Russian state-owned banks open branches in Ukraine's occupied territories

Major Russian state-owned banks have begun to open branches in Ukraine’s occupied territories.

Source: Financial Times

Details: Large Russian retailers, banks and other businesses were previously hesitant to openly operate on the Crimean peninsula, or in Donetsk and Luhansk oblasts in Ukraine’s east.

Although many Russian brands continue to shun Ukraine’s occupied territories, fearing Western sanctions and the difficulties of doing business in a war zone, Russia's two major state lenders, Sberbank and VTB, have begun to open branches in Ukrainian territories captured by Russian forces.

Sberbank, which has been subject to Western sanctions since 2022, has opened 130 ATMs and 48 departments in Ukraine's east and south, including full-service branches.

Sberbank has also returned to Crimea. Last year it opened its first branch there since ceasing operations in 2014.

Sberbank's new branches include half a dozen "mobile offices" in Mariupol. VTB, which has been sanctioned since 2022, says it will open bricks-and-mortar offices in Mariupol by the end of the year. Its CEO, Andrei Kostin, cut the ribbon opening the first branch in occupied Luhansk in July.

Promsvyazbank, the first bank to enter the newly-occupied territories, already has around 400 branches in Donetsk and Luhansk oblasts.

"Sensible businesses won’t go there – it’s just not worth it. Purchasing power is low, with mostly pensioners and state workers remaining in those regions. The risks are high. Even in Crimea, which is a different situation altogether, very few companies have entered," a source in the Russian retail industry said.

But opening branches in occupied territory allows Russian brands to show off their patriotism. For example, in June, Black Star Burger, a restaurant chain co-owned by pro-Kremlin rapper Timati, announced plans to add venues in Mariupol and Kherson.

Background: In July, Rospatent, the Russian Federal Service for Intellectual Property, granted the "exclusive right" to the Melitopol cherry geographical brand to the occupation "authority" in Ukraine's temporarily occupied territory.

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