The European subsidiary of Russia’s VTB (VTBR.MM) is changing its name as it liquidates. The Frankfurt-based bank, already ring-fenced by regulators due to sanctions and in liquidation since last year, will be known as OWH SE, said Frank Hellwig, the chief executive officer of VTB’s Europe hub. Before Russia invaded Ukraine, the bank attracted tens of thousands of German savers with its relatively high-interest rates. It marketed itself as a sponsor of Frankfurt’s ice hockey team, the Lions.
Earlier this month, the Extraordinary General Meeting of VTB Bank Europe SE voted to liquidate it from April 1 and begin winding up operations, with business and client relationships ending. The decision was made when liquidity in international capital markets was low, credit risk was increasing, and the financial condition of companies in the international market, including those that serve VTB Group customers, had deteriorated, the company said.
As a result, the Group’s profit margins have decreased significantly. This trend is expected to continue shortly. However, the Group will focus on achieving growth and profitability by expanding its share of critical high-margin businesses such as corporate, investment banking, and retail.
In March, the Group’s shares dropped by almost a third as it cut its stake in the state-owned Demeter-Holding. The move followed a request from the federal financial watchdog to reduce its ownership of the holding. As a result, the company’s total stake decreased to 50% plus one share and became equal to the share held by Post Bank.
Another recent event was the publication of the personal information of five thousand VTB depositors on a website specialized in the sale of data. The database published contains the full names, home addresses, indexes, and phone numbers of depositors. The information is accessible to anybody who has Internet access and knows the address.
As for the current situation of the European subsidiary, VTB’s deposit insurance body has increased lenders’ contributions by about 50% in the wake of last year’s implosion of Greensill Bank, which cost it 1.1 billion euros ($1.2 billion). The company said that depositors are now being encouraged to shrink their local VTB accounts as much as possible to avoid triggering payouts. Despite all the difficulties, VTB in Europe will remain an essential asset for its parent and the Group as a whole, the company’s management said. It has a solid capital base and a good liquidity position and is in an excellent position to grow. The company also has an extensive and well-diversified business portfolio, and its international operations are developing fast. In addition, it has an excellent reputation in the industry, which will help it to develop its business in the future. The Group also has an excellent management team committed to continuing the company’s development and growth. The company aims to become the leader in its field; to achieve this, it will need to work hard to implement strategic goals and continue contributing to the stability of the Russian economy.
