Russia's shrunken banks in London face further pain
Remember Sberbank? Remember VTB? Not all that long ago, the two banks were hiring in London and were reasonably popular as employers. - VTB, for example, brought in ex-Goldman Sachs banker Atanas Bostandjiev and offered big guarantees pre-2014. However, sanctions have since helped shrink their businesses and the prospect of further sanctions threatens more contractions to come.
Russian banks in London have been subject to sanctions since 2014, when the British government imposed a rule prohibiting individuals at Sberbank, VTB bank, Gazprombank, Vnesheconombank (VEB) and Rosselkhozbank from, "directly or indirectly dealing with a transferable security or money market instrument if it has a maturity exceeding 30 days." When they were introduced, the sanctions prompted ex-Deutsche Banker Nick Hutt (currently VTB's chairman for Europe SE) to make cuts across London and New York. The restrictions have also hindered growth: SberBank, which acquired Troika Dialog in 2011, in order to move into the investment banking business, has maintained a steady small presence in London ever since - it had 34 employees in 2012 according to Companies House filings, and just 38 in 2020.
Nonetheless, both Sberbank and VTB are still active in London, and not all (although most) of their employees are members of the Russian expat community. Alex Metherell, a former Dresdner banker, has been head of natural resources at VTB since 2009. Fernando Ortega, a former Morgan Stanley managing director, has been an MD in VTB's banking team since 2012. Sberbank's chief executive in the UK is Adam Jesney, formerly of RBS and CIBC; he joined in 2013.
In London, both Russia's leading banks are characterized by some longserving members of staff. They don't pay badly, although nor do they pay well compared to European and US banks. Sberbank, for example, paid its four London regulated staff (top traders and bankers) an average of $644k in 2020. On average, the 17 people working in Sberbank's front office roles in London earned $405k in the same year.
The danger now is these bankers who've clung on at the top Russian houses since 2014 might find themselves ousted by a new range of sanctions as a result of events in the Ukraine. [Update: For the moment, the British sanctions look comparatively weak and cover only Rossiya, IS Bank, General Bank, Promsvyazbank and the Black Sea Bank, all of which are comparatively unheard of, but they may be tightened.) They're not the only ones at risk: as cross-border business dries up, anyone with Russian clients looks vulnerable.
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