Foreign News
The largest bank in Russia has exited the European market.
The largest bank in Russia has exited the European market.
The largest bank in Russia has exited the European market.
Sberbank
The largest bank in Russia has exited the European market.
Sberbank of Russia is exiting the European market after many of its banking subsidiaries faced insolvency as depositors hurried to withdraw funds in response to sanctions imposed on Russia’s largest bank.
The bank has subsidiaries in Austria, Croatia, Slovenia, the Czech Republic, Hungary, and the Baltics. At least four have gotten into financial difficulties and had to be sold or dissolved.
In a statement issued Wednesday, Sberbank Russia PJSC stated that its “subsidiary banks have suffered an extraordinary outflow of funds as well as a number of safety concerns about its workers and offices.”
Sberbank’s retrenchment follows efforts by western governments to cut several Russian banks from the global financial system. The U.S. put Sberbank on a sanction list that forbids U.S. banks from conducting certain transactions with them, basically shutting it off from the U.S. dollar.
On Monday, the European Central Bank had already highlighted the risks Sberbank’s European units faced, warning that Sberbank Europe, based in Austria, and its subsidiaries in Croatia and Slovenia had been deemed failing or likely to fail.
Then on Tuesday, Europe’s Single Resolution Board, which is responsible for ensuring the orderly unwinding of failing financial institutions, said Sberbank’s subsidiaries in Croatia and Slovenia were sold to ensure the financial stability of the banks. The Croatian unit was sold to Croatian Postbank while the Slovenian unit was acquired by Nova Ljubljanska Banka d.d. The terms of the deal weren’t disclosed.
The Austria operation will be shuttered by the country’s authorities through an insolvency procedure, according to the SRB. SRB’s chairwoman, Elke König, said Wednesday in a press conference that Sberbank’s subsidiary in the Czech Republic went into insolvency on Monday.
Sberbank also said that its subsidiary banks remain highly capitalized and that customer deposits remain insured in accordance with local legislation. The bank has enough assets to execute payments to all of its depositors, Sberbank said.
