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Sanctions forced Sberbank to close UAE office, firm says

Sanctions forced Sberbank to close UAE office, firm says

  • This content was produced in Russia, where laws restrict reporting on Russian military operations in Ukraine

MOSCOW, Dec 26 (Reuters) – Major Russian lender Sberbank (SBER.MM) First Vice Chairman Alexander Vedyakhin said on Monday it would be forced to close its United Arab Emirates (UAE) office early next year, blaming sanctions pressure.

The West imposed sweeping sanctions on Russia’s financial system after Moscow sent tens of thousands of troops to Ukraine on Feb. 24. Sberbank is one of several Russian banks banned from using the international SWIFT payment system, with some senior executives personally hit by the sanctions.

“Unfortunately, in the context of sanctions restrictions, our SberInvest Middle East office in Abu Dhabi is facing severe constraints and unfortunately, we are forced to close it in the first quarter of 2023,” Vedyakhin told reporters.

Sberbank will continue to serve clients in the UAE market and is in active talks with Chinese regulators about opening an office there, he said.

“I hope we will be able to open a branch in China by the end of 2023, usually it takes 1-1/2 to 2 years,” Vedyakhin said.

Sberbank’s Vienna-based European branch was closed in March on orders from the European Central Bank, after the ECB warned the bank faced failure due to a run on deposits.

Earlier this year, Russia’s central bank ordered financial institutions to limit their disclosures. Sberbank resumed partial reporting this quarter, with net profit slumping 84.8% year-on-year for the January-November period, outperforming a broader sector that was still losing money as of Nov. 1.

Vedyakhin declined to give a full-year forecast, but said Sberbank was confident of turning a profit in December.

Sberbank said in a report that the bank’s corporate customer base will grow 3% year-on-year to 3 million in 2022, and its corporate loan portfolio will grow 13.5% to more than 18 trillion rubles ($263.35 billion), excluding currency revaluation . pitch meeting.

Vedyakhin said he expects Russia’s corporate loan portfolio to grow 12-14% overall in 2023, assuming inflation is in line with the central bank’s 5%-7% forecast and key interest rates stay around current levels.

($1 = 68.3500 rubles)

Reporting by Alexander Marrow; Editing by Andrew Cawthorne and David Evans

Our standards: Thomson Reuters Trust Principles.

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