“This is the first tranche, the first barrage of what we are prepared to do,” Prime Minister Boris Johnson told parliament.
“Any assets they hold in the UK will be frozen and the individuals concerned will be banned from travelling here,” Johnson said of the individuals being sanctioned.
He took the steps after the Russian president said Moscow was going to recognise the independence of two breakaway areas in eastern Ukraine.
The sanctioned banks are Rossiya, IS Bank, General Bank, Promsvyazbank and the Black Sea Bank, Johnson added. The three individuals are Gennady Timchenko, Igor Rotenberg and Boris Rotenberg.
He did not impose the complete package of sanctions the UK has prepared because Russia has not yet invaded new sovereign Ukrainian territory, but instead recognised self-proclaimed republics that have been under Russian-backed control.
The EU is expected to announce its own tough package on Tuesday afternoon.
The larger package, being coordinated with Washington and the EU, will be implemented if a full-scale invasion takes place.
No major oligarchs based in the UK have been affected by Monday’s announcements, and Labour urged Johnson to go further, saying a threshold had been breached, demanding a full package now so Putin does not believe the benefits outweigh the costs.
Johnson accused Putin of calmly and deliberately plotting the destruction of a nation of 44 million people, deploying absurd and mystical reasons.
He stated, “In a single inflammatory speech, he denied that Ukraine had any tradition of genuine statehood, claimed that it posed a direct threat to the security of Russia and hurled numerous other false accusations and aspersions.”
He noted Russian tanks and armed personnel carriers have “since been spotted” in the breakaway regions, adding, “The house should be in no doubt that the deployment of these forces in sovereign Ukrainian territory amounts to a renewed invasion of that country.”
“And by denying Ukraine’s legitimacy as a state and presenting its very existence as a mortal threat to Russia, Putin is establishing the pretext for a full-scale offensive,” he continued.
Earlier Johnson announced if an invasion went ahead Russian companies would be prevented from raising money on the London capital markets in Sterling or dollars and he also promised to unmask the Russian beneficial owners hiding behind a facade of shell companies and properties.
In total, 31 Russian companies are listed on the LSE, with a combined market value of £468bn, according to the data company S&P Global.
London-listed Russian oil, gas and mining companies paid their government £39bn in taxes in 2020. Revenue from such businesses is hugely important to the Putin regime: Russia spent £41.7bn on its military in 2019, 11.4% of government spending, according to the World Bank’s latest figures.