Russia’s Sberbank, a European subsidiary, will be liquidated after being pressured by Western sanctions against the bank in response to Moscow’s invasion of Ukraine, European banking regulators said on Tuesday.
The Austrian subsidiary of Russia’s largest lender, Sberbank Europe AG, will be allowed to enter “normal insolvency proceedings” while branches in Croatia and Slovenia have been sold to local banks, according to the Single Restructuring Council, part of the European Union’s system for bankruptcy. maintaining financial stability. declaration.
Investors in the Austrian subsidiary will be protected up to 100,000 euros ($ 111,265) in accordance with European law, while those in Croatia and Slovenia will be covered “without restrictions”.
Sberbank AG has experienced funding problems following the imposition of severe European Union sanctions aimed at stifling Russian banks’ access to capital markets.
The European Central Bank said Monday that the European subsidiary “has failed or is likely to fail” after “suffering significant deposit outflows as a result of the reputational impact of geopolitical tensions”.
Support for the Austrian subsidiary from his mother was not possible, as Russia’s central bank forbade financial institutions from sending cash to countries that have imposed sanctions.
Sberbank Europe AG – which is 100% owned by the bank’s Russian parent company – also has subsidiaries in Bosnia and Herzegovina, the Czech Republic, Hungary and Serbia that are not monitored by European regulators.
In the case of the Austrian subsidiary, SRB determined that leaving the bank bankrupt “will not have a negative impact on financial stability”. Subsidiaries in Croatia and Slovenia will reopen as usual on Wednesday.