The EU subsidiary of the state-run bank is insolvent.
(Photo: Reuters)
Vienna The EU’s tougher financial sanctions against Russia are claiming a first victim. According to the European Central Bank, Sberbank Europe AG, a wholly owned subsidiary of Sberbank Russia, and its Croatian and Slovenian branches are or are about to be insolvent.
The subsidiary of Russia’s largest bank apparently went bankrupt: “Due to the effects of geopolitical tensions on their reputation, Sberbank Europe AG and its subsidiaries had to accept significant outflows of deposits,” explains the ECB. “This caused their cash position to deteriorate.”
There is no way that would offer a realistic chance of restoring liquidity. Russia is the majority owner of the bank.
Also, Sberbank itself acknowledged that customers withdraw their funds. In some subsidiary banks, this has led to longer waiting times in the branches and in some cases to a restriction on the amount of daily cash withdrawals.
Top jobs of the day
Find the best jobs now and
be notified by email.
The bank said in a statement Monday it wanted to protect its customers and maintain the bank’s critical functions. “We are making every effort and fully supporting the authorities to use their powers to manage this unprecedented situation in the interests of customers,” says Sonja Sarközi, CEO of Sberbank Europe.
Deposits secured up to EUR 100,000
Sberbank Direct, a branch of Sberbank Europe, also collected money from private investors in Germany and recently lured customers with interest payments of up to 1.5 percent. Since the European subsidiary has its headquarters in Vienna, it is covered by the Austrian deposit insurance. In the European Union, all deposits up to EUR 100,000 per customer and bank are protected.
According to its own statements, Sberbank Europe operates in eight countries in Central and Eastern Europe and has total assets of 13 billion euros. The institute looks after 800,000 customers, operates 187 branches and has more than 3,900 employees.
Sberbank is not the only Russian institute trying to attract German private customers. There was no news on Monday morning about the Frankfurt-based subsidiary of the major bank VTB.
The institute’s website states, under the heading “Your money is safe with us”, that VTB direct bank is observing the “recent developments in the world with great concern”. There is currently a “large number of customer inquiries”. The institute emphasizes that it is a member of the deposit insurance of the German private customer association BdB, which protects deposits of up to 750,000 euros per customer.
More: Asia’s markets start unevenly after the package of sanctions – Moscow postpones the start of the stock exchange, the ruble collapses