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German financial services regulator BaFin does not plan to sell the European arm of Russian lender VTB Bank, Interfax has reported.
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As per the statement on VTB Bank Europe’s website, BaFin will focus on maintaining the operations of the lender.
In April this year, VTB Bank was completely cut off from its European subsidiary following the sanctions imposed in retaliation to the Russian invasion of Ukraine.
“We are currently focusing on protecting operations,” BaFin representative Frank Hellwig was quoted by the news agency as saying.
Hellwig said: “As a result of the sanctions and the suspension of new business, VTB Europe is currently going through the process of structuring management and effectively winding down the existing business.
“Other scenarios, such as a sale and, subsequently, a change in ownership, are not currently under consideration, given the sanctions in place against the Russian parent bank.”
In the first half of 2022, VTB Bank recorded a net loss of €35.8m. At the end of June 2022, the bank’s assets fell to €5.5bn from €7.3bn at the end of 2022.
Assets in savings accounts and term deposits also fell from €4.1bn to €2.6bn.
As per the statement, the lender has enough capital to cover losses and meet its obligations to its depositors.
Earlier this month, VTB Bank’s larger peer Sberbank divested its Kazakhstan subsidiary to local financial holding Baiterek citing the current geopolitical situation.
