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Russia’s No. 1 lender Sberbank withdraws from Europe

A person shows the logo of the Russian bank Sberbank Europe AG's headquarters in Vienna
A person shows the logo of the Russian bank headquarters Sberbank Europe AG in Vienna, Austria, February 28, 2022. REUTERS / Leonhard Foeger

March 2, 2022

MOSCOW (Reuters) – Russia’s biggest lender Sberbank on Wednesday said it had abandoned most of its European markets, blaming massive cash outflows and threats to its employees and assets. themselves after Russia’s invasion of Ukraine and Western sanctions.

The news comes as the state-controlled bank reported record annual profits for 2021.

The bank said it was no longer able to provide liquidity to its European subsidiaries, at the behest of the central bank, but that the bank’s level of capital and asset quality was sufficient to pay for all those loans. depositors.

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

Unprecedented steps by Western nations to isolate Russia’s economy and financial system after the invasion of Ukraine included sanctions on the country’s central bank and the exclusion of some lenders from the global payment system SWIFT.

The European Central Bank (ECB) has ordered the closure of Sberbank’s European branch, after warning that the bank faces setbacks due to a shortage of deposits caused by the backlash. for the invasion, which Moscow calls a “special operation”.

Sberbank, which has operations in Austria, Croatia, Germany and Hungary among other countries, had European assets worth 13 billion euros ($14.4 billion) as of December 31, 2020.

Slovenian bank NLB says it is acquiring Sberbank’s Slovenia unit.

The departure does not affect the bank’s operations in Switzerland.

Sberbank’s net profit for 2021 increased 64% year-on-year to 1.25 trillion rubles ($12.38 billion). Its return on equity for the year was 24.2% and its net interest income was 1.8 trillion rubles.

The Moscow Exchange stopped trading in shares and sought to stem the flow of capital out of Russian assets, but Sberbank’s depository receipts in London have lost all of their value, dropping to $0.

(1 dollar = 100,9700 rubles)

(1 dollar = 0.9018 euros)

(Reporting by Reuters, Editing by Clarence Fernandez and Mark Potter)

https://www.oann.com/russias-sberbank-to-leave-european-market-in-face-of-cash-outflows/?utm_source=rss&utm_medium=rss&utm_campaign=russias-sberbank-to-leave-european-market-in-face-of-cash-outflows Russia’s No. 1 lender Sberbank withdraws from Europe

Caroline Bleakley

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