Varengold has blasted media protection of the German regulator’s investigation into the financial institution and defended its Iran-linked enterprise actions.
Earlier this month, it emerged that the German Federal Monetary Supervisory Authority (BaFin) is investigating Varengold’s cost transaction enterprise in its business banking division, as a consequence of attainable compliance violations.
On Tuesday (22 June), Varengold revealed that the regulator’s audit pertains to funds linked to Iran, which it stated provoked elevated enquiries from media in addition to shareholders.
“Numerous media are presently reporting on the so-called ‘Iran enterprise’, whereby the function of Varengold Financial institution in your complete advanced is being represented in {a partially} inaccurate and deceptive method,” the Hamburg-based financial institution stated at the moment.
Varengold, which has funding agreements with a lot of European peer-to-peer lending platforms, stated that it solely helps Iran-linked transactions within the humanitarian discipline.
“The enlargement of this space goes again to a enterprise resolution taken a few years in the past to help individuals who do not need entry to banking companies as a consequence of tough regulatory circumstances, political motives or different restrictions,” it stated. “On this context, the financial institution additionally supported exporters within the processing of funds for urgently wanted meals and medical know-how to Iranian importers.”
The financial institution stated these transactions are permitted and have been carried out correctly from the start.
Varengold additionally defended its liquidity place, after it emerged final week that it cancelled its dividend cost for 2022 to guard its capital base.
The financial institution stated it has “a long-term and adequate liquidity place” and defined how its steadiness sheet meant it might address a flurry of redemptions.
“Varengold Financial institution’s steadiness sheet complete is made up of about 60 per cent each day accessible account balances of company clients in an account on the Deutsche Bundesbank, about eight per cent fairness and provisions, and about 32 per cent name and fixed-term deposits of German savers,” it stated. “These German savers are matched by an an identical quantity of loans. Which means the steadiness sheet construction of Varengold Financial institution itself would be capable to address the simultaneous withdrawal of all deposits within the name cash accounts by clients.”
Varengold has greater than halved its full-year revenue steering, is chopping 22 per cent of its workforce and halting sure initiatives to chop prices within the wake of the regulator’s audit.
The regulator has imposed additional reporting necessities on the financial institution, referring to liquidity, financials and capital reserves.