Wirecard Bank AG

analysisAccording to ESMA's chronology, Wirecard bought XCOM in 2006 and renamed it Wirecard Bank, obtaining Visa and Mastercard licences to issue credit cards and handle money for merchants; a European Parliament briefing describes it as holding a full German banking licence under BaFin's supervision and as a member of the private banks' deposit protection fund. The 2011 annual report calls it a principal member of MasterCard and Visa and a member of JCB, with licences for card issuing and merchant acquiring and online-acquiring licences for China UnionPay and Discover/Diners Club; the 2019 prospectus adds American Express. In the 2019 half-year report the Acquiring & Issuing segment comprised Wirecard Bank AG, Wirecard Acquiring & Issuing GmbH and the group's Turkish, Brazilian, British and North American card companies. ^{1 2 3 4 5}

analysisOn 8 May 2018 the bank applied to BaFin for approval of a restructuring that would make it a direct subsidiary of Wirecard AG, starting an owner-control procedure with the Bundesbank and the European Central Bank; approval came in January 2019, but because Wirecard missed the deadline it had to apply again in January 2020. A 2017 special audit under the minimum requirements for risk management found weaknesses in lending: no risk classification procedure for strategic loans, weaknesses in assessing collateral and debt-service capacity, incomplete financial statements for risk-relevant exposures and no evidence of regular impairment tests on collateral. The Finance Ministry's timeline lists several special audits between 2010 and 2019, including one of the lending organisation from 3 June to 21 July 2017. ^{1 2}

analysisOn 3 June 2019, after press reports that the bank processed payments for operators of fraudulent trading sites, BaFin asked the prosecutor and the Financial Intelligence Unit (FIU) for further information; after a special anti-money-laundering audit in early July it placed the bank under intensive anti-money-laundering supervision on 15 July 2019, a classification the ministry says resulted from a differentiated risk analysis unrelated to the allegations against the parent. The FIU had received more than 500 suspicious-transaction reports from the bank about its customers and held more than 1,000 items with links to Wirecard, of which 72 were, as of 9 July 2020, possibly connected with the allegations against Wirecard AG. By decision of 13 January 2021 BaFin fined the bank EUR 60,000 under the Banking Act, final on 2 February 2021. ^{1 3}

analysisAccording to the company's statement of 25 June 2020, Wirecard Bank was not part of the insolvency proceedings and BaFin had appointed a special representative for it; the bank assured customers that their deposits were protected up to EUR 19.7 million each, and the service provider Xolo stopped opening new Wirecard Bank accounts for Estonian e-residents. A news report of 2 July 2020 citing insiders said Deutsche Bank intended to help the still solvent bank and was positioning itself for a possible takeover, that the Bundesbank had been installed as special representative to ensure that no funds flowed to the parent, and that Aldi Süd had moved its customers' card payments to Payone; no statement by Deutsche Bank is in the record. No takeover by Deutsche Bank followed, and the bank was later renamed WDB Abwicklungs AG. ^{1 2 3 4}