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

The Russians began to open branches of the largest state-owned banks in the occupied territories of Ukraine. Source: Financial Times Details: Previously, huge Russian shops, banks, and other businesses were hesitant to openly operate in the Crimean Peninsula, as well as Donetsk and Luhansk oblasts of Ukraine's east.

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

Sberbank, which has faced Western sanctions since 2022, has opened 130 ATMs and 48 departments in Ukraine's east and south, including full-size branches. Sberbank has also returned to Crimea, building its first branch there last year after ceasing operations in 2014.

Sberbank's new branches include a half-dozen "mobile offices" in Mariupol. VTB, which has been sanctioned since 2022, has stated that it will open established offices in Mariupol by the end of the year.

Its CEO, Andrei Kostin, cut the ribbon on the first branch in occupied Luhansk in July. Promsvyazbank was also the first to enter the newly-occupied territories, and it 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," said a source in the Russian retail industry.

At the same time, opening branches in occupied territory allows Russian brands to display patriotism. For example, in June, the Black Star Burger restaurant chain, which is co-owned by pro-Kremlin rapper Timati, announced plans to add locations in Mariupol and Kherson. Background: In July, Rospatent granted the occupation "authority" of Ukraine's temporarily occupied territory an "exclusive right" to the "Melitopol cherry" brand.

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