The deluge of economic sanctions imposed by the West continues to reverberate in Russia, a week after its invasion of Ukraine. Russian bank Sberbank announced on Wednesday that it was exiting the European market as its subsidiaries faced large deposit outflows.
The financial institution said it was no longer able to provide liquidity to its European subsidiaries, but its capital level and the quality of its assets were sufficient to make payments to all depositors.
Subsidiary banks of the group face abnormal outflows of funds and threats to the security of their employees and offices the group said in a statement quoted by Russian news agencies.
On Tuesday, Russia’s central bank banned Russian institutions from sending funds to countries imposing sanctions, a move that backfired on Sberbank’s main European subsidiary.
Unable to finance itself, Sberbank Europe AG will now have to undergo a
insolvency proceedings in Austria. The bank had some 773,000 customers in Central and Eastern Europe in 2020. The assets of the institution’s customers will be guaranteed up to 100,000 euros, as required by European legislation in this area.
The central bank of Russia for its part suspended, for a third consecutive day, the exchange of shares on the Moscow Stock Exchange on Wednesday. It did, however, allow a few types of limited operations for the first time this week.
The Russian economy is also weighed down by the fact that many multinationals in the energy, automotive and cultural sectors, as well as air and maritime carriers, have begun to limit or completely sever their business ties with Russia.