July 10, 2019
Wirecard’s own financial accounts, submitted to and published by the Brazilian Central Bank, show that MCA lending is negligible or non-existent in Brazil. This is a direct contradiction to their claim that at least €133m is being lent in “Brazil and Turkey, mostly Brazil.”
While Wirecard does not provide full financials for its subsidiaries, the firm’s Brazilian business is required to file certain information with the Brazilian Central Bank, which the Bank subsequently publishes. This is an opportunity to get an accurate picture of the maximum MCA the firm can be offering in that country.
Spoiler – almost none! The published balance sheet shows that there is almost no MCA lending in Brazil. Wirecard management is lying about the scope of the firm’s lending to merchants in Brazil.
and is revealed by significantly lower payables balances than receivables as merchants have been “prepaid”.
Wirecard’s accounts show almost no differentials between receivables and payables, proving that meaningful MCA activity from their balance sheet is impossible. Over four months the accounts show that payables are consistently over 96% of receivables (98% in April). Even if the gap is all MCA lending, it suggests that the maximum MCA being lent by Wirecard Brazil during this period is just €3.9m. This is far from their stated amount of €133m.
|2019 (BRL m)||Jan||Feb||Mar||Apr|
|Max MCA EURm||3.6||3.9||2.9||1.4|
The lies keep piling up. There’s no meaningful MCA lending in Turkey, and what there is, is illegal. Similarly, there’s close to zero in Brazil. So where is this €133 million? Are they lying about it to mask a lack of cash flow?
We urge you to verify the source documents yourself. Follow this link to access the Wirecard Brazil accounts on the Central bank website (the site can be slow). Scroll down to the bottom and select Balancete geral (“General Balance Sheet”) for the month of your choice. Because the website downloads an unwieldy CSV file, we are providing a translated pdf of all of the data currently available.
To translate the data yourself into a usable format:
Accounts Receivable from Issuing banks are: “Direitos Junto a Participantes de Sistema de Liquidação e de Arranjo de Pagamento” or (“Rights to Participants of Settlement and Payment Arrangement System”).
Accounts Payable to Merchants are the first operating liability, “Outros Depositos” or (“Other Deposits”, this is a Central Bank Classification).
We encourage you to compare the balances each month to our summary above.
|Wirecard Brazil (€M)||Our|
|Company Reported MCA||400||400|
|Brazil % Estimate||40%|
|Brazil MCA Estimate||160||160|
|Monthly Credit Volume||37.2||37.2|
|Calculated MCA Balance||18.6||18.6|