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VTB Bank is reportedly preparing a withdrawal from Europe following Russia’s invasion of Ukraine and retaliatory sanctions.

This decision comes after assets of the Russian lender were frozen by western allies in light of the conflict, reported Financial Times citing people with knowledge of the matter.

The publication quoted a person engaged in the planning as saying: “There’s no attempt at continuing as normal.

“We’re trying to do it as swiftly as we can — but operations in Europe are much more complicated than those in the UK. We’re doing everything we can to get customers’ money back to them. It’s critical we do this in an orderly manner.”

This comes on the heels of European regulators’ decision to wind down and divest Sberbank’s European units amid the Ukraine conflict.

VTB, the second-biggest bank in Russia, will soon be removed from the Swift global payments system as well.

This ends Russian lenders’ long-running strategy to expand its global reach. However, Russia’s Crimea annexation in 2014 and retaliatory sanctions impacted this plan significantly. 

VTB’s retail banking unit in Germany has a customer base of 160,000.  It manages over €4bn in deposits for mainly German retail clients. The bank also has 600 firms, 150 financial institutions, and German local governments in its client list.

Retail customers reportedly opted for VTB as it did not charge negative interest rates.

VTB’s European retail arm has a workforce of 230 in Frankfurt and another 30 in Austria. Its Swiss commodities trading business has a staff headcount of 60.

The bank also has investment banking presence in London. Currently, its London staff headcount has shrunk to 120 from more than 500.

The Crimea annexation along with Brexit were the driving factors behind this reduction, with job cuts and relocation of some employees to Frankfurt.

Last month, VTB Capital’s London Stock Exchange membership was ended, and the UK government froze the bank’s assets.

The bank has now been offered a 30-day licence, ending 27 March, to make payments to its employees as well as close transactions. Upon expiry of the licence, jobs of its UK employees will be axed.