According to reliable sources, ECB's banking supervision, followed by Luxembourg's financial supervisory authority, the Commission de Surveillance du Secteur Financier (CSSF), intends to close Banque Havilland in Luxembourg.

Little is currently known about the reasons for the imminent license revocation. However, given the geographical focus of the regulatory action, it is assumed that the potential cause is located at the headquarters. This is confirmed by a source familiar with the matter to finews.com: the reasons lie solely in Luxembourg.

Regular Irregularities

Banque Havilland has repeatedly drawn attention due to irregularities.

At the end of 2018, it was fined 4 million euros by the CSSF for inadequate measures against money laundering and poor governance – one of the harshest administrative fines the authority can impose.

Suspected Repeat Offense

Given this historical burden, it seems likely that the now imminent license revocation is due to facts that the CSSF deemed a repeat offense.

A few years ago, Bloomberg reported on the close entanglement of the bank’s British billionaire owner, the Rowland family, with the scandal-ridden Prince Andrew, who allegedly acted as a door-opener for new clients, according to international news agency reports.

Conspiracy Against Qatari Currency

Bloomberg also highlighted the apparently very active involvement of owner David Rowland in client acquisition and credit decisions. He had bought the bank in 2009 from the remnants of the defunct Icelandic Kaupthing Bank.

About a year ago, Banque Havilland in London was fined 10 million pounds by the Financial Conduct Authority (FCA), though the fine is not yet final. The now-closed British unit of the bank allegedly attempted to conspire with investors against the currency of Qatar.

Employees Charged in Monaco

A few weeks ago, two employees of the Monaco subsidiary of Banque Havilland were charged in Monaco for money laundering offenses.

Recently, finews.com reported inconsistencies in the country-by-country reporting in the bank's 2023 annual report: figures for the previous year 2022 were changed without plausible explanation, with the declared loss for Luxembourg increasing from 17 to 24 million euros.

Uncertainty in Liechtenstein

Within the banking group headquartered in Luxembourg with subsidiaries in Monaco and Liechtenstein/Switzerland, the Liechtenstein unit with its Zurich branch has so far not attracted negative attention.

Nevertheless, the question arises as to what the license revocation in Luxembourg means for the Liechtenstein bank with its approximately 40 employees and 1.6 billion francs in customer funds (as of the end of 2023).

Onboarding Currently Prohibited

Reportedly, the Financial Markets Authority (FMA) in Liechtenstein and the Financial Market Supervisory Authority (Finma) in Bern are closely monitoring the process. Normal banking activities such as customer onboarding or granting loans are currently restricted for Banque Havilland in Liechtenstein and Zurich.

Upon request, the Liechtenstein banking supervisory authority neither confirms nor denies the impending license revocation in Luxembourg. They stated: «Banque Havilland S.A. in Luxembourg is not under the supervision of the FMA. Therefore, the FMA does not comment on Banque Havilland S.A. in Luxembourg.»

FMA Statement

The bank has a subsidiary in Liechtenstein with a branch in Switzerland. The subsidiary, Banque Havilland in Liechtenstein, is an independent bank licensed in Liechtenstein and is thus supervised by the FMA.

«As part of prudential supervision, the FMA monitors the continuous compliance with the relevant legal standards by Banque Havilland (Liechtenstein) AG and all other banks licensed in Liechtenstein, as well as their branches.»

Safeguarding Measures

The authority further stated that «generally» it examines and promptly takes measures «when it becomes aware of a situation that could jeopardize the interests of customers of a Liechtenstein bank.» Such regulatory action could include «the issuance of safeguarding measures at the Liechtenstein bank.»

The goal is «to ensure that no customer suffers harm» and generally «to maintain the stability of the Liechtenstein financial market and protect the reputation of the financial center.»

Emergency Sale as an Option

It remains unclear to what extent it will be possible to separate business processes from the presumably soon non-operational Luxembourg headquarters. The likelihood that the subsidiary can operate independently as a bank is considered rather low. A theoretically conceivable way out would be an emergency sale, although a buyer would need to be found for that.

Whether the order to revoke Banque Havilland’s license has already been delivered or if it is already final could not be ascertained by Tuesday afternoon. The bank was not available for comment.