How does a bank which has just paid a million-franc fine for money-laundering and is linked to a Swiss criminal probe over the «Lava Jato» scandal respond? Not timidly, Ticino-based PBK Private Bank is demonstrating.

Lugano-based PKB Private Bank wants to expand its Latin America activities and will open branches in Argentina and Colombia, the bank confirmed to finews.com

The expansion plans are surprising: the Swiss private bank saw 1.3 million Swiss francs in ill-gotten profits clawed back by Swiss financial regulator Finma last week. The alpine nation's prosecutor is also looking into the bank's dealings, «Luzerner Zeitung» (in German) reported on Thursday. The Swiss bank maintained dozens of accounts linked to state-backed oil firm Petrobras and to Odebrecht, an engineering conglomerate; both firms are at the center of a massive Brazilian corruption probe. 

Argentine Retreat

The regulatory slam would be reason enough for most private banks to rethink their expansion plans in the region, but not PKB: the bank will continue building its activities in Latin America to become a third pillar of its business, after Switzerland and Italy.

Bernardo Brunschwiler is the driving force behind the move. The veteran Latin America banker previously worked for UBS, Credit Suisse and Banca della Svizzera Italiana, or BSI, in senior roles in Latin and South America. 

He began advising PKB six years ago on opening an office in Panama, where the bank books most of its roughly 1 billion francs in Latin American assets under management. PKB is the only Swiss bank with a banking license in Panama, the land tie between Central and South America and the subject of the massive «Panama Papers» data leak two years ago.

Rogue Private Banker

Brunschwiler plans to open an advisory office in Argentina, making it the first Swiss bank with an onshore presence in Latin America's second-largest nation. Swiss banks withdrew from Argentina in favor of Uruguay more than 15 years ago during the country's financial crisis. He also plans a representative office in Colombia.

The Finma rebuke and ongoing criminal probe haven't hampered PKB's plans, according to Brunschwiler. Instead, the banks is unshackled after the two-year enforcement probe, and is under no restrictions on pursuing its growth strategy.

The case stems from a rogue private banker taken on by PKB through an acquisition. The bank uncovered the case in 2015, then hired Brunschwiler, who had until then been an outside advisor, to clean up. Three years on, the bank considers the prosecutor's probe a mere formality, especially since the bank itself notified authorities.