Asian abrasion

31 October 2016 By Dominic Elliott

Fallout from Malaysia’s 1MDB fund scandal means banks must vet the region’s wealthy more keenly. Tougher compliance needs come at an awkward time for Credit Suisse and Julius Baer, which have been hiring furiously. They also explain why subscale peers like ABN Amro may want out.

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Australia's ANZ on Oct. 31 said it would sell its retail and wealth businesses in five Asian countries to Singapore's DBS Bank.

DBS and Julius Baer are weighing bids for Dutch lender ABN Amro's Asia private banking business that manages about $20 billion in assets, Reuters reported on Oct. 25, citing several people with direct knowledge of the matter.

Singapore's financial regulator on Oct. 11 forced Zurich-based Falcon Bank to shut its operations in the country and fined DBS Bank and UBS for anti-money laundering failings linked to Malaysia's scandal-hit 1MDB fund.

Falcon Bank was fined S$4.3 million ($3.1 million), UBS was fined S$1.3 million and DBS ordered to pay S$1 million. Falcon is the second bank to be forced to shut in Singapore over the affair after BSI Bank.

Falcon said the regulator's decision was "regrettable and disappointing". UBS and DBS separately said they would take action against staff responsible.

Julius Baer Chief Executive Boris Collardi on Sept. 21 said that Asia could be the Swiss private bank's biggest region by revenue in five years.

Collardi said Julius Baer had hired more than 100 private bankers in Asia this year, mainly in Hong Kong and Singapore. Including support staff, headcount has increased by 200, he said.

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