Sberbank and VTB shares rebound when top Russian banks escape UK sanctions

Shares of Moscow-Russia’s two biggest lenders, Sberbank and VTB, reversed early losses on the deal on Tuesday after the state-owned group escaped British sanctions on Russian banks.

UK sanctions target the Central Bank of Russia, the Black Sea Bank, Genbank, IS Bank, and Promsvyazbank, which are small lenders on the list of systemically important credit institutions of the Central Bank of Russia.

British Prime Minister Boris Johnson also sanctioned three wealthy people in response to Russia’s decision to deploy troops in two secession areas in eastern Ukraine after granting independence.

In 2014, the US Treasury described Sberbank as “a private bank for senior officials of the Russian Federation” when Moscow sanctioned lenders after annexing Crimea.

Promsvyazbank was a commercial bank until it was bailed out and nationalized in 2017. Later, it became a bank specializing in defense sector lending to reduce the likelihood of other lenders being sanctioned.

According to the financial markets, Genbank has the 92nd largest asset size in Russia, with ISBank and BlackSea Bank occupying 155th and 197th respectively.

Market leader Sberbank’s share rose 2.8% by 1341 GMT, while VTB’s share rose 3.4%.

“The really serious sanctions that can bring down the market begin with the moment we put a major Russian bank or company on the sanctions list or talk about serious trade sanctions,” said Sophia Donets of Russia and the CIS. Says. Renaissance Capital economist.

Russia’s huge reserves, modest debt, and strong budget positions mean that most sanctions risks have already been priced by the market, she said.

Veles Capital analyst Elena Kozhukhova said Russian banks could continue to be under pressure this year due to possible sanctions, but will recover sooner if conditions improve thanks to high interest rates. rice field.



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