Satabank has enough funds to pay back depositors, however, experts would have to finish combing through the bank’s 12,000 accounts first, sources in the financial services watchdog said.
“This is quite an undertaking. We are aware of the inconvenience this has caused to depositors and work is going on around the clock to address this as soon as possible, while ensuring the proper checks are carried out,” the sources said.
Accounts at Satabank, a small international bank, were effectively frozen by the Malta Financial Services Authority last month, with EY (formerly Ernst and Young) appointed to administer the bank’s assets in “the best interests of depositors”.
The move had come after a joint inspection and audit by the MFSA and Financial Intelligence Analysis Unit had found shortcomings in the bank’s anti-money laundering procedures.
Depositors have reportedly slipped into “a state of desperation” after they became unable to access their own funds and some had even taken to physically waiting outside Satabank’s St Julian’s headquarters in a desperate bid to find out what would happen to their money.
Sources involved in overseeing the process said Satabank holds around €300 million in customer deposits. Efforts were ongoing to release depositors’ funds as soon as possible, but no definitive date could be given yet.
“The money will be disbursed in a controlled manner so that the ‘competent person’ and the MFSA are assured that all the proper procedures are adhered to before the funds can be released,” the sources said.
EY is currently reviewing the accounts held by the bank’s 5,000 customers, to ensure the proper due diligence and ‘know your client’ requirements were met.
This, the sources added, was being done because the authorities had discovered “systemic failures” in the bank’s governance which raised concerns over whether or not the right checks had been carried out when the accounts had first been opened.
EY and the watchdog were now assessing which of the bank’s clients were at the highest risk of suffering immediate financial consequences from the block on all accounts.
In the meantime, however, depositors have contacted the Times of Malta to express their dismay.
“This has killed my business here in Malta. It has been a terrible ordeal,” an Italian businessman said.