Watchdog lets Sberbank Swiss unit pay creditors, points to sale

ZURICH (Reuters) -Swiss financial market supervisor FINMA will temporarily allow the Swiss arm of Russian state lender Sberbank to repay non-sanctioned creditors, it said on Friday, as it pointed to a potential sale or change of ownership of the Russian-owned bank.

“FINMA is enabling Sberbank (Switzerland) AG to settle due claims of its creditors and make corresponding payments from 1 to 5 July 2022,” FINMA said in a statement, adding that would not include repayments to sanctioned persons or to parent company Sberbank Russia.

“These payments will enable the bank to reduce its balance sheet, also with a view to a possible sale or change of ownership,” it said.

A Sberbank executive in mid-June told Interfax Sberbank was planning to sell its Swiss subsidiary by the middle of July, saying it had found a buyer and stood in “fruitful dialogue” with FINMA, which imposed protective measures at Sberbank Switzerland in March.

Sanctions imposed by Western countries over Russia’s actions in Ukraine have severely hit Sberbank’s overseas operations, prompting the Russian lender to announce plans in May to quit almost all European markets.

The European Union and Switzerland have since also removed Sberbank, Russia’s top lender, from the international SWIFT payments notification system as part of widening sanctions packages.

Its European arm, Vienna-based Sberbank Europe AG, is to be wound down by the end of the year, Austria’s national bank and Financial Market Authority (FMA) said in May.

FINMA in March banned Sberbank Switzerland from making payments and transactions and imposed other measures it said were designed to protect creditors, which in June were extended through August.

FINMA on Friday said the bank had since stabilised its financial situation, allowing it to make the payments to creditors, which it added were permitted under international sanctions now in force.

“The investigating agent appointed at the bank by FINMA will monitor the payment process,” FINMA said, adding it would retain “intensified supervision” of Sberbank (Switzerland).

(Reporting by Brenna Hughes Neghaiwi and Miranda Murray; Editing by Michael Shields)