EU excludes seven Russian banks from Swift but keeps first and third largest

The European Union has communicated on Wednesday the list of Russian banks that remain from the SWIFT messaging system for bank transfers as part of the military deployment in Ukraine. There are seven in total, although among them there is only one of the three main entities.

Sberbank and Gazprombank are spared. The EU has removed Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, Vneshconombank, and VTB Bank from the international payment system, as already reflected in the Official Gazette of the EU until this past Wednesday at noon.

It has been agreed by the EU and the members of the G7, Germany, Canada, the United States, France, Italy, Japan and the United Kingdom, who have decided to keep Sberbank and Gazprombank, the first and third largest Russian banks respectively, because through them the EU pays Russia the energy bill.

Sberbank stops operating in Europe

Although it remains in SWIFT, Sberbank has announced this morning its exit from the European market as a result of the impact on its subsidiaries in the Old Continent due to the sanctions, which include the closure of its subsidiary Sberbank Europe, ordered by the European authorities.

“In the current environment, Sberbank has decided to withdraw from the European market. The group’s subsidiary banks face an abnormal outflow of funds and a threat to the safety of employees and branches,” the Russian bank said in a statement released by the Russian agency Tass.

The decision comes one day after the Austrian Financial Market Authority (FMA) banned Sberbank Europe from continuing its business operations with immediate effect, blocking customer access to accounts.

The Austrian authority (it is the competent institution for deposit insurance and investor compensation) has guaranteed the claims of Sberbank customers with a limit of up to 100,000 euros in deposits and up to 20,000 euros in investor compensation claims.

Also yesterday, the European Commission approved the resolution plans for Sberbank Europe in Croatia and Slovenia on the basis of the approaches adopted by the Single Resolution Board (SRB), involving the transfer of businesses, to Hrvatska Potanska Banka and Nova Ljubljanska Bank , respectively. Thus, these two banks have opened normally today, guaranteeing clients financial stability in Croatia and Slovenia and the protection of depositors.

Sberbank has indicated that, due to the implementation of the Bank of the Russian Federation rules, the parent of these entities will not be able to provide liquidity to its European subsidiaries, adding that these subsidiaries have a high level of capital and asset quality, while customer deposits are guaranteed by local law. “The bank’s assets are sufficient to make payments to all depositors,” the entity has indicated.