Russia's biggest bank plunges 95% to trade at a penny as companies' shares collapse on Ukraine conflict
- Russia's biggest bank plunged as much as 95% on the London market as sanctions battered the economy.
- Other major Russian companies such as Gazprom, Lukoil and Novatek crashed by similar amounts.
Russia's biggest bank plunged as much as 95% on the London stock exchange Wednesday and other companies crashed by similar amounts as the war in Ukraine and ensuing sanctions caused investors to dump the country's assets.
Sberbank, which has more than 135 million customers, plunged to as low as $0.01 Wednesday morning, having stood at $16.12 at the start of the year. The company's depository receipts — certificates representing shares — are listed in London, although its main listing is in Moscow.
The lender said Wednesday that it had decided to withdraw from the non-Russian European market after facing "an exceptional outflow of funds."
Other Russian companies which also have depository receipts listed in London crumbled by comparable amounts Wednesday.
Energy giant Gazprom fell as much as 97% to $0.02, having stood at $9.24 at the start of the year.
Oil company Lukoil fell by as much as 95%, while gas producer Novatek dropped as much as 97%. Prices in all the companies hit record lows as investors frantically ditched the shares.
Russia's stock exchange has been shut for three days as the central bank tries to limit the selling of Russian assets. The country's MOEX index fell as much as 50% in a day last week, and was down 35% for the year as of Friday's close.
The dramatic plunge in Russian companies on the London market reflected the huge pressure that the war in Ukraine and Western sanctions have put on the country's economy.
President Vladimir Putin's Russia invaded its neighbor Ukraine last week in an effort to assert control over a country that had chosen to move towards the Western political and economic sphere.
At the weekend, the US and its allies responded by cutting select Russian banks out of a key global payments system called SWIFT and moving to hinder the central bank's ability to deploy its currency reserves. Sberbank and Gazprombank have been left off the list, however.
Western companies, including oil giant BP, have been pulling out of Russia rapidly, although Moscow has moved to make such exits more difficult.