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Russia's largest lender Sberbank quits Europe
Russia's largest lender Sberbank quits Europe
Russia's largest lender Sberbank said Wednesday it was leaving the European market after Western sanctions were levelled against the state bank in response to Moscow's invasion of Ukraine.
"In the current environment, Sberbank has decided to withdraw from the European market," the bank said in a statement carried by Russian news agencies.
Sberbank's European subsidiaries were experiencing "abnormal cash outflows and threats to the safety of employees and branches," the statement added.
The group's shares plunged 94 percent to just 1 US cent on the London Stock Exchange on Wednesday.
Sberbank ran into financing issues following the announcement of tough European Union sanctions aimed at choking off Russian banks' access to capital markets.
The bank said that it would be unable to ensure liquidity for its subsidiaries, but that they had "a high level of capital and asset quality, and clients' deposits are insured according to local legislation".
The bank's assets are sufficient to pay out to all the depositors, it said.
Since Russian troops rolled into Ukraine last week to achieve Vladimir Putin's mission of overthrowing the pro-Western government of President Volodymyr Zelensky, hundreds of civilians including children have been reported killed.
European banking regulators said Tuesday that the European subsidiary of Russia's Sberbank would be wound up.
Sberbank's Austria-based European arm, Sberbank Europe AG, which has almost 4,000 staff, would be allowed to enter "normal insolvency proceedings", the European banking supervisory authority, the Single Resolution Board, said.
It added that subsidiaries in Croatia and Slovenia were sold to local banks.
On Monday, the European Central Bank had said that Sberbank Europe AG and its subsidiaries were "failing or likely to fail" after they "experienced significant deposit outflows as a result of the reputational impact of geopolitical tensions".
Sberbank's arm in Switzerland was not affected by the measure because it is not part of Sberbank Europe AG, and continues to function normally, the bank's spokeswoman Polina Trizonova said in a statement.
Sberbank on Wednesday announced robust results for 2021 with net profits of 1.246 trillion rubles (around $12 billion at the current exchange rate, which has fallen dramatically since 2021).
Since the autumn of 2021 Sberbank's capitalisation has fallen by almost 95 percent.
O.Ouellet--SMC
