Sber cuts loose its European operations

Sber cuts loose its European operations
Sberbank Czech Republic will be liquidated. / bne IntelliNews
By Robert Anderson in Prague March 2, 2022

Sber, Russia’s largest bank, is cutting loose its European operations after having been targeted by Western sanctions.

"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."

Sberbank Europe was ordered to close its doors by the European Central Bank on Monday, February 28 amid a rush on deposits, and regulators are now making sure that its Central and Southeastern European operations are quickly sold to other banks or wound down.

Confidence in the bank has been shaken by the Russian invasion of Ukraine and the imposition of Western sanctions on parent Sber of Russia, which is now excluded from the SWIFT international payment system.

The authorities stepped in after warnings that Sberbank Europe was facing the risk of collapse after clients across Central and Southeast Europe rushed to withdraw their deposits. 

“There are no available measures with a realistic chance of restoring this position at group level and in each of its subsidiaries within the banking union,” the ECB said on Monday.

Sberbank Europe AG had total assets of €13.64bn at the end of last year. It is present in Austria, Czechia, Serbia, Bosnia & Herzegovina, and Hungary. Sber also has two separate Croatian and Slovenian units.  

The ECB placed a moratorium on the bank’s operations in the Eurozone, namely Austria, Croatia and Slovenia. The Single Resolution Board, which handles European lenders that run into trouble, said it has decided to transfer all shares in the bank’s Croatian and Slovenian subsidiaries to other firms in those countries.

The bank’s Austrian unit is now being liquidated. The ECB move does not cover Sberbank’s operations in Switzerland.

Sberbank's operations in Hungary, which is not under the ECB, have also been placed under a moratorium by the Hungarian central bank and will wind it down. The Czech National Bank has launched steps to revoke the banking licence of Sberbank CZ and will wind it down.

Sber had already been in the middle of trying to sell its operations in Croatia, Slovenia, Hungary, Serbia and Bosnia. Sberbank Europe said in November it had reached a deal to sell its subsidiaries in Croatia, Slovenia, Hungary, Serbia and Bosnia to a group including Serbia's AIK Banka and Slovenia's Gorenjska bank.

AIK Banka has finalised the acquisition of Sberbank Serbia, the two banks said on Monday. But Slovenian Gorenjska Banka had announced on February 28 that it is not possible to proceed with the acquisition of the Slovenian subsidiary, given the bank’s crisis.

The Slovenian central bank said on March 1 that Nova Ljubljanska banka (NLB) has decided to buy the Slovenian unit of Russian Sberbank to enable the bank to continue serving its customers. State-owned Hrvatska Postanska Banka in Croatia will acquire Sberbank’s business in that country.

ASA Bank Sarajevo bought Sberbank BH Sarajevo on March 1, after the Banking Agency of the Bosnian Federation took control of the bank two days earlier. Meanwhile, in Bosnia & Hezegovina’s other entity Republika Srpska, the government has taken over the ownership and management of Sberbank Banja Luka