Swiss private bank EFG International has announced plans to lower its acquisition price for rival BSI by CHF140m ($143m), mainly owing to its involvement in the 1Malaysia Development (1MDB) state fund scandal.
EFG, however, said that it continues to prepare for the integration with BSI and expect the deal to be completed by the fourth quarter of 2016.
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In February 2016, EFG agreed to purchase BSI from Brazil's Grupo BTG Pactual in a cash-stock deal worth 1.33bn.
In May 2016, the bank was alleged of violating money laundering regulations in connection with 1MDB by the Swiss financial regulator Finma.
At the same time, the bank was also ordered by the Monetary Authority of Singapore (MAS) to close its Singapore operations.
The Singapore watchdog also said that the bank would lose its merchant banking status in Singapore due to serious breaches of anti-money laundering requirements, poor management oversight, and gross misconduct by some of its employees.
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By GlobalDataThe news comes as BSI reported AuMs of CHF76bn in the first half of 2016 ended 30 June, down from CHF87.7bn as at 31 December 2015.
Net new assets were CHF(9.6)bn during the period, reflecting the outflows following regulatory actions in Singapore.
Underlying profit during the period stood at CHF34.4m, compared to CHF36.5m in the second half of 2015. IFRS net profit was CHF(18.3)m, compared to CHF28.1m in the second half of 2015.
