Ukraine’s sanctions against the subsidiaries of several Russian banks working in the country will not have a tangible impact on the parent organizations, Standard & Poor’s Associate Director Sergey Voronenko told Sputnik on Monday.
On Thursday, Ukrainian President Petro Poroshenko approved the Ukrainian National Security and Defense Council’s proposal to impose one-year sanctions on subsidiaries of five Russian state banks, including Russia’s largest bank Sberbank and VTB. The subsidiaries are no longer able to take assents out of Ukraine.
“In terms of the impact of these events on Russian banks, it is unlikely that they will have any sort of significant effect on their financial stability due to the relatively small amount of [Ukrainian] assets compared to the net assets of the banking groups. The situation looks completely manageable in terms of possible financial losses,” Voronenko said.
Ukraine has already become an insignificant market for Russian banks since 2014, he added, noting that the Ukrainian subsidiaries were mostly unprofitable and were financed by their parent structures over 2015 and 2016.
The only short-term risks are faced by the subsidiaries themselves, according to Voronenko.
“A further deterioration of the Ukrainian subsidiaries’ asset quality is possible. The population may also start to withdraw savings given the negative informational background,” he said.
Sberbank has vowed to safeguard the interests of its Ukrainian customers despite the sanctions and to continue work while calling Kiev’s move politically motivated.