ZURICH- Swiss private bank PKB Privatbank SA Lugano committed serious breaches of money laundering regulations in business linked to scandal-plagued Brazilian groups Petrobras PETR4.SA and Odebrecht ODBES.UL , the Swiss financial watchdog said.

"FINMA has ordered the disgorgement of 1.3 million Swiss francs ($1.40 million) in unlawfully generated profits and will appoint an external auditor to supervise the measures taken," the Financial Market Supervisory Authority said on Thursday.

FINMA has investigated more than a dozen Swiss banks in relation to the Petrobras and Odebrecht cases and launched four enforcement proceedings, one of which is still pending.

The bank in a separate statement said the decision would have no impact on the smooth functioning of the bank.

($1 = 0.9303 Swiss francs)

(Reporting by Michael Shields; editing by Brenna Hughes Neghaiwi) ((Michael.Shields@thomsonreuters.com; +41 58 306 7461; Reuters Messaging: michael.shields.thomsonreuters.com@reuters.net))