07 March AtoZForex, Amsterdam — Last year, the German Bank already had a major management reorganization at its Varengold Dubai office. Eventually, the Varengold retail Forex division in the Middle East got closed down, while focussed was shift to its European market. Now, months later it seems like the entire Varengold retail Forex division will be closed down, as the bank is going to focus on other segments.
For many years, Varengold Bank AG was registered with Germany’s financial regulator BaFin for numerable of licenses and now the German Bank has decided to wind down its FX division. It depicts a remarkable move of the German bank, since last February Varengold raised its Cash Capital successfully. In more detail, on the 24th of February the company informed publicly that it successfully completed its capital increase through issuing 974,184 new shares. These shares of Varengold Bank were placed at the issue price of €13 per share.
CEO of Varengold Bank confirms exit
According to the press release on DGAP, Varengold is preparing to close its Capital Markets brokerage. The German bank is planning to focus more on its core business segments: commercial banking and prime brokerage. The motive behind this strategic shift is to turn to businesses that have higher risk-adjusted returns. This is also what the CEO of Varengold Bank confirms, as Frank Otten stated publicly:
“We decided to close the business first and foremost because we made the strategic decision to fully concentrate all our efforts on just two business lines which are Prime Brokerage and Commercial Banking. These business lines offer us in our assessment a better risk / return reward.”
See also: Varengold close Dubai operations
What will happen to the clients’ funds?
The pressing case at the moment is; what will happen to the funds of the clients. Relating to this concern, Frank Otten has commented that: “We will make sure that our client’s interests will be safeguarded. It is definite that the bank will discontinue the business. The process will reflect the interests of our clients.”
Lastly, what will happen to the staff? Now that the Varengold retail Forex will be closed soon. According to sources close to the developments, the personnel from the Capital Markets brokerage at the Hamburg office might have to leave as soon as in May.
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