Russia’s two largest banks to open in annexed regions of Ukraine by July

Russia’s two largest banks expect to open branches and offices in July in the regions of Ukraine that Moscow claimed to have annexed in 2022, the heads of Sberbank and VTB said on Tuesday.

Russian President Vladimir Putin moved to annex Ukraine’s Donetsk, Luhansk, Kherson and Zaporizhzhia regions in September 2022, following what Ukraine said were sham referendums. The move was condemned by many countries as illegal.

Russian forces only partly control the four regions.

State-owned Promsvyazbank, which has focused on state employees and the defense sector since it was bailed out by the central bank in 2017, has already been opening branches in the four regions, as Russia aims to provide civilians and soldiers with cheap credit and banking services.

“Within one and a half months our first 16 branches should open there,” Sberbank CEO German Gref said in Russia’s upper house of parliament on Tuesday. “So we will be present throughout the whole country’s territory.”

No. 2 lender VTB will open two offices in Luhansk in July and plans to start servicing clients in Donetsk and the port city of Mariupol in the Donetsk region by the end of the year, CEO Andrei Kostin said on Tuesday.

VTB’s branches there will serve retail clients and small and medium-sized businesses.