Malta-registered and MFSA-regulated Ferratum Bank was fined by the controversial regulator Financial Intelligence Analysis Unit (FIAU). The bank’s parent company Multitude SE has considered the FIAU’s penalty decision following a compliance examination on its subsidiary Ferratum Bank. The examination was carried out on Ferratum Bank between December 2018 and May 2019, resulting in an administrative penalty of €653,637. The fine was issued in August 2022, hence almost more than three years after the visit!
According to a statement, the Multitude Group and its Ferratum Bank take the AML/CFT framework very seriously. The bank has offered its services from Malta for ten years after obtaining its license as a credit institution in 2012 and currently employs 180 individuals. Its services comprise mainly low-value unsecured consumer loans to customers located within the EEA and retail deposits primarily from the German market. Acknowledging the importance of compliance, the Bank has, during the past years, made substantial investments in its internal control processes and increased the number of resources dedicated to this area. No earlier major administrative measures in this field have been imposed on Ferratum Bank by the FIAU.
While continuously supporting the missions of the FIAU, the Multitude group strongly disagrees with the FIAU’s decision, considers it disproportionate, and supports Ferratum Bank’s decision to appeal.
The Multitude group also wishes to express that the FIAU’s decision was highly unexpected. Ferratum Bank has always collaborated with the FIAU and MFSA openly and transparently. Among several considerations, the group wishes to highlight that it had been more than three years since the on-site visit and audit process were carried out, respectively the news of this penalty was unanticipated.
The Multitude Group would also like to highlight that the incident is isolated to the Ferratum Bank and does not have wider ramifications for the Multitude Group. The penalty decision does not significantly impact Multitude‘s financial position.
Multitude has been operating for 17+ years and was founded in Finland. It is listed in the Prime Standard segment of the Frankfurt Stock Exchange. According to FIAU, the compliance review of Ferratum Bank revealed that the bank’s Business Risk Assessment had various shortcomings that were of high concern for two reasons.
The first was that the inherent risk was being assessed inadequately, the FIAU said. Secondly, the controls in place were not being adequately assessed.
The FIAU has been highly criticized for being strong with the weak and weak with the strong. Shocking testimony in court revealed that Calamatta Cuschieri Investments Services Limited did hand €500,000 in hard cash to a convicted criminal. To date, FIAU has not fined Calamatta Cuschieri Investments Services for this, and neither the Malta Police did act. The FIAU officials do not declare their conflicts of interest. An FIAU official, Rudolf Muscat, is a former employee of Calamatta Cuschieri. Another FIAU official is former XNT compliance officer Kristina Arbociute, who also hit the headlines for the wrong reasons.
