MADRID (Reuters) - Subsidiary of Andorran lender Banca Privada d'Andorra (BPA) Banco Madrid has requested to enter in to insolvency proceedings and will suspend activity after significant deposit withdrawals, the Bank of Spain said on Monday.
"The decision comes after the sharp deterioration in the financial situation of Banco Madrid as a consequence of important withdrawals from client funds and after latest events which have affected its capacity to meet its obligations," the central bank said in a statement.
Deposits were protected by the Spanish deposit guarantee fund of up to 100,000 euros ($105,350) per client, the bank said.
Andorra seized control of privately-owned BPA last week as it investigates U.S. allegations of money laundering, and replaced executives with provisional administrators.
($1 = 0.9492 euros)
(Reporting by Tomas Cobos; Writing by Paul Day)
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