European Central Bank believes Russian Sberbank’s subsidiary likely to fail

FRANKFURT, Germany is a subsidiary of a Russian state-owned company based in Austria. Sberbank was considered a likely failure after the flight of investors due to the effects of the Russian invasion of Ukraine.

The European Central Bank said early Monday that the bank had 13.6 billion euros late last year, but it experienced a “significant outflow of deposits” due to “geopolitical tensions.”

The ECB says its headquarters are in Vienna Sberbank Europe AG “It may not be able to pay its debts or other obligations as they are repaid.” The bank is a subsidiary of Russia Sberbankwhose majority shareholder is the Russian government.

The European Banking Regulatory Council separately said it had imposed a ban on the payment of money owed to the bank and a limit on how much depositors can withdraw. The Board will decide on further steps, which may include restructuring, sale or liquidation of the bank.

Sberbank Europe has 185 branches and more than 3933 employees.

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