The VTB direct bank is a branch of the VTB Bank Europe SE and is under the supervision of the Bafin.
(Photo: Reuters)
Frankfurt One day after the closure of Sberbank Europe, the European subsidiary of the second largest Russian banking group VTB emphasized its ability to function. VTB Bank Europe “is currently not subject to any sanctions from the European Union” and is a full member of the global payment system Swift, the institute announced on its website on Thursday.
The bank is in close coordination with the Federal Financial Supervisory Authority (Bafin). “The economic situation of VTB Bank (Europe) SE is stable and the bank is fully functional,” the statement continues.
On Wednesday, the EU Commission published a list of Russian banks that are to be excluded from the Swift banking messaging system. The Russian parent company VTB is on this list, but the legally independent subsidiary VTB Bank Europe is not.
On Wednesday evening, the Reuters news agency reported that according to insiders, authorities are currently preparing a possible closure of VTB’s European subsidiary. Two people familiar with the matter told Reuters that the reason was growing concerns about the impact of Western sanctions on the financial sector following Russia’s invasion of Ukraine. In its statement, VTB Bank Europe did not specifically address the Reuters report.
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At the request of the Handelsblatt, a Bafin spokesman said that the supervisory authority was in close contact with VTB Bank Europe and was continuously analyzing potential risks and developments from a supervisory perspective. “We do not comment on reports based on unnamed sources,” the spokesman said. According to information from the Handelsblatt, Bafin had already intensified supervision of VTB Europe because of the war in Ukraine.
At the beginning of the week, the authorities imposed a moratorium on the European arm of the Russian Sberbank due to high cash outflows and prohibited the institution from continuing business operations on Wednesday night. The parent company in Russia then announced that it would withdraw from the European market. The European branches are confronted with strong cash outflows and there are threats against employees and buildings, the bank had said.
VTB Bank Europe is based in Frankfurt and is therefore subject to EU law. It is under the direct supervision of Bafin. According to the annual report, the institute had customer deposits of around 4.7 billion euros at the end of 2020. In Germany it is represented by the branch office VTB Direktbank. She recently lured savers with annual interest payments of up to 0.65 percent on fixed-term deposit accounts.
At the beginning of the week, the European subsidiary of the Russian VTB Bank stopped new business. A spokesman for Bafin did not want to comment on the reasons for the stop in new business from the direct bank.
More: European subsidiary of Russian VTB Bank stops new business