The long-standing Forex brokerage under the name Varengold Bank, may have a short time left for its Capital Markets brokerage as the firm is preparing to wind it down, according to headlines by German finance company DGAP, and as per people close to the news that Finance Magnates reporters spoke with.
The German written press release from DGAP said that Varengold will focus on segments with higher risk-adjusted returns, including commercial banking, and prime brokerage, as it aims to end its capital markets business segment, and after the capital it raised in February for its shares.
In the last few years as the change in ownership shifted at the firm, so did the company’s landscape, including after it closed its Middle East operation in Dubai, and now people from its Hamburg office in Germany may be preparing to make moves.
Varengold Bank AG has been registered with Germany’s BaFin regulator across a number of its licenses for many years now – with the oldest one dating 1998 for its initial broking license (Finanzkommissionsgeschäft (§ 1 Abs. 1 Satz 2 Nr. 4 KWG) and its newest change from 2013 for its deposit and lending segments, among others, according to information on the regulator’s website.
2020 Trading Cup Gets Off to a Flying StartGo to article >>
2013 was around the time when its CEO and current board member Frank Otten joined the helm of Varengold Bank, nearly 2.5 years ago, and after having served as global head of financial institutions for 19 years at HSH Nordbank, as per a LinkedIn profile with his name.
It’s not clear what the reason is behind a potential closure of the firm’s Capital Markets business, yet according to people familiar with the developments, staff may only have until May or even sooner before bidding farewell from that division.
Update: Comments From Varengold Bank CEO
Finance Magnates reporters reached out to the company for comments around time of publication and recieved comments from it’s CEO shortly after we published the original article, Mr. Otten said in reply to questions we posed, “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,” and added with regard to any reduction in staff “we anticipate that very few staff members will be affected because most of them are already now fulfilling their tasks not only for the Capital Markets Brokerage Business but also for the business lines we are going to strengthen.”
We asked what will happen to client’s funds and whether the firm will partner with another brokerage, such as an IB, or if client’s would be refunded, Mr. Otten replied, ” We are in the final stages of a process to define this and will make sure that our client’s interests will be safeguarded,” and concluded, ” It is definite that the bank will discontinue the business. The process will reflect the interests of our clients.”