Russia’s Sberbank Halts Ukraine Retail Lending Amid Crisis
Ukraine’s deadly clashes prompted OAO Sberbank to stop offering loans to individuals in the country less than one year after it opened 50 branches there, Chief Executive Officer Herman Gref said.
Russia’s biggest bank, which closed three branches in downtown Kiev this week as violent clashes killed at least 77, has also witnessed a “run on” its automatic teller machines in the country, Gref told reporters in Moscow today. The hryvnia, which is managed by Ukraine’s central bank, plunged almost 8 percent against the dollar this year and non-deliverable forward rates show it will slump another 11 percent in three months.
“We have temporarily suspended active operations,” Gref said. “We have stopped giving loans to clients of the street. We will continue to lend to large enterprises whose finances we do not doubt.”
Growing pressure on the currency could lead individuals to rush to pull money from Ukrainian bank accounts, Dmitri Barinov, a money manager overseeing $2.5 billion of debt at Frankfurt-based Union Investment Privatfonds, said Feb. 18. Ukrainian President Viktor Yanukovych and opposition leaders agreed to a European Union-brokered peace deal today aimed at bringing an end to a three-month political standoff and halting violence.
State-controlled Sberbank more than doubled its Ukrainian retail customers last year to 800,000, it said this month. Ukraine accounts for less than 1 percent of the lender’s $458 billion assets. The bank doubled retail clients in 2013, according to a Feb. 17 statement.
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