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Monday, August 21, 2017

Sberbank: Ukraine turmoil not a threat to business

After assessing the political upheaval in Ukraine, Sberbank recently said that it sees no threat to its business thanks to its strong capital base there.

At the end of the third quarter, Sberbank had an exposure of $4 billion to Ukraine, marking less than one percent of its balance sheet of $460 billion, Reuters reports.

Over the last several weeks, Ukrainian President Viktor Yanukovich has faced massive protests after pulling out of a free trade deal with the European Union. He also sought closer ties with Moscow leading to turmoil that has had a negative effect on Ukraine's finances.

The government has also sought help in covering an external funding gap of $17 billion next year, which will nearly deplete the central bank's currency reserves.

Sberbank said that it will be the last to feel the problems in the Ukraine as it has a strong Tier 1 capital adequacy ratio unit of 13 percent, which is higher than for the group as a whole, according to Reuters.

Sberbank's biggest concern is how long the situation will last and how it will hit economic indicators.