The rows at the Frankfurt headquarters of VTB Bank (Europe) SE are thinning: after Russia's attack on Ukraine and the sanctions imposed by the West, four out of five board members are said to have left the subsidiary of the Russian financial institution.

Only CFO Miro Zadro is to hold the position, according to Frankfurt financial circles.

Markus Fruehauf

Editor in Business.

  • Follow I follow

The motivation to work for VTB Bank (Europe) should no longer be too high after the Federal Financial Supervisory Authority (Bafin) last Sunday specified the reduction of business activities as the direction to be taken.

However, weeks ago the private banks had feared worse: another case for their deposit guarantee systems, which were already badly strained by the Greensill imbalance.

The Association of German Banks (BdB) is responsible for this, with Deutsche Bank boss Christian Sewing as bank president.

That no longer threatens, because the Bafin and the Bundesbank consider the liquidity and asset situation of the former subsidiary of the second largest bank in Russia to be in order.

The Russian VTB Bank has had nothing to report to the Frankfurt institute since last Sunday.

As part of the new sanctions imposed by the European Commission against Russia, the parent company's voting rights were revoked, as the FAZ reported in its Monday edition.

The decimated board of directors must coordinate with the special representatives of Bafin and the Bundesbank about the limited business activities of VTB Bank (Europe).

Deposits dropped significantly

She had advertised German depositors with attractive interest rates.

At the end of 2020, deposits amounted to 4.4 billion euros, more recent figures are not available.

Even at the request of the FAZ, the VTB Bank (Europe) does not want to provide any information.

But it can be assumed that many customers have said goodbye to the European VTB Bank due to the sanctions.

Deposits are therefore likely to have fallen significantly.

Since the beginning of March, it has not been allowed to accept new deposits, which the Bafin ordered.

This ban is considered a precursor to a moratorium, i.e. a freeze on payouts, which is usually followed by a case of compensation for deposit insurance.

According to a spokesman for the Frankfurt VTB unit, deposits into accounts are no longer possible.

This applies, for example, to overnight money accounts or savings plans as part of capital-forming benefits (VL).

However, the amounts already saved would continue to earn full interest.

Payouts are still possible with call money accounts.

Sanctions unsettle other banks

However, this can be a problem because other banks do not accept transfers from VTB Bank (Europe) for fear of the sanctions.

Then customers cannot withdraw their deposits from VTB because other institutes refuse to do so.

"Most banks accept transfers from VTB and thus follow their own guidelines and European legislation, according to which VTB Bank (Europe) SE is not sanctioned," explained a VTB spokesman.

In individual cases it can happen that the payments are refused, he admits.

Bafin and the Bundesbank are also trying to calm things down: the operational business situation of VTB Bank (Europe) is basically unchanged.

Depositors could continue to freely dispose of their money and debtors could service their loans with interest and principal.