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VTB Capital, the London-based investment unit of sanctions-hit Russian lender VTB, is preparing to file for administration, Bloomberg News reported citing people privy to the development.
The unit, whose assets were frozen by Britain shortly after Russia’s military invasion of Ukraine, is expected to approach a London court this week to seek special administration, according to sources.
Representatives for VTB did not comment on the news.
Last week, a report by Sky News said that VTB Capital was facing insolvency proceedings and the UK banking regulators brought on board advisers to proceed with the unit’s insolvency.
Last month, Reuters reported that VTB was ‘proceeding with an orderly wind-down of its positions and obligations’ after laying off some of its staff in the previous weeks.
Russia’s second-largest lender has been cutting down its presence in London in recent years. VTB Capital reduced its London employee headcount to around 150 from about 400 in 2014.
The same month, a report by Financial Times said that VTB is planning an exit from Europe in the wake of stringent sanctions.
Sanctions against Russia, announced by the US and its allies in the wake of the Ukraine crisis, has made it difficult for Russian lenders to maintain their operations abroad.
This week, a report by Russian news agency TASS said that Sberbank is winding down its London-based investment arm following a reassessment of the economic potential of the presence of its Global Markets business in the UK.
Sberbank Corporate & Investment Business has been placed under special administration by the Financial Conduct Authority (FCA) in the UK, which found the unit was ‘operationally unable to make payments’ after its parent fell under sanctions.