German regulator not planning to sell VTB's subsidiary in Europe, to focus on protecting operating activities

MOSCOW. Sept 14 (Interfax) - Germany's Federal Financial Supervisory Authority (BaFin) is not considering selling the European subsidiary of VTB , and BaFin will focus on maintaining the operations of the credit institution, according to a statement on the website of VTB Bank Europe.

VTB Bank Europe, with assets totaling 7.3 billion euros at the end of 2021, is owned by VTB. Following sanctions being imposed against VTB in April of this year, BaFin removed the Russian bank from managing the subsidiary, indicating separately that VTB Bank Europe was not subject to European Union restrictions.

"We are currently focusing on protecting operations," BaFin representative Frank Hellwig said in the statement.

"As a result of the sanctions and the suspension of new business, VTB Europe is currently going through the process of structuring management and effectively winding down the existing business. Other scenarios, such as a sale and, subsequently, a change in ownership, are not currently under consideration, given the sanctions in place against the Russian parent bank," Hellwig said.

The bank generated net profit of 26.9 million euros in 2021 against 71.4 million euros the previous year, and it posted a loss of 35.8 million euros in H1 2022. According to the bank's financial statement, it is looking to end 2022 with a small profit, and is expecting a return on equity of 0.5%.

VTB Bank Europe's assets declined to 5.5 billion euros at the end of June 2022 from 7.3 billion euros in 2021. Funds in savings accounts and term deposits shrank from 4.1 billion euros to 2.6 billion euros.

According to the statement, the bank has a sufficient capital cushion to cover losses and fulfill its obligations to depositors.

VTB transferred its European divisions in Germany, Austria, and France to a single banking license headquartered in Frankfurt am Main in early 2018. VTB Bank (Europe) SE also included the VTB Direktbank online retail platform in Germany.