Russia’s Sberbank to close London investment arm

The bank is unable to make payments because of sanctions, UK's FCA says

People stand in line to enter Sberbank in Moscow, Russia. Its UK investment arm is winding down operations. AP Photo

Russian lender Sberbank said on Friday it was winding down operations at its investment arm in London, which Britain's financial watchdog said was “operationally unable to make payments” owing to sanctions over the Russian invasion of Ukraine.

“Sberbank is ceasing the operation of its London office, Sberbank CIB (UK) Limited. We are in contact with the local regulator, the FCA [Financial Conduct Authority], and in accordance with the law we will close our activities, fulfilling all obligations to our clients,” Sberbank said.

It said key members of staff were still working in their current roles.

The FCA said it had appointed two people to oversee the administration, a form of creditor protection that often precedes bankruptcy.

The regulator said sanctions had caused Sberbank's investment arm to become “operationally unable to make payments despite the firm having sufficient assets to cover its liabilities.”

“Having considered the firm's position, the directors concluded that the firm is insolvent and applied to court to place the firm into special administration,” it said.