Published by Finews Asia – 9th April 2018
Falcon has suffered a setback in its recovery from the 1MDB scandal: the private bank is losing several long-standing top executives as well as the banker who turned out the lights in Singapore.
Four high-ranking executives are leaving the Zurich-based private bank, a source at the company told finews.asia. Finance chief Urs Zgraggen, technology chief Mathias Studach, trading head Ivo Sauter, and operating chief of risk and compliance Christian Schulthess have elected to leave Falcon, the person said.
The exits represent a major setback for CEO Martin Keller, who told finews.asia in February that Falcon had to break with its past after an existential crisis over its 1MDB dealings. The bank ignored warnings from staff about the Malaysian wealth fund, took huge business risks and was extremely sloppy in its dealings, regulators found in 2016.
Singapore’s regulator yanked the bank’s license, Finma in Switzerland clawed back profits, and the Swiss prosecutor is investigating a former board member. Last year, Abu Dhabi injected fresh capital and the bank began rehabilitating by altering its strategy and replacing its board.
Falcon Heavyweights
A spokesman for the bank confirmed the exit of Zgraggen, Studach, Sauter and Schulthess, who have a combined 32 years with the Zurich-based bank. They departures follow a top-level management exodus led by CEO Walter Berchtold last year.
As finance chief through the tumultuous past 18 months, Zgraggen is a linchpin to the bank’s restructuring and recovering. His exit isn’t linked to the 1MDB scandal, the bank signaled – Zgraggen will continue in his role through his six-month notice period, giving the bank at least some breathing room.
Singapore Exit
Schulthess had stepped in as Falcon’s branch manager in Singapore, wrapping up the office’s business in the city-state after the Monetary Authority of Singapore yanked its license its license and branch manager Jens Sturzegger was arrested (he has since returned to Switzerland, as finews.asia reported exclusively).
Schulthess had also returned to Switzerland last year to coordinate Falcon’s strategic and regulatory initiatives. CEO Keller is midway through a staff reduction to 250 people from currently roughly 300, partly through regular fluctuations, but the bank will also have to let some employees go.
Bonus Timing
The timing of the exits are unsurprising: bonuses traditionally granted in February and paid out in March usually prompt a seasonal churn among private bankers. However, the Falcon departures point to a larger pattern of worry among key, long-time employees over the bank’s future under owner Abu Dhabi.
Last September, CEO Berchtold threw in the towel following a dispute with Falcon’s owners. Product and services head Arthur Vayloyan also left, taking the consequences after losing out to Keller as CEO. Shortly after, legal and compliance boss Urs Bigger and long-standing Chairman Christian Wenger also departed.
