Reacting to numerous world sanctions placed on Russia over its invasion of Ukraine; Sberbank, Russia’s largest lender, has declared its withdrawal from Europe.
“In the current environment, Sberbank has decided to withdraw from the European market,” it announced on Wednesday in a statement carried by Russian news agencies.
Sberbank, which had operations in Austria, Croatia, Germany and Hungary among other nations, had European assets worth 13 billion euros ($14.4bn) as of December 31, 2020.
The state-controlled bank’s European subsidiaries were experiencing “abnormal cash outflows and threats to the safety of employees and branches”, it added.
Following a central bank directive, the bank stated that it was no longer able to deliver liquidity to European subsidiaries, but that its capital level and asset quality were adequate to pay all depositors.
Western nations have taken extraordinary efforts to isolate Russia’s economy and banking system in the aftermath of the invasion, including sanctions on its central bank and the suspension of some of its institutions from the global payments system, SWIFT.
The European Central Bank had previously ordered the closure of Sberbank’s European subsidiary after warning that it threatened collapse due to a run on its deposits caused by the war’s aftermath.
Sberbank’s Austria-based European arm, Sberbank Europe AG, would be allowed to enter “normal insolvency proceedings”, while branches in Croatia and Slovenia were sold to local banks, ECB said.
Slovenian bank NLB said it was acquiring Sberbank’s Slovenian unit.
The exit does not affect the bank’s operations in Switzerland.
The Moscow Exchange has halted trading on stocks and sought to prevent capital outflows from Russian assets, but Sberbank’s depositary receipts in London have lost their entire value, falling to $0.