Russia’s largest lender Sberbank quits Europe

MOSCOW / NEW YORK

Russia’s largest lender Sberbank said yesterday it was leaving the European market after coming under pressure from Western sanctions levelled against the state bank in response to Moscow’s attacks of Ukraine.

“In the current environment, Sberbank has decided to withdraw from the European market,” the lender said in a statement carried by Russian news agencies.

The bank’s European subsidiaries were experiencing “abnormal cash outflows and threats to the safety of employees and branches,” the statement added.

Sberbank suffered financing issues following the announcement of tough European Union sanctions aimed at choking off Russian banks’ access to capital markets.

European banking regulators said on March 1 that the European subsidiary of Russia’s Sberbank would be wound up.
Sberbank’s Austria-based European arm, Sberbank Europe AG, would be allowed to enter “normal insolvency proceedings,” while branches in Croatia and Slovenia were sold to local banks, the European banking supervisory authority said.

On Feb. 28, the European Central Bank had said that the European affiliate was “failing or likely to fail” after it “experienced significant deposit outflows as a result of the reputational impact of geopolitical tensions.”

Visa, Mastercard, Amex block Russian banks

U.S. credit card giants Visa, Mastercard and American Express said they were blocking Russian banks from their payment networks following international sanctions in response to Moscow’s invasion of Ukraine.

“As a result of sanction orders, we have blocked multiple financial institutions from the Mastercard payment network,” Mastercard Chief Executive Michael Miebach said in a statement released Monday night.

“We will continue to work with regulators in the days ahead to abide fully by our compliance obligations as they evolve.”
Visa said on its website that it is “taking prompt action to ensure compliance with applicable sanctions, and is prepared to comply with additional sanctions that may be implemented.”

While American Express said its business in Russia was “small,” it stressed that “since the beginning of this crisis, we have been complying with US and international sanctions.”

Amex CEO Stephen Squeri said that “has resulted in us halting relationships with impacted bank partners in Russia, and we will continue to comply with all relevant laws as the situation evolves.”

The statements follow moves by western governments to sanction Russian banks and Russian nationals as the United States, the European Union and other powers seek to isolate the country and punish its economy.

The steps taken by the credit card firms prevent these entities and individuals from accessing their platforms.
Mastercard also said it is working to guard against cyberattacks, “the threat of which is heightened significantly in the present environment,” Miebach said.

“American Express is taking all necessary steps to detect, prevent, and respond to any malicious activity through our layered defenses,” said Squeri for his part.