European subsidiary of Russian Sberbank to file for bankruptcy

The European subsidiary of Russia’s largest bank, Sberbank, was allowed to file for bankruptcy, after being hit hard by sanctions taken against Russia for the invasion of Ukraine, the European Union’s banking regulator said.

The subsidiary Sberbank Europe AG will be subject to “insolvency proceedings” in Austria, where it is based, and its clients’ deposits will be guaranteed up to 100,000 euros, said the European regulatory body, the Single Resolution Board.

The clients of the entity of Russian origin made massive withdrawals of their deposits and there was no possibility that the parent company would come to the rescue, since the Russian central bank prohibits its banks from sending funds to countries that impose sanctions against Moscow.

Sberbank Europe, which had €13.6 billion in assets at the end of 2021, has subsidiaries in Bosnia and Herzegovina, the Czech Republic, Croatia, Hungary, Slovenia and Serbia, as well as a branch in Germany.

As the entity heads towards probable liquidation, a solution has been found for two sub-subsidiaries in Croatia and Slovenia.

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