On the evening of March 1st, the Single Resolution Board (SRB) issued resolutions and decided to apply the sale-of-business tool to the Sberbank Europe Group’s subsidiaries in Slovenia and Croatia. All the shares of each bank were sold to a solvent local bank. The banks’ operations are continuing as normal and customers are protected.
At the same time, the SRB decided that there were no grounds for putting the Group’s parent bank in the EU (Sberbank Europe AG) into resolution. The bank’s insolvency proceedings in Austria will be conducted under national law and depositors’ funds will be repaid from the Austrian deposit guarantee fund up to a limit of EUR 100 000 per depositor.
In its communication, the SRB states that the resolution solution for the two subsidiaries was in the public interest in terms of safeguarding financial stability and avoiding economic shocks in Croatia and Slovenia. In the case of the Austrian parent, it was not felt that the bank provided functions and services of critical importance for society, and that if it were wound up in normal insolvency proceedings it would not have any adverse impact on financial stability or the Austrian economy.
The SRB’s decisions followed a joint assessment of the bank’s situation by the supervisor and the resolution authority. The European Central Bank (ECB) and the SRB on 27th February were of the view that Sberbank Europe AG and its subsidiaries were about to fail – or were probably already failing – on account of weakening liquidity. The SRB also applied the new moratorium tool in the case.
The aim is to continue critical bank operations and protect taxpayers
The resolution measures taken by the SRB are possible due to the EU’s Single Resolution Mechanism introduced in the wake of the financial crisis of 2008. The aim of European resolution regulation is to be able to resolve crises faced by institutions unable to continue to operate and to do so in a controlled manner without any serious disruption to the financial system.
Depositors are furthermore protected under the Directive on deposit guarantee schemes, which harmonises certain practices, such as swift payment, the protection of deposits and guaranteeing a maximum level of compensation of EUR 100 000.
Further information: Director General Tuija Taos (forename. surname(at)rvv.fi)
SRB decision on resolution for Sberbank Europe AG (SRB press release)
SRB assessment of Sberbank Europe AG’s financial situation (SRB press release)
General information on resolution
General information on deposit guarantee schemes in Europe
