BSI Group chief executive Stefano Coduri has resigned with immediate effect, the Swiss bank said on Tuesday, following the Monetary Authority of Singapore's (MAS) withdrawal of its merchant banking approval amid allegation of anti-money laundering lapses.
Board member Roberto Isolani has been appointed as the new CEO.
Earlier on Tuesday, MAS said it is withdrawing its approval for BSI Bank, BSI Group's Singapore subsidiary whose employees have been embroiled in investigations into fund movements related to Malaysian state fund 1Malaysia Development Berhad (1MDB).
MAS cited serious breaches of anti-money laundering rules for its move. It has also referred six BSI Bank employees to the Public Prosecutor for evaluation of whether criminal offences have been committed, and is imposing a S$13.3 million fine on BSI Bank.
The BSI Group is being taken over by Switzerland's EFG International. MAS will allow the transfer of the Singapore subsidiary's assets to the Singapore branch of EFG Bank or to BSI SA.
In a statement, BSI Group said the Singapore subsidiary has its full support. Penalties imposed by MAS and the Swiss Financial Market Supervisory Authority will be paid from BSI Group's general reserves for banking risks, and the bank remains "well capitalised", BSI Group said.