Major bank says EU trying to force it out of Russia

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Raiffeisen says it expects to be asked by the EU Central Bank to further reduce operations in the sanctioned country

Raiffeisen, the largest foreign-owned bank in Russia, said on Thursday it is being pressured by the EU regulator to more rapidly reduce its presence in the country. Raiffeisen Bank International (RBI) said it is expecting to receive a request from the European Central Bank (ECB) to that effect “in the near term.”

RBI is one of the few foreign banks to have stayed in Russia despite sanctions imposed on Moscow by the EU, the US and their allies since the start of Russia’s military operation in Ukraine in February 2022. The Austria-based lender plays a crucial role in the Russian economy, enabling euro and dollar payments to and from the country.

RBI has been gradually reducing its operations in Russia over the past two years, it said in the statement. According to the Financial Times, the lender has reduced its corporate loan book in the country by 56% over the past two years.

The ECB’s new draft of the requirements demands that RBI decrease loans to customers by a further 65% by 2026, compared to the third quarter of 2023, and “significantly” decrease international payments originating from Russia, the statement says.

RBI has described the new proposals as going “far beyond RBI’s own plans” and added that they may “adversely impact” the lender’s attempts to sell its Russian division.

In March 2023, the Austrian lender revealed it was in talks with two potential customers for the sale of its Russian banking arm. According to the Financial Times, there has been little sign of progress on either side so far.

In December, the banking group announced that it had agreed to buy a stake in construction company Strabag SE from the sanctioned Russian businessman Oleg Deripaska. The transaction was aimed at lowering the two Austrian firms’ exposure to the Russian market, according to Bloomberg.

The Financial Times reported last month that the ECB had urged lenders to speed up their withdrawal from Russia due to increased risks of doing business in the sanctioned country. The outlet cited top banking supervisor Claudia Buch as saying her team was continuing to put pressure on European banks with operations in Russia to downsize and exit the country.

In March, Washington warned Austria’s banking giant that it risks “being cut off from the US financial system” if it is found to have helped fund Russia’s military, Reuters quoted the US Treasury Department as saying.

A number of other EU banks, namely Italy’s UniCredit, Dutch lender ING, Germany’s Commerzbank and Deutsche Bank, Hungary’s OTP Bank, Italy’s Intesa SanPaolo, and Sweden’s SEB maintain a presence on the Russian market.

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