The VTB direct bank is a branch of the VTB Bank Europe SE and is under the supervision of the Bafin.
(Photo: Reuters)
Frankfurt The second largest Russian banking group VTB is suspending new business in the European Union. This also affects the VTB direct bank, which has collected a lot of money from small savers in Germany. Interested parties currently receive a short message: “Unfortunately, you cannot open an account at the moment. Please be patient.”
VTB Direct Bank is a branch of VTB Bank Europe SE. As a legally independent institution, it is under the direct supervision of the German financial regulator Bafin. A spokesman for the authority did not want to comment on the reasons for the stop in new business from the direct bank. VTB Bank Europe also kept a low profile.
However, the Frankfurt branch confirmed on Tuesday on its website that the money at VTB Direktbank is as safe “as at any other bank based in Germany”. The economic situation of VTB Bank Europe SE is stable.
Because of the situation in Ukraine, Bafin has intensified supervision of VTB Bank according to Handelsblatt information. “Due to the current situation, the Bafin is in close contact with the bank,” the supervisory authority announced at the beginning of the week. “Existing customers who are not subject to the sanctions can currently dispose of their credit within the framework of the contractual agreements.”
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One of the most important concerns of the financial regulator is to prevent funds from being transferred from VTB Bank in Europe to Russia.
Unlike the European subsidiary, the Russian VTB Bank is subject to the sanctions imposed by the European Union and the USA, since the banking group is majority-owned by the Russian state.
VTB Direktbank, in turn, is a member of the German Private Banking Association BdB. It recently attracted private investors with annual interest payments of up to 0.65 percent on fixed-term deposit accounts. According to the annual report, VTB Bank Europe had customer deposits of around EUR 4.7 billion at the end of 2020.
Details of the sanctions list
The Russian parent company has come under international pressure: According to a report by the Bloomberg news agency, VTB is on the draft of an EU list that specifies which Russian banks should be excluded from the banking intelligence service Swift.
Bank Rossija, Bank Otkritie, Novikombank, Promsvyazbank PJSC, Sovcombank PJSC and VEB.RF can also be found there. A spokeswoman for the EU Commission declined to comment.
According to the report, the state-dominated institutions Sberbank and Gazprombank are not yet on the Swift exclusion list. However, it is not final and is still to be coordinated with the USA. In the US, Sberbank and Gazprombank are already on sanctions lists, 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 USA, the EU Commission, France, Germany, Italy, Great Britain and Canada announced the Swift exclusion of certain Russian banks in a joint statement over the weekend, but without giving details.
The previous sanctions had already led to the European Central Bank (ECB) declaring on Monday that Sberbank Europe AG, a wholly owned subsidiary of Sberbank Russia, and its Croatian and Slovenian branches were or would soon be insolvent.
As a result, the Austrian supervisory authority FMA imposed a moratorium on the Vienna-based European subsidiary of Sberbank, which expired on Wednesday night.
This was done on behalf of the European resolution authority for banks, the Single Resolution Board. She had found that Sberbank Europe was actually highly likely to fail. The EU authority can decide to wind up the European subsidiary, sell it – or leave it to its fate. Then the institute would be a case for the Austrian deposit insurance. However, the deposit insurance of German private banks could also come into play.
More: The EU subsidiaries of the largest Russian money house Sberbank are on the verge of collapse