US sanctions on dollar transactions for Sberbank, Russia's largest bank by a long way, are a big deal and will be painful in the short term for the Russian financial system.
But those sanctions aren't as tough as those on VTB, which cut it out of the financial system entirely.
But those sanctions aren't as tough as those on VTB, which cut it out of the financial system entirely.
https://twitter.com/maxseddon/status/1496930947047907328
A few quick notes on these banks.
Sberbank was a staid Soviet-style institution before it got a new lease on life under Herman Gref, Putin's most liberal confidant. He styled it after Silicon Valley and tried to make it an example for Russian reform.
ft.com/content/3450c8…
Sberbank was a staid Soviet-style institution before it got a new lease on life under Herman Gref, Putin's most liberal confidant. He styled it after Silicon Valley and tried to make it an example for Russian reform.
ft.com/content/3450c8…
By all accounts, Gref did a great job modernizing Sberbank – it was one of Europe's most profitable companies.
But as it became clear in recent years Putin had no interest in reform, however, its tech ambitions began to founder as well.
ft.com/content/4b5248…
But as it became clear in recent years Putin had no interest in reform, however, its tech ambitions began to founder as well.
ft.com/content/4b5248…
Though it has also turned itself around somewhat in the last couple years, VTB is perceived much more as a vehicle for Kremlin Inc – funding pet projects of the powerful.
You may remember it from such hits as the Panama Papers.
ft.com/content/f26b2d…
You may remember it from such hits as the Panama Papers.
ft.com/content/f26b2d…
Originally, VTB was devised as Russia's answer to Deutsche when Putin decided Russia needed a global investment bank to become a great nation.
But its finances went the way of, um, Deutsche's, and sanctions shut down its international plans.
ft.com/content/4e7860…
But its finances went the way of, um, Deutsche's, and sanctions shut down its international plans.
ft.com/content/4e7860…
Once the US placed financing sanctions on state companies and banks like VTB, private lenders like Otkritie emerged to replace them.
Its former owners were notorious risk-takers: one deal nearly crashed the ruble, and the bank was eventually nationalized
ft.com/content/0a0084…
Its former owners were notorious risk-takers: one deal nearly crashed the ruble, and the bank was eventually nationalized
ft.com/content/0a0084…
After the bailout Otkritie reinvented itself as a pretty meat-and-potatoes retail bank. It was hoping for an IPO or sale to a big investor this year – Unicredit looked at it but backed out over the Ukraine tensions.
ft.com/content/5ab93f…
ft.com/content/5ab93f…
The other two US moves are less consequential. Novikombank is a defense industry bank and is basically designed so it gets sanctioned, rather than other banks more integrated into the global financial system.
Not sure why they did Sovcombank. It's just a big private retail bank.
Not sure why they did Sovcombank. It's just a big private retail bank.
There are also debt sanctions against Alfa-Bank and Credit Bank of Moscow. Those aren't as strict but they bar them from all but short-term financing on global markets.
It will also *cough* make it harder for certain Russian energy giants to handle forex debt at certain banks.
It will also *cough* make it harder for certain Russian energy giants to handle forex debt at certain banks.
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