Sberbank

Sberbank's history goes back to Cancrin's financial reform of 1841,[12] when a network of the first state-owned savings banks was created in Russian Empire. By the end of the 19th century, the network reached almost 4 thousand outlets with over 2 million depositors.[13]

Since 1905, savings bank outlets became authorised to sell insurance. After 1910, savings banks started subsidising credit cooperation institutions and extending loans to small lenders. In 1915, savings bank outlets started accepting government securities for depositing.[14]

After the October Revolution of 1917, the state savings banks system continued its activity and growth under the management of the Finance Ministry of the USSR as the State Labour Savings Banks System. From 1926, the saving bank outlets were used to pay wages to blue- and white-collar workers. The savings banks were used to distribute state lottery tickets and for the placement of state bonds with the population. The savings banks introduced wider services such as money transfers.[15]

By late 1980s, the Soviet savings bank system had almost 80 thousand branches. As part of Perestroika reforms, in 1987 the savings bank outlets are reorganised into the Savings Bank of the USSR. Within the Savings bank of the USSR,[16] separate savings banks were created in the Soviet Republics. Following the dissolution of the USSR, the former republican savings banks became state savings banks of the newly independent post-Soviet states.

In 1991, the Savings bank of the RSFSR has been reorganised into the Joint-Stock Commercial Savings Bank of the Russian Federation (Sberbank of Russia).

In post-Soviet Russia, Sberbank is the largest universal bank despite growing competition from private and other state-owned commercial banks. The bank has gradually expanded its international presence.[17]

Since 2007, Sberbank is led by former economy minister Herman Gref who is a very close friend of Vladimir Putin.[18]

2011 Volksbank International acquisition

In 2011, Sberbank acquired Volksbank International AG from its shareholders Österreichische Volksbanken AG, BPCE, DZ Bank and WGZ Bank. The deal included all Volksbank assets - banks in Slovakia, Czech Republic, Hungary, Slovenia, Croatia, Ukraine, Serbia and Bosnia and Herzegovina, except for Volksbank Romania. The agreed price was €585 to €645 million, depending on Volksbank business performance in 2011. Volksbank's total assets excluding Romania was €9.4 billion in June 2011. On 16 December 2013, Volksbank (Ukraine), which was a wholly owned subsidiary of Sberbank, changed its name to VS Bank (Ukrainian: ВіЕс Банк).[19][20]

2012 Denizbank acquisition

In June 2012 Sberbank bought the Turkish DenizBank for Turkish lira 6,469 billion (about EUR 2,821 billion or US$3.504 billion) from the lender Dexia, which in 2011 was "partly nationalized by the governments of France, Belgium and Luxembourg".[21] The deal included DenizBank subsidiaries in Turkey, Austria and Russia.[22]

After the annexation of the Crimean Peninsula by Russia in 2014, the Obama administration imposed targeted sanctions on 12 September 2014, through the US Department of Treasury's Office of Foreign Assets Control (OFAC) by adding Sberbank and other entities to the Sectoral Sanctions Identifications (SSI) List.[23][24][25][26][27][28][29][30][31] This was done in concert with 31 July 2014 addition of Sberbank to the European Union sanctions list.[32][33] Sanctions consist of access restriction to the EU and US capital markets.[34][35][36] After announcement of the sanctions, and by the end of July, Sberbank's market value had dropped the most market value among the world's major lenders plus investors moved $22 billion from Sberbank's market capitalization.[37] Still, during the following year Sberbank's share price grew back 89%.[38] Sberbank together with other Russian banks filed claims with the highest EU court to lift the punitive economic measures.

On 27 August 2014, Switzerland imposed sanctions on Sberbank and other Russian financial institutions.[39]

On 22 December 2015, the United States imposed additional sanctions on Sberbank and its subsidiaries.[40][41][25][26][27][31]

On 17 October 2016, Ukraine imposed sanctions against Sberbank Russia, Sberbank Leasing, and their payment systems Kolibri (Hummingbird), formerly Blitz (Ukrainian: «Колибри» стара назва – «Блиц»).[42][43][44]

On 15 March 2017, the president of Ukraine imposed sanctions on Sberbank (and other Russian state-owned banks operating in Ukraine: VTB Bank, BM Bank, Prominvestbank, and VS Bank (Ukrainian: ВіЕс Банк)) as part of its continued sanctions on Russia for its annexation of Crimea and involvement in the war in Donbas.[45][46][47]

Credit cards - both issuer and payment

As of May 2016, Sberbank dominated the card payments business in Russia with over 61% of the market. Sberbank's competitors in the card business are VTB Bank, Alfa-Bank, Tinkoff Bank, and Gazprombank which combined only had a 29% of the card business market.[48]

2017 Sale of VS Bank to Tihipko

In December 2017, due to sanctions, Sberbank sold its Ukrainian subsidiary, VS Bank (Ukrainian: ВіЕс Банк)[45] to Ukrainian businessman Serhiy Tihipko.[49]

On 24 February 2022, as a result of the 2022 Russian invasion of Ukraine, US president Joe Biden announced sanctions against additional Russian individuals and companies, including new restrictions on Sberbank's operations,[50] after which Sberbank's stock lost more than half of its value.[51]

On 25 February 2022 the banking licence of Sberbank in Ukraine was revoked.[52]

On 28 February 2022, Sberbank Europe was facing bankruptcy as a consequence of the sanctions. Deutsche Börse suspended trading of Sberbank stock.[53][54][55] Two days later, Sberbank Europe declared that it was leaving the European market.[56]

Visa and Mastercard suspended their activities in Russia at the beginning of March 2022.[57] Cards of these systems issued by Russian banks no longer worked outside of Russia, and all Visa cards issued outside of Russia no longer work within Russia.[57]

On 1 April 2022 Sberbank CIB (UK) Limited went into Administration.[58] The affairs of Sberbank CIB USA, Inc were also placed into wound down from April 2022.[59]

In April 2022, Apple and Google removed Sberbank mobile apps from their stores. The Android application can be downloaded from the bank's website, but iPhone users did not have this option.[60] In August, the SBOL application appeared in the App Store. It does not formally belong to Sber, but it fully reproduces the functionality of the removed application.[61] A week later, this app was also removed from App Store.[62] Deputy Chairman of the Board of Sberbank Stanislav Kuznetsov, speaking at the Eastern Economic Forum, spoke about new applications allegedly distributed on behalf of Sberbank. According to him, all new applications on the AppStore hosted by Sberbank have nothing in common with it. Kuznetsov noted that these are programs for fraudsters to remotely access a smartphone to steal passwords and bank card numbers.[63]

In July 2022 the EU imposed sanctions on Sberbank in relation to the 2022 Russian invasion of Ukraine.[64]

Sberbank Switzerland was sold in September 2022 to m3 Groupe Holding SA and will trade as TradeXBank AG in future.[65]

On 15 December 2022 Sberbank Europe AG banking licence lapsed and can no longer trade.[66] On 29 December 2022 Sberbank CIB (UK) Ltd and SIB (Cyprus) Limited were removed as member firms of the London Stock Exchange[67]

Sberbank will be closing its office in the UAE in 2023 as a result of sanctions pressure.[68]

Sanctioned by New Zealand in 2022.[69]

On June 16, 2023, Sberbank announced that it had sold the Austrian bank Sber Vermögensverwaltungs AG in Abwicklung (formerly Sberbank Europe AG) to an unnamed Austrian company. It was the last subsidiary of Sberbank in Europe.[70]

On August 23, 2023 Kazakh financial holding Baiterek announced buying of Kazakhstani Sberbank subsidiary.

Former Sberbank office in Atyrau, Kazakhstan

Belarus	BPS Sberbank
China	Sberbank International
India	Sberbank International
Kazakhstan	Sberbank[107] (closed August 2023)
Malaysia	Sberbank International
Austria	Sberbank Europe (closed December 2022, sold in summer 2023[70])
Cyprus	SIB (Cyprus) (closed May 2023)
Czech Republic	Sberbank Europe (closed December 2022)
Germany	Sberbank Europe (closed December 2022)
Switzerland	Sberbank Switzerland (sold September 2022)
Ukraine	Sberbank[108] (closed 2022)
United States	Sberbank CIB (wound down 2022)
United Kingdom	Sberbank CIB (in receivership 2022)

The 19 August 2021 Supreme Court of Ukraine ruling forbids the daughter of the Russian Sberbank in Ukraine to use the trademark "Sberbank" since it ruled that Oschadbank is the sole legal owner of the trademark "Sberbank" in Ukraine.[109]

In November 2021, aiming to focus on priority markets, Sberbank Europe AG sold associated banks in Bosnia and Herzegovina (Sberbank a.d. Banja LuKa and Sberbank BH d.d. Sarajevo), in Croatia (Sberbank d.d.), in Hungary (Sberbank Magyarorszag Zrt.), in Serbia (Sberbank Srbija a.d. Beograd) and in Slovenia (Sberbank banka d.d.) to Serbian MK Group for about 500 million Euros.[110]

In the fall of 2023, Sberbank announced the opening of a branch in China. Also, to work with Chinese clients in the Russian border territories, the bank registered the trademark Сбер银行.[111]

Sberbank is the successor of Soviet Saving Banks (as it name implies), whose assets belonged to the state.[119] During Russia's transition to a market economy in the 1990s, in which these assets were sold, Sberbank provided no guarantee for citizens' deposits.[120] This resulted in a landslide depreciation, which in turn led to severe discontent among the Russian population.[121] Since 1996, partial compensation for investors' losses has been offered.[122] However, until 2003 this only applied to state-owned banks such as Sberbank, giving them an unfair advantage over fully private banks.[123]

The law of 1995 assumed that in 2003 the repayment of debts to the population would begin, taking into account the real value of the ruble at the current moment. However, for 20 years, the start of payments was regularly postponed. As of 2022, the full repayment of the debt would cost the state almost 200 trillion rubles. In the fall of 2022, the government introduced a bill on a new delay - until 2026.[124]

In the early 2000s, Sberbank was repeatedly blamed for poor service.[125][126] In subsequent years, Sberbank introduced new services[127] and improved the quality of some of its existing ones. By the mid-2010s, the bank was reportedly among the market leaders with regards to quality of client services, such as services for retail depositors,[128] premium services[129] and several others.

Sergei Leonidovich Magnitsky accused numerous persons and entities of laundering stolen money in tax fraud in a Hermitage Capital Management case in Russia.[130] Owned by Denis Katsyv, Prevezon Holdings, represented by Natalia Vladimirovna Veselnitskaya and Louis Freeh, paid $6 million to resolve the claim without admitting any crime which subsequently led to all charges being dropped by the Justice Department in the summer of 2017.[130][131][132][lower-alpha 1]

In United States court, Sergey P. Poymanov (Russian: Сергей Пойманов), a Voronezh-based businessman, sued Sberbank, several of its subsidiaries and executives, and a business rival for $750 million, claiming that a valuable granite gravel quarry he owned was illegally bankrupted and seized by the bank in a corporate raid in 2012. Sberbank says it took the quarry as collateral after Mr. Poymanov failed to repay a loan. Sberbank is retaining Marc Kasowitz for this court case.[130]

In January 2017 Herman Gref, a bank chief executive, has personally commented on Poymanov case, referring to the latter as a "fraudster" and accusing him of not paying loands and debts, and that Poymanov is charged with a felony. He said that Poymanov "extracted" a lot of money out of the company and that he was offered with a restructuring of his loans but allegedly refused.[136]

Poymanov was subsequently charged with a bunch of misdemeanors and arrested on May 24, 2017, by Russian police who then subjected him to harsh pretrial detention at a notoriously rough Moscow jail, Matrosskaya Tishina, which is the same jail where Magnitsky died.[130][137] He was charged with alleged embezzlement of company's money amounting to almost 1 billion rubles (about $13 billion) as a part of Bankruptcy fraud.[138]

Anti-Russian graffiti "It's a Russian bank" near the department of bank in Oleksandriia, Ukraine

In April 2014, several Ukrainian officials accused Sberbank of funding the 2014 pro-Russian unrest in Ukraine, including alleged terrorism. The bank denied any involvement in the financing of illegal activities on Ukrainian territory, which was later confirmed by an examination carried out by the National Bank of Ukraine.[139]

"It is another instance of aggressive nationalism of neo-Nazi dogma that is gathering momentum in Ukraine and obviously enjoys support of official authorities of the country," the Russian foreign ministry stated.[140]

15 March 2017, the president of Ukraine imposed sanctions on Sberbank (and other Russian state-owned banks operating in Ukraine: VTB Bank, BM Bank, Prominvestbank, and VS Bank (Ukrainian: ВіЕс Банк)) as part of its continued sanctions on Russia for its annexation of Crimea and involvement in the war in Donbas.[45][46][47] Since then, Sberbank's Ukrainian subsidiary, VS Bank (Ukrainian: ВіЕс Банк), has been put on sale.[45] But as of August 2017 it has been unsuccessfully trying to sell the asset after the National Bank of Ukraine blocked the sale of the bank due to a "failure to provide the necessary and sufficient documents to carry out checks on the investors in compliance with Ukrainian law."[45] In 2017 Sberbank was reported to be waiting for approval from the National Bank of Ukraine to sell its Ukrainian subsidiaries. "Everything is prepared on our side. The question is whether we will be given a permission to sell or not by Ukrainian authorities," Herman Gref who is the chairman of Sberbank said on the World Economic Forum held in Davos in January 2018. On 13 December 2017, Sberbank sold another subsidiary, VS Bank (Ukrainian: ВіЕс Банк), to a Ukrainian banker, former PrivatBank chairman Serhiy Tihipko.[49][140]

In March 2019, the Troika Laundromat was exposed as an international money laundering network involving the Troika Dialog which is an investment bank that has been merged with the Sberbank's subsidiary Sberbank CIB.[141][142][143][144]

In October 2019, it was revealed that analysts from cybersecurity firm DeviceLock had shared information about a large Sberbank data breach with the newspaper, the Kommersant.[145] The personal information of up to 60 million Sberbank credit cards had been offered for sale on the black market. It was the largest data breach to have taken place in Russian banking.[146]