Vontobel fires top execs after Internet bank overspend

Vontobel fires top execs after Internet bank overspend

Swiss private bank Vontobel has fired three senior executives after they led a failed Internet bank project that exceeded credit limits and had a material impact on earnings.

The Zurich-based asset management firm has fired operational chief Joerg Fischer, deputy chief executive and head of corporate finance Hans-Peter Bachmann and chief financial officer Walter Kaeser, following a month long investigation into the failure.

Vontobel last month scrapped plans to establish the country's first stand-alone Internet bank, dubbed y-o-u, after costs spiralled to Sfr167 million Swiss francs ($99.4 million). Contrary to previous statements, the firm now says that liquidation-related costs will burden the current year accounts and has taken a Sfr100 million provisional charge against 2000 earnings. This will lower group profits to Sfr241.6 million, virtually unchanged from the previous year's total.

In a statement Vontobel says that Fischer and Kaesar "did not adequately execute their duties pertaining the y-o-u project". The bank says it will conduct an urgent internal inquiry into the activities of the corporate finance department, led by Hans-Peter Bachman, after auditors discovered "irregularities" relating to the transgression of credit limits and infringement of accounting guidelines.

"The auditors will establish whether these irregularities will have any financial implications for the Vontobel Group within the weeks," says the bank.

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