Today has been a very solemn day in financial markets. This morning, stocks sold off in a big way, spurred by the Russian invasion of Ukraine. Among the Russian stocks investors are watching today is Sberbank (OTCMKTS:SBRCY). This Russian bank has sold off in epic proportion today, with SBRCY stock currently down around 65% at the time of writing.
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Sberbank is among the key Russian banks President Joe Biden’s administration and NATO allies are targeting with significant sanctions. Sberbank is Russia’s largest lender, and, as such, is an important piece of the Russian economic pie.
The significant sanctions imposed by the White House should allegedly be more impactful than SWIFT sanctions, which were previously discussed. By cutting off foreign capital markets to these large institutional lenders, the goal is to limit the ability for Russian banks to have the ability to carry out domestic lending activities, particularly for Russia’s military.
Let’s dive into what the announcement and why Sberbank is crashing today.
SBRCY Stock Down 65% as Sanctions Hit Russian Banks
At a press briefing at 1:30 p.m. Eastern, President Biden announced that sweeping “significant” sanctions would be imposed on Russia’s Sberbank. The market had already priced in these sanctions, with the stock opening more than 70% lower this morning.
Sberbank has come out and said that the bank is prepared for any developments, one way or another. However, the market appears to believe that these sanctions could cripple Sberbank and its peers, sending shares of this bank plummeting today.
Threats of economic sanctions intended to halt a full-scale invasion of Ukraine. However, with Russian President Vladimir Putin moving forward, the market appears to believe that times are about to get very tough for Sberbank and its Russian banking peers.
Right now, uncertainty in the market is increasing. Accordingly, investors are seeking safe havens, as questions of how far this military action will go continue.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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