The first banks in the euro zone are hit by sanctions while Switzerland waits to see if the federal government follows in the footsteps of the EU.
To one degree or another, Swiss banks will not be able to escape sanctions against Russia, whether they relate to corporate lending, commodity trade financing or doing business with wealthy Russian clients.
Switzerland’s second largest bank, Credit Suisse, for example, has stopped financing commodity trading from Russia.
Swiss financial watchdog Finma told finews.com it was in talks with the banks over the risks posed by the sanctions on their Russian business. It is not clear to what extent subsidiary institutions operating in Switzerland such as Sberbank (Switzerland), Gazprombank (Switzerland) and VTB Capital, mainly in the financing of commodity contracts, will be affected.
Sberbank, Gazprombank and the Association of Foreign Banks in Switzerland declined to comment to finenews.com on the current situation.
In the euro zone, the Russian branches of Sberbank are on the verge of bankruptcy due to sanctions imposed by the EU, the United States and the United Kingdom. According to the ECB banking regulator, they are no longer able to service their debts or other liabilities, and the parent company is also prohibited from injecting funds.
According to the report, Vienna-based Sberbank Europe and its two eurozone subsidiaries, Sberbank in Croatia and Sberbank Banka in Slovenia, are affected.
Sberbank Europe and its subsidiaries have experienced significant deposit outflows due to the impact of geopolitical tensions on their reputation,” the banking regulator said in a statement. “As a result, their liquidity position has deteriorated. In addition, no measures are available where there is a realistic prospect that this position will be restored at group level and at the level of individual banking union subsidiaries.
The Austrian Financial Markets Authority (FMA) also reacted by temporarily suspending almost all business operations of Sberbank’s European branch. The Vienna-based bank is “not authorized to make any withdrawals, transfers or other transactions”. Depositors are, however, allowed to withdraw 100 euros per day to cover their daily needs.
We are making every effort and fully supporting the authorities to use their powers to deal with this unprecedented situation in the best interest of customers, wrote Sonja Sarkoezi, CEO of Sberbank Europe, in a statement.
Several banks in the group have seen a large outflow of customer deposits in a very short time, she said, leading in some cases to restrictions on daily cash withdrawals.