FINMA initiates bankruptcy proceedings against Espirito Santo
The Swiss Financial Market Supervisory Authority FINMA initiated bankruptcy proceedings against Banque Privée Espírito Santo SA. FINMA found that the bank, which has been in voluntary liquidation since July 2014, was over-indebted. According to current estimates, the bank is in a position to rapidly and fully reimburse privileged deposits to its clients.
During its close supervision of Banque Privée Espírito Santo SA, which is undergoing liquidation, FINMA found the company to be over-indebted. The fact that the bank is in liquidation resulted in it having to stringently re-evaluate its assets.
FINMA has been closely supervising the Swiss bank throughout this entire phase, requiring the bank to take action to enable it to handle the crisis. In July 2014, Banque Privée Espírito Santo SA thus decided to sell off significant parts of its client portfolios to CBH Compagnie Bancaire Helvétique SA for a fair market price. This allowed Banque Privée Espírito Santo SA to shorten its balance sheet and strengthen its capital base.
FINMA, however, aims to protect depositors. One of the first steps the newly appointed bankruptcy liquidator will thus undertake is the repayment of privileged deposits (up to CHF 100,000). Current estimates indicate that the bank has sufficient resources and liquid assets to fully reimburse its clients their privileged deposits.
Source: FINMA- FINMA initiates bankruptcy proceedings against Espirito Santo
