The private Vontobel bank of Zurich has announced that the SFr100 million ($57.77 million) it set aside last month as a provision will be enough to cover all liquidation costs of its failed online banking project y-o-u.This content was published on May 8, 2001 - 10:30
The total costs of y-o-u will be up to SFr250 million, the bank announced on Tuesday.
An in-depth inquiry by the Vontobel Group's auditors, Ernst and Young, listed a number of serious failings in their report.
Last month, heads rolled at Vontobel, with the board of directors dismissing Jörg Fischer, the chief executive of Vontobel Group, Walter Kaser, the chief financial officer and Hans-Peter Bachmann, the head of the corporate finance department at Bank Vontobel.
According to the Ernst and Young report, it was the "head of corporate finance who initiated or carried out most of the business dealings in question or issued the respective instructions".
It added that the responsibilities of a chief financial officer were not fulfilled correctly, particularly with regard to accounting principles, risk monitoring and the extension of credit.
The Vontobel statement said that this year's accounts would be burdened by write-off and valuation adjustment requirements amounting to roughly SFr75 million as of the end of April with respect to several large securities positions.
It added that the first half net profit would be - as announced earlier well - below the record figure posted in the first half of 2000.
In a related development, Fischer on Tuesday criticised the Vontobel management for not allowing him to present his side of the story. In a written statement, he said that he welcomed an independent inquiry to be carried out by the Swiss federal banking commission.
Fischer, who is chairman of the Swiss stock exchange, said he did not wish to go into detail because he felt bound by Swiss banking secrecy laws.
Vontobel decided to set up y-o-u early last year, with the aim of attracting some 1.4 million affluent clients across Europe by the year 2005. It announced the project would be discontinued on February 27, after spending SFr151 million. It said that the cost projections and time frame had been "shown to be unrealisable".
swissinfo with agencies
This article was automatically imported from our old content management system. If you see any display errors, please let us know: email@example.com