Austria shuts down subsidiary of Russia's biggest bank

Austria shuts down subsidiary of Russia's biggest bank

Austria’s Financial Management Authority has ordered the immediate closure of Sberbank Europe AG on Tuesday evening, citing the orders from the European Central Bank amid widespread financial sanctions against Moscow over the conflict in Ukraine.

Sberbank’s European branch was banned “from continuing business operations in their entirety with immediate effect,” the FMA said in a statement at 10:45 pm local time (2145 GMT), about an hour before the moratorium on the bank’s activities ordered on Monday was due to expire.

The bank said on Monday it had faced a “significant outflow of customer deposits within a very short period of time,” after the EU and US moved to sanction several major Russian banks as part of punitive measures against Moscow for invading Ukraine.

The bank run prompted the FMA to impose the moratorium, and the European Central Bank to declare Sberbank Europe “failing or likely to fail.” Austria will now cover deposits of up to 100,000 euros ($111,240) per account under the deposit guarantee scheme, the FMA said.

London also sanctioned Sberbank on Tuesday, calling it “an exceptionally significant player in the Russian financial services sector, which is of strategic importance to the Russian government.” However, the British sanctions won’t affect the bank’s operations in Russia.

Source: www.rt.com

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