Russia’s largest lender, Sberbank PJSC, yesterday said that it was quitting almost all European markets, blaming big cash outflows, and threats to its staff and property, following Russia’s invasion of Ukraine and Western sanctions.
The news came as the state-controlled bank reported record annual profits for last year.
The bank said that it was no longer able to supply liquidity to European subsidiaries, following a central bank order, but its capital level and asset quality were sufficient to pay all depositors.
Photo: Jure Makovec, AFP
“In the current situation, Sberbank has decided to leave the European market,” it said in a statement. “The group’s subsidiary banks have faced abnormal cash outflows, and threats to the safety of its employees and branches.”
Unprecedented steps by Western nations to isolate Russia’s economy and financial system over its invasion of Ukraine include sanctions on its central bank and the exclusion of some of its lenders from global payments system SWIFT.
The European Central Bank had ordered the closure of Sberbank’s European arm, after saying that it faced failure because of a run on its deposits sparked by the backlash to the invasion.
As of Dec. 31, 2020, Sberbank, which had operations in Austria, Croatia, Germany and Hungary, among other nations, had European assets of 13 billion euros (US$14.41 billion at the current exchange rate).
Sberbank’s net profit for last year jumped 64 percent year-on-year to 1.25 trillion rubles (US$11.46 billion).
The bank’s return on equity for the year was 24.2 percent and its net interest income stood at 1.8 trillion rubles.
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