MOSCOW, Aug 2 (Reuters): Russia's top lender, Sberbank , faces rising borrowing costs and a squeeze on its margins after being included in the latest European Union sanctions over the Ukraine crisis.
In its heaviest penalties on Moscow over the conflict in Ukraine, Brussels has banned all EU nationals and companies from buying or selling new bonds, equity or other financial instruments with a maturity of more than 90 days issued by five major state-owned Russian banks or those acting on their behalf.
Sberbank said it had sufficient resources to continue operating successfully despite the ban, which it said "violates the foundations of the global financial system".
Its shares still fell 1.7 per cent by 1500 GMT on Moscow's MICEX index, dragging down the broader market.
The European Union will review the ban, which also applies to Sberbank's rival VTB Bank, after three months.
While Russia's central bank has said it is ready to support sanctioned banks, the effective closure of access to European capital markets is likely to drive up borrowing costs at Sberbank, an important lender to Russia's $2 trillion economy.
"The sanctions could negatively affect the growth rates of Sberbank and VTB's balance sheets, especially credit, or pressure their net interest margin if they replace cheap funding in dollars or euros with expensive funding in roubles," analysts at Gazprombank said in a note.
Alexei Kudrin, Russia's former finance minister, said the EU sanctions would drive borrowing costs up by 1.5 to 2.5 per cent but that Sberbank was in good shape.
EU ban to hit Russian Sberbank costs
FE Team | Published: August 03, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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