Russia’s VTB in Europe changes name as it liquidates. According to a Reuters executive, VTB (VTBR.MM), the second-biggest bank in Russia, is changing its name in Europe since its parent company won’t let it use the brand.
Frank Hellwig, the chief executive officer of Frankfurt-based VTB Bank (Europe) SE, said that the bank, which has been in liquidation since last year and has been placed under regulatory lockdown owing to penalties, would now be referred to as OWH SE.
Tens of thousands of German depositors were drawn to VTB in Europe before Russia invaded Ukraine by the bank’s comparatively high interest rates and marketing strategy of supporting Frankfurt’s ice hockey club, the Lions.
However, savers withdrew their money once the war started, causing a bank run and forcing authorities to control the withdrawal. After the bank was cut off from Russia and sanctions were put in place, they took over in April 2022.
VTB is still the official owner of the European company. Hellwig stated he contacted the bank’s headquarters in Russia to obtain authorization to continue operating under the name until the terms of a license agreement were fulfilled. VTB said no.
Since Germany “illegally established control” over its European business in April 2022, VTB in Russia claimed it had been prohibited from exercising its shareholder rights.
“In this situation, we found it impossible to satisfy VTB Europe’s request to give them the right to continue using the VTB logo and brand,” VTB stated to Reuters. “A third-party financial organization, over whose activities we have no responsibility, has no right to use VTB Bank’s name and reputation.”
Ost-West Handeslbank, the lender’s prior incarnation, is the source of the present name, OWH. Although the bank has achieved a significant milestone, the liquidation process is expected to last for a few years, according to chief financial officer Miro Zadro.
The final client of the Direktbank division, which catered to retail savers, utilized VTB to deposit a garden shed. The division has since closed.
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