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Eastern Europe
February 16, 2018 www.intellinews.com I Page 18
Sberbank shrugs
off Brexit fears by doubling capital of its London business
Jason Corcoran in Moscow
Russia’s biggest lender Sberbank has shrugged off concerns about both Brexit and sanctions by committing another £40mn ($56mn) to its trou- bled London investment bank, bne IntelliNews can reveal.
A filing made by the bank on February 8 with UK Companies House shows that £40mn was injected by the parent in a move, which more than doubles the capital of Sberbank CIB, its London-based unit. Filings show that Sberbank's UK operation now has an aggregate capital of £74.3mn.
The investment is the largest by Sberbank into its UK business and follows more modest capital injections of £5.5mn and £3mn made by the parent last year.
"Sberbank has taken a long-term view and have decided to stay in the city of London despite all the problems with sanctions against it and all the negative Brexit noise," a senior Russian banker told bne IntelliNews.
Previous Sberbank regulatory filings show that the funds were made to support the UK unit’s capital base and to ensure that sufficient capital buffers were maintained, suggesting the Russian banking behemoth is committed to remaining
in the UK beyond the country’s departure from the EU.
Sberbank has declined to outline any plans it may have for setting up a headquarters for its invest- ment bank within the EU. However, the parent
Sberbank shrugs off Brexit fears by doubling capital of its London business
bank is rapidly retreating from mainland Central and Eastern Europe in a series of disposals.
Sberbank is in talks with the Dubai banking group Emirates NBD over selling Denizbank, the Turkish lender it acquired in 2012 for $3.5bn. Its Ukraine business is also being offloaded to local tycoon and former National Bank of Ukraine (NBU) governor Sergiy Tigipko at a significant loss.
Sberbank boss German Gref, a former Economy Minister under President Vladimir Putin, told state TV in September last year that sanctions have made the bank's life in Europe "extremely difficult."
Kremlin-controlled lenders like Sberbank have been subjected to sanctions by the US and EU since Russia fomented a separatist war in eastern Ukraine in 2014, barring them from raising capital with a maturity of more than 30 days in western markets.
Sberbank, which controls about 46% of Russia’s deposits and a third of the nation’s loans, has had a torrid time in the UK over the past few years but intends to stay the course. The business was cut to the bone following a quadrupling of losses in 2014 and a record $5mn sexual discrimination award to Svetlana Lokhova, a former equity saleswoman.
Lokhova was thrust back into the spotlight last year after it emerged she had struck up a friend- ship with Michael Flynn, US President Donald