June 23, 2020 / 3:11 PM / 15 days ago

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

FILE PHOTO: The logo of Germany's Federal Financial Supervisory Authority BaFin (Bundesanstalt fuer Finanzdienstleistungsaufsicht) is pictured outside of an office building of the BaFin in Bonn, Germany, April 15, 2019. REUTERS/Wolfgang Rattay

FRANKFURT (Reuters) - German financial watchdog BaFin is working to shield customer deposits at Wirecard Bank (WDIG.DE) 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 (£1.7 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 (£1.26 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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