Clients of Croatian Sberbank unit rush to withdraw cash

Clients of Croatian Sberbank unit rush to withdraw cash
By bne IntelliNews February 28, 2022

Croatian officials sought to reassure clients of the Croatian unit of Russia’s Sberbank, after they rushed to the bank to withdraw their savings, following the Russian invasion of Ukraine. Local media reports say that Croatian Sberbank clients formed long queues waiting to take their money back.

The rush happened before a warning from the European Central Bank (ECB) early on February 28 that European subsidiaries of Sberbank are failing or are likely to fail, as the war and sanctions on Russian banks rattled customers.

However, Croatia's State Deposit Insurance Agency told people that their savings are safe regardless of the war and the sanctions against Russia.

"I would like to remind people about the deposit insurance system that has existed for more than 20 years now and that there's no reason to panic about deposits in any bank in that system, including those in Sberbank. Sberbank RH currently has slightly more than 69,952 clients, of which 69,858 clients are insured and protected,'' the director of the agency Marija Hrebac said at a press conference, reported Total Croatia News.

At the same time, Sberbank has said that they would continue to operate as usual.

“Sberbank Croatia (RH) will be operating as usual, providing all products and services to all its clients. Sberbank Croatia is part of the Sberbank Europe Group — a European financial institution with a European banking license. We operate here on the local market, primarily at the service of Croatian Sberbank clients, under the regulation and supervision,” said a statement on the bank's website.

The ECB warned on February 28 that several European subsidiaries of Sberbank are failing or are likely to fail due to reputational cost of the war in Ukraine, Reuters reported quoting the ECB. Sberbank Europe AG and its Croatian and Slovenian units have suffered a rapid deposit outflow in the days since the invasion. 

Sberbank’s situation could affect Croatia’s Fortenova Group, the successor company to bankrupt food and retail giant Agrokor. After the restructuring of Agrokor, Russian banks Sberbank and VTB, as creditors, became shareholders in Fortenova. 

However, Fortenova said in a statement it does not expect EU’s sanctions to affect its business.

“With regards to the question of a possible impact of the present and any potential new sanctions that Europe has announced in relation to Russia, Fortenova Group does not expect them to have a negative impact on its operations. The banks in Russian ownership do not have majority management and ownership rights in Fortenova Group, those are below 50%, and the second largest shareholder of the company are local Croatian owners,” the company said in a statement.

It added that Fortenova Group has a stable capital structure with the financing headed by HPS Investment Partners, a US investment company, hence the sanctions are not expected to affect the financing of Fortenova Group.