Sanctions thwart Sovcombank's acquisition of Uzbek state lender

·1 min read

* This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine

MOSCOW, June 27 (Reuters) - Russian private lender Sovcombank said on Monday sanctions had thwarted its efforts to buy Uzbek state bank Uzagroexportbank, the latest sign Western measures against Moscow are hampering development of Russia's financial sector.

Sovcombank was placed under U.S. sanctions on Feb. 24, the day Russia sent tens of thousands of troops into Ukraine, and measures from other jurisdictions soon followed as Western states sought to isolate Russia's financial system.

Days earlier, Sovcombank said it had agreed to buy 100% of Uzagroexportbank for $4 million.

"Unfortunately, due to the fact that sanctions were imposed on us, as with practically all systemically important Russian banks, implementing the project in the current conditions has become impossible," Sergei Khotimskiy, first deputy chairman of Sovcombank's board, said in a statement.

"The deal is now in the process of being cancelled by the mutual decision of the parties. You could say that it has already practically been cancelled."

With almost all key Russian banks hit by sanctions one way or another, Western lenders have been seeking to exit the once lucrative market. Societe Generale sold its Russian unit, Rosbank, to a Russian oligarch, while other major players, Citibank and UniCredit, are looking for a way out. (Reporting by Reuters Editing by Mark Potter)

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