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FlowBank Enters Bankruptcy Proceedings Following FINMA Decision

FlowBank Enters Bankruptcy Proceedings Following FINMA Decision


The Swiss Financial Market Supervisory Authority (FINMA) announced on Thursday, June 13, the closure of the local online bank FlowBank and the initiation of bankruptcy proceedings against it.

FINMA confirmed that FlowBank SA “no longer has sufficient capital for its operations as a bank” and has seriously violated the minimum capital requirements it is required to meet. Additionally, there are “well-founded concerns that the bank is currently over-indebted.” FINMA stated, “as there is no prospect of a restructuring, the bank must be wound up.”

The law firm Walder Wyss AG has been appointed by FINMA to serve as the liquidator for the bankruptcy proceedings.

According to the announcement, FINMA first took enforcement action against FlowBank SA in October 2021 after identifying serious breaches of supervisory law, specifically concerning capital requirements, adequate organization, and risk management. Despite ordering the bank in October 2022 to implement “wide-ranging measures to restore compliance with the law” and appointing an independent auditor to monitor their implementation, the bank continued to exhibit compliance deficiencies. These included inaccurate and incomplete financial reports and failure to fulfill disclosure and reporting obligations to FINMA.

Due to these serious malpractices, prolonged non-compliance with licensing conditions, and the bank’s inability to restore legal compliance, FINMA ordered the withdrawal of the bank’s license on March 8, 2024, and disqualified its guarantee of proper business conduct. Following the initiation of bankruptcy proceedings, the bank’s licenses as a bank and securities dealer have been revoked.

FlowBank has confirmed the cessation of its commercial activities on its website. In an Information Letter to its clients, the company stated: “The commercial activities of the Bank stopped at the opening of the bankruptcy. The Bank is no longer authorised to carry out banking transactions or to act as securities dealer. In this regard, all payments, purchases and sales of securities can no longer be made. The Bank and its governing bodies are strictly prohibited from carrying out any legal act without the approval of the Liquidators.”

The letter from FlowBank assured customers that cash deposits held in their accounts at the bank will be reimbursed up to a maximum of CHF 100,000, with repayment terms currently being formulated. Additionally, custody assets, such as shares, bonds, funds, and certificates, remain the property of the clients and do not form part of the bankrupt estate. FlowBank will transfer these assets to clients subject to any compensation or restrictions. The liquidators are in the process of determining the transfer modalities.

FINMA emphasized that its primary aim is to protect depositors. According to its current calculations, the privileged deposits can be repaid in full from the bank’s available funds.

FlowBank also stated in the letter that it will soon send its clients a circular describing the procedure for the repayment of secured deposits and the transfer of custody assets.

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