'Facing abnormal cash outflows': Russia's largest lender Sberbank quits European market
India Today
The European arm of Sberbank (SBER.MM), Russia's biggest lender, has been closed by order of the European Central Bank.
Russia's largest lender Sberbank said on Wednesday it is quitting the European market after the West imposed economic sanctions on Russia over the invasion. The bank said its European subsidiaries are facing "abnormal cash outflows".
On February 14, Russian President Vladimir Putin declared war on Ukraine. Condemning Putin’s move, the western countries, including the United States and the European Union slapped economic sanctions on Russian banks. The West also demanded that the Russian banks be cut off from the international SWIFT payment system.
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The European Central Bank said on Monday that Vienna-based Sberbank Europe AG and its branches in Slovenia and Croatia were failing or likely to fail after they “experienced significant deposit outflows" because of the impact to their reputation from the conflict.
The European Central Bank's Single Resolution Board (SRB) ordered the moratorium so that it could determine whether the case should be handled under European bank resolution rules and decided it should not, the Austrian Financial Market Authority (FMA) was quoted by Reuters as saying.
Sberbank and VTB banks are Russia's two largest state-run banks and own roughly half of the assets in the Russian banking system.
