Russia closed four Ukrainian lenders in Crimea as it pushes to integrate the Black Sea peninsula, following a weekend of violence in eastern Ukraine that the countries blamed on each other.
The Russian regulator banned Privatbank, VAB Bank, Bank Kyivska Rus and Imexbank from Crimea for violating the “legal rights” of depositors, by ceasing operations with no sign of resuming, according to a website statement. UniCredit SpA, Raiffeisen Bank International and Alfa Bank, Russia’s largest privately owned lender, have also stopped working in the region, as there’s no “legal basis” to operate under Ukrainian law.
Violence over the weekend, with three pro-Russian “activists” killed in a shootout in eastern Ukraine, is undermining an accord aimed at defusing the situation that Ukraine, the U.S., the European Union and Russia reached last week in Geneva. The U.S. has threatened more sanctions against Russia, with measures targeting its banking and energy industries, unless progress is made on carrying out the accord.
|Customers lineup to withdraw money from an ATM outside a Privatbank CJSC bank branch in Kiev. (Bloomberg)|
“It’s a regulatory nightmare now,” Natalia Berezina, a banking analyst at UralSib Financial Corp. in Moscow, wrote in emailed comments Monday. “For Russian banks operations in Crimea there’s still a risk of possible U.S. sanctions.”
Russian President Vladimir Putin pledged last week to expedite Crimea’s switch to the ruble and said the region would have a working banking system within a month.
Crimea will have more than 200 branches of Russian banks by the end of the month, central bank Deputy Chairman Mikhail Sukhov said Monday, Interfax reported. Many Ukrainian banks are continuing operations in the Black Sea region, the news service reported, citing Sukhov.
Bank Rossiya, a St. Petersburg-based bank sanctioned by the U.S. administration over Russia’s annexation of Crimea from Ukraine last month, said it opened a representative office in the peninsula’s capital of Simferopol on April 15. The lender, which the U.S. singled out as the “personal bank” for senior Russian officials, plans to open branches in other cities on the peninsula, according to a website statement.
Alfa Bank has “no plans to open any branches in Crimea,” Leonid Ighnat, a Moscow-based spokesman, said on April 14.
Raiffeisen Russia’s chief executive officer, Sergey Monin, said on April 8 that the group is monitoring events in Crimea before deciding to build an operation. (Bloomberg)