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

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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)