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Ukraine Invasion – Failure Of European Subsidiary of Russian Sberbank Imminent!

As a result of the Ukraine invasion of Ukraine, the EU imposed sanctions on Russian banks, which put them under pressure. The European headquarters of the state-owned Russian Sberbank is located in Vienna, Austria. The European Central Bank ECB warned that Sberbank Europe is likely to fail because of economic difficulties. Therefore, as the national resolution authority, the Austrian Financial Market Authority (FMA) has imposed a moratorium on Sberbank Europe with immediate effect.

Sberbank Europe AG, registered in Vienna, Austria, is a wholly-owned subsidiary of state-owned Russian Sberbank in Moscow. The following restrictions apply for the period of the moratorium:

  • All payment and delivery obligations of Sberbank Europe AG to its creditors are suspended;
  • Creditors cannot enforce any security interests against Sberbank Europe AG;
  • Termination rights of counterparties of Sberbank Europe AG are temporarily suspended;
  • The enforcement of security interests of secured creditors of Sberbank Europe AG is prohibited;
  • The termination rights of a party to a contract with Sberbank Europe AG are suspended;

Therefore, Sberbank Europe AG may not make any disbursements, transfers, or other transactions during the moratorium. However, depositors of eligible deposits have access to a maximum amount of € 100 per day to secure the most necessary daily needs until the end of the moratorium. Deposits up to €100,000 will continue to be covered by the Austrian deposit guarantee scheme.

The European Central Bank ECB has warned that Sberbank Europe AG has severe economic difficulties. As a result, the bank’s failure is imminent. After a thorough assessment, the Single Resolution Board (SRB), as the competent European bank resolution authority, has imposed this temporary moratorium to consider the further steps required. The measure serves to safeguard and strengthen financial market stability in the banking union.

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