The Curious Case of VTB Bank’s UK Administration

On 6 April 2022, the English High Court made an administrative order in respect of the UK arm (VTB Capital) of Russia’s second largest bank, VTB Bank. VTB Capital is a designated entity under the UK sanctions regime, which has led to extensive asset freezes since the onset of the Ukraine invasion. Despite this, VTB Capital was one of the first sanctioned entities to be granted a general licence for its winding down by the UK Office for Financial Sanctions Implementation (UK OFSI). The general licence has not however made it easier for the Russian-owned bank to find funding to facilitate the wind-down of its business. Although the bank is balance sheet solvent, the skeleton argument made by VTB Capital at the High Court highlighted that it was unable to pay its employees, suppliers, and other creditors, thus making VTB Capital’s directors’ plea for an administration ‘urgent’.

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