June 23, 2020 / 4:12 PM / 18 days ago

German watchdog to shield deposits of Wirecard's bank - sources

A logo of Wirecard is seen on a booth at the computer games fair Gamescom in Cologne, Germany, August 22, 2018. REUTERS/Wolfgang Rattay/Files

FRANKFURT (Reuters) - German financial watchdog BaFin is working to shield customer deposits at Wirecard Bank from being affected by turbulence at its parent company, people close to the matter said on Tuesday.

Wirecard’s former boss has been arrested on suspicion of falsifying its accounts, after the German payments firm disclosed a $2.1 billion financial hole and questioned whether trustees had actually held money on its behalf.

BaFin is now seeking to prevent money held at Wirecard Bank to being used to plug the financial hole at Wirecard AG, the sources said.

Bafin and Wirecard declined to comment.

Wirecard Bank has a full banking licence and has been advertising its “Boon Planet” banking app offering an interest rate of 0.75 percent on deposits, while few other lenders offer any interest on deposits.

According to filings in Germany’s Federal Gazette 2018, Wirecard Bank had customer deposits of 1.39 billion euros ($1.57 billion) at the end of 2018.

Reporting by Hans Seidenstücker und Patricia Uhlig; Writing by Arno Schuetze; Editing by Douglas Busvine

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