Following a district court ruling in the Netherlands, the Dutch National Bank (DNB) has reported that Amsterdam Trade Bank (ATB) has declared bankruptcy.
ATB is a subsidiary of a Russian bank known as Alpha Bank. In the year 2020, ATB was reported to have assets amounting to 1.2 billion euros, with an equity of 174 million euros. In 2020, ATB reported a profit of 27 million euros. Clearly, a sharp decline in profits has taken place in recent months.
ATB’s main transactions involved trade financing. Recently, the bank sought to expand into lending to more small and medium-sized companies. It had previously been reported that ATB’s owners had been trying to sell the bank unsuccessfully for a few years prior to bankruptcy. ATB is a subsidiary of Russian controlled Alpha bank, which has been targeted by US sanctions over the ongoing war in Ukraine. However, ATB’s Russian parent bank has not yet been targeted by the European Union’s sweeping financial sanctions on Russian institutions. Whether or not this will change in the coming weeks and months is unclear.
As found by the Dutch chamber of commerce, a Russian-Israeli billionaire, Mikhail Fridman, owns somewhere between a 25% and 50% stake in ATB. Fridman has repeatedly contested Western sanctions imposed on him following Russia’s invasion of Ukraine. To the horror of ATB’s depositors, following the invasion of Ukraine, many European banks refused transfers out of ATB. Although ATB itself has not been sanctioned, depositors reportedly began to panic on Thursday afternoon.
ATB’S Depositors to Get up to 100,000 Euros in Relief
Because it is a bank based in the Netherlands, ATB’s creditors are guaranteed a certain amount of their deposits. According to a statement from the Dutch National Bank’s website, ATB depositors will be covered up to 100,000 euros. This is in accordance with the Netherlands’ deposit guarantee system.
Reportedly, the vast majority of ATB’s customers are Dutch. As per the Dutch National Bank, ATB had nearly 23,000 customers at the time of its bankruptcy filing. Other than Dutch, the largest nationality of ATB’s customers is German, with nearly 6,000 keeping money at ATB.
ATB Blames US and British Sanctions for Bankruptcy
Evidence suggests that Western sanctions surrounding the war in Ukraine are largely to blame for the bank’s collapse. As previously noted, ATB’s parent bank, the Russian Alfa Bank, has been heavily sanctioned by the United States of America. Although this does not mean that ATB itself has been sanctioned, it has reportedly resulted in many European banks shunning money from ATB’s customers.
In a statement on its website, ATB confirmed that it had requested and been confirmed bankruptcy due to sanctions. According to the bank, British and US-led sanctions caused tremendous operational difficulties. It appears that the main consequence of these sanctions was corresponding European banks refusing to continue their support of money transfers from ATB. A Dutch financial newspaper known as Het Financieele Dagblad (FD) reported that as a result of these sanctions and European banks’ reactions, ATB’s depositors began to panic in large numbers. This has led to the bank’s ultimate request and granting of bankruptcy.