The Austrian Financial Market Authority (FMA) has issued an emergency administrative decision (Mandatsbescheid) fully prohibiting the European American Investment Bank AG (Euram Bank), with its registered office at Schottenring 18, 1010 Vienna, from the continuation of business operations with immediate effect. Consequently an official payment stop of covered deposits occurred, so that in particular no further deposits, withdrawals or transfers can be conducted. This action triggered the deposit guarantee pay out event: Einlagensicherung AUSTRIA Ges.m.b.H. is therefore required within seven working days to pay out an amount to every depositor of this bank that is equal to the amount of their covered deposits.
Covered deposits are eligible deposits (such as credit balances on current accounts, salary accounts, student accounts and pension accounts or deposits held in savings books and saving accounts) up to an amount of EUR 100 000 or the equivalent amount in a foreign currency per depositor. An amount of up to € 500,000 may be repaid under certain conditions. The deposit guarantee scheme is already cooperating closely with Euram Bank to organise the orderly pay-out. In doing so, the deposit guarantee scheme must take into account any anti-money laundering checks.
Affected depositors may also contact Einlagensicherung AUSTRIA Ges.m.b.H by telephone or by e-mail:
Hotline (within Austria): 0800 404345
Hotline (international): +43 (1) 3589034
Further information: https://www.einlagensicherung.at/en/case-eur.php
The prohibition of the continuation of business operations as well as additionally appointing lawyer and external auditor Dr. Gerd Konezny as an expert supervisor (government commissioner) for the credit institution was necessary for protecting the interests of creditors. It was neither possible for a resolution to be passed for the required capital increase of € 25 million to ensure the continuing business operation of the bank, nor was it possible to present a successful self-liquidation in a conclusive and plausible manner. The bank’s grave financial situation is largely attributable to two particular causes: Firstly severe deficiencies in relation to the prevention of money laundering have necessitated the prohibition of new business thereby ruling out future and new revenues for the bank until further notice. Secondly, the need for enormous write-downs in the bank’s loan portfolio resulting from the bank’s practices in granting loans in recent years.
Further information
- Einlagensicherung Austria press release about EURAM (in German only)
- FMA orders Euram Bank to hold an extraordinary general meeting and to vote on a capital increase
- FMA imposes coercive penalty against Euram Bank for failure to submit its audited financial statement for 2023
- Under threat of a coercive penalty, the FMA instructs Euram Bank to establish legal compliance regarding the prevention of money laundering
- FMA appoints temporary administrator to assist Euram Management Board