Russia’s biggest lender Sberbank closes EU operations

In a statement on Wednesday, Russia’s biggest lender Sberbank said, it was exiting from almost all European markets following threats to its staff, property and large cash outflows.

The development comes in the wake of the bank reporting a record annual profit for 2021.

Sberbank said, it was no longer able to supply liquidity to European subsidiaries, following an order from the Russian central bank. Its capital level and asset quality however are sufficient to pay all depositors.

“In the current situation, Sberbank has decided to leave the European market,” it said in a statement. “The group’s subsidiary banks have faced abnormal cash outflows and threats to the safety of its employees and branches.”

US led sanctions by Western nations have isolated Russia’s economy and financial system following its invasion of Ukraine. Some Russian banks have also been kicked out from the global payments system SWIFT.

The European Central Bank (ECB) has also ordered the closure of Sberbank’s European arm.

Moscow has termed its invasion of Ukraine as a “special operation.”

As of December 31, 2020, Sberbank, which had operations in Austria, Croatia, Germany and Hungary among other nations in the EU, reported assets worth $14.4 billion (13 billion euros).

In a statement Slovenian bank NLB said it was acquiring Sberbank’s Slovenian unit.

Incidentally, Sberbank’s exit from the EU does not affect its operations in Switzerland.

The bank’s net profit for 2021 jumped by 64% year on year to $12.38 billion (1.25 trillion roubles). Return on equity for the year was 24.2% and its net interest income stood at 1.8 trillion roubles.

The Moscow Exchange has halted trading on stocks in an attempt to stem capital outflows from Russian assets; however Sberbank’s depositary receipts in London have lost their entire value, and have fallen to $0.

($1 = 100.9700 roubles)

($1 = 0.9018 euros)

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