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© Reuters. FILE PHOTO: A Deutsche Bank logo in Frankfurt, Germany June 9, 2015. REUTERS/Ralph Orlowski/File Photo
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By Tom Sims and Alexandra Schwarz-Goerlich
FRANKFURT (Reuters) -The European Central Bank on Monday warned that Sberbank Europe, a unit of Russia’s Sberbank, and two other subsidiaries under its watch “are failing or likely to fail”, in an indication of the fallout of a fresh round of sanctions.
The ECB said it was “owing to a deterioration of their liquidity situation”, while Austria’s Financial Market Authority said it imposed a moratorium on Sberbank Europe, which is based in the country.
Separately, Deutsche Boerse (DE:DB1Gn), the German stock exchange operator, said that it was suspending from trading a number of securities from Russian issuers with immediate effect. The list includes VTB Bank and Sberbank.
The two developments are among the reactions by European finance to sanctions and other measures in retaliation for Russia’s invasion of Ukraine.
Over the weekend, banks and their lawyers scrambled to discern the impact of a fresh wave of sanctions and the banishment of big Russian banks from the main global payments system SWIFT on their businesses.
Societe Generale (PA:SOGN), with a big unit in Russia, lost 6.7% at the open. BNP opened down 7.1%.
Germany’s Deutsche Bank (DE:DBKGn) and Commerzbank (DE:CBKG) were both indicated to open down.
“We support the decisions of the German government and its allies and will consistently implement the sanctions,” Deutsche Bank said in a statement.
The ECB’s warning extended to Sberbank subsidiaries in Croatia and Slovenia. Sberbank is majority owned by Russia.
The lender said in a statement that several of its subsidiaries saw “significant outflow of client deposits within a very short time” and that it was in close contact with regulators.
Meanwhile, the Russian securities dropped by Deutsche Boerse also include Lukoil and Aeroflot.
Fallout on global finance: ECB warns on Sberbank; Russia issuers dropped
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