Germany shuts down German arm of Canada's Maple Bank

The German financial sector watchdog, BaFin, said Sunday it has shut down the German arm of Canadian lender Maple Bank until further notice due to looming over-indebtedness.

Bafin said in a statement that it had imposed a so-called "moratorium" on Maple Bank GmbH, closing it down for customers and barring it from taking payments not related to redemption of debt.

Because the lender is tiny with total net assets of just 5.0 billion euros ($5.6 billion), it poses no threat to the financial stability of the country, BaFin said.

Maple Bank is known in Germany because it helped luxury sports carmaker Porsche in its ultimately failed attempt to takeover auto giant Volkswagen in 2008.

It specialises in equities and derivatives trading and had 2.6 billion euros in liabilities mainly with institutional clients as of February 4, BaFin said.

Because it is having to set aside tax provisions, there is a threat of over-indebtedness, it added.

In September, German prosecutors searched offices and residences linked to Maple Bank in a probe of serious tax evasion and money laundering connected to dividend stripping.