The Swiss private bank Ihag has reported a financial loss and must close. The institution officially cited a “challenging market environment” and a “lack of growth opportunities” as reasons for this decision.
In reality, the bank appears to have been compelled to issue a loan to the struggling Signa Group, led by René Benko, which has found itself in difficulties, according to a report by the Swiss Daily Advertiser.
Loan only partially secured
A spokesperson for the bank confirmed reports about a loan that was issued in early 2023. 12 million euros were backed by shares, while the bank had to write off 18 million euros. For Ihag Bank, which was established in 1949 by the Swiss industrialist family Buhrle, this marked the end of its operations.
Ihag Bank manages over 3 billion euros in client assets. The client portfolio was acquired by Vontobel Bank, as announced on Friday. The purchase price remains undisclosed, and the transfer of client funds is expected to be finalized by the beginning of next year.
76 employees affected
An unspecified number of employees are anticipated to transition to Vontobel. In total, 76 employees will be impacted by the closure, with 20 to 25 needing to seek new employment. Plans for early retirements have also been mentioned.
Explosive personnel
The Kronen Newspaper reported that an explosive personnel issue has surfaced in connection with the bank’s closure. The board of directors of the Swiss private bank in 2023 included Susanne Riess-Hahn, the former FPÖ Vice Chancellor and CEO of Wüstenrot. She is also scheduled to hold a supervisory board position at Signa Prime Selection until early 2024. However, Ihag no longer lists her in this role on their website.
Ihag Bank Closure: Impact, Reasons, and What Lies Ahead
Overview of Ihag Bank’s Financial Decline
The Swiss private bank Ihag has recently announced its closure, attributing its decision to a challenging market environment and a troubling lack of growth opportunities. Founded in 1949 by the renowned Swiss industrial family Buhrle, the bank has succumbed to financial difficulties and must officially close its doors.
Loan to Signa Group: A Pivotal Factor
Media reports, including insights from the Daily Advertiser, suggest that Ihag Bank was significantly impacted by a financial obligation to the struggling Signa Group, led by entrepreneur René Benko. The bank provided a loan in early 2023, which became a major liability.
Details of the Loan
The spokesperson for Ihag Bank confirmed that the total amount of the loan was 30 million euros. However, only 12 million euros of this amount was secured by the bank through shares, leading to a substantial 18 million euros write-off. This crippling financial burden has ultimately contributed to the bank’s closure.
Impact on Client Funds
Despite its financial struggles, Ihag Bank managed to hold more than 3 billion euros in client funds at the time of the decision to close. As part of its closure, client accounts will be transferred to Vontobel Bank, another reputable financial institution. The exact purchase price has not been disclosed.
Timeline for Transition
The transition of customer funds is expected to be completed by the beginning of the next year, ensuring continuity for clients during this challenging period.
Employee Impact and Transition Plans
As a direct consequence of the bank’s closure, 76 employees will be affected. While some employees are expected to transition to Vontobel, approximately 20 to 25 employees will unfortunately need to seek new employment opportunities. In light of this situation, early retirements are also being planned for some staff members.
Employment Transition Options
- Potential transition to Vontobel Bank for select employees.
- Job placement assistance for those seeking new opportunities outside of the bank.
- Options for early retirement to ease the financial burden of layoffs.
Board of Directors and Personnel Issues
The closure of Ihag Bank also raises questions regarding its governance structure. Notably, the bank’s board of directors in 2023 included Susanne Riess-Hahn, a prominent figure who previously served as the Vice Chancellor of FPÖ and as CEO of Wüstenrot. The Kronen Newspaper highlighted her involvement and noted that she held a supervisory board position at Signa Prime Selection until the beginning of 2024.
Transparency and Governance Challenges
The lack of information on the current status of board members, including Riess-Hahn, raises concerns among stakeholders about governance in times of financial distress.
Market Conditions Leading to Closure
The “difficult market environment” cited by Ihag Bank reflects broader trends that have affected many financial institutions. Factors contributing to these challenging conditions may include:
- Stagnant economic growth in Europe.
- Increased regulation and compliance costs.
- Changing client demands and preferences for financial services.
- Intensified competition from fintech companies offering alternative financial solutions.
What This Means for Clients
For clients who have entrusted their funds with Ihag Bank, the transition to Vontobel will offer a measure of stability. However, clients should be aware of the following:
- Account transfers will be handled efficiently, minimizing disruptions.
- Clients are advised to monitor communications from both Ihag and Vontobel regarding their accounts.
- Services offered by Vontobel may vary; clients are encouraged to inquire about changes in offerings.
Client FAQs About the Closure
1. Will my funds still be safe after the transition?
Yes, client funds will be transferred securely to Vontobel Bank, which is a reputable financial institution.
2. How will I know when my account has been transferred?
Both Ihag Bank and Vontobel will communicate directly with clients regarding the timeline and process of account transfers.
3. What happens to my investment products?
Investment products will be assessed and either transferred or converted in accordance with Vontobel’s policies.
Conclusion
The closure of Ihag Bank marks a significant moment in the Swiss financial sector, shedding light on the vulnerabilities of traditional banking institutions in an ever-evolving economic landscape. As clients look to navigate this transition, continued communication and support from involved institutions will be of paramount importance.
