Status: 03/02/2022 10:58 a.m
The European subsidiary of the largest Russian bank has ceased operations. About 35,000 Sberbank customers are to be compensated – including many investors from Germany.
The European subsidiary of the Russian Sberbank ceases its business operations. In the morning, the financial institution announced that it was withdrawing from the European market.
Among the reasons given by the bank were large cash outflows from the European branches. The exclusion of several Russian banks from the international payment system SWIFT is apparently not responsible for the difficulties of the European subsidiary. The measure will not affect Sberbank directly, the news agency reported dpa citing diplomatic circles.
Austria’s deposit insurance steps in
The Association of German Banks (BdB) announced today that EUR 913 million of the deposits totaling EUR 1 billion were secured by Einlagensicherung Austria (ESA). Since the approximately 35,000 customers come almost exclusively from Germany and are managed via the German branch of Sberbank Europe AG, the German Bank Compensation Scheme (EdB) carries out the compensation procedure. The statutory deposit insurance protects up to 100,000 euros per customer.
Last night, the Austrian Financial Market Authority (FMA) prohibited Sberbank Europe from continuing its business operations with immediate effect. Because of the expected economic difficulties, the FMA had previously prohibited transfers, transactions and larger payments. The move came at the direction of the European Central Bank (ECB), which on Sunday determined that Sberbank Europe AG may face insolvency due to the Russian invasion of Ukraine and massive outflows of funds.
Mostly state owned
The company is based in Vienna and is a 100 percent subsidiary of the Russian mother bank Sberbank, which is majority state-owned. In Germany, the bank operates through a branch and has previously operated there under the trademark Sberbank Direct.
A comparison with the summer of last year shows how severe the crisis in Russia’s largest bank is. At that time it was still the seventh most valuable bank in the world based on its market value. Since then, the institute’s share price has fallen by about a quarter.
As of today, the Sberbank securities, like all other Russian bonds, shares and derivatives, can no longer be traded on the German stock exchange. “In the public interest”, the purchase and sale of these securities will be stopped until further notice, the Frankfurt stock exchange operator announced yesterday.