The rise and end of BSI

From Ticinese commercial bank to international private bank

Banca della Svizzera Italiana was founded in Lugano in 1873 and opened its main office on the Piazza della Riforma.¹ Its early history belongs to Chapter C.IV, which describes how it survived the crash of 1914 that destroyed several other Ticinese banks. For most of the twentieth century BSI was the largest bank with its head office in Ticino, combining a local commercial and retail business with a growing private banking business for Italian and, increasingly, Latin American and Asian clients. In 1998 the Italian insurance group Assicurazioni Generali of Trieste became its sole shareholder.² Under Generali's ownership BSI expanded abroad and absorbed another Lugano institution. In 2008 it acquired Banca del Gottardo, the Lugano private bank founded in the post-war decades, which had belonged to the Swiss Life group before its sale.³ With the integration of Gottardo, BSI became the dominant private bank of the Ticino financial centre and one of the largest foreign-owned private banks in Switzerland.

The years after 2008 combined growth with mounting legal risk. In 2015 BSI reported assets under management of CHF 84.3 billion.⁴ In the same year it entered into a nonprosecution agreement with the United States Department of Justice under the programme for Swiss banks that had assisted United States taxpayers in evading taxes, paying a penalty of USD 211 million.⁵ In July 2014 Generali agreed to sell BSI to the Brazilian investment bank BTG Pactual for a price reported at USD 1.7 billion.⁶ The Brazilian owner intended to use BSI as a platform for its international wealth management. Within months the 1MDB affair made that plan impossible.

The 1MDB findings of FINMA

On 24 May 2016 FINMA announced the result of its enforcement proceedings against BSI. The authority found that the bank had committed serious breaches of the antimoney laundering rules and of the requirement of proper business conduct in connection with the Malaysian State investment fund 1Malaysia Development Berhad (1MDB). According to FINMA, BSI had executed numerous large transactions with an unclear purpose over several years without adequately clarifying their background. Between 2011 and 2015 the bank had failed to identify and limit the risks of relationships with politically exposed persons, had not documented high-risk transactions systematically and had not adequately monitored a group of about one hundred accounts belonging to a single client group. FINMA cited examples: the bank had accepted the explanation that a transfer of USD 20 million was a "gift" without verification, and had credited USD 98 million to an account without clarification. In FINMA's assessment the bank's management had knowingly given priority to lucrative relationships over the control of risks.⁷

FINMA ordered the disgorgement of profits of CHF 95 million and opened enforcement proceedings against two former members of the bank's top management. On the same day the Monetary Authority of Singapore imposed a fine of about SGD 13 million and withdrew the licence of BSI's Singapore branch. FINMA stated that it had cooperated closely with the Office of the Attorney General of Switzerland, which had opened criminal proceedings.⁸ The legal basis for the disgorgement was Art. 35 of the Federal Act on the Swiss Financial Market Supervisory Authority (FINMASA), which permits FINMA to confiscate profits that a supervised person has made through a serious violation of supervisory law.⁹

Notes

1. Wikipedia, "BSI Ltd", https://en.wikipedia.org/wiki/BSI_Ltd (founded 1873 in Lugano as Banca della Svizzera Italiana; main office on Piazza della Riforma). Used as a last resort; the founding year is also confirmed by laRegione (20 May 2026, above). ↩
2. Wikipedia, "BSI Ltd" (above) ("1998: Assicurazioni Generali, Trieste, becomes the sole shareholder"). ↩
3. Wikipedia, "BSI Ltd" (above) ("2008: BSI acquires Banca del Gottardo"). ↩
4. Wikipedia, "BSI Ltd" (above) (assets under management CHF 84.3 billion in 2015). ↩
5. Wikipedia, "BSI Ltd" (above) (2015: USD 211 million paid under a non-prosecution agreement); Swissinfo, "EFG completes acquisition of BSI" (November 2016), https://www.swissinfo.ch/eng/private-banking_efg-completes-acquisition-of-bsi-/42559744 ("BSI's $211 million U.S. tax evasion penalty"). That BSI was the first bank to conclude a non-prosecution agreement under the Swiss Bank Program (30 March 2015) is from general knowledge. ↩
6. Wikipedia, "BSI Ltd" (above) (sale to BTG Pactual for USD 1.7 billion, July 2014). The date of completion of the sale has not been verified. ↩
7. FINMA, "FINMA takes action against BSI in 1MDB case" (media release, 24 May 2016), https://www.finma.ch/en/news/2016/05/20160524-mm-bsi/. ↩
8. FINMA (24 May 2016, above). ↩
9. Federal Act on the Swiss Financial Market Supervisory Authority of 22 June 2007 (Financial Market Supervision Act, FINMASA), SR 956.1, Art. 35, as described in Federal Administrative Court, media release on judgment B-3930/2016 (3 December 2019), https://www.bvger.ch/en/newsroom/media-releases/bsi-case-finma-s-approach-is-incomprehensible-1108. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.