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Russian banking group VTB Bank has been completely cut off from its European subsidiary, Reuters reported citing the German regulator BaFin.

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The German regulator said that in the wake of full blocking sanctions from the EU, VTB Bank has no control over VTB Bank (Europe) SE.

The new sanctions also prohibit the management of the bank from taking instructions from the Russian parent entity, which has been barred from accessing the assets of its subsidiary.

The move will “result in a complete ring-fencing of VTB Bank (Europe) SE from the parent company,” the regulator added.

Notably, VTB Bank was already among those cut off from the SWIFT payments messaging system.

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The new sanctions will freeze VTB Bank’s assets and completely cut it off from the EU markets.

Other than VTB Bank, Bank Otkritie, Novikombank and Sovcombank are subject to the new sanctions announced by the union last week.

All these banks represent around 23% of the market share in the Russian banking industry.

Furthermore, BaFin said that customers of VTB Bank (Europe) SE will have access to their funds.

Last month, a Bloomberg report said that VTB Bank (Europe) SE has been put up on sale by the German regulator to avoid triggering the country’s deposit insurance scheme.

VTB’s retail business in Germany serves around 160,000 customers and employs 230 people in Frankfurt.