Falcon Private Bank's finance chief is poised to leave the Swiss company, finews.com has learned. His is the latest in a series of exits and turmoil as the bank seeks to recover from the 1MDB scandal.
Falcon Private Bank is losing its finance chief: Urs Zgraggen has handed in his notice, a source told finews.com. A spokesman for the bank confirmed Zgraggen's departure, which is another setback for the Zurich-based private bank's efforts to recover following the 1MDB scandal and a management exodus.
Last September, CEO Walter Berchtold as well as product and services head Arthur Vayloyan threw in the towel. The CEO left after a dispute with Falcon's Abu Dhabi owners, while Vayloyan drew the consequences after losing out to Martin Keller as CEO.
Break With Past
Shortly after, legal and compliance boss Urs Bigger, left. Long-standing Chairman Christian Wenger also departed in favor of Roberto Grassi, a well-connected Swiss finance and commodities expert.
In February, Keller, the new CEO, told finews.com that Falcon had to break with its past after an existential crisis over its 1MDB dealings. The bank ignored warnings from staff about 1MDB, took huge business risks and was extremely sloppy in its dealings, Switzerland's financial regulator found in 2016.
Torrid Past
Singapore's regulator yanked the bank's license, Finma in Switzerland clawed back profits, and the country's 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.
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 scandal, the bank signaled – Zgraggen will continue in his role through his six-month notice period, giving the bank at least some breathing room.
Falcon Revamp
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. Zgraggen, originally a pilot for Swissair, has been with Falcon for nine years, initially as risk boss, then as deputy finance chief and head of credit.
He took the top finance job four years ago and is one of three people beside CEO Keller and risk boss Bruno Meyer in top management. Previously, Zgraggen worked for derivatives boutique EFG Financial Products – the predecessor to Leonteq – as risk head. Falcon didn't disclose succession plans.
