in further strengthening our compliance and risk framework.»
1MDB Uncovers Holes
The comments reflect Falcon's efforts under Berchtold to retrench following the damaging 1MDB scandal, which represents the largest scandal in the private bank's history.
Falcon was a pass-through for more than $3.8 billion in funds allegedly pilfered from Malaysia's state soccers. Two former Falcon board members, Khadem al-Qubaisi and Mohamed Badawy al-Husseiny, played a major role in covering up the bank's involvement in the scandal, regulators found, including by ignoring warnings from staff.
Too Lean
Falcon lost its license in Singapore and branch manager Jens Sturzenegger was sentenced to prison. The bank had an easier time in Switzerland: regulator Finma clawed back 2.5 million Swiss francs in ill-gotten profits, but left its banking license untouched.
The bank was also required by Finma to make changes to its management and board, which it has virtually swept clean: former CEO Eduardo Leemann ran a lean management with just himself, operating chief Tobias Unger, who has since moved to software provider Avaloq, and finance head Zraggen.
Decisive Step
Meyer's appointment to the newly-created risk role is a decisive step for Falcon towards normalizing its structure: the bank simply can't afford another money-laundering scandal after the 1MDB scandal.
To do so, Berchtold is attracting former colleagues from Credit Suisse – an often-employed device in Swiss banking. Credit Suisse has effectively provided the employee pool for several banks: Julius Baer hired copiously, including now CEO Boris Collardi, off its larger rival when it began transforming into a global private bank.
Digital Ties
By hiring Meyer, Falcon has fulfilled Finma's requirement to revamp its leadership. In March, the bank disclosed a massive capital injection from its owners as well as several new board members including fintech investor Marc Bernegger and Swiss asset management executives Martin Keller and Dominik Schaerer.
The bank's strategic overhaul without an Asia presence will take more time. Earlier this month, it took a minority share in asset management and investment advice platform Move Digital, indicating the bank will seek to raise its digital profile.
The move also highlights Falcon's ties to Credit Suisse: Move Digital boss Mohammed Alaoui used to be a managing director at Credit Suisse, and current Credit Suisse investment chief Michael Strobaek sits on the board of Move's wealth subsidiary.
