Raiffeisen Bank still operates in Russia. The pressure to get out of it is increasing

On tensions between the European Central Bank (ECB) and Raiffeisen over its activities in Russia writes Reuters after talking to five people familiar with the matter.

As the German “Der Standard” notes, Raiffeisenbank International (RBI) has been operating in Russia since 1996, and its Moscow subsidiary was generating significant profits. Of the EUR 3.6 billion profit recorded by RBI last year, 60 per cent. (i.e. approx. EUR 2 billion) came from business in Russia. Since the beginning of the war, the RBI has been “considering” withdrawing from Russia, but has not taken any steps in this direction. In addition, RBI remains one of the few banks in Russia that can still carry out Swift transactions. According to the ZDF portal, this is a profitable activity for the bank, because as much as 50 percent. (according to Financial Times estimates) up to 25 percent (according to RBI data) of international payment transactions from Russia are processed through this Austrian bank. In February, the US Sanctions Authority launched an investigation into Raiffeisen Bank International.

The pressure from the ECB came after “a high-ranking official USA Sanctions Committee” expressed its concern about Raiffeisen’s activities in Russia during a February meeting in Vienna.

As the agency notes, Austria’s second-largest bank “plays a key role in the Russian economy” and more and more questions are raised about its activities as the conflict continues. After all, if many Western companies have left Russia, including the French bank Societe Generale, why can’t the Austrians do the same?

While the ECB is not asking Raiffeisen to leave the country immediately, it does want an action plan to end operations, two people said. One person said such a plan could involve selling or closing his Russian bank.

“We have asked the banks to continue to closely monitor business in Russia, and ideally to reduce and liquidate it as much as possible,” an ECB spokesman said, adding that it has been doing the same with all institutions since Russia launched its invasion of Russia. Ukraine.

However, Raiffeisen does not intend to present such a plan yet, sources told Reuters, and some Austrian government officials see the moves by the ECB and the US as unwarranted foreign interference.

A spokesman for Raiffeisen said various options for operations in Russia were being considered, “including a carefully managed exit” and that he was “speeding up” his assessment of the situation, adding that he had also reduced borrowing in the country.

ECB officials said they were reluctant to put pressure on Raiffeisen for an immediate sale, fearing another blow to the global market after a week of global banking turmoil.

A spokesman for the Austrian finance ministry said that while there could be no return to the status quo in relations with Russia, “most” international companies, including banks, remained.

“There is significant trade between Russia and the rest of the world in goods such as grain, fertilizer, oil, gas, nickel and other metals that … require payment,” the spokesman said.

During the president’s visit Austria Alexander Van der Bellen in Kiev last month, the president of Ukraine Volodymyr Zelensky criticized Austrian companies still operating in Russia, paying particular attention to Raiffeisen and stating that he supported Russia.

The bank also faced sharp criticism from investors after it participated in a Russian program to suspend the repayment of loans to soldiers fighting in Ukraine.

While the stakes are high, some Austrian officials are hoping to hold out long enough – three people familiar with the matter told the agency – until some form of resolution to the conflict is announced, allowing normal business to resume with Russia.