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Prepared by Ana Lariau (EUR).
A large exposure is defined as any exposure that is taken on by an entity with a client or group of connected clients by an amount higher than 10 percent of the entity’s eligible capital.
A person or a close member of that person’s family is related to a bank if that person has control, joint control, or significant influence over the entity or is a member of its key management personnel. Related party loans are referred to loans made by the bank to these persons.
The three Andorran banking groups combine domestic commercial banking with private banking both in Andorra and internationally. However, the weighing of each business line to the overall business and the relevance of international businesses differs by bank. Andbank is the largest bank by business volumes and is largely focused on international private banking. Credit Andorra is the largest bank by business volumes in Andorra, thus it is more exposed to commercial banking and to the domestic economy, though it continues to seek growth through its international private banking business. MoraBanc is the second largest player in the domestic market and, while its international expansion has been more modest than its peers, it has accelerated in recent years (Fitch Ratings, 2021).
AUMs declined slightly following the AML/CFT breach episode of Banca Privada d’Andorra (BPA), but have recovered since then and continued growing despite the COVID-19 shock.