Volksbank Düsseldorf Neuss under pressure: scandal and rescue needed!

Volksbank Düsseldorf Neuss under pressure: scandal and rescue needed!

Volksbank Düsseldorf Neuss is currently facing an unprecedented crisis. After almost 150 years of existence, the bank last year for the first time recorded losses so severe that emergency aid was required. At the representative meeting at the end of May, financial burdens were discussed that the bank cannot bear from its own resources. In order to avoid a crash, it urgently needs a rescue package, which is secured, among other things, by guarantees from the Federal Association of German Volks- und Raiffeisenbanken (BVR). This situation is further burdened by a scandal that is making headlines not only nationally but also internationally. RP Online reports that the bank may be facing an existential threat.

A central aspect of the problem is the replacement of the entire top management team at Volksbank, which allegedly took place under pressure from the financial regulator Bafin. CEO Rainer Mellis and his colleague Jessica Jüntgen have resigned from their positions. Michael Horf, a former managing director of Degussa Bank, will manage the bank on an interim basis together with a general representative. The aim of this measure is to bring the bank back into “normal waters”. The supervisory board and Jessica Jüntgen want to ensure a transparent investigation of the fraud case, also known as the “Düsseldorf case”. South German newspaper addresses the risk factors that led to this situation.

The fraud case and its consequences

The fraud case, at the center of which is a criminal customer, has caused significant damage to the bank. This person illegally withdrew 100 million euros from a corporate account of a French company via an account in Turkey. The money transfer was problematic because the deposit amount was unusually high. Public prosecutors in Düsseldorf and Paris have launched investigations to clarify the background to these machinations.

There is currently a discussion within the Volksbanks as to whether the cooperative model might invite risky business. The three support cases are likely to cost the association several hundred million euros. Despite the estimated four to six billion euros that the Volksbanks' security scheme comprises, the damage to their reputation is already noticeable. The financial regulator Bafin checks the functionality of Volksbank Düsseldorf Neuss, while the BVR at the same time provides guarantees for stabilization.