European subsidiary of Russia's Sberbank 'failing or likely to fail': ECB

European subsidiary of Russia's Sberbank 'failing or likely to fail': ECB

Sberbank Europe AG has
Sberbank Europe AG has "experienced significant deposit outflows as a result of the reputational impact of geopolitical tensions", the ECB said

FRANKFURT - The European subsidiary of Russia's state-owned Sberbank is facing bankruptcy, the European Central Bank said Monday, in the wake of sanctions aimed at punishing Moscow for its invasion of Ukraine.

Sberbank Europe AG, headquartered in Austria and with branches in Croatia and Slovenia, has "experienced significant deposit outflows as a result of the reputational impact of geopolitical tensions", the ECB said.

"The European Central Bank (ECB) has assessed that Sberbank Europe AG and its two subsidiaries in the banking union, Sberbank d.d. in Croatia and Sberbank banka d.d. in Slovenia, are failing or likely to fail owing to a deterioration of their liquidity situation," the ECB said in a statement.

"The bank is likely to be unable to pay its debts or other liabilities as they fall due," it added.

The two largest Russian banks, Sberbank and VTB, were targeted Thursday by tough US sanctions aimed at limiting their ability to conduct business internationally.

The sanctions were stepped up over the weekend with the announcement that selected banks would be expelled from the international SWIFT payment system.

Sberbank Europe AG -- which is 100 percent owned by the bank's Russian parent company -- also has subsidiaries in Bosnia and Herzegovina, the Czech Republic, Hungary and Serbia, which do not come under the jurisdiction of the ECB.

The ECB said it has "coordinated with national competent authorities" in those countries.

Do you like the content of this article?
COMMENT

Off to jail

Former Democrat MP Thepthai Senpong (pictured) and his younger brother Manote lose their final appeal against two-year sentences for vote buying in a 2014 local government election, and go straight to prison.

14:20

Opec secretary-general dies

Organization of the Petroleum Exporting Countries (Opec) secretary-general Mohammad Barkindo, an oil industry veteran who steered the group through the creation of the Opec+ alliance, has died in his native Nigeria, according to officials.

14:10

Cannabis opponents should be open to wisdom, says health minister

NONTHABURI: Opponents of the decision to decriminalise cannabis need to open their minds to the wisdom on the merits of the plant, Public Health Minister Anutin Charnvirakul said on Wednesday.

13:54