The insolvency of Sberbank Europe AG was able to be averted and therefore permits the orderly winding-down of the bank. Austria’s deposit guarantee scheme, which has already paid out € 926 million in eligible deposits to date, will therefore be repaid the entire amount in full. All other creditors were able to be satisfied in a timely manner under the sanctions regime. Based on the current state of planning, winding down of banking business should be concluded by the end of this year.
On 1 March, under instruction by the European Central Bank (ECB), Sberbank Europe AG was prohibited from continuing business operations by means of an administrative decision issued by the Austrian Financial Market Authority (FMA) due to the impending threat of insolvency. Yesterday, on Tuesday, 3 May 2022, the Austrian supervisor was able in consultation with both the government commissioner as well as the ECB to expedite orderly resolution.
“Sberbank Europe, which serviced approximately 775,000 customers in total and had total assets of approximately € 13.6 billion, with 3,800 staff members, eight subsidiary banks, and a total of 187 branches in Central Eastern and South Eastern Europe, is the most complex case of the resolution of a bank in the European Union to date,” remarked the FMA’s Executive Board: “The close and good cooperation between the European Central Bank, Europe’s resolution authority, and the national institutions responsible for supervision under the new European regime for supervision and resolution have made it possible for the banks within this group to make an orderly exit from the market without any shock to financial market stability and while ensuring that customers were duly protected to a great an extent as possible.”
“The quick and decisive action of banking supervision and the prompt pay-outs by the deposit guarantee scheme made a considerable contribution in this challenging environment towards ensuring that financial market stability and confidence in the Austrian financial market were maintained. By disposing of Sberbank Europe’s assets by way of an orderly wind-down it has now been possible for all payments made by the deposit guarantee scheme to be covered in full, and it was thereby possible to avoid the deposit guarantee scheme being burdened, thereby avoiding a negative financial impact for Austrian banks,” remarked Gottfried Haber, Vice Governor of the Oesterreichische Nationalbank (OeNB). The temporary provision of liquidity for pay-outs to eligible depositors, in accordance with the fundamental design of the deposit guarantee scheme, thereby made a significant contribution towards ensuring financial market stability.
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