Current situation at VTB Bank (Europe) SE

VTB Bank (Europe) SE, headquartered in Frankfurt, is majority-owned by the Russian PJSC VTB Bank in St. Petersburg. The latter was included in the group of companies sanctioned by the European Union (EU) on April 8, 2022. This has significant consequences for VTB (Europe) SE, which holds a German banking license.

On April 9, 2022, the German supervisory authority, the Federal Financial Supervisory Authority (BaFin), initiated the process that has resulted in Russian PJSC VTB Bank being prohibited from exercising voting rights over its subsidiary VTB Bank (Europe) SE, as the parent company is no longer considered reliable within the meaning of Section 2c (1b) No. 1 of the German Banking Act (KWG).

At the same time, BaFin prohibited the management of VTB Bank (Europe) SE from following instructions of the owner PJSC VTB Bank. These measures – together with the already issued prohibition to make payments or other transfers of assets in favor of companies of the VTB Group – lead to a complete shielding of VTB Bank (Europe) SE from the Russian parent company.

As a result, PJSC VTB Bank, St. Petersburg no longer has control over VTB Bank (Europe) SE and cannot dispose of its financial assets or economic resources.

What does this mean for customers and business partners of VTB Bank (Europe) SE in Frankfurt?

BaFin has sent a Special Representative with Management Board competences to VTB Bank (Europe) SE. As early as February 27, 2022, BaFin had already ordered that VTB Bank (Europe) SE may no longer accept deposits or grant loans. VTB Bank (Europe) SE will therefore no longer conduct any new business, it will not establish any new business relationships, it will no longer accept any new or additional deposits from retail customers, among others, and it will not grant any new loans.

Depositors can continue to freely dispose of their money within the framework of the contractual agreements made, in particular taking into account existing notice periods and agreed repayment dates. In exactly the same way, debtors are still obliged to service their loans received from VTB Bank (Europe) with interest and repayments. Other creditors of the bank – insofar as they are not themselves sanctioned – may also be serviced accordingly and receive payments from the bank.

The Bundesbank also expressly stated on April 9, 2022 that payments to VTB Europe (SE) are permissible unless it is apparent in advance to the payer that these payments are to be forwarded to PJSC VTB Bank, St. Petersburg or another listed person in violation of the sanctions. The purpose of the payments is generally irrelevant. Likewise, correspondent banks, service providers (insofar as these two are not themselves sanctioned) and employees may continue to work for VTB Bank (Europe) SE.

The asset and liquidity situation of VTB Bank (Europe) SE will be closely monitored by BaFin. Should the situation of the bank change, BaFin will react promptly with appropriate measures.

Customer deposits at VTB Bank (Europe) SE are secured by a two-tier deposit guarantee system.

VTB Bank (Europe) SE is a member of the Compensation Scheme of German Banks. The Deposit Protection Fund secures all balances on accounts or savings books, such as demand deposits, other current accounts, time deposits or money payable on demand. The protection limit per creditor is EUR 100,000 per investor and per bank.

VTB Bank (Europe) SE is additionally affiliated to the Deposit Protection Fund of the Association of German Banks (Bundesverband deutscher Banken e.V.). The scope of protection per depositor and bank is calculated on the basis of the liable equity capital of the respective bank. Detailed information on the voluntary deposit protection fund as well as the exact scope of protection of VTB Direktbank can be found at Einlagensicherungsportal.