With sanctions, Russian Sberbank faces 'failure' in Europe

BELGRADE, Serbia (AP) — Faced with a rush of people withdrawing money, Sberbank and the Russian bank’s subsidiaries in southeastern and central Europe are facing closures or takeovers following international sanctions imposed on Moscow for its invasion of Ukraine.

The European Central Bank said Monday that Vienna-based Sberbank Europe AG and its branches in Slovenia and Croatia are failing or likely to fail after they “experienced significant deposit outflows" because of the impact to their reputation from the conflict.

“The bank is likely to be unable to pay its debts or other liabilities as they fall due,’’ the ECB said.

Sberbank and VTB banks are Russia’s two largest state-run banks and own roughly half of the assets in the Russian banking system. They were targeted last week by tough U.S. sanctions aimed at limiting their businesses internationally and over the weekend barred from the international SWIFT payment system.

In both Slovenia and Croatia, Sberbank temporarily closed its branches or limited cash withdrawals following a rush by its clients last week.

In Croatia, the bank’s clients will be allowed to withdraw a maximum of about 1,000 euros per day over the next two days. In Slovenia, the branches will be closed for the next two days and then the withdrawals will be limited to 400 euros per day.

Sberbank Europe AG also has subsidiaries in Bosnia, the Czech Republic, Hungary and Serbia, which do not come under the jurisdiction of the European Central Bank.

People’s money is protected up to 100,000 euros per depositor in the European Union, including Slovenia, Croatia, the Czech Republic and Hungary. In Serbia and Bosnia, local bank regulators guarantee up to 50,000 and 25,000 euros, respectively.

The Czech central bank said Monday that it was taking steps...