Dubai Financial Services Authority takes action after Portuguese group ran into financial problems
The Dubai Financial Services Authority (DFSA) said on Thursday that it was imposing restrictions on ES Bankers (Dubai) Ltd (ESBD), part of Espirito Santo group, after the Portuguese group ran into financial difficulties.
The measure is the latest in a web of international regulatory action against Espirito Santo in an effort to untangle the finances behind the troubled business empire. In August, Banco Espirito Santo, which is part of the group, was rescued by the Portuguese state after reporting 3.6 billion euros in losses.
ESBD has been restricted from taking or paying deposits, and it is required to maintain and preserve its assets, the DFSA, which is the regulator for the Dubai International Financial Centre (DIFC), said in statement.
The DFSA said ESBD's operations and solvency had been "seriously compromised", and that it was acting to protect the interests of depositors and other clients of the bank.
The regulator had already taken steps after the "rapid onset of financial difficulties" at the wider group, including placing restrictions on transfers of assets to other Espirito Santo companies and requiring a manager to act in place of the board of directors of the Dubai business effective Aug. 11.
As a DIFC bank, ESBD is not permitted to deal with retail clients or accept deposits from United Arab Emirates clients,.
ES Bankers, which is 95 percent owned by Luxembourg-headquartered ESFG Holding, is a private banking and wealth management operation incorporated in the DIFC, according to its website.
The action was taken because of the failure of a Swiss-domiciled bank in the Espirito Santo Group, Banque Privee Espirito Santo (BPES), to honour contractual commitments to ESBD and to repay deposits owed to ESBD, the DFSA said.
Switzerland's financial regulator said Sept. 3 it was investigating BPES, which is undergoing voluntary liquidation, with a focus on its role in distributing securities and financial products to the wider group.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.