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European arm of Russia’s Sberbank to be wound down by year-end – Metro US

European arm of Russia’s Sberbank to be wound down by year-end

The logo is on display in an office of Sberbank
The logo is on display in an office of Sberbank in Saint Petersburg

BERLIN (Reuters) – The European arm of Sberbank, Russia’s biggest lender, is to be wound down by the end of the year and creditors will be paid back, Austria’s national bank, the OeNB, and the Financial Market Authority (FMA) said on Wednesday.

Sberbank Europe AG, based in Vienna, was closed by order of the European Central Bank in March, after the ECB warned that the bank faced failure due to a run on deposits after Russia invaded Ukraine.

The Austrian deposit insurance fund, which paid out 926 million euros ($974 million) in secured deposits, will receive back all funds from the lender, OeNB and FMA said.

Sberbank, which serves more than 100 million individual customers in Russia, confirmed that all deposits would be paid in full and that it was continuing systematic work on exiting the European market.

The European Commission on Wednesday proposed removing the lender from the international SWIFT transaction and messaging system, the latest sanctions to target the heart of Russia’s financial system over Moscow’s actions in Ukraine.

($1 = 0.9504 euros)

(Reporting by Riham Alkousaa and Maria Sheahan;Editing by Elaine Hardcastle)

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