Liechtenstein-based Union Bank will give up its banking licence in the next few days as it enters voluntary liquidation.
A liquidator will be appointed to wind it up.
The private bank said that “all client funds are secured within the framework of the applicable liquidity regulations”.
Requirements
The reason behind the move was that the bank was unable to meet the capital adequacy requirements of the European Capital Adequacy Ordinance (CRR), which has been applicable in the country since 1 January 2020.
The regulation requires banks to set aside enough capital to cover unexpected losses and keep themselves solvent in a crisis.
Union Bank said that the reason for the non-attainment of the capital adequacy requirements was that “no shareholder acceptable” to the Liechtenstein watchdog Financial Market Authority (FMA) “could be found who would have contributed the necessary funds”.
Regret
The bank said in a statement on 10 August: “In recent months, the board of directors has intensively reviewed various options that would have permitted the continuation of operational banking activities under a new anchor shareholder and with a significantly higher capital base.
“It was not possible to renew the group of shareholders, although intensive negotiations were held with interested parties, some of which have also gone through the regulatory approval process.
“The board of directors regrets this development, especially since it was committed to the continued existence of the bank on a renewed foundation right up to the end.
“Our special thanks go to the employees of Union Bank AG, who have worked with us to the very end and always in the interests of our clients and shareholders, they all deserve our utmost respect.”
