How Sanctions—not Brexit—Sealed the Fate of VTB Capital’s London Unit

In mid-October 2016, following the UK’s vote to leave the EU, multiple outlets reported that VTB—more specifically, its investment banking arm, VTB Capital—was considering relocating its European investment banking operations from London to a continental jurisdiction (potentially Frankfurt, Paris, or Vienna). This was attributed to the anticipated loss of EU passporting rights and the broader regulatory uncertainty arising from Brexit. The primary voices at the time were Deputy President Herbert Moos and CEO Alexei Yakovitsky. Moos suggested London would “cease to be VTB’s European investment banking hub” and pointed to “scaling down” London operations while building up in Europe; Yakovitsky, however, played down immediate changes, stating it was “very early to say” anything definitive and emphasizing London’s enduring appeal due to its human capital, clients, and investor base [0search3][0search0].

However, in assessing whether VTB ever actually shifted its investment banking operations out of London in response to Brexit, the evidence is inconclusive. There are significant countervailing developments that suggest the prospect of a move did not fully materialize:

• VTB Capital Plc remained active in London through 2022, when UK authorities, acting under sanctions imposed after Russia’s February 2022 invasion of Ukraine, forced it into winding down and eventually administration—not as a continuation of Brexit-driven strategy, but because of sanctions and inability to service its obligations under the sanctions regime [0search2][0search8].
• Reports from IFR in 2022 indicated that VTB Capital was in the process of “winding down” all positions in London by March 2022, rather than relocating them. The wind-down was enabled by UK licensing to permit staff payments and asset realization under constraints, rather than planning to establish a new hub elsewhere [1search6].
• Recent reporting (2024-2025) shows that London’s arm remains under administration with small staff numbers retained for legal and creditor management, not continuing investment banking operations. For example, about 12 employees were paid £3.3 million total in the first half of 2025 for winding-down tasks [1news12][1news13]. No credible announcement of full relocation of the investment banking business to Europe has been found in recent years.

Strategically, then, the narrative of VTB relocating its international investment banking hub from London because of Brexit appears to have been more speculation and contingency planning than operational reality. Key pressures that ultimately shaped the fate of VTB’s London presence were sanctions and regulatory constraints following the Ukraine war, rather than Brexit alone.

Some implications and open questions arising out of this sequence:

• For other banks and financial firms, VTB’s trajectory illustrates how sanctions or geo-political shocks can supersede regulatory shocks like Brexit in driving location strategy.
• There remains uncertainty over whether VTB ever consolidated or expanded its continental European presence in a meaningful way post-2016 in anticipation of regulatory fragmentation. Public reporting suggests it might have maintained licenses in Germany, Austria, France, etc., but no firm evidence of relocation of deal-origination or advisory functions from London enduringly. [0search0]
• The current institutional and legal wind-down of VTB Capital Plc in London raises questions about creditor recoveries, trapped assets, the treatment of liabilities under changing sanctions licences, and the precedent set for other sanctioned entities in the UK’s insolvency regime [1search0][1news12].