Yesterday, on April 6, 2022, the U.S. imposed sanctions against subsidiaries of Sber and Alfa Bank in Kazakhstan. As a result, all assets of these banks should be frozen in the U.S. and no American company or individuals can do business with these entities, according to the official website of the White House.
The U.S. government has also imposed fully blocking sanctions against parent companies of Sberbank and Alfa Bank. The White House noted that Sber counts for one-third of all assets of the Russian banking sector while Alfa Bank is the biggest private financial organization in Russia and fourth in terms of ranking of the country’s banks.
Both subsidiaries as well as Sberbank’s headquarter in Moscow have refused to comment on the situation. Also, there are no official statements on their websites.
However, in February some of the Russian banks’ subsidiaries in Kazakhstan reported an outflow of deposits. For example, individual deposits in Sberbank decreased that month by $168.6 million while corporate deposits declined by $540.4 million. In Alfa Bank corporate deposits have decreased by $168.6 million even though the volume of individual deposits hasn’t changed. It is worth noting that the outflow of money from Russian banks’ subsidiaries started in January. Since the beginning of the current year, the remaining balance in Alfa-Bank and Sber has decreased by 25.5% and 25% respectively.
Because of the outflow of about $1 billion, Sberbank with $8 billion of assets is now ranked third, not second in terms of assets. As of March 2022, Alfa Bank with $1.9 billion of assets was ranked 11th.
The U.S. imposed sanctions against Russian banks right after the Russian invasion of Ukraine. However, in February Sberbank wasn’t a subject for full blocking sanctions (SDN), which are aimed at isolating an entity from the dollar-based financial system.
At the end of March, the British government imposed sanctions against German Gref, head of Sberbank, his first deputy Alexander Vedyakhin and former deputy head of the bank Lev Khasis. The U.S. has also supported the move and also imposed sanctions against German Gref.
Among other prominent Russian financiers and moguls who have become targets for sanctions by the West are Mikhail Fridman, Pyotr Aven and German Khan. In order to save at least 50% of the bank’s equity, the bank owners have changed their shares like this: Andrei Kosogov 40.96% (earlier he owned just 3.7% of shares), Mikhail Fridman 32.86%, Pyotr Aven 12.4%, UniCredit S.p.A. 9.9% and the Mark Foundation for Cancer Research 3.87%. German Khan and Alexey Kuzmichev have withdrawn as shareholders of ABH Holdings SA in Luxemburg.
In early March, Fitch Ratings downgraded ratings for Sber and Alfa similar to their parent companies. At the end of the month, the agency revoked those ratings altogether.
However, both Sberbank and Alfa Bank said that they do not plan to leave the Kazakhstani market.