Amsterdam Trade Bank (ATB) has filed for bankruptcy after the lender and its parent company, Russia’s Alfa Bank, were hit with sanctions in response to Russia’s invasion of Ukraine.

Established in 1994 to finance trade between European countries and former Soviet states, ATB provided shipping, commodities and trade finance.

The bank says in a statement that it filed for bankruptcy on April 22 and the Amsterdam District Court appointed two bankruptcy trustees after UK and US sanctions “caused operational difficulties”.

“The majority of ATB’s counterparties, including correspond[ent] banks and infrastructure providers, find it difficult to continue supporting ATB,” the statement says.

In response to questions from GTR, court-appointed trustees Toni van Hees and Job van Hooff say that “UK and US suppliers threatened to terminate their services or already suspended their services. Also, correspondent banks bounced payments made by or to ATB.”

The lender had outstanding loans of €570mn at the time of the bankruptcy, according to the trustees. It had €1.2bn in assets as of 2020.

On April 7, ATB was one of six Alfa Bank subsidiaries explicitly sanctioned by the US Treasury “for being owned or controlled by, or for having acted or purported to act for or on behalf of” Alfa Bank.

The EU has not sanctioned ATB or Alfa Bank, but the sanctions from the US and UK can still severely restrict a bank’s ability to operate due to the importance of both countries, but particularly the US, as correspondent banking hubs.

At the end of 2020, Alfa Bank owned 75.4% of ATB, with a further 6.5% stake held by Alfa Bank’s parent company, ABH Holdings, according to the bank’s 2020 annual report, the most recent available. Alfa Bank, Russia’s largest commercial bank, was sanctioned by the US on February 24, the day after Russia launched its attack on Ukraine.

ATB was in the midst of a transition away from commodities and shipping finance. In 2020 it hired as chief executive Oren Bass, founder of US online lender Pave, and in October last year launched FIBR, with the aim of developing a digital-only lender to small and medium enterprises across the EU and UK.

“Over time, our exposures to trade, commodity and shipping finance will be reduced as we focus more on financing European SMEs,” the annual report says. It was not clear if the bank was accepting new commodities, shipping or trade business in the period leading up to the bankruptcy.

At the end of 2020, around 40% of its loans were to the shipping sector and 17.7% to trading companies. The remainder of the debt was to sectors including energy, finance and agriculture.

The bank had more than 23,000 private account holders, most of whom reside in the Netherlands but with another 6,000 in Germany, according to a statement on April 22 from De Nederlandsche Bank, the Dutch central bank.

The central bank says it has activated the deposit guarantee scheme, which insures personal accounts up to €100,000 and up to €25,000 for customers receiving investment services from the bank.

The total amount guaranteed by the deposit guarantee scheme at ATB is approximately €700mn, the central bank says.

In 2017 the Fiscal Information and Investigation Service, the Dutch anti-financial crime agency, launched an investigation into ATB over suspected money laundering.

The bank’s 2020 annual report says the investigation was still ongoing and the bank had received “limited additional information about possible charges regarding culpable money laundering and bribery” but no indictment had been issued.

“The scope of the investigation includes suspicions of non-compliance such as to client due diligence, timely reporting of unusual transactions, sanction[s] monitoring, bribery, forgery of documents and culpable money laundering,” the bank says in the report, adding it had since satisfied itself that its compliance processes were robust.