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Germany has appointed a special representative to run the operation of the European arm of sanctions-hit Russian lender VTB Bank, Reuters reported citing BaFin.

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With the executive authority, the special representative will work with the only remaining member of the executive board and scale down the business of VTB Bank (Europe) SE, the regulator said.

The announcement follows the European Union’s decision to impose full blocking sanctions against four key Russian lenders, including VTB Bank.

The sanctions severed VTB Bank’s ties with the Germany-based entity by freezing its assets.

The move barred the management of the bank from taking instructions from VTB Bank and “result in a complete ring-fencing of VTB Bank (Europe) SE from the parent company,” BaFin had said earlier.

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VTB Bank (Europe) SE’s retail business caters to around 160,000 customers and employs around 230 people.

Earlier this month, a Bloomberg report said that VTB Capital, the London-based investment unit of the Russian lender, is preparing to file for administration.

The sanctions imposed by the US-led western alliance are not only making it difficult for Russian firms to operate outside the country but have also triggered a mass exodus of foreign firms operating on Russian soil.

Most recently, New Zealand imposed sanctions on 18 Russian financial institutions that hold around 80% of the country’s total banking assets.