Gazprombank Luxembourg executives face allegations of profiting from sanctions

Gazprombank’s Luxembourg subsidiary, GPB International S.A., reported a record net profit of €61.4 million in 2022, driven largely by €55 million in foreign exchange trading. This windfall occurred amid market volatility following the invasion of Ukraine. However, profits plummeted by approximately 90% in 2023, falling to €6.1 million, as the bank offboarded clients and saw its loan portfolio shrink.

Investigations suggest that four executives at the Luxembourg arm may have personally profited from sanctions-related market shifts. Reports indicate these directors utilized personal loans from the Moscow-based parent company to purchase discounted Gazprom bonds in Europe, which were then sold at full price in Russia following a presidential decree allowing bond replacements. This activity, involving roughly fifty transactions, potentially yielded personal profits exceeding €9 million.

Internal sources have raised concerns regarding possible insider trading, noting that the timing of the transactions suggests prior knowledge of which bonds would be eligible for exchange. While the Luxembourg entity previously served as a vital conduit for European energy payments, its operational flexibility has diminished following recent sanctions by the US Treasury’s Office of Foreign Assets Control (OFAC).