In the former bank, there are still a thousand of clients retained…

Despite the fact that the State Agency for Resolution of Banking Institutions (AREB), an institution created to respond to the situation of the Banca Privada d’Andorra (BPA), assumed the guardianship of the intervened entity, it has not been able to preserve the maximum value of the institution. To the contrary, they have half-acted by only finalizing the liquidation of the bank, but they have not been able to debug the responsibilities or recovered the savings of the clients.

More than two years after the fateful 10 March 2015, many unknowns remain to be solved, and the special commission is still far from issuing assertive conclusions about what happened and what needs to be done so that this black episode does not repeat itself. While clients and employees pay a high cost for the farces and inadequacies of the Government of Andorra to resolve this crisis.

The pit continues to deepen; as from first of January the “non-regularised” clients of Vall Banc cannot withdraw any money in cash, they can only dispose of their deposits using financial instruments such as transfer or checks. The “healthy” bank entity has limited the rest of clients to cash withdrawals of 250 thousand euros annually.

What is certain is that the measure taken by Vall Banc with the connivance of the administrative bodies of the Principality – AREB and INAF – aims at making any withdrawal of deposits harder and in this way retain the money of foreign clients that found themselves in the midst of the BPA crisis. Insofar that the provision for the “non-regularised” to not access cash seems as a measure to hinder the outflow of capital due to the large amounts of money that are exiting Vall Banc, as the ‘corralito’ imposed to the clients transferred from the intervened bank is without effect.

In the former bank, there are still a thousand of clients retained, most of whom, as is now known, have nothing to do with illicit practices. Even so, AREB maintains the absolute blocking of those clients, who since May of last year have not been able to retrieve a single euro.

Then it cannot be ruled out that the transfer of clients coincide with the expiration of the ‘corralito’ that was established ‘de facto’ on the first clients of the new bank coming from the defunct BPA. However, as of yet everything is still in uncertainty; the managers do not know what to tell the clients – who have had to provide two and three times the same documentation to prove the legality of their capital – when they are asked.

Negligently the executives of Vall Banc never tire of upbraid that the transfer is not ruled by them. While AREB, which is the body that formally has to make the decision, has absolved itself completely, despite the fact that the responsible of PricewaterhouseCoopers (PwC) already made the analysis of accounts and clients, for which in their opinion and criterion, they have already communicated their decisions. The Last Word belongs to AREB, which if opens more the tap, Vall Banc will take little in running out of euros.

At the end who are taking the hit, are the thousands of savers who trusted their capitals to BPA, and which have begun to claim compensations.

The experts on financial legislation had already warned about the following since August 2015: the Law of urgent measures for the restructuring or resolution of banking institutions, popularly known as the “BPA law”, should not contemplate the direct sale of the bridge bank; in other words Vall Banc should not juridical become a regular bank so that an acquisition of this entity could be made by a third party – as was the case with the vulture fund J.C. Flowers on the 14 July 2016. Contrary to what AREB had been trumpeting as a healthy manoeuvre and that has led to the total international discredit of the Andorran banking.

In the analysis, the Andorran authorities acted arbitrarily when not including a mechanism for a direct transformation of a bridge bank to a normal bank; on the contrary, they opted for the indirect route of the liquidation: the sale of assets and liabilities. The first negative impact was the fact that the ex-workers of BPA were the subject of new recruitment by whom purchased Vall Banc, which did not guarantee the working conditions of the employees, by failing to respect their positions and antiquity in the former bank.

The former Chief Executive Officer of Banca Privada d’Andorra and Banco Madrid, Joan Pau Miquel, had also alerted, by accusing the Andorran Government of intervening the entity “for State reason” and “without legal and technical means”, concluding the complaint presented at the time by the EU anti-money laundering agency, and described the Andorran performance as politicized and amateurish.