The European Central Bank (ECB) found on Monday (Sunday evening, 27th, in Brazil, the “breakage or probable bankruptcy” of the European branch of the Russian bank Sberbank, one of the largest in the country, due to “significant” withdrawals from deposits amid the Ukraine crisis and Western sanctions.
Austria-based Sberbank Europe AG and its branches in Croatia and Slovenia “have experienced significant deposit outflows as a result of the impact of geopolitical tensions,” the ECB’s banking supervisory body explained in a statement.
The entity warned that “in the near future, it is likely that the bank will not be able to pay its debts or other liabilities as they mature”.
The withdrawals caused a “deterioration of its liquidity” and “there are no measures available with realistic possibilities” to restore the institution’s cash flow.
Then, the Austrian regulator FMA imposed a “moratorium on the European branch”, with which it will not be able to carry out “any withdrawal, transfer or other transaction” until at least March 2.
According to European regulations, deposits from individuals are guaranteed up to 100,000 euros.
The two biggest Russian banks, Sberbank and VTB Bank, have since Thursday been the target of US sanctions, which seek to limit their international transactions due to the Russian invasion of Ukraine.
The sanctions aimed at the Russian banking system were reinforced on Saturday with the announcement of its exclusion from the SWIFT international banking platform.
Sberbank Europe AG is 100% owned by the bank’s Russian central. It also has branches in Bosnia and Herzegovina, the Czech Republic, Hungary and Serbia, which would have been affected by the crash but are under the jurisdiction of the ECB.
The European supervisor reported that he has “coordinated with the national authorities” in these countries.
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