FRANKFURT (AFP) – The European subsidiary of Russia’s state-owned Sberbank is facing bankruptcy, the European Central Bank (ECB) said yesterday, in the wake of sanctions aimed at punishing Moscow for its invasion of Ukraine.
Sberbank is one of Russia’s largest banks.
Austrian bank Sberbank Europe AG and its subsidiaries in Croatia and Slovenia have “experienced significant deposit outflows as a result of the reputational impact of geopolitical tensions”, the ECB said.
As a result, the bank is “likely to be unable to pay its debts or other liabilities as they fall due”, the ECB said.
“The ECB has assessed that Sberbank Europe AG and its two subsidiaries in the banking union, Sberbank dd in Croatia and Sberbank banka dd in Slovenia, are failing or likely to fail owing to a deterioration of their liquidity situation,” the ECB said.
The two largest Russian banks, Sberbank and VTB, were targetted last Thursday by tough United States (US) sanctions aimed at limiting their ability to conduct business internationally.
As customers rushed to withdraw their money from Sberbank Europe AG, “this led to a deterioration of its liquidity position”, the ECB said.
“There are no available measures with a realistic chance of restoring this position at group level and in each of its subsidiaries within the banking union.”
Austria’s financial market regulator FMA has imposed a “moratorium” on Sberbank Europe AG, blocking it from carrying out any “withdrawal, transfer or other transaction” until at
least tomorrow.
Under European Union (EU) legislation, retail depositors are protected up to EUR100,000 per depositor per bank.
Chief Executive Officer of Sberbank Europe AG Sonja Sarkozi said she was “in close contact with the competent regulatory authorities” to seek a solution to “an unprecedented situation”.
The bank’s Slovenian subsidiary said it had “recorded a substantial outflow of funds in a very short space of time” and had “decided to keep its agencies shut for the next two days”.
Withdrawals and payments were being limited to EUR400 per day, it added.
The Czech National Bank (CNB) said it was revoking the banking licence of Sberbank CZ, following “a deterioration of the bank’s liquidity situation in the context of a significant outflow of deposits”.
“In this context, the CNB has issued a preliminary measure preventing the bank from disposing of assets and liabilities, including the provision of new loans and accepting deposits,” it added in a statement.
Sberbank Europe AG is 100 per cent owned by the bank’s Russian parent company, which has 800,000 customers, employs 3,900 people and has assets worth EUR13 billion.
Sberbank Europe AG also has subsidiaries in Bosnia and Herzegovina, the Czech Republic, Hungary and Serbia, which do not come under the jurisdiction of the ECB.
