Russia’s Sberbank pulls out of Europe after facing failure amid sanctions
Sberbank, Russia’s biggest lender, is pulling out of the European market, after it said it faced large outflows of cash in the region, as well as threats to the safety of its employees and branches.
The bank said in a statement that its European subsidiaries had faced “abnormal cash outflows”, meaning it could no longer supply them with liquidity. However, Sberbank said it had sufficient capital to be able to make payments to all of its depositors.
Sberbank has been operating in Germany, Austria, Croatia, and Hungary among other countries, and had European assets worth €13bn (£10.8bn) at the end of 2020.
The lender’s announcement came only hours after the European Central Bank had ordered closure of its European arm, warning it could fail after a run on deposits amid a backlash resulting from the Russian president Vladimir Putin’s invasion of Ukraine.
The UK, EU and US have been ramping up sanctions and taking unprecedented measures to squeeze Russia’s economy, including blocking Russia’s access to the Swift international banking payment system and restrictions on the Russian central bank.
Sberbank was among the list of banks added to the UK and US sanctions lists after the invasion by Moscow, with the British government highlighting the Kremlin’s controlling share.
The lender has played a significant role in financing Russian companies, including those listed on the London Stock Exchange. The government highlighted the Russian government’s controlling share and said it was a “highly significant entity”.
Sanctions are beginning to bite in Russia, where the rouble has tumbled in value since trading began on Monday morning, prompting the central bank to double interest rates to 20%, and suspend trading on the Moscow stock
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