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Russia’s Sberbank is pulling the plug on its London-based investment arm Sberbank Corporate & Investment Business (Sberbank CIB), reported Russian News Agency TASS.
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The development comes as numerous sanctions by the US and its allies continue to target Russia over its invasion of Ukraine.
The Financial Conduct Authority (FCA) in the UK placed the unit under special administration, saying that it was ‘operationally unable to make payments’ after sanctions were imposed against Sberbank.
Sberbank said that its decision to wind down the London office was made based on a reassessment of the economic potential of the presence of its Global Markets business in the UK.
The Russian lender said: “Sberbank is ceasing the operation of its London office, Sberbank CIB (UK) Limited. We are in contact with the local regulator, the FCA, and in accordance with the law we will close our activities, fulfilling all obligations to our clients,”
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By GlobalDataThe bank added that its employees will continue to fulfil their current roles.
Sberbank CIB specialises in investment banking services, corporate finance, as well as market trades operations with securities.
FCA said in a statement: “Sberbank CIB’s failure is the consequence of the ability and risk appetite of critical suppliers to work with firms with links to the Russian state following the invasion of Ukraine and the global imposition of sanctions.
“Having considered the firm’s position, the directors concluded that the firm is insolvent and applied to court to place the firm into special administration.”
The FCA appointed joint special administrators to oversee the assessment of the client money and custody assets held by the unit.
The special administers will work to return client money and custody assets to customers in line with applicable law.
Last week, a report by Sky News said that VTB Capital, the London-based investment banking unit of sanctioned Russian bank VTB, is facing insolvency proceedings in the aftermath of sanctions.
