EU closes Russia’s largest bank in Swift

Hard blow for the Russian financial system: the largest bank in the country, Sberbank, will be excluded from the Swift international banking system. This was said on Wednesday by the President of the European Commission, Ursula von der Leyen.

Sberbank, Russia’s largest bank, will no longer be allowed to participate in the Swift banking system. This was announced by the President of the European Commission, Ursula von der Leyen, on Wednesday in Brussels. “By doing so, we are hitting banks relevant to the Russian financial system and limiting Putin’s ability to destroy more,” she said. “This will cement the complete isolation of the Russian financial sector from the global system.”

The European branch of Russian state bank Sberbank was recently able to avoid insolvency and is now being liquidated in an orderly fashion. By selling loan receivables, the bank can repay in full the sum of 926 million euros paid to customers by the Austrian Deposit Insurance (ESA), the Vienna-based bank announced on Tuesday evening.

Savers’ deposits are protected in Austria up to a sum of 100,000 euros. If a compensation event occurs, the ESA and the Austrian banks must intervene proportionally. Sberbank Europe will now pay out savings deposits that exceed the maximum safe amount in full, he said.

European subsidiary affected by the sanctions

According to the institute, neither ESA nor other banks have to pay customers’ savings deposits. According to Sberbank Europe, all debts of 428 million to the Austrian National Bank (OeNB) and the European Central Bank (ECB) will be fully repaid.

Sberbank Europe got into trouble when, after the start of the Ukrainian war and the sanctions against Russia, there were large outflows of money from the bank. The bank’s customers were almost exclusively German private customers. In early March, supervisory authorities banned the business activities of Sberbank Europe with immediate effect. This sparked the statutory deposit insurance case and the ESA stepped in for guaranteed deposits.

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