(Bloomberg) — The British unit of Sberbank of Russia PJSC, Russia's largest bank, is facing bankruptcy, becoming London's most important financial victim after the invasion of Ukraine.
The directors of Sberbank CIB U.K. Ltd. applied for special administration, a form of insolvency that means that the administrator ensures that there is minimal disruption in the financial markets as a result of the bankruptcy of a company, his lawyer Mark Phillips told a court in London on Friday. He attributed the measure to “difficulties arising from sanctions” and said that, although unity is not sanctioned, it remains “a problem”.
Phillips noted that administrators have been in talks to try to obtain a special license that would allow the unit to continue some financial services. A license granted to Sberbank to continue some activities expires on Sunday
.The Russian Government has a majority stake in the bank. Although Sberbank's unit in the United Kingdom has not been specifically sanctioned, its parent company was banned from settling sterling payments through the UK and cut off access to the US financial system.
Sberbank said in a statement sent by email that it will “settle the operations” of Sberbank CIB UK “in accordance with the legislation after fulfilling all the obligations of customers.”
He noted that the decision was made “as a result of the reassessment of the economic potential of the presence of the Global Markets business unit in the United Kingdom.” Key employees of the company “will continue to perform their duties.”
The move comes a few weeks after a judge ruled that Sova Capital Ltd., a London-based trader owned by Russian banker Roman Avdeev, should enter special administration. Sova's lawyers testified last month in a London court that he had “serious liquidity problems” and “significant exposure to Russian interests.”
Original Note:
Sberbank's U.K. Arm Faces Collapse Amid Russia Sanctions (1)
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