The Swiss private bank of HSBC finally returned to profit in 2019 as the hiring of new CEO Alexander Classen paid off for the British bank.

London-based HSBC's private bank in Switzerland recorded a pretax profit of $90 million, according to a statement on Tuesday. The profit from the Swiss unit helped the global private banking business to increase its pretax by a fifth to $402 million.

The Swiss private bank’s profit follows after years of losses, with a pretax loss of $100 million in 2018 and $192 million in 2017.

Appointment of CEO Pays Off

HSBC didn’t specifically comment on the business of its private-banking arm in Switzerland. The global wealth management attracted $23 billion of net new money, the highest inflow since 2008.

HSBC in 2018 appointed Alexander Classen as the new CEO of the wealth management arm in Switzerland and Luxembourg, replacing Franco Morra. Morra had departed earlier that year after HSBC decided to introduce a new structure, more closely aligning the Swiss unit with five other private banking units – the U.K., France, Germany, Luxembourg, and the Channel Islands.

Poisoned Legacy

Classen, who previously had run the international unit of Coutts, took over at a bank that had been rocked by the data leak instigated by Hervé Falciani, a former data technician. HSBC slimmed the private bank from more than 150 markets to roughly 20 and cut hundreds of jobs.

HSBC private bank Switzerland was also one of the so-called category 1 banks in the U.S., meaning that prosecutors were investigating its dealings with U.S. clients and offshore accounts.

EU Departure Creates Volatility

At the end of 2019, the bank was finally able to draw a line under the protracted tax dispute with the U.S. government. HSBC's Swiss private bank agreed to a so-called deferred prosecution agreement, which included a payment of $192.35 million, to settle the dispute. The bank had taken a provision covering that sum.

HSBC also said that the uncertainty over the future relationship between the U.K. and the EU created market volatility and economic risk, particularly in its domestic market. The global presence, however, helped the bank mitigate the impact on it of the U.K.’s withdrawal from the EU.