Sberbank’s Austrian operations, Russia’s largest lender, are set to go bankrupt while its Croatian and Slovenian units are transferred to new owners by the EU authority responsible for reorganizing failed banks.
The move was announced by the EU’s only decision-making council on Tuesday evening and makes Sberbank’s Austrian envoy the first banking victim of the far-reaching sanctions imposed on Russia in response to its invasion of Ukraine.
The SRB already was suspended Most of the activities of the Russian bank are state-owned this week, after customers rushed to withdraw money in response to Western sanctions.
The SRB said On Tuesday it decided to transfer all the shares of Sberbank’s Croatian subsidiary to Hrvatska Poštanska Banka, while its Slovenian unit will be transferred to Nova Ljubljanska Banka. He said both banks will open on Wednesday.
“The SRB has also decided that a decision is not necessary for the Austrian mother of Sberbank Europe AG,” he added. “Insolvency proceedings will be carried out under national law. Eligible deposits up to € 100,000 are protected by the Austrian Deposit Guarantee Scheme”.
This is only the second time the SRB has taken over a bank in trouble since its inception in 2015 as a pan-European authority with the power to impose losses on shareholders and junior bondholders of failed lenders in an attempt to avoid a government bailout in the country.
The last time the SRB took over a bank through an official settlement process was when it would orchestrate the sale of Spanish Banco Popular to rival Banco Santander for € 1 in 2017.
Sberbank Europe has around 800,000 retail and business customers in Central and Eastern Europe, with almost 4,000 euros and 13 billion euros in assets and assets. The Russian bank set up its European subsidiary when it acquired Volksbank International in Austria in 2012.
Sberbank Direct, its online banking business, has sought to expand its deposit base by offering German savers an interest rate of up to 1.5% on their money – much higher than the almost zero interest rate offered by most local lenders.
However, the Russian bank last year agreed to sell its operations in Bosnia and Herzegovina, Croatia, Hungary, Serbia and Slovenia to a consortium of banks headed by Slovenian AIK Banka. But this deal has not been completed and has been undermined following the collapse of Sberbank’s operations in the EU.
EU arms of Russia’s biggest bank to be placed into insolvency or sold Source link EU arms of Russia’s biggest bank to be placed into insolvency or sold