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Raiffeisen unwinds its operations in Russia but doesn’t leave

Author
Kira Ivanova

The Austrian banking group Raiffeisen Bank International (RBI) unwinds its business activity in Russia, but the bank hasn’t yet announced the date it would leave the country. The update on RBI’s business activity in Russia was published by the Group on March 30, 2023.

The Group plans to progress potential transactions that would result in the sale or spin-off of Raiffeisenbank Russia and the deconsolidation of the Russian subsidiary from the RBI in compliance with international and Russian laws.

Quote"We are committing to further reducing business activity in Russia whilst we continue to progress such potential transactions," the bank announced
Raiffeisen is urged to unwind its Russian business, while India can be left without Russian weapons

The bank underscored that it would maintain part of its banking operations in Russia and support customers, "including those impacted by the reduction in business activity in Russia." The RBI Group also mentioned its "duty of care to employees in all markets where RBI operates." In Russia, it employs over 9,000 people.

How Raiffeisen Bank International has unwound its business activity in Russia:

  • RBI has reduced some business activity in Russia and minimized the RBI Group’s cross-border exposure to Russia;
  • the Group reduced Raiffeisenbank’s loans to customers;
  • Raiffeisenbank Russia ring-fenced the bank’s capital in Russia.
Quote"In all scenarios, including in the event the RBI Group deconsolidated Raiffeisenbank Russia at zero, the RBI Group’s CET1 ratio will remain robust," the bank explained.

The bank plans to further reduce loans to customers in Russia and the overall volume of foreign currency transactions.

Quote"This will lead to a reduction in the size of the RBI Group’s payments business" and "a decline in income generated by Raiffeisenbank Russia," the Group added.

Context. In March 2023, it became known that Raiffeisen Bank International and Sberbank of Russia were negotiating a possible asset swap.

On March 23, 2023, Ukraine’s National Agency for Prevention of Corruption put the RBI Group on the list of international sponsors of war. The top managers of the Group have been listed as such since late 2022.

In January, President Zelenskyy enacted sanctions against another Russian subsidiary of the Group, Raiffeisen Leasing.

This followed an international scandal caused by the information that Raiffeisen Russia recognized the so-called Donetsk and Luhansk People’s Republics and gave soft loans to the Russian military. At that time, the RBI responded that its Russian business was only complying with local laws.

The National Bank of Ukraine urged all international financial groups to unwind their activities in Russia, which is waging an aggressive war in Ukraine.

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Raiffeisen Bank Aval economic war against Russia NBU