EFG chief executive says BSI will benefit from takeover

The chief executive of EFG International said BSI will benefit from the Swiss private bank's know-how after it completed the takeover of the troubled bank, which has been punished for its links to the scandal-hit Malaysian state fund 1MDB.
EFG last week completed the acquisition of BSI from Brazil's Grupo BTG Pactual SA for a preliminary 1.06 billion Swiss francs ($1.09 billion).
But EFG said the BSI business had suffered net new money outflows of 17.8 billion Swiss francs ($18 billion) in the first 10 months of 2016 amid sanctions over its ties to 1MDB.
"We at EFG have a very good compliance regime," Joachim Straehle told NZZ am Sonntag in an interview published on Sunday.
"We have been untouched by the big legal cases and have a good relationship to [Swiss financial watchdog] FINMA," the chief executive said.
"BSI will benefit from our know-how."
In December 2015, EFG agreed to pay a fine of $29.98 million after signing a non-prosecution agreement with the US authorities to settle claims it helped American clients open secret bank accounts to hide money from the tax authorities. In March last year, BSI agreed to pay a $211 million penalty to settle similar claims.
In May, FINMA closed down BSI's operations in the city-state, while Switzerland has launched criminal proceedings against the bank, in the biggest international crackdown on financial entities dealing with the Malaysian government fund 1MDB.
FINMA said at the time that it found BSI in breach of money- laundering regulations in connection with 1Malaysia Development Berhad.
"We have gone into this acquisition with open eyes," Straehle said in the interview. "We knew the risks," he added, although he said the hard approach of the regulators had been unexpected.