Frankfurt Due to the war in Ukraine and the sanctions against Russia, the VTB direct bank has been overwhelmed with inquiries and has therefore temporarily switched off the customer hotline. “Due to the special situation, we are currently receiving so many inquiries that we can hardly keep up with answering all the telephone calls,” explained the offshoot of the second largest Russian bank VTB on its website. “Unfortunately, more and more callers are using the wrong tone of voice.”
Since the bank could not integrate new employees quickly, they decided to “stop being available by telephone at short notice”. However, the institute can still be contacted by e-mail or via the website.
However, customers then have to wait some time for answers. On Monday, the institute was still processing inquiries from March 4, explained the VTB direct bank. It is a branch of VTB Bank Europe SE, the European subsidiary of VTB, and is monitored by the German financial regulator Bafin.
At the end of September 2021, VTB Bank Europe had customer deposits of EUR 4.35 billion. Until recently, their offshoot VTB direct bank attracted investors with annual interest payments of up to 0.65 percent on time deposit accounts.
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In the meantime, however, the institute is no longer allowed to collect funds from private investors. The VTB direct bank has now confirmed a corresponding report by the Handelsblatt on Monday. The Bafin allowed the money house to continue its business, but with the condition “that we are not allowed to accept any new savings deposits”.
The Bafin was informed about the shutdown of the customer phone, said a spokeswoman for the supervisory authority. “Due to the current situation, we are still in close contact with the institute.”
Waiting times when paying out money market accounts
In contrast to the European subsidiary of the Russian Sberbank, which collapsed after the outbreak of war in Ukraine, the economic situation of VTB Bank Europe is stable, the institute explained. In view of the sanctions against Russia and the parent company VTB, however, it is clear that the Frankfurt branch’s business cannot continue as it has in the past.
The supervisory authorities and German private banks are therefore hoping to be able to put VTB Europe into a kind of hibernation so that the institute can shut down its business in a controlled manner. This is intended to prevent a collapse in which the deposit insurance of the German private banks would have to step in. Only last year, when Greensill went bankrupt, it suffered a major loss.
According to VTB Europe, money is with her because of membership in the deposit protection fund up to at least 750,000 euros secured per customer. In addition, the institute emphasizes that payments from its overnight money accounts are still possible. Due to the high processing status, however, “longer waiting times could occur”.
The parent company VTB has come under international pressure: it is one of seven Russian financial institutions that the EU has excluded from the international payment messaging system Swift. However, this does not apply to the European subsidiary. VTB said its European subsidiary will continue to operate but is looking for ways to simplify its operations.
Financial center helps Löwen Frankfurt out of trouble
In Hesse, VTB Bank Europe was also the main sponsor of the Löwen Frankfurt ice hockey team for many years. However, the second division team ended sponsorship with immediate effect at the end of February due to the war in Ukraine – and got into financial difficulties as a result.
On Tuesday, several Frankfurt financial institutions announced that they would close the Löwen Frankfurt funding gap by the end of the season. “Deutsche Bank, Frankfurter Volksbank, Helaba, ING Deutschland, Metzler, Oliver Wyman and Valuebridge have promised their short-term and unbureaucratic financial help,” said the financial center initiative Frankfurt Main Finance.
Talks are being held with other financial center players, in particular to fill the vacant sponsorship positions for the next season and thus ensure licensing for the 2022/2023 season.
“The financial center’s spontaneous willingness to help is overwhelming and gives us courage,” explained Stefan Krämer, managing partner of Löwen Frankfurt. With the new support, the club can initially concentrate more on ice hockey and the targeted promotion to the first German ice hockey league (DEL).
More: European subsidiary of VTB is no longer allowed to collect deposits