Commerzbank is the latest company to feel the shock waves of Wirecard’s collapse, with the beleaguered firm having had a €200m ($237.51m) credit facility with the German lender.
At the time Wirecard imploded in June after it admitted that €1.9bn ($2.1bn) of the money in its balance sheet didn’t exist, the company had reportedly used up about 90% of its credit.
When Commerzbank announced its quarterly results, it highlighted that things had been looking good for the most part, but that one single provision had cost the bank €175m ($207.82m).
According to sources familiar with the matter speaking with Bloomberg, that one bad provision was Wirecard.
As a result, Commerzbank is now reportedly pushed into the red for the rest of the year, despite having had an otherwise solid quarter.
Of course, Commerzbank, while being hit the hardest, was not the only bank to suffer from Wirecard’s collapse. Bloomberg reported that ING Groep NV, ABN Amro Bank NV and Landesbank Baden-Wuerttemberg had similar exposures.
Moreover, regulators such as BaFin and auditor EY have been criticised for not doing more to prevent the scandal from growing, prompting people to call for more scrutiny in the sector.
BaFin has been sued by investors who accused it of having turned a blind eye against the evidence that things weren’t what they should’ve been at the collapsed FinTech.
Since Wirecard filed for insolvency in June, authorities around the world have been hard at work unearthing what could be one of the biggest financial frauds ever. Several of the company’s top brass have been arrested or are wanted by the authorities.
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