How Switzerland's Rescue Of A Russian Bank Went Spectacularly Wrong

(MENAFN- Swissinfo) For three days in September 2022, Switzerland had a brief window to solve one of the most intractable financial problems created by Russia's full-scale invasion of Ukraine. Select your language

Generated with artificial intelligence. Listening: How Switzerland's rescue of a Russian bank went spectacularly wrong This content was published on November 12, 2026 - 09:53 22 minutes Mercedes Ruehl in Zurich and Tom Wilson in London, Financial Times

At 10 on a Friday morning, Swiss regulator FINMA temporarily lifted restrictions imposed six months earlier on the local subsidiary of Sberbank, Russia's largest bank.

The Zurich-based lender, which had hundreds of millions of francs in assets and counted some of the world's largest commodity traders among its clients, had become a dilemma for authorities after Bern and other western capitals adopted sanctions against Moscow.

Liquidating the bank threatened to turn into years of legal and administrative wrangling. Instead, FINMA cleared the way for an extraordinary rescue. By the time the window closed, Sberbank Switzerland had been sold to two western businessmen and renamed TradeXBank, allowing it to operate again.

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The buyers were an unlikely pair: Stephen Lynch, a Wharton-educated American investor who had spent decades cutting deals in Russia, and Abdallah Chatila, a flamboyant Lebanese-born Swiss jeweller turned property entrepreneur.

The sale, cleared by the US Treasury and SECO, the Swiss sanctions agency, was controversial, given it meant paying Kremlin-controlled Sberbank roughly CHF130 million (£118 million) while Russian bombs rained down on Ukraine. But it appeared to offer a neat solution for Swiss authorities. The bank survived, jobs were preserved and FINMA promised to monitor it closely. Christian Lüscher, a former Swiss parliamentarian appointed as chair of TradeX, called the Swiss deal“absolutely brilliant”.

Four years later, what once resembled a rescue became an extraordinary saga of unpaid debts, feuding owners and legal battles stretching across several countries. Lynch and Chatila became locked in a bitter dispute when the ink on the original deal was barely dry. Until a last-minute settlement, the bank was facing the possibility of being wound up.

The tale of Sberbank Switzerland, drawn from interviews with multiple players involved in the deal, is a case study in what happened when western governments imposed sweeping sanctions on Russia and suddenly faced the problem of finding new owners for billions of dollars of Russian assets. Often, the only buyers willing to step in came from far outside the traditional corporate world. Regulators greenlit unconventional deals with opaque financing and stored up problems for later, critics say.

The affair also comes at an uncomfortable time for Switzerland's financial establishment. The collapse of Credit Suisse in 2023 exposed serious failures in banking supervision, while repeated money-laundering scandals and banking downfalls have tarnished the country's reputation as a safe haven for global wealth.

FINMA, already under fire for failing to act decisively before Credit Suisse's demise, now finds itself accused of standing by as another troubled bank became entangled in debt disputes.

“Mistakes were made from the beginning when FINMA did not ask proper questions about how and by whom this deal for Sberbank was being funded,” says Monika Roth, a Swiss academic and lawyer in banking compliance, adding it was“astonishing” the TradeX saga had been allowed to drag on for so many years.

More More TradeXBank to resume full operations after Sberbank Switzerland taken off sanctions list

This content was published on May 7, 2024 TradeXBank, the former Swiss branch of Russia's Sberbank, will be able to resume its dollar-denominated activities from the second half of this year.

Read more: TradeXBank to resume full operations after Sberbank Switzerland taken off sanctions

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