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VTB Bank Is Preparing to Close European Operations: Report

VTB Bank, which is Russia’s second-largest lender, has decided to wind down its operations in Europe as the bank is struggling with the rampant sanctions of the Western governments, Financial Times reported. However, the bank did not officially confirm the decision yet.

“VTB Bank Europe continues to operate but is looking at ways to simplify its activities,” the bank said in a statement.

Earlier, Russia’s largest lender Sberbank pulled out of Europe by liquidating its Austrian and other subsidiaries and also selling some of the branches to local outfits. Sberbank and VTB bank together hold more than half of the Russian banking market.

VTB offers investment banking services in London and operates in the retail banking market in Germany where it serves more than 160,000 customers and holds over €4 billion in customer deposits. VTB Europe lured retail customers by not charging negative interest rates and also serves German local governments, 600 companies and 150 financial institutions.

Facing Tough Sanctions

The bank was one of the primary targets of the Western governments when they were imposing sanctions. Most recently, the European Union decided to ban VTB and six other Russian banks from accessing SWIFT, which will be effective from March 12.

The London operations of the bank were also interrupted as its London Stock Exchange membership was suspended last month, making it unable to trade securities on the  exchange  . VTB Capital was also termed as a default as a member of the  clearinghouse  LCH.

The UK government also froze VTB’s assets last month and granted a 30-day license until March 27 to close all transactions and pay its employees.

“There’s no attempt at continuing as normal,” an anonymous source told FT.

“We’re trying to do it as swiftly as we can — but operations in Europe are much more complicated than those in the UK. We’re doing everything we can to get customers’ money back to them. It’s critical we do this in an orderly manner.”

VTB Bank, which is Russia’s second-largest lender, has decided to wind down its operations in Europe as the bank is struggling with the rampant sanctions of the Western governments, Financial Times reported. However, the bank did not officially confirm the decision yet.

“VTB Bank Europe continues to operate but is looking at ways to simplify its activities,” the bank said in a statement.

Earlier, Russia’s largest lender Sberbank pulled out of Europe by liquidating its Austrian and other subsidiaries and also selling some of the branches to local outfits. Sberbank and VTB bank together hold more than half of the Russian banking market.

VTB offers investment banking services in London and operates in the retail banking market in Germany where it serves more than 160,000 customers and holds over €4 billion in customer deposits. VTB Europe lured retail customers by not charging negative interest rates and also serves German local governments, 600 companies and 150 financial institutions.

Facing Tough Sanctions

The bank was one of the primary targets of the Western governments when they were imposing sanctions. Most recently, the European Union decided to ban VTB and six other Russian banks from accessing SWIFT, which will be effective from March 12.

The London operations of the bank were also interrupted as its London Stock Exchange membership was suspended last month, making it unable to trade securities on the  exchange  . VTB Capital was also termed as a default as a member of the  clearinghouse  LCH.

The UK government also froze VTB’s assets last month and granted a 30-day license until March 27 to close all transactions and pay its employees.

“There’s no attempt at continuing as normal,” an anonymous source told FT.

“We’re trying to do it as swiftly as we can — but operations in Europe are much more complicated than those in the UK. We’re doing everything we can to get customers’ money back to them. It’s critical we do this in an orderly manner.”


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