Sberbank UK enters administration

Sberbank CIB, which provided trading and execution services, including providing access to the Russian markets, has been placed into special administration.

David Philip Soden, Robert Scott Fishman and Matthew Steven Roe, all of Teneo Financial Advisory, were appointed joint special administrators on 1 April.

The Financial Conduct Authority (FCA) said the firm had become “operationally unable to make payments” despite possessing “sufficient assets to cover its liabilities” on 1 April.

This was due to the reduced ability and risk appetite of “critical suppliers to work with firms with links to the Russian state,” FCA commented.

The decision to close the office was made following a reassessment of the economic potential of the Global Markets business’s presence in the UK, Sberbank UK said.

It also confirmed that “key employees” will carry out their duties until the division is closed.

The European arm of VTB is also undergoing difficulty. German regulator BaFin appointed a special representative to help run it on 19 April, having wrested control from its parent, Reuters reports.

BaFin said the appointment of a representative with executive authority aims to ensure the bank complies with rules on the minimum number of managing directors at a credit institution. 

It also said that, together with the only remaining member of the executive board, the special representative will continue to pare back the business activities of VTB Bank’s European division. 

BaFin said the sanctions meant that management at VTB’s Frankfurt-based subsidiary was no longer allowed to take instructions from its parent bank and that the parent company cannot access the financial assets or economic resources of its European unit. 

The London branch of Russia’s state-owned VTB Bank also entered administration (with Teneo appointed as administrators).

On 6 April, Judge Timothy Fancourt told London’s High Court the move came about because the firm was unable to pay its debt due to Western-imposed sanctions since Russia’s invasion of Ukraine.

However, the FCA did not seek to put VTB in special administration, partly because it had been winding down the London-based unit for several years, with recent downsizing occurring.