A reorganization or liquidation of the bank according to the European Bank Reorganization and Resolution Directive is not in the public interest, it said.
(Photo: Reuters)
Frankfurt The European subsidiary of the Russian Sberbank, which is affected by sanctions, has to stop operations. On the instructions of the European Central Bank (ECB), the Austrian Financial Market Authority (FMA) has prohibited the institute from continuing its business operations. The FMA announced this on Wednesday night.
According to the Single Resolution Board (SRB), the European resolution authority for banks, a reorganization or resolution of the bank in accordance with the European Bank Reorganization and Resolution Directive is not in the public interest.
This automatically starts the compensation of the investors, amounts up to 100,000 euros are covered by the Austrian deposit insurance. Most of the affected customers come from Germany. A watchdog appointed by the FMA should now determine whether and, if so, when an insolvency offense has been fulfilled.
Sberbank Europe, based in Vienna, is a wholly owned subsidiary of the largest Russian financial institution, Sberbank. According to its own statements, it is active 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.
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In the US, Russia’s Sberbank is already on sanctions lists for Russia’s attack on Ukraine, and the EU has also imposed sanctions on banks that are more than 50 percent owned by the Russian state. This applies to Sberbank.
The previous sanctions had already led to the ECB declaring on Monday that Sberbank Europe and its Croatian and Slovenian branches are or will soon be insolvent.
“Sberbank Europe AG and its subsidiaries have experienced significant deposit outflows due to the impact of geopolitical tensions on their reputation,” the ECB said. “This led to a deterioration in their liquidity situation.” There is no way that would offer a realistic chance of restoring liquidity.
Croatian and Slovenian offshoots are sold
As a result, the Austrian supervisory authority FMA imposed a payment moratorium on the Vienna-based European subsidiary of Sberbank. She was therefore not allowed to “carry out any withdrawals, transfers or other transactions”. The only exception was for depositors, who were allowed to withdraw a maximum of 100 euros per day to secure “essential daily needs”. The payment moratorium would have expired on Wednesday night.
According to the SRB, unlike Sberbank Europe, both the Croatian and the Slovenian branch will be sold. The Croatian Postbank (HPB) takes over the domestic Sberbank branch, while the Slovenian branch is bought by the Slovenian banking group NLB.
After the restrictions of the past two days, the two banks would open as usual on Wednesday without any adverse effects for customers, the SRB said.
With agency material.
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