European Arm of VTB, Russia’s Second-Largest Bank, Could Close Within Days

Regulators in Germany are preparing for the closure of the European arm of VTB, the second-largest bank in Russia.

As Reuters reported Thursday (March 3), sources in the German regulatory community say VTB’s operations in Europe could be closed within days. Germany is where VTB does much of its European business.

Another source said BaFin, the German regulator, was on “high alert,” but added no decisions had been made.

VTB said on its website it was consulting with BaFin and was fully operational.

If the bank does close in Europe, it will mark the second major Russian bank to do so this week. Most European operations of Sberbank, the largest bank in Russia, ended earlier in the week.

According to Reuters, VTB has more than 4 billion deposits in Europe, mostly in Germany. It would be covered by the country’s deposit protection plan, which covers accounts with up to 100,000 euros.

Read more: EU Mulls Blocking Russian Banks From SWIFT, but Big Name FIs Are Missing

BaFin has said that VTB cannot take on new customers and that current account holders can still access their money.

VTB is among seven Russian banks the EU has said it wants to delist from the SWIFT network, a global financial communication system. Also on that list: Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank and Sovcombank.

However, not every big Russian bank has been targeted. Sberbank and Gazprombank — Russia’s third-largest bank — are so far still able to access SWIFT (Society for Worldwide Interbank Financial Telecommunications).

SWIFT was created in 1973 by a group of 239 banks searching for a better way to conduct cross-border payments. The network doesn’t hold or transfer funds, but allows banks and other financial institutions to notify each other when transactions are taking place.

Blocking a country’s access to SWIFT would hinder its ability to carry out those cross-border transactions, forcing banks, importers and exporters to find new — and costly — ways to send payment instructions.