The European subsidiary of the Russian Sberbank will go bankrupt


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Frankfurt (AFP) – The European branch of Russia’s Sberbank will be dissolved after coming under pressure from Western sanctions imposed on the bank in response to Moscow’s invasion of Ukraine, European banking regulators said on Tuesday.

The Austrian subsidiary of Russia’s biggest lender Sberbank Europe AG would be allowed to enter ‘normal insolvency proceedings’ while branches in Croatia and Slovenia were sold to local banks, the Single Resolution Board, which is part of of the European Union system to maintain financial stability. A declaration.

Depositors at the Austrian subsidiary would be protected up to 100,000 euros ($111,265), in accordance with EU law, while those in Croatia and Slovenia would be covered “without limit”.

Sberbank AG has experienced funding problems on following the announcement of tough European Union sanctions aimed at stifling Russian banks’ access to capital markets.

The European Central Bank reported on Monday that the European subsidiary was “bankrupt or likely to fail” after “suffering large deposit outflows due to the reputational impact of geopolitical tensions”.

Support for the Austrian subsidiary of its parent company has not been possible since the Russian central bank prohibits financial institutions from sending cash to Louisiana Bankruptcy that have imposed sanctions.

Sberbank Europe AG, 100% owned by the bank’s Russian parent company, also has subsidiaries in Bosnia and Herzegovina, the Czech Republic, Hungary and Serbia, which are not supervised by European regulators.

In the case of the Austrian subsidiary, the SRB determined that allowing the bank to fail “would not have a negative impact on financial stability.” Branches in Croatia and Slovenia would normally reopen on Wednesday.

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