FNG Exclusive… FNG has learned that Walder Wyss Ltd, liquidator of bankrupt Swiss neobroker / neobank FlowBank, has issued an update to former clients and creditors of the company, providing more insight and data from its efforts to return client and creditor funds, and deal with some of Flowbank’s assets, including its ownership stake in FCA regulated broker London Capital Group (LCG).

Flowbank return of client and creditor funds

First, the good news.

Walder Wyss indicated that it is confident that the first and second class claims against Flowbank will be paid to the relevant creditors in full. First and second class creditors are essentially those whose deposits are up to a maximum amount of CHF 100,000 per creditor. Based on the Bank’s records, the liquidators have admitted these claims in the amount of CHF 2.2 million.

The not-so-great news is that based on available assets, the liquidators estimate at this stage that the refund for (the much larger amount of) third class claims will be in the range of between 70% and 80%. Third class claims include mainly unsecured deposits from the Bank’s customers of above CHF 100,000. Total amount of claims filed in third class is CHF 384.2 million – meaning that between CHF 77 million to CHF 115 million of Flowbank deposits will likely not be returned.

London Capital Group (LCG) sale

Walder Wyss also reported that it is still seeking a potential buyer for LCG, the FCA regulated FX and CFDs broker that was owned by FlowBank. We reported recently that following a rebranding and change in business model to becoming an Introducer, LCG has seen an improvement in results, with positive cash flow in H2-2024 and the company expected to report an annual profit for 2024, following losses in 2023 and 2022.

Transfer of securities to clients

Walder Wyss reported that for clients who chose this route, the transfer of securities is still ongoing. The transfer of a client’s portfolio to another beneficiary bank  is not a very frequent process. Consequently, the volume of transfers that the Bank has to deal with as part of this liquidation is much higher than before the liquidation.

Regarding the status of the securities transfers, the Liquidators inform that as of 7 February 2025:

(i) 36,650 deposit positions were sold or transferred, out of a total of 39,640 deposit positions, representing 92.46% of the deposit positions;

(ii) 5,339 customers recovered their shares or the proceeds from the sale of their shares, out of a total of 6,281 customers.

At the same date:

(iii) 260 customers have never provided instructions for a total of 666 deposit positions, representing 1.68% of the deposit positions;

(iv) 682 customers have provided instructions but have not yet received the transfer of their securities for a total of 2,324 deposit positions, representing 5.86% of the deposit positions. It should be noted that 93 different financial institutions are designated as Beneficiary Banks.

The liquidators’ objective is to transfer or sell all the securities for which instructions have been received by 31 March 2025.

Inventory of Flowbank assets

Since the publication of the Flowbank liquidators’ previous circular in December 2024, the inventory of assets has changed, in particular due to the payment of secured deposits and various costs incurred by the bankrupt estate in connection with the transfer of securities and the payment of secured deposits.

As a result, the inventory of assets at 31 December 2024 can be summarized as follows:

We will continue to follow this story as it develops.