The Czech National Bank has placed a preliminary injunction on new loans and deposits at European-Russian Bank, pending regulatory action, the central bank announced on March 9.

The move suggests the Russian-owned bank may be struggling because of EU sanctions and the recession in Russia. However, there's more than a whiff of politics surrounding the lender also.

The central bank did not disclose the details behind its decision. It would only note that it "wants to highlight that complications could occur in the provision of certain services by the bank to its clients".

After a thorough assessment the CNB "decided to issue an interim measure and adjust for the meantime the rules for the functioning of the bank" in order to "avoid irreversible losses in the event of a deterioration of its financial situation", CNB spokesman Thomas Zimmermann said in a statement.

ERB's corporate business is led by the financing of Czech exports to Russia. In retail it serves mainly Russian clients, although it has targeted Czechs with high-interest savings products.

ERB's Vice Chairman Anton Suckova admitted to local press in February that the bank was looking to diversify because of the effect of EU-Russia sanctions on its business. In particular, he noted ERB's business funding trade between the Czech Republic and Russia had deteriorated to the point that the bank was drawing up a new strategy.

He also denied recent allegations that the bank has acted as an intermediary in Russian funding of political parties in the EU, or that ERB is connected to Russian oligarch Gennady Timchenko, who has close links to the Kremlin and is one of the biggest names on EU and US sanctions lists.

Russian-owned ERB Bank – active in the Czech Republic since 2009 - is one of the smallest players on the market, with total assets of around CZK7bn. At the end of the third quarter it held CZK6.1bn in deposits and had CZK2.7bn in its loan portfolio.

Owner Roman Popov, who used to work for Stroitransgaz – a pipeline contractor now held by Timchenko - is also the sole shareholder at First Czech Russian Bank. The small Russian-based bank supplied a €9mn loan to France's far-right National Front in 2014, according to Bloomberg.