The London Stock Exchange announced on Friday that it had suspended trading in VTB Capital, the British subsidiary of VTB Bank, one of Russia's biggest lenders. The suspension of membership means the bank can no longer trade on the U.K. stock market and follows a sanctions package revealed by Boris Johnson late Thursday.
The Prime Minister announced in the House of Commons what he called "the largest and most severe package of economic sanctions that Russia has ever seen."
The financial measures include a full asset freeze on VTB Bank, which is owned by the Russian state. They also prevent Russian banks from having access to sterling and clearing payments in the U.K.
"These powers will enable us to totally exclude Russian banks from the U.K. financial system, which is of course by far the largest in Europe," Johnson said in a statement late Thursday.
The British sanctions also ban Russian state and private companies from raising funds in the U.K. through securities and loans. And they limit the amount of money that Russian nationals will be able to deposit in U.K. bank accounts.
Johnson also said he will impose asset freezes on more than 100 entities and individuals.
VTB Capital said in a statement on its website that it will continue to cooperate with its clients and partners in accordance with the law.
"We have meticulously studied the possible negative scenarios for each business line, product and service and have developed an action plan that minimizes the negative consequences," VTB Capital said. "We are taking all necessary measures to resolve the situation with each of our clients."
VTB Group has more than 30 banks and financial companies in more than 20 countries, according to the World Economic Forum. The group was the second-largest financial group in Russia by assets and by customer accounts in 2015, the forum added.
Aziz Rahman, senior partner at financial crime specialists Rahman Ravelli, said on Friday that the government's sanctions raise the stakes.
"Those who are subject to these sanctions have little or no scope for trying to function as they could prior to the invasion," he said. But he added that "there is the possibility that the sanctions could drive some individuals and their wealth out of the U.K., which would be ironic given the U.K.'s unwanted reputation for being a magnet for foreign dirty money."
The prime minister announced on Tuesday an initial set of asset freezes against five Russian banks and three oligarchs close to Russian President Vladimir Putin.
Meanwhile the European Union also said on Friday that it has agreed to a package of sanctions that will cut 70% of Russia's banking system off from the bloc's capital markets.
Ursula von der Leyen, president of the European Commission, said that leaders of member state had approved overnight targeted measures aimed at having a "maximum impact on the Russian economy and the political elite."
The financial sanctions target 70% of Moscow's banks and also state-owned companies, ensuring that they do not have access to capital markets, she said.
"These sanctions will increase Russia's borrowing costs, raise inflation and gradually erode Russia's industrial base," von der Leyen said. The package will also curb the deposits that Russian elites can hold in the EU "so that they cannot hide their money anymore in safe havens."
The commission said that its measures are "closely coordinated with our partners and allies" in the U.K. and U.S., as well as Canada, Norway, South Korea and Japan.
U.S. President Joe Biden aimed sanctions on Thursday at major Russian financial institutions that account for nearly 80% of all banking assets in that country, including VTB Bank and Sberbank.
But the Ukraine government said that, even after the latest round of sanctions, the West is not going far enough to inflict real economic pain on Russia.
Freezing Russia out of the international payments so far has been omitted from packages of Russian sanctions issued by the U.S., and EU.
Ukraine Foreign Minister Dmytro Kuleba pressed western governments on Friday to oust Russia from SWIFT, a key interbank payments system linking financial institutions worldwide, to isolate Russia from global financial transactions.
Britain's defense minister, Ben Wallace, said on Friday that the U.K. is in favor of suspending Russia from the SWIFT system, but that other governments so far have blocked the move.
--Editing by Ed Harris.
For a reprint of this article, please contact firstname.lastname@example.org.