The Swiss financial services watchdog has said that the market impact of Russia's invasion of Ukraine has put Sberbank (Switzerland) AG at risk of running into liquidity problems. (iStock.com/BalkansCat)
The regulator ordered the Zurich-based Sberbank unit to postpone with immediate effect the bank's obligations on deposits until May 2. It said the bank now is not allowed to make any payments or transactions that are not required for its upkeep as a bank.
"The bank has decided not to engage in any new business until further notice and is largely restructuring and reducing its business activities," the regulator said.
The watchdog said it also has appointed an administrator to monitor the bank's financial stability, ensure the equal treatment of creditors and check that the bank has an appropriate organizational structure in place.
Sberbank (Switzerland) AG specializes in commodity trade financing serving approximately 70 business clients, with a focus on international trading companies and Russian commodity producers.
A statement on Sberbank Russia's website said Sberbank Switzerland has strong liquidity and adequate capital, and that, at the end of 2021, its assets stood at 3 billion Swiss francs ($3.3 billion), with capital exceeding 500 million Swiss francs.
The suspension order makes it the second Sberbank subsidiary in Europe since Russia's invasion of Ukraine to feel the pinch of international sanctions on market access and cash flow. Vienna-based Sberbank Europe AG applied for court-supervised insolvency proceedings on Tuesday after running into a liquidity squeeze of its own.
As part of a rising tide of Western financial sanctions, the European Union moved to freeze Russian bank assets in the bloc and deny banks access to its financial markets. Similar steps restricting Russian market access and recourse to assets held abroad have been taken by the U.S. and British governments.
Switzerland on Friday joined the EU in cutting off Russian banks from the SWIFT network, barring access to the global messaging system for international payments, interbank transactions and trade financing.
-Additional reporting by Najiyya Budaly and Martin Croucher. Editing by Joe Millis.
Update: This story has been updated with comment from Sperbank Russia.
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