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(Bloomberg) – Europe is splitting Sberbank of Russia PJSC’s business in the region after sanctions over President Vladimir Putin’s invasion of Ukraine led to the flight of local deposits.

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Austria-based Sberbank Europe AG will be liquidated through local insolvency proceedings, while all shares in its Croatian and Slovenian subsidiaries will be transferred to other companies in those countries, according to the Single Restructuring Board, which deals with insolvent European creditors. Shares of the parent company, listed in London, fell 90% on Wednesday, while trading in Russian shares remained closed.

Read more: Sberbank fell 90% in London, and the local market is still closed

The United States and the European Union are stepping up measures against Russia by blocking some of the national banks in various parts of the global financial system. As early as last week, the United States said it was sanctioning five of Russia’s largest creditors, including Sberbank and VTB Bank PJSC. While Sberbank in Europe is only part of the lender’s overall business, its closure is an additional blow to Russia.

“I think it’s fair to say that it was a bank run, which was really caused by increased geopolitical risk and sanctions,” Elke Koenig, who runs SRB, told reporters on Wednesday. “This is not insolvency due to negative equity, but insolvency due to lack of liquidity.

On Monday, SRB suspended most payments at three of the bank’s branches after the European Central Bank ruled that Sberbank Europe and its subsidiaries in Croatia and Slovenia were unlikely to be able to pay their debts or other debts.

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Hrvatska Postanska Banka, the only large state-owned bank in Croatia, will acquire Sberbank’s business in the country, while Nova Ljubljanska Banka will take over operations in Slovenia. Bloomberg announced their offers earlier on Tuesday.

Units in both countries will open on Wednesday “as usual, without interruption to depositors or customers,” SRB said. “They are already part of well-established, stable and stable banking groups.”

The Austrian financial markets regulator has said it has banned Sberbank Europe from continuing to do business. This triggers compensation for customers, giving the country’s guarantee system 10 banking days to pay up to 100,000 euros ($ 111,260) to a depositor.

Covered deposits

Sberbank has decided to withdraw from the European market after facing an accumulation of deposits, Russia’s largest lender said in a statement on its website. The bank failed to provide liquidity to its subsidiaries due to an order from Russia’s central bank, but local assets are enough to pay off all depositors, Sberbank said.

Koenig confirmed this, saying she was “very confident” that Sberbank Europe’s assets would cover its deposits, although it was not yet clear whether they would be enough for all its liabilities. Sberbank Europe previously reported 13.6 billion euros in assets.

The Austrian Deposit Guarantee Fund, backed by the country’s banks, said on Wednesday that it covers about 913m euros out of 1 billion euros in total deposits in the local unit. Sberbank’s Vienna-based division has about 35,000 private depositors, almost exclusively based in Germany but protected by the Austrian system.

Including Sberbank, the seven-year-old SRB has dealt with the bankruptcy of six banks, the last of which was in 2019. The Brussels-based regulator monitors creditors with cross-border businesses and other major banks, leaving the bankruptcy of smaller banks such as Greensill Bank AG in Germany last year. year, in the hands of national authorities.

The European Commission states in a separate statement that the Czech authorities have decided to close and liquidate the Sberbank branch in this country, and depositors are entitled to the same legal compensation as in Austria. Regulators in Hungary have also ordered the closure of Sberbank’s Budapest branch.

VTB Bank OJSC, a Russian lender that has come under tougher sanctions than Sberbank, does not accept new customers in its German division, but existing customers who are not subject to sanctions can gain access to their deposits, said German regulator BaFin. -early this week.

“For now, the financial system in Europe is definitely a stable financial system, but of course you never know what the future holds,” Koenig said. “But I would not consider something inevitable on our part. Needless to say, Russian-owned banks are under stress.

(Updates on trade in London in second place)

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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.

General Motors no longer invests in Lordstown Motors as the Ohio-based electric vehicle startup continues to struggle to keep its doors open.

GM confirmed on Tuesday that it had sold its stake in Lordstown in the fourth quarter of 2021 after an “undisclosed blockade period”, spokesman Jim Kane told CNBC.

GM owned 7.5 million ordinary shares during the SPAC deal in Lordstown, which made the company public in late 2020. GM’s stake was approximately $ 75 million in initial equity. The shares were given to GM in exchange for $ 25 million in cash and in-kind contributions. The shares account for less than 5 percent of GM’s ownership in Lordstown.

Lordstown has been experiencing significant difficulties since last year, delaying the launch of its first pickup and revealing to investors that it has no cash. Last year, he told shareholders there were “substantial doubts” that the company would open in June 2022. Foxconn, a Taiwanese-based electronics maker, bought Lordstown’s Ohio plant, providing a joint venture between the two companies that ultimately The bill will provide for the production of the all-electric Endurance pickup. The partnership is still being finalized, although the plant is already owned by Foxconn. CEO Dan Ninivagi said the partnership is key to Lordstown’s future endeavors.

Lordstown Motors slows down the Endurance truck, sells the Ohio plant to Foxconn

The uncertainty was enough for GM to get out. Kane declined to disclose the exact timing of GM’s sale of Lordstown shares, nor could he commit to net income or market value of the shares, as the total was not a significant figure. GM’s investment was seen as a “gesture of goodwill” as Lordstown struggled to keep cash flow from investors. GM and LG have built a $ 2.3 billion joint-stock battery plant in Lordstown, but it was not known whether the plant would supply cells for the Endurance pickup.

It seems that GM’s plan has always been to give up its investment in Lordstown. “Our goal in investing was to allow them to complete the purchase of the plant and restart production,” Kane said.

Yesterday, during a conversation about Lordstown’s profit for the fourth quarter of 2021, company executives confirmed that there are several pre-production vehicles already in production. These cars are used for various validation activities to achieve full homologation, said President Edward Hightower. “Despite ongoing challenges in parts supply and other supply chain issues, we continue to focus on commercial production and sales in the third quarter of 2022.” GM sales. Shares of Lordstown rose more than 3.5% at the time of writing, trading at $ 2.66 per share.

Disclosure: Joey Klender is not a shareholder in Lordstown.

I will be glad to hear from you! If you have any comments, concerns or questions, please email me at [email protected]. You can also contact me on Twitter @KlenderJoeyor if you have news tips, you can email us at [email protected].

General Motors no longer invests in Lordstown Motors

WASHINGTON (AP) – Moscow’s war against Ukraine and the fierce financial reaction it unleashed not only caused an economic catastrophe for President Vladimir Putin’s Russia. The consequences also threaten the global economy, shake up financial markets and make life more dangerous for everyone from Uzbek migrant workers to European consumers to hungry Yemeni families.

Even before Putin’s troops invaded Ukraine, the world economy was strained under a number of burdens: rising inflation. Intricate supply chains. Falling stock prices.

The crisis in Ukraine has simultaneously increased any threat and complicated potential solutions.

“We’re actually in unexplored territory,” said Clay Lowry, executive vice president of the Institute of International Finance, a trade group of global banks. “We know there are consequences we can’t foresee.”

At least for now, the damage to the overall global economy seems relatively minor, if only because Russia and Ukraine are not economically powerful centers. As important as exporters of energy, precious metals, wheat and other commodities are, they together account for less than 2% of the world’s gross domestic product. Most large economies have only limited trade exposure to Russia: for the United States, this is 0.5% of total trade. For China about 2.4%.

With the exception of a major escalation of the war – far from impossible – “the effects on the United States, China and much of the emerging world must be limited,” said Adam Slater, a leading economist at Oxford Economics. He predicts only a 0.2% drop in world GDP this year.

However, Russia is a vital supplier of oil, natural gas and metals, and higher prices for these goods are sure to cause economic damage around the world. Europe relies on Russia for nearly 40% of its natural gas and 25% of its oil. For the European continent, Russia’s war has significantly increased the likelihood of rapid inflation, another economic crisis – or both.

Here’s a deeper look:

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ECONOMIC SIEGE

Enraged by Putin’s aggression, the United States and other Western nations have turned to Russia with unprecedentedly broad and severe sanctions on a major economy. They have expelled major Russian banks from the international payment system SWIFT, restricted high-tech exports to Russia and severely restricted Moscow’s use of its foreign exchange reserves.

The rapid and united international revenge against Russia seems to surprise the Putin regime.

“The world – or most of it – is putting an economic siege on Russia,” wrote Karl Weinberg, chief economist at High Frequency Economics.

The sanctions quickly damaged. The Russian ruble fell to a record low on Monday. Depositors lined up in front of ATMs to try to withdraw their money from the troubled banking system. Detached from Google Pay and Apple Pay, the Russians were stuck in the ticket booths of the subway railways.

The Institute of International Finance predicts that the Russian economy will double-digit this year, even worse than its 7.8% decline in the year of the Great Recession in 2009.

Oxford Economics said evidence of wars ranging from the Iran-Iraq war of 1980-1988 to NATO bombing of Serbia in 1999 suggests a staggering 50% to 60% collapse in the Russian economy.

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DIFFICULT TIMES FOR EUROPE

Due to its dependence on energy from Russia, the European economy is now particularly threatened.

Natural gas prices have risen by 20% since the start of the war, in addition to earlier increases, and are now approximately six times higher than in early 2021. The gas price shock fuels higher inflation and the increase in utility bills. As a result, households have less money to spend, and hopes of a jump in consumer spending as a result of fewer pandemic restrictions and COVID-19 cases have diminished.

Rising gas prices have triggered what economists call “demand-wasting” among industrial enterprises, such as fertilizer producers who use a lot of gas and have now reduced production. Farmers pay more to drive machinery and buy manure. Germany’s economy, which fell 0.7% in the fourth quarter of 2021, will face a technical recession if it shrinks again in the first three months of 2022.

The economic downturn can be offset by an increase in German defense spending. In response to the Russian invasion, Chancellor Olaf Scholz said the government would allocate 100 billion euros ($ 111 billion) to a special fund for its armed forces and increase defense spending by more than 2% of GDP.

“The impact of higher prices and the negative impact of confidence could reduce real GDP growth in the euro area from 4.3% to 3.7% in 2022,” said Holger Schmiding, chief economist at Berenberg bank.

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NO RELIEF ON THE SUPPLY CHAIN

The unexpectedly stable recovery of the world from the pandemic recession has forced companies to struggle to find enough raw materials and components to produce goods to meet growing customer demand. Congested factories, ports and freight plants mean shortages, delays in deliveries and higher prices. Interruptions in Russian and Ukrainian industry may delay any return to normal.

Mark Zandi, chief economist at Moody’s Analytics, noted that Russia and Ukraine together produce 70% of the world’s neon, which is important in semiconductor production. This is particularly worrying because the world, and in particular car manufacturers, are already experiencing a shortage of computer chips.

When Russia seized Crimea from Ukraine eight years ago, neon prices jumped 600 percent, although Zandi noted that since then, chipmakers have stored neon and sought alternatives to Russian supplies.

Russia and Ukraine together supply 13% of the world’s titanium, which is used to make passenger planes, and 30% of palladium, which goes to cars, cell phones and dental fillings, Zandi said. Russia is also a major producer of nickel, used to make batteries for electric cars and steel.

“It’s impossible to catch up,” said Vanessa Miller, a partner at Foley & Lardner LLP, which specializes in supply chains.

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QUALITY PROBLEM

Conflict and sanctions will also damage Russia’s neighbors in Central Asia. As its own workforce grows older, Russia has turned to younger migrant workers from countries such as Uzbekistan and Tajikistan. The families of these workers began to rely on the money they sent home – remittances.

Even in the midst of COVID-19 in 2020, remittances from Russia to Uzbekistan exceeded $ 3.9 billion and to Kyrgyzstan $ 2 billion, according to Russia’s central bank.

“The pressure on the ruble, bank restrictions on foreigners and – in the long run – the collapse of Russia’s labor market will have an immediate and profound economic impact on Central Asia,” Gavin Helf, a Central Asia expert at the US Peace Institute, wrote this week. .

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DIRECTION OF FOOD SUPPLIES

Ukraine and Russia account for 30% of world exports of wheat, 19% of corn and 80% of sunflower oil, which is used in the food industry. Much of the Russian and Ukrainian awards go to poor, volatile countries such as Yemen and Libya.

The threat to farms in eastern Ukraine and the disruption of exports through Black Sea ports could reduce food supplies just when prices are at their highest levels since 2011 and some countries are suffering from food shortages.

Anna Nagarney, a professor of management at the University of Massachusetts Amherst, described the consequences as “extremely worrying”.

“Wheat, corn, oil, barley, flour are extremely important for food security,” Nagarney said, “especially in the poorer parts of the globe.”

With closed ports, airports and railways, and young Ukrainians battling the Russian invasion, she asked, “Who will harvest? Who will do the transport? “

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GROWING PRICES

The war in Ukraine coincides with a high-risk moment for the Federal Reserve and other central banks. They have been caught unprepared by the rise in inflation over the past year, largely as a result of the unexpectedly strong economic recovery.

In January, consumer prices in the US rose 7.5% from a year earlier, the biggest such jump since 1982. In Europe, Wednesday’s data is likely to show that inflation accelerated to 6% last month from 5.1 % in January for the 19 countries that use the euro.

Now the fighting and sanctions, which have disrupted Russia’s trade with the global economy, threaten to raise prices, especially energy: Russia and Ukraine, Zandi said, together produce 12% of world oil and 17% of natural gas.

To fight inflation, the Fed will start raising interest rates when it comes together in two weeks, reversing the ultra-low interest rate policies it adopted in 2020 to help save the economy from a pandemic recession. Similarly, the European Central Bank is gradually withdrawing its efforts to stimulate the pandemic.

But now? Central bankers must assess the growing inflationary pressures against the risk of the crisis in Ukraine weakening economies. In Europe so far, “there are no hints of rising interest rates,” said Carsten Brzeski, head of global macros at ING Bank.

Yet the Fed, rudely accused of slowly acknowledging the resurgence of inflation, may continue to deviate from easy money policies.

With the exception of a stock market crash or an expansion of the war outside Ukraine, Zandi said: “I do not expect any change in the Fed’s monetary policy as a result of the economic crossroads created by the Russian invasion of Ukraine.

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McHugh reported from Frankfurt, Germany. AP New York writer Ken Sweet contributed to this report.

Nvidia has confirmed that it was hacked – and that the actor behind last week’s “incident” is leaking employee credentials and his own information on the Internet. In a statement to PCMag, Bloombergand VideoCardzThe company says it learned of the violation on February 23 and that “it does not expect an interruption of [its] business or our ability to serve our customers as a result of the incident. “

The hacker group Lapsus $ claimed responsibility for the attack and asked Nvidia to make its drivers open source if it did not want more data to leak. Nvidia does not have to agree to these requests; the company says it has made security improvements, notified law enforcement and is working with cybersecurity experts to respond to the attack.

Lapsus $ claims to have about terabytes of data from Nvidia, according to PCMag. In a message seen by On the edge, hackers say that only the hardware folder is 250 GB and contains information about “all recent Nvidia GPUs”, including the mysterious RTX 3090 Ti. In an earlier statement, the group threatened to leak the files if Nvidia did not remove restrictions on its latest graphics cards, which aim to make them less attractive to cryptocurrencies. Lapsus $ updated its requirements today, adding Nvidia’s requirement to make its GPU drivers completely open source, and said the company has until Friday to make a decision.

After Nvidia confirmed that it was investigating an incident, there was speculation that ransom software was involved and that the attack could be linked to the Russia-Ukraine conflict. However, Nvidia says there is no evidence that any of these things are true.

This was said by Toby Lewis, Head of Threat Analysis at Darktrace On the edge that “the previous goals of the alleged hacker group and the almost local use of Spanish and Portuguese in previous ransom notes suggest that [it] He also said the group was “top secret” and that its attack on Nvidia seemed to be taking advantage of the confusion caused by everything that was happening, not motivated by ties to the Russian government.

Multinational carmaker Stellantis has officially joined the electrical revolution by recently outlining its plan for net zero carbon emissions by 2038. The conglomerate’s strategy, called Dare Forward 2030, calls for 50% of US car sales and 100% of European sales. to be BEV by the end of the decade. Stellantis is also annoying two upcoming EVs under its own brands: Jeep’s first electric SUV and the Ram 1500 BEV pickup, which are said to provide some flagship features.

Stellantis exists as the latest resurrection of Fiat Chrysler Automobiles (FCA), whose last namesake goes the line between bankruptcy and one of the “big three” in American internal combustion cars for decades. After merging with Peugeot SA, which was finalized in early 2021, the name Stellantis was born.

As the world’s top ten carmakers, Stellantis controls various notable vehicle brands, such as Alfa Romeo, Chrysler, Citroën, Dodge, Fiat, Jeep and Ram – to name a few. While Stellantis has an impressive number of well-known brands in markets around the world, its all-electric presence leaves much to be desired, especially as a growing number (well, in fact almost all inherited carmakers) promise a certain percentage of electrification to their fleets. this decade.

Slowly but surely, but mostly slowly, Stellantis appeared on BEV, despite 50% of the extra costs that electric vehicles bear, according to CEO Carlos Tavares, now that electrification is “imposed on the automotive industry”.

Despite Tavares’ disregard for creating more expensive vehicles that are better for the environment, Stellantis is turning to BEV. In January, Chrysler introduced the Airflow Concept EV and promised to become fully electric by 2028. Many models of its European brands such as Opel and Peugeot have also switched to BEV only, and the company itself is investing in future EV technologies such as solid state batteries.

Despite Tavares’ pessimistic outspokenness about electric cars just months ago, he helped chart a 15+ year plan for Stellantis, as it looks like someday it will reach net carbon neutrality.

Stellantis shares a net zero plan, including 75 BEV

Details of Stellantis’ Dare Forward 2030 strategy were outlined in a press release today after a two-hour live presentation. The presentation, led by Tavares, outlined all aspects of Stellantis’ strategy to achieve net zero emissions, including cultural diversity of employees, enhanced women’s leadership and even a support fund for Ukraine.

Here are some key points to save you the need to review the entire presentation:

• Stellantis aims for a 50% reduction in carbon emissions by 2030, net zero carbon by 2038.
• 100% of sales in Europe will be BEV by the end of the decade, 50% in the US.
• The company plans 75 proposals for BEV in all brands by 2030 to reach a global annual sales of BEV of 5 million.
• A US-specific product offensive is planned, offering more than 25 all-new BEVs (1/3 of the entire BEV portfolio).
• The planned capacity of the battery will increase by 140 GWh to approximately 400 GWh.
• Stellantis will work with Waymo to create a sustainable Delivery as a Service.
• The company aims to reach one-third of global online sales in 2030 and launch a global digital marketplace.

The new Stellantis BEVs include an electric Jeep, Ram 1500

Now let’s get into the things you actually clicked on here, the new electric cars! Not much of Tavares and Stelantis today, but they left us some breadcrumbs before we got a full slice in 2023.

One of the main EVs mentioned, albeit briefly, was the all-electric SUV – the first of its kind under the brand. This new model is scheduled to be launched in the first half of next year and will be the first of an all-electric Jeep, which Tavares says will cover every SUV segment by 2025.

Later this year, Dodge will unveil its first battery-powered muscle car concept. It is expected to be delivered sometime in 2024. Jeep’s electric family SUV will be joined by off-road UV, both of which will arrive in 2024.

Tavares talks about Stellantis’ deal with Amazon as its first EV fleet commercial customer with its Ram ProMaster BEV coming in 2023. Finally, Tavares introduced a teaser for the all-electric Ram 1500 pickup to arrive in 2024. Tavares had some bold promises for the upcoming pickup:

According to our internal performance index, our Ram 1500 will outperform all competitors in the features that customers are most interested in: range, towing, payload, charging time. Really exciting! It is built on our new architecture of the STLA frame, designed specifically for full-size electric vehicles. Do not doubt, we will bring the best electric truck in the full size segment. And Ram will continue to deliver fully electrified solutions in most of its segments until 2025 and a full portfolio of electrified solutions for all its segments no later than 2030.

You can view the entire Stellantis presentation here.

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Exxon, the largest oil company in the United States, was a glaring omission among major brands that have severed ties with Russia. The company manages the Sakhalin-1 project on behalf of a consortium that includes Russian, Japanese and Indian companies.

“In response to recent developments, we are beginning the process of terminating operations and developing steps to exit Sakhalin-1,” Exxon said.

The company has not detailed the financial consequences of terminating a project in which it has invested significant resources over the years.

Exxon has signaled that it will not be released overnight, saying it has a duty to ensure the safety of people and the environment when it leaves the project.

“The process of terminating operations will need to be carefully managed and closely coordinated with co-founders to ensure that it is carried out safely,” the company said.

In a statement on the state of the Union on Tuesday night, President Biden emphasized the fact that more goods are produced “Made in America”.

Biden pointed out that carmakers are contributing to production and job growth.

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The president said companies were choosing to build new factories in the United States when the factories were to be built abroad a few years ago.

He used Ford and General Motors as specific examples, but left one business leader and carmaker.

“Ford is investing $ 11 billion in electric vehicles, creating 11,000 jobs nationwide,” Biden said. “GM is making the largest investment in its history – $ 7 billion to build electric vehicles, creating 4,000 jobs in Michigan.

ILLON MUSK SAYS BIDEN TREATS AMERICANS “AS FOOLS” AFTER THE PRESIDENT MEETS GM, FORD EXECS FOR ELECTRIC CARS

Tesla CEO Elon Musk has objected to what he considers contemptuous.

Musk tweeted Tuesday night that Tesla has created “more than 50,000 jobs in the United States in the electric vehicle industry and is investing more than double GM + Ford combined.”

“Like all that, we created 369,000 new manufacturing jobs in America last year alone,” Biden added.

This was not the first time Musk had shot Biden.

Musk I said that President Biden “treats the American public like fools,” after Biden met with executives at rival automakers General Motors and Ford Motor in January.

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The electric vehicle pioneer said in September that the administration was “perhaps a little biased” and “seems to be controlled by the unions”.