Frankfurt German financial regulator Bafin has banned major Russian bank VTB from exercising its voting rights in subsidiary VTB Bank Europe. As a result, the parent company in St. Petersburg lost control of its subsidiary.
This measure is the consequence of the fifth EU sanctions package against Russia, which has just been imposed following the Russian attack against Ukraine, Bafin announced on Sunday. On Saturday, the EU adopted its new sanctions against Russia. It also includes a complete ban on transactions at the expense of four major Russian banks, including the country’s second-largest bank, VTB.
According to Bafin, VTB Bank Europe, based in Frankfurt, is no longer authorized to follow the instructions of the parent company. A few weeks ago, the supervisory authority had already issued a ban on making payments or transferring assets in favor of the Russian mother. The supervisors point out that the girl is now completely shielded.
>>Read also: VTB Europe in a state of emergency
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According to Bafin’s announcement, the operational business situation of VTB Bank Europe is virtually unchanged, the asset and liquidity situation is still orderly. “Depositors can continue to freely dispose of their money and borrowers can repay their loans with interest and principal. Other creditors of the bank may also be served accordingly and accept payments from the bank – unless they themselves have been sanctioned. » Other banks, service providers and employees can continue to work for VTB Bank Europe.
Bafin and the Bundesbank sent special representatives to the institute to oversee the “reduction of business activities”. The European branch of VTB has been in a state of emergency since the Russian invasion of Ukraine. Four out of five board members have now left the money house. In early April, the only remaining board member was CFO Miro Zadro.
Customer deposits likely decreased
VTB Europe has raised a lot of money, especially from German private investors. At the end of September, customer deposits amounted to 4.4 billion euros. In the meantime, however, this sum has probably decreased significantly. The European Central Bank classified the European branch of Russia’s largest financial institution, Sberbank, as “failing or likely to fail” after the outbreak of war in Ukraine and shut it down.
VTB Bank Europe was spared this fate. According to information from the Handelsblatt, after a special audit at the end of February, the financial supervisory authority decided that the institute could continue to exist. “If the situation of the bank were to change, Bafin would react quickly with appropriate measures,” said the statement from the supervisory authority on Sunday.
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