Falcon Private Bank skidded to a loss, when the bank was roiled by the 1MDB scandal, forcing a capital injection from its Abu Dhabi owner. The Swiss bank also named its fourth chairman in seven years.

The Swiss private bank didn't mention 1MDB in a statement, but it didn't need to – the fallout from the billion-dollar Malaysia graft scandal is evident.

The bank, owned by Abu Dhabi's sovereign wealth fund, was sent packing from Singapore and its branch manager jailed after it became apparent that Falcon had readily catered to 1MDB linchpin Jho Low, persisting with dubious transactions even over vocal objections of lower-ranked employees.

«We have taken relentless action to address remaining legacy issues and have made good progress in strengthening our compliance and risk framework to meet Finma requirements,» Falcon said on Thursday.

Deeply Unprofitable

 The scandal left its mark on Falcon's results for the year: the bank swung to a 128 million Swiss franc loss, from a profit on nearly 10 million francs one year ago, after writing off more than 85 million in illiquid positions from legacy businesses.

The bank, which quickly dispatched board member and former Credit Suisse private bank head Walter Berchtold into management when the scandal broke, said the move draws a line under its financial restructuring.

Falcon's assets dropped sharply on the year: the bank now manages 11.6 billion francs, down from 14.1 billion francs at the end of last year.

String of Chairmen

The bank also named its fourth chairman in seven years. Christian Wenger, a Swiss securities lawyer, will take over from Murtadha Al Hashmi, the finance chief for IPIC, a vehicle of Abu Dhabi's oil-rich emirate.

Al Hashmi was effectively demoted to vice-chairman through the move, which is a result of Swiss regulator Finma's insistence of an independent chairman, a bank spokesman said. Wenger has been on Falcon's board since 2005. 

Falcon said Abu Dhabi is committed to the investment, and had injected an undisclosed amount of capital to compensate for the loss and to reinforce the bank's capital, which now stands at over 20 percent.

Fintech Expertise

The bank is also getting fintech and capital markets expertise: fintech investor Marc Bernegger is joining the board as well as Martin Keller and Dominik Schaerer, Swiss asset management executives.

Lennart Blecher, a partner in Swedish investment firm EQT and until now the vice-chairman of Falcon, has stepped down, the bank said. 

The bank hopes to bring an end to months of often sordid coverage over 1MDB. Falcon's CEO Eduardo Leemann retired hastily last year, while the banker long groomed to replace him, Tobias Ungerer, bolted shortly after for banking software firm Avaloq.