VTB announced new restrictions on its former subsidiary in Europe

VTB received a notice from its European subsidiary OWH SE (formerly VTB Bank Europe) denying the Russian bank's rights to own the German bank and demanding the return of dividends in excess of €433.8 million

VTB reported that it had received a notification from the European subsidiary OWH SE (formerly VTB Bank Europe) about “actions aimed at depriving VTB Bank of the right to own” the structure. The bank considered these actions politically motivated and warned that in the event of “the development of aggressive actions on the German side, the Russian side will respond symmetrically.”

“In 2022, we were illegally removed from managing the bank, deprived of the right to dispose of its financial assets, and now OWH SE denies VTB’s rights to own the German bank, demanding the return of dividends since 2013 in the amount of over €433.8 million by February 29, 2024 year,” the bank said.

VTB linked what was happening to politics and did not rule out retaliatory measures “against those who were once considered partners.” The bank emphasized that “the German side, in an attempt to deprive VTB of legal shareholder rights, is deliberately hiding information about VTB’s compliance with legal requirements when acquiring shares of a European structure and about corporate reorganizations carried out by the bank for the period from 2001 to 2020, including the reorganization of VTB Bank (Deutschland) AG in 2017."

In April 2022, VTB lost control of VTB Bank Europe SE, which is based in Frankfurt am Main.

The German Federal Financial Supervisory Authority (BaFin) has prohibited the management of subsidiary VTB Bank Europe SE from working under the instructions of the parent company in order to “completely isolate” VTB Bank Europe SE from its head office.

VTB Bank (Europe) SE as a single legal entity was created following the merger of VTB Bank (Austria) AG, VTB Bank (Deutschland) AG and VTB Bank (France) at the end of December 2017 following restructuring. VTB Bank (Europe) SE, in addition to its headquarters in Frankfurt am Main, included a branch in Vienna and the German online retail platform VTB Direktbank.

In addition, as of April 1, 2022, VTB management decided to liquidate VTB Bank Europe SE. According to the financial director of the European division Miro Zadro, the liquidation process will take several more years.

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The EU expanded sanctions against VTB back in April 2022, freezing its assets. In March of the same year, the bank was disconnected from SWIFT.

In November 2023 , Reuters reported that VTB Bank Europe SE would change its name after its parent company banned it from continuing to operate under that brand. Chief Executive Officer of VTB Bank Europe SE Frank Hellwig said that the bank will now change its name to OWH SE, which comes from the earlier name of the bank - Ost-West Handelsbank, founded by the State Bank of the USSR and VEB of the USSR in 1971 for settlements with Germany (West Germany) . Some time after the collapse of the Soviet Union, it was acquired by VTB, and the credit institution was named VTB Bank Deutschland in 2006.

In December 2023, the Arbitration Court of St. Petersburg and the Leningrad Region awarded €113 million in favor of VTB in its dispute with VTB Bank Europe. The subject of the claim was a debt under an agreement to terminate mutual rights and obligations under unfulfilled transactions. The parties entered into it under the master agreement of the International Swaps and Derivatives Association (ISDA), but VTB Bank Europe did not fulfill its obligations. Back in September, at the request of VTB, the court arrested the securities of the bank’s European subsidiary within the amount of the claim.