A bank run on Banco de Madrid following money laundering charges did the bank in today.

The Wall Street Journal reports Banco de Madrid Files for Bankruptcy After Parent Accused of Money Laundering.

Banco de Madrid SA, the Spanish unit of an Andorran lender accused of laundering money for organized-crime groups, has filed for protection from its creditors, Spain’s central bank said Monday.

Banco de Madrid has been hit by substantial client withdrawals, the central bank said, which has impacted the ability of the lender to “meet its obligations in a timely matter.”

Filing for creditor protection will allow depositors and other creditors “equal treatment.”

Deposits of up to €100,000 ($104,970) a client are protected by Spain’s deposit-guarantee fund, the central bank said. Banco de Madrid held €674.7 million in customer deposits as of September 2014, according to data from Spain’s banking association AEB.

he Spanish lender said it had undergone a “sharp deterioration in its economic and financial situation” in recent days after its parent company was named a “primary laundering concern” by the U.S. government. Banco de Madrid had over €6 billion in assets under management before the intervention, according to news releases published by the bank in recent months.

The lender had 15,000 clients and 21 offices in major cities such as Madrid and Barcelona as of March 11, a spokeswoman said Monday. The bank targeted high-net worth clients with deposits above €500,000, she added.

Goodbye Bank Madrid

Guru Huky says Goodbye Bank of Madrid. Operations Suspended

Huky comments …

Banco de Madrid, will be the first bankrupt entity to see in action at our brand new Deposit Guarantee Fund which guarantees the first €100,000 depositors have in a financial institution in trouble.

Looking at financial numbers Huky concludes “Oh, well, [Banco de Madrid] is a technically bankrupt zombie with a negative net worth of €1.637 billion.

Anyone who had over €100,000 in deposits probably lost it.

Mike “Mish” Shedlock