The closure of the Vienna-based European American Investment Bank AG (EURAM) has sent shockwaves through the financial world in Vienna. The Financial Market Authority (FMA) has intervened, halting the bank’s operations entirely due to severe deficiencies. With deposits totaling €276.3 million, the fallout from this move is significant, leaving hundreds of clients in uncertainty about their funds.
The EURAM Bank has long been under scrutiny, particularly for its failure to comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. Established in 1999, EURAM built its reputation through its dealings with foreign clients, often engaging in international transactions. However, repeated failures in AML compliance, identified as early as 2022, placed the bank squarely on the regulatory radar. A follow-up review in October 2023 showed no improvements, triggering the FMA’s decisive action to suspend the bank’s business activities.
One of the major red flags highlighted was EURAM’s loan portfolio, which had been marked by significant write-downs, pointing to high-risk lending practices over the past years. These internal financial issues only exacerbated the problems related to compliance with legal standards.
Despite the FMA’s escalating concerns, EURAM repeatedly refuted the allegations. The situation became untenable by early 2023 when the FMA barred the bank from conducting new business and installed a government administrator in August to oversee operations. Ultimately, the bank’s failures were deemed too severe to rectify.
For EURAM’s 757 clients, the collapse of the bank has triggered fears over their savings. While the majority of the bank’s clientele—often high-net-worth individuals—held substantial deposits, only €37.6 million of the total €276.3 million is secured through Austria’s deposit guarantee scheme. Fortunately, for deposits up to €100,000, the Austrian deposit protection entity, Einlagensicherung Austria (ESA), has assured customers that compensation will be processed within seven working days.
ESA has promised swift action to reimburse affected clients. Stefan Tacke, ESA’s managing director, assured that the process will be handled online for maximum efficiency. He also noted that ESA is closely cooperating with the Austrian Financial Intelligence Unit (A-FIU), reflecting the gravity of the AML deficiencies uncovered at EURAM.