Liquidation continues as planned
20.08.2024
The European Central Bank (ECB) and the German Federal Financial Supervisory Authority (BaFin) have informed OWH SE i.L. (OWH) that OWH’s banking licence will be revoked with effect from 20 August 2024. OWH, which is being wound up, is the former VTB Bank (Europe) SE i.L., which was renamed at the turn of 2024. The majority of OWH’s shares are held by the Russian PJSC VTB Bank, St. Petersburg. Extensive international sanctions have been imposed on PJSC VTB Bank. OWH is and will remain comprehensively shielded from any influence by PJSC VTB Bank through measures initiated by BaFin. It is therefore regarded as non-sanctioned in the EU by the responsible Bundesbank. In addition, the UK sanctions authority OFSI has granted settlement licences. The US sanctions authority OFAC removed OWH from the list of sanctioned entities and persons at the beginning of April.
“The cancellation of the banking licence is the next step in the continued liquidation of OWH,” says Frank Hellwig, Special Representative of BaFin and one of the liquidators of OWH. “It brings some significant relief for the wind-up in our daily work, particularly with regard to our regulatory obligations.”
The basis for the cancellation of the licence is, among other things, Section 35 (2a) of the German Banking Act (KWG. According to this, the licence is to be withdrawn by the competent supervisory authority if a resolution has been passed to wind up the institution. This liquidation resolution was already passed by the Annual General Meeting of OWH on 24 March 2023. In addition, the supervisory authority sees a further reason for revoking the banking licence in the fact that the Russian owner is not to be classified as reliable within the meaning of the KWG.
The liquidation of OWH is already well advanced. The former VTB Direktbank, which was managed as a branch and still had more than 160,000 customers at the end of 2021, i.e. before Russia’s attack on Ukraine, has been wound up and dissolved. All deposits were repaid to the primarily German customers in accordance with the contract.
In addition, services and functions still required for the remaining wind-up were outsourced to a large extent. “This is an important measure for further orderly liquidation. OWH is now one of the very few institutes in Germany to have moved its entire IT into the cloud,” says Chief Operating Officer Hans-Georg Herrmann. “This gives us considerable flexibility for the further wind-down of the remaining business and applications and is much more cost-effective than continuing to operate our own IT infrastructure just for the wind-down.”
In total, OWH still has around EUR 1.5 billion in loan receivables on its books, which are offset by a total of around EUR 0.6 billion in liabilities to companies and credit institutions. The value-preserving repayment of assets remains the central task in the liquidation of the company even after the withdrawal of the banking licence.
Despite the cancellation of the banking licence, OWH is still permitted to maintain an account with the Deutsche Bundesbank. “This is very important for OWH because it facilitates the further recovery of OWH’s receivables, especially from customers from other countries,” says Peter Petrik, Head of CIB (Corporate & Investment Banking) at OWH, “if the Bundesbank is involved, foreign debtors in particular have even more confidence regarding compliance with all sanctions regulations. The Bundesbank account facilitates payments to OWH, which will continue to be closely monitored by the German supervisory authorities throughout the entire wind-down-process.”
OWH has already reported in detail on the result for the 2023 financial year and the progress of the liquidation with the publication of the annual financial statements.