SataBank Closed

[Martin Everson]

So most affected people are foreigners and expats who thought Malta operates like a normal country.

You summed it up well. The unsuspecting foreigner is the one who gets clobbered when the dust clears...literally . It is all very sad how this is being handled with ZERO respect for the clients of the bank. Not even a 50 euro a day ATM limit to allow people to survive. Two weeks with no money is no joke.

If they think people will forget these actions they are mistaken. They have shaken confidence in their ability to manage a tiny crisis. Good luck if one of their core banks starts to fail. People may want to consider keeping cash under their pillow......Satabank is the textbook example of why we should all do that .

 

[jackfrost]

I have to disagree, Malta is what you make out of it and it can be quite awesome E.g. i would hate to leave for Cyprus in case 2019 legislation goes bonkers and sure as hell would not go back to Mutti Merkel.

People just need to do their due diligence before just packing and moving to some little island and/or keeping money in EMIs that clearly state that they are an EMI and do not offer deposit protection, have very questionable investors etc or any Maltese bank for that matter. As KJK states correctly, things are run different in Malta than in continental Europe.

- you should know that when moving to Malta -

Do you due diligence, know what you are getting into. Grass is always greener on the other side at first sight...

 

[lookingforward]

Malta is a strange place, kinda like if Sicily became an independent state with a 'f**k everyone' attitude. The reality is that the country is a small place smaller than many cities in other countries.
Everyone knows "someone" - that is, someone connected to some shady practice, like operating semi-legal casino, broker, real estate company, bank.

Not that long ago in history the elite of Maltese population emigrated and left the island (for Australia, UK, America). What remained was a dull island with no resources, no beaches, half of its population gone and nothing special to offer. So I'm not surprised that they decided to offer something special to the world. Like these very 'special' banks

It's possible that the mentioned pensioner's son or daugther knew in advance and got some warning. So most affected people are foreigners and expats who thought Malta operates like a normal country.

this is so true

 

[negon]

I know a few people which are doign fine in Malta and Cyprus so as mentioned here already, people may want to do proper due diligence before they move anywhere.

 

[Martin Everson]

Bottom line is that Malta is a third world country that happens to be in the EU . It is a place where people that investigate corruption get blown up and no one don't speak out . The place is under developed....lol.

Malta car bomb kills Panama Papers journalist

 

[mbj]

To attend the GTRU meeting they want attendees to sign up for a membership. It costs 120€ / y.

I was late to the news of the meeting happening, so I did not go and had not to decide if I'd want to spend that money.

 

[Martin Everson]

To attend the GTRU meeting they want attendees to sign up for a membership. It costs 120€ / y.

That's quite sad as if things do not work out well then some people wont even have a business. So why commit to 120 euro a year.

 

[mbj]

My business will survive it. After moving I was just starting to accumulate savings. So in my case "only" 2 month of surplus are gone. Not too bad, and all my private accounts are at Bunq. An old policy of mine to never have business and private accounts on the same bank turned out to help.

Next client payments come this week to TW / Revolut. So I'm fine. But I'll probably not move any money to Maltese banks any time soon. Its confirmed that local IBAN is not required for the tax refund.

Others are far less fortunate. I've got people in my network that where hit super bad.

 

[mbj]

OT: My business is IT security, consulting. And tech wise SATA Bank never convinced me to be even a vaguely competent operator of a banking system. There are lots of visible flaws in their online interface. I should have executed my plan to move off them earlier.

I think there is a correlation (maybe even causation) from having very bad visible IT operations and shitty business. I'll not take this thread OT to talk about the visible issues, but when I walked into their office wanting to explain them what they are doing wrong: They refused to even listen. Other financial institutes I've reported issues too where reacting far more competent.

 

[Martin Everson]

More than two weeks in and this line below sums up the incompetence and urgency of Malta's MFSA who pulled the plug without a plan of action on how to follow things up. So glad my funds from BNF and BOV have successfully left Malta and arrived on my accounts outside Malta.....capital flight is real .

Satabank

-----------------

• We will be supporting the MFSA in designing the process to return customer deposits. We will update you on our progress in our next weekly update.

-----------------

 

[Martin Everson]

Surely Malta's MFSA has failed in its duty and is in violation of EU by failing to ensure that Satabank has a resolution plan in place? So what is this nonsense that Sata is saying above about "designing the process to return customer deposits". This should already exist and be part of the resolution plan should it not?

What does it mean when a bank is failing or likely to fail?

------------------
Every year banks are required to prepare recovery plans, which are assessed by their supervisor (the ECB in the case of significant banks). Recovery plans specify possible scenarios that could arise should a bank get into financial difficulty, and set out actions which the bank could take to continue operating, thus preventing a failure. A bank in financial difficulty could, for example, raise additional capital, reduce planned lending or sell assets.


The resolution plan, on the other hand, is a type of living will that sets out how a bank would wind down its operations should it be decided that it is no longer viable. The purpose is to determine the bank’s critical functions, identify and address any impediments to its resolvability and prepare for its possible resolution. The resolution authority is responsible for preparing the resolution plan for each bank based on information received from the bank and from the supervisor, who is also consulted in the process.

-------------------

 

[mbj]

This update they posted is just a weak summary of everything known before. But apparently they have the time to make "appealing" visuals. That announcement image indicates via its `Last-Modified` header it was uploaded today.

I'm not convinced I'll see my money back at this point.

 

[Milky Moon]

This update they posted is just a weak summary of everything known before. But apparently they have the time to make "appealing" visuals. That announcement image indicates via its `Last-Modified` header it was uploaded today.

I'm not convinced I'll see my money back at this point.

In 'theory' the closure is due to compliance issues, not 'stolen/missing' funds. So all the money should still be available.

 

[mbj]

I know the common theory. And I 'hope' its turns to be that case. But the current behavior does not give me reassurance that this is actually the case. Their press releases do tell me they have a distributed transaction fuckup. Their focus at this point seems to be to consolidate the open transactions.

But ask yourself what % of the overall deposited money in the bank should be "in flight" at a given point in time? Of all frozen accounts, I'd expect that 1% or even less should be subject to an in-flight transaction.

Now if its important that all money in-flight is consolidated before moving on (and moving on could even be to give everyone 50€ per day per account), it means that the overall money in the bank is not enough to give everyone his deposit back. Why else the open distributed transaction problem is blocking the process, if it should only block some accounts to have an up-to-date total?

They told the public: We had to stop the bank to protect depositors, but halting a distributed transaction system is a dangerous operation. You'd normally wait for bank closure.

And as they halted transaction processing "the mid of the day" where the owners caught moving significant liquidity out of the bank, defrauding the depositors? And the MSFA taking the route of an emergency shut down?
This is the only valid example I can think of on why you'd hold transaction processing mid-day. If they had waited to after bank closure they'd have had a FAR easier time consolidating the totals.

Sorry as someone who worked in the backend of banking systems, worked on distributed transaction validation this entire operation procedure stinks to hell.

The only hope is they where just too incompetent, and no good plan was in place (like Martin Everson hinted) and everything I see from my background is just paranoia.

 

[jackfrost]

ECB shuts Pilatus Bank as EU readies new move on Malta | Reuters

 

[blizz]

Malta is a strange place, kinda like if Sicily became an independent state with a 'f**k everyone' attitude. The reality is that the country is a small place smaller than many cities in other countries.
Everyone knows "someone" - that is, someone connected to some shady practice, like operating semi-legal casino, broker, real estate company, bank.

Not that long ago in history the elite of Maltese population emigrated and left the island (for Australia, UK, America). What remained was a dull island with no resources, no beaches, half of its population gone and nothing special to offer. So I'm not surprised that they decided to offer something special to the world. Like these very 'special' banks

It's possible that the mentioned pensioner's son or daugther knew in advance and got some warning. So most affected people are foreigners and expats who thought Malta operates like a normal country.

Well if you have sufficient with money this seems to be the perfect place to be. You can get it like you want.

Anyway, this is going of topic and we need to get back to the original post.

 

[sp00k]

Just noticed it today... when logged in to Satabank, trying to pay for routine corporate needs.
They didn't even notify account holders. I really felt it coming but was on a very long trip and planned to get the funds out in November.
From 2 years experience, Satabank was always a serious pain. Insanely incompetent, were trying to charge us 200 euro a month claiming we are gambling business. Which were are not.
Was hesitant to leave the Malta but too many issues arose.
There are serious delays with Tax refunds this year, so we didn't pay corporate tax for the 2016 still!
Funny thing I can't find articles on that, that were top in google search on months delays on corporate tax refunds and thousands of unhappy companies.
Can't pay lots of corporate bills and are forced to liquidate and move from Malta this year. At least there is time for that.
P.S. Have a legitimate photo-video stock business. Got corporate account but it is e-money as well.
Most probably moving to Estonia.

 

[Martin Everson]

ECB shuts Pilatus Bank as EU readies new move on Malta | Reuters

Slightly off topic I know but must add that Pilatus paid in its capital (8m Euros) via BOV. BOV is being investigated for its role .

@mbj you raise some important points. Satabank has some serious failing somewhere. Whatever the MFSA saw happening at satabank it was serious enough to cause them to act very quickly . It does seem that depositors funds (liabilities) are probably not 100% covered with available assets. Otherwise they could have returned them by now and worry about the other stuff later.

Satabank if I remember had around three account types:

Personal : No deposit protection
Business: No deposit protection
Merchant: Deposit protection

Lets hope that however they decide to distribute the funds that they don't discriminate against local and foreign depositors. That is what got Cyprus government currently entwined in a lawsuit by Greek depositors by violating international law with such actions .

Greeks Suing Cyprus for Lost Millions in Bank “Bail-In” - The National Herald

 

[mbj]

So lets assume there are not enough assets. Lets go with 50% for a thought experiment.

Now: Which type of deposit gets preference when covering the banks debt? Lets go through each player:

* Satabank officials themselves? Nave nothing to say (anymore).
* EY: Appointed by the MSFA, so is not an independent player with power, but gets payed to do whatever MSFA wants
* MSFA, has to oversee the stability of the entire banking system (and here is the catch 22)

Now the MSFA is primarily concerned with Malta as a whole. SATA Bank is just an "annoyance" for them. Which means they'll likely want to optimize down the pay out from the deposit protection scheme. As having to use the deposit protection scheme would show the public: Hey they regulated a bank that bad our precious savings have to be touched!

Right now, assuming 50% asset coverage I think the MSFA would invoke a rule like:

> Before deposit protection pays "anything" the bank assets must be fully liquidized into the debt.

Which means they have a huge incentive to use the assets preferably for covering the Merchant accounts. Which can likely reduce the deposit protection scheme pay out to 0%. And everybody else is just fucked. And they can rightfully point to: Well you had an account without deposit protection, not our fault!

 

[Martin Everson]

Which means they have a huge incentive to use the assets preferably for covering the Merchant accounts. Which can likely reduce the deposit protection scheme pay out to 0%. And everybody else is just fucked. And they can rightfully point to: Well you had an account without deposit protection, not our fault!

Unfortunately this is exactly what will happen. Merchants that will coincidentally happen to be local Maltese businesses will get paid first. It will be killing two birds with one stone i.e avoiding using deposit protection and protecting the local i.e restaurants . Ordinary e-money holders who knew all the risk when they signed up with Satabank (i.e ZERO deposit protection) will end up taking a massive haircut or getting nothing unless all funds are available.

Hopefully the bank can call in successfully all the loans it has on its books or find another bank in the local market willing to buy them. After all, these loans will probably be the banks only assets alongside its capital and any retained profits