DFSA probing ABN Amro for supposedly failing guidelines
The Dubai Financial Services Authority has launched an investigation into ABN Amro’s private banking activities in Dubai in conjunction with the Dutch central bank, following the resignation of six employees this year.
The DFSA is leading the investigation, which may lead to penalties for the state-owned Dutch bank, said Bloomberg News.
It was announced earlier this month that six Dubai-based employees at the bank resigned earlier this year after an internal probe at the bank found that that they had failed to comply with its guidelines.
A Dubai-based client of ABN Amro, who did not want to be named, told The National at least one banker was put on enforced leave in early January.
The bank launched an investigation into staff practices in Dubai following signs in the middle of last year that some employees had not been complying with internal guidelines, Brigitte Seegers, a spokeswoman for the lender, told Bloomberg News earlier this month.
The six resignations came after the investigation confirmed their non-compliance with the rules, she said.
The Dutch finance minister Jereon Dijsselbloem said on Thursday that the bank’s investigation found that no fraud had been committed, nor was there any evidence of money laundering.
The probe would not affect the government’s plans for an IPO of the bank, Mr Djisselbloem said.
Officials at the DFSA could not be reached for comment.
The regulator’s investigation comes after the DIFC Courts ruled last August that Bank Sarasin Alpen, a bank registered in the emirate’s financial hub, and Bank Sarasin, a related finance house from Basel, Switzerland, had mis-sold “unsuitable investments” of more than US$200 million to three members of the wealthy Al Khorafi family after the investments went bad during the financial crisis in 2008.
The DFSA took Deutsche Bank to court in Dubai in October 2013 after it refused to hand over documents pertaining to an investigation of to the bank’s personal wealth management business. The case was dropped two months later after the bank complied with the request.
Such controversies are a common feature of the private banking industry worldwide and are not unique to Dubai, said Nigel Sillitoe, the chief executive of Insight Discovery, a strategic research company in Dubai.
“Often it’s because there’s a lack of communications between the private banker and their client about the risks that are involved,” he said.
Although the UAE’s private banking sector has expanded in recent years with the country’s improving economy, banks often struggled to attract qualified private bankers, he said.
“There’s not a large pool of talented private bankers in the UAE, and the sector is growing rapidly, so inevitably there are going to be some bad apples.”
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Published: March 21, 2015 04:00 AM