‘Paralysed’ UK arm of Russia’s second-largest bank VTB goes bust after being sanctioned
The British arm of Russia’s VTB Bank is set to tumble into administration after being sanctioned.
In a hearing at the High Court in London yesterday, Judge Timothy Fancourt approved its application to appoint administrators.
He said Russia’s second largest bank was unable to function and pay its debts – such as rent owed – following Western sanctions prompted by the invasion of Ukraine.
A branch of VTB Bank in Moscow. VTB’s UK operation is set to go into administration
Daniel Bayfield, a lawyer for VTB, said: ‘The company’s operations have been paralysed even beyond the paralysis caused by the sanctions.’
But Fancourt added that the US, which has also heaped restrictions on VTB, must first grant a licence for the lender to enter administration.
It came as the UK took aim at Sberbank, Russia’s largest lender, in further sanctions.
Ministers imposed a full asset freeze on the group, which put its UK arm into special administration last week.
This is a process used by regulators to protect other firms connected to Sberbank, but was not deemed necessary for VTB as it had recently cut down its size.
More than 60 staff work for VTB, the court heard.