Lombard Odier banker: Sberbank, VTB to survive Western sanctions

By Andrei Skvarsky.

A top executive at Lombard Odier, one of Europe’s biggest private banking firms, has argued that Sberbank, VTB and other Russian state-controlled banks would most likely be targets of potential Western sanctions against Russia because of its invasion of Crimea but that the lenders would stay afloat without major damage.


Domestic sources of financing and government support would save the state-controlled institutions from going under as they did during the global financial crisis of 2007-2008, Stephane Ulcakar, senior vice-president at the Geneva-based bank and its representative in Moscow, said in answering a question from EmergingMarkets.me at a media event in Russia’s capital.

Nor, according to a colleague of Ulcakar’s, would it be a blow to the United States if Russian holders of US government bonds scrapped them in retaliation as suggested by senior Kremlin adviser Sergei Glazyev.

Arnaud Leclercq, head of new markets at Lombard Odier, argued at the same media event in Moscow that the Russian-held US treasuries accounted for just a fraction of the United States’ foreign-held debt.

According to US Treasury data as of the end of 2013 as cited by Russian news agency RIA Novosti, Russian investments in US government bonds total around $139bn out of a total of $5.8trln of the US debt held in foreign hands.

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