European intervention in Russia’s largest bank, Sberbank, dictated its expulsion from the European Union. The core operations in Austria go bankrupt and the subsidiaries in Croatia and Slovenia have new owners: among them are the Croatian and Slovenian states themselves. It is therefore a change of state ownership. After the intervention, the Russian bank itself came to say that it was leaving the continent (except for Switzerland).
Since Monday, we know that after the leak of the deposits, the European Central Bank kicked off so everything was different in the European arms of Sberbank, giving it the stamp of “at risk or insolvent”. On this, preparations began with the Single Resolution Board, the European body in charge of interventions in European banks.
THE decision, after a two-day moratorium of freezing, it was taken on March 1, and came up with different positions: on the one hand, Austrian insolvency; on the other, Croatian and Slovenian continuity. In the case of deposits, there is protection of up to €100,000 for claims placed with the Austrian bank, and full guarantee on claims placed with Croatian and Slovenian banks, when they pass to another owner .
No Single Resolution Fund funds
“Today, we are acting to protect the public interest and ensure financial stability. All this was done without the use of public funds, so not only Sberbank customers were protected, but also taxpayers, ”said the chairwoman of the Single Council, Elke König. The European Commission supported the decision of the Single Resolution Board, the implementation of which is now up to each of the national authorities.
There is no assistance from the Single Resolution Fund, to which European banks contribute in the event of payment difficulties in a banking entity, as the European Commission points out in the decision authorizing the resolution measure. This means that Portuguese banks do not contribute to these operations.
“Banks were at risk of insolvency, there were no private solutions outside of the resolution regime, there were no supervisory actions to prevent insolvency and resolution action was needed in the ‘public interest’, according to the European Commission.
Even if there is no European money directly, the truth is that the new owners receive money from the taxpayers concerned.
The new state owners
“The Single Resolution Board has decided to transfer all shares of the Sberbank subsidiary in Croatia to Hrvatska Poštanska Banka dd [HPB, o banco postal croata] and all shares of the subsidiary of Sbrebank in Slovenia to Nova ljubljanska banka (NLB)”. This option means that the banks reopened this Wednesday, March 2, without problems, neither for depositors nor for customers. “They are now part of well-established, solid and stable banking groups.”
In case of Croatian activity, the new shareholder of the Russian bank HPB, is a Croatian public establishment with capital, holding a market share of 5.6% of the assets of the banking system of this Balkan country. The Croatian Republic owns 45% of the capital, in addition to other entities of the country, such as the postal service company, the deposit and pension guarantee system.
The Croatian official recalls “that all deposits of citizens and companies, regardless of their volume, are absolutely safe”. In the Slovenian case too.
The Slovenian institution that owns the country’s Sberbank Its capital is the Republic of Slovenia. The NBL is the largest international bank in the country, and it is public – it was recently privatized, with the Slovenian state holding 25% of the capital, which is the largest shareholder. It has other shareholders, including Schroders and BERD.
Austrian and Czech insolvency
Conversely, the bank in Austria: “The Single Resolution Board decided that the resolution of the Austrian Sberbabank Europe AG was not necessary. Insolvency proceedings will be followed in accordance with national law.
The authority’s conclusion is that this unit, although it was the heart of the other entities, did not perform “critical functions” for the economy, and that the insolvency would not have a negative impact on Austrian financial stability (“its termination would not significantly disrupt the real economy of Austria, nor the disruption of financial stability in Austria and other member states”).
According to the Austrian supervisorwhich follows the instructions of the ECB (which is the direct supervisory authority of the institution), the deposit guarantee scheme will have to pay up to 100,000 euros per request within 10 working days.
Since the Austrian bank is no longer, the freedom to provide services that it had in Portugal also ceases to exist.
Rejected by others and by himself
Sberbank is present in other European countries, but these three entities were those which, being autonomous, were under the direct supervision of the European Central Bank due to the cross-border dimension of the group. In the Czech Republic, the Sberbank unit – which was not directly supervised by the ECB, but by the national authority – had already had its banking license revoked, and it also ensures the payment of deposits up to 100 thousand euros in the next seven days . The Czech guarantee system has already ensured that it has the money to pay all eligible deposits.
This is the step that dictates the future of Sberbank in Europe, which even had an agreement since last year to sell operations in Bosnia and Herzegovina, Croatia, Hungary, Serbia and Slovenia – the war Russian terminated these plans. The end has come and without receiving any money.
Incidentally, in addition to the decision of the European banking authorities, Sberbank also announced the withdrawal of its presence in Europe (with the exception of Switzerland). According to a statement quoted by the international press, the Russian central bank ordered the departure from Europe due to its inability to provide liquidity to European subsidiaries – foreign currency must be kept in the country. In addition to the decision, the Russian group also justifies the departure by the “threats to the safety of employees and counters” felt in the countries, as quoted by Reuters.