Swiss Regulator Probes Coutts in International Investigation

  • Finma has opened enforcement proceedings against Coutts & Co.
  • Coutts is cooperating with other jurisdictions, RBS says

Royal Bank of Scotland Group Plc said regulators are investigating the Coutts International private-banking business it sold to Union Bancaire Privee last year.

The Swiss Financial Market Supervisory Authority, known as Finma, has opened enforcement proceedings into Zurich-based Coutts & Co. and the firm is cooperating with other jurisdictions, RBS said in litigation notes appended to its first-quarter results statement on Friday, without providing details.

“It does relate to the international private bank that we no longer own,” Ross McEwan, chief executive officer of the Edinburgh-based bank, said on a conference call with reporters.

Switzerland has attracted unprecedented scrutiny from foreign authorities in recent years, including inquiries into tax evasion by Americans and corruption scandals surrounding FIFA, the world soccer body, and the Brazilian oil company known as Petrobras. Authorities have cracked down on banks involved, requiring them to divulge information about customer accounts.

Joint Investigation

Swiss prosecutors are working with Luxembourg and Singapore authorities in an investigation into allegations of bribery and corruption at 1Malaysia Development Bhd., a Malaysian government fund.

Vinzenz Mathys, a spokesman for Finma in the Swiss capital Bern, declined to comment on the RBS disclosure.

RBS’s deal with UBP in March last year involved a client asset transfer at Coutts International businesses spanning Switzerland, the Middle East and Asia and includes an arrangement for legal risks, the companies said at the time. RBS finished shifting the Asia business on April 11, marking the end of the transfer process, according to the statement on Friday.

“The acquisition was an asset deal and as a result, the bank will not inherit Coutts’s legal issues,” Maude Hug, a spokeswoman for UBP, said in an e-mailed response to questions.

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