Russia’s biggest lender Sberbank has shrugged off concerns about both Brexit and sanctions by committing another £40mn ($56mn) to its troubled London investment bank, bne IntelliNews can reveal.

A filing made by the bank on February 8 with UK Companies House shows that £40mn was injected by the parent in a move, which more than doubles the capital of Sberbank CIB, its London-based unit. Filings show that Sberbank's UK operation now has an aggregate capital of £74.3mn.

The investment is the largest by Sberbank into its UK business and follows more modest capital injections of £5.5mn and £3mn made by the parent last year.

"Sberbank has taken a long-term view and have decided to stay in the city of London despite all the problems with sanctions against it and all the negative Brexit noise," a senior Russian banker told bne IntelliNews.

Previous Sberbank regulatory filings show that the funds were made to support the UK unit’s capital base and to ensure that sufficient capital buffers were maintained, suggesting the Russian banking behemoth is committed to remaining in the UK beyond the country’s departure from the EU.

Sberbank has declined to outline any plans it may have for setting up a headquarters for its investment bank within the EU. However, the parent bank is rapidly retreating from mainland Central and Eastern Europe in a series of disposals.

Sberbank is in talks with the Dubai banking group Emirates NBD over selling Denizbank, the Turkish lender it acquired in 2012 for $3.5bn. Its Ukraine business is also being offloaded to local tycoon and former National Bank of Ukraine (NBU) governor Sergiy Tigipko at a significant loss.

Sberbank boss German Gref, a former Economy Minister under President Vladimir Putin, told state TV in September last year that sanctions have made the bank's life in Europe "extremely difficult."

Kremlin-controlled lenders like Sberbank have been subjected to sanctions by the US and EU since Russia fomented a separatist war in eastern Ukraine in 2014, barring them from raising capital with a maturity of more than 30 days in western markets.

Sberbank, which controls about 46% of Russia’s deposits and a third of the nation’s loans, has had a torrid time in the UK over the past few years but intends to stay the course. The business was cut to the bone following a quadrupling of losses in 2014 and a record $5mn sexual discrimination award to Svetlana Lokhova, a former equity saleswoman.

Lokhova was thrust back into the spotlight last year after it emerged she had struck up a friendship with Michael Flynn, US President Donald Trump’s disgraced former national security adviser, in her new role as a Soviet intelligence historian.

Lokhova was taunted by her London colleagues with unfounded allegations of drug use and driven to a mental breakdown, an employment tribunal ruled. She later passed a drug test taken at her insistence, while the tribunal ruled that then UK boss Paolo Zaniboni had victimised her by failing to discipline the London-based bankers who bullied her.

The former saleswoman was eventually awarded £3.2mn after finding she had been a victim of harassment, victimisation and discrimination amounting to constructive dismissal. Zaniboni and David Longmuir, a banker who was also implicated in the case, have both since left the London business.

Sanctions do not prohibit clients from trading with Sberbank, but they do restrict investors from accessing debt and equity financing. To compound matters, many leading UK, European and US fund managers opted to sever trading lines entirely with Sberbank for fear of incurring the wrath of Wall Street regulators.

The number of employees at Sberbank's London office shrank last year to 30 from 37 for the prior year. Chief operating officer Adam Jesney was appointed as acting chief executive last year following Zaniboni’s departure.

Gref, a former economy minister under President Vladimir Putin, told Bloomberg News in 2016 that investment banking is “not our strategy in the long term”, because it’s not growing as fast as the bank’s retail or corporate units. Gref has soured on investment banking since paying Armenian banker Ruben Vardanyan and his colleagues more than $1bn in 2011 for Troika Dialog. The business was later rebranded Sberbank CIB.

bne IntelliNews previously reported exclusively that Gazprombank, Russia’s third-largest lender, had wound up its London business after it, like Sberbank, was sanctioned by the US and EU over Russian military adventurism in Ukraine. bne IntelliNews also broke the news in November that Russia’s UralSib had put its London unit up for sale. A sale of UralSib Securities to the emerging markets brokerage ITI Capital was finalised last year.

Not all Russia banks are decamping from Londongrad even as many of their European, US and Chinese counterparts look to Frankfurt, Dublin and Luxembourg for new EU HQs.

VTB, Russia’s second-biggest lender, has been tempering initial talk that Brexit may force its retreat from London. A Financial Times report in October cited VTB deputy chairman Herbert Moos as saying the board was considering relocating its European HQ to an alternative hub, such as Frankfurt, Paris or Vienna.

Since then, however, VTB has been keen to damp speculation that it may be retrenching from the UK, In March, the bank even hired several senior bankers in London from both Deutsche Bank and J.P. Morgan.

BSC Global Markets, the leading Russian brokerage on the Moscow exchange, is keen to keep growing its London business from its location at the Tower 42 office block.

“Let’s wait and see how the chips fall,” Luis Saenz, head of equity sales and trading at BCS in London old bne IntelliNews. “We think it’s too soon to tell how things pan out to make any decisions now.”