What will Russian banks that have come under sanctions do?

March 16, will probably stay in history as a “black day” for Russian banks in Ukraine. This day President of Ukraine Petro Poroshenko signed the decision of the National Security and Defense Council of Ukraine, which imposed sanctions against banks with Russian capital.

The deputy head of the National Bank of Ukraine, Ekaterina Rozhkova, said:

“We absolutely know that all banks with state-owned Russian capital that are operating in Ukraine today are negotiating  about potential sale”.

There are 6 banks that theoretically fall under the sanctions, VEs Bank, Prominvestbank, VTB Bank, BM BANK and Alfa Bank. The last one, by the way, wasn’t included to this list. Some of them have already expressed their opinion on this situation.

Sberbank

The chairman of the board of the largest Russian bank, German Graf, called such a decision discriminatory and stated that they are looking for ways out of Sberbank of Russia from the Ukrainian market. This is not surprising, because it is Sberbank, whose branches have suffered the most and are still suffering. Activists are closing the entrances to the offices with bricks, hitting shop windows; they have even made fires several times.

Alfa Bank

The shareholder of this financial institution Petr Aven, unlike the management of Sberbank, does not intend to withdraw its “daughter” from the Ukrainian market. Although, Ukrainian activists have caused some damage for the central branch on Khreshchatyk Street. In addition, representatives of the bank declare that they are not Russian at all – most of the shares belong to individuals residing in London and the Italian UniCredit Group. Perhaps this is due to the fact that the NSDC did not bring Alfa Bank to the sanctions list. Be that as it may, Peter Aven said that they have normal working relations with the National Bank of Ukraine.

VTB Bank

The president and chairman of the board of this bank, Andrei Kostin, on the one hand, said that the damage from sanctions is insignificant. On the other hand, he said that the financial institution has entrusted to him will take a course to exit from Ukraine. In addition, he said that another bank that has got under sanctions, it is a BM bank and it is ready for sale and there are even four potential Ukrainian buyers.

VS bank

The bank said nothing about the fact that they will leave the Ukrainian market, but in their statement they assured their clients that this bank is well capitalized, highly liquid and will fulfill all obligations to its customers.

Prominvestbank

Till this moment, they haven’t commented their hit under sanctions.

In the meantime, Russia has hit Ukrainian workers rather hard, having banned any international transfers from Russia to Ukraine. It seems, that the so-called “hybrid war” has spread to the financial sphere and we will have to hear many more reports from the “financial fronts”.