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European company Sberbank is on the verge of bankruptcy

European company Sberbank is on the verge of bankruptcy

The European branch of the Russian State Bank Sberbank is on the verge of bankruptcy. This is according to the assessment of the European Central Bank (ECB). The bank’s liquidity position deteriorated after the Russian invasion of Ukraine.

The European Central Bank’s analysis said Sberbank Europe’s headquarters, in Austria, and its subsidiaries in Croatia and Slovenia are “going bankrupt, or likely to go bankrupt”. Subsidiaries in Bosnia, Serbia, the Czech Republic and Hungary are also on the verge of collapse, but they fall outside the jurisdiction of the European Central Bank.

The European Central Bank explained that the current geopolitical tensions have led to a “large outflow of deposits” at Sberbank Europe. This has led to a deterioration in the liquidity position.” Moreover, “there are no available actions that have a realistic chance” of turning the tide.

According to the European Central Bank, Sberbank Europe managed 13.6 billion euros in assets at the end of 2021. The central bank states that assets in a bank account of up to 100,000 euros are protected in the European Union.

Sberbank, along with four other major Russian banks, has been the target of US sanctions since last week. In addition, the state-owned bank is also one of the institutions affected by the exclusion from the Swift international banking system.

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