Russian bank VTB's UK arm poised to enter administration
Reuters
Published Apr 06, 2022 14:58
Updated Apr 06, 2022 15:41
By Iain Withers
LONDON (Reuters) -The British unit of Russian bank VTB will be placed in administration in the coming days, subject to a licence being granted to do so by United States sanctions authorities, a judge at London's High Court said on Wednesday.
Judge Timothy Fancourt told the court that the London-based VTB Capital plc unit was unable to operate and pay its debts due to Western sanctions imposed on VTB since Russia's invasion of Ukraine.
The order to appoint administrators would not be sealed until the U.S. Office of Foreign Assets Control issued a licence permitting the action, the judge added.
Western sanctions on Russia have largely cut Moscow off from the global financial system and made some of the international operations of Russian banks unviable.
State-owned VTB, Russia's second-largest bank, had already said last month it planned to close the London-based arm of its investment bank, after laying off some of its staff.
Britain froze VTB's assets on Feb. 24, as part of an early wave of sanctions following the invasion.
As the British-based arm of VTB's investment banking business, VTB Capital Plc lent money to businesses and advised on mergers and corporate fundraising for Russia-related deals.
Judge Timothy Fancourt said the sanctions had caused the company financial difficulties - including its funds being frozen in an account held with its correspondent bank HSBC - and otherwise it was balance sheet solvent.
VTB had already been winding down the London-based unit for several years, the judge said.
More than 60 staff are still employed by VTB's UK unit, the company directors' QC, Daniel Bayfield, told the court.
British regulators did not seek to put the unit in special administration – a form of insolvency designed to protect the wider market – partly due to its recent downsizing, Bayfield said.
VTB rival Sberbank placed its investment arm in London in special administration last week, while London-based broker Sova - controlled by Russian banker Roman Avdeev - entered the same process in March.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.