Raiffeisen Bank International AG has announced that it will intensify its regulatory compliance measures to significantly reduce its operations in Russia. Initial steps to reduce operations have already taken effect. Writes UNN with reference to Bloomberg.
Details
The Vienna-based lender, which owns the largest bank with foreign investments in Russia, is scaling back its operations in line with the European Central Bank's directives. In April, the ECB ordered the bank to reduce its loan portfolio in Russia by 65% by 2026 and cut the volume of payment services provided.
In line with the ECB's requirements, we are accelerating the reduction of our business in Russia,
The bank announced that in Russia it has limited the provision of credit and payment services to a specially approved list of large and international companies. Raiffeisen has stopped offering term deposits, and current accounts now bear no interest and come with high service fees.
The bank has faced criticism for continuing to operate in Russia after Russia's full-scale invasion of Ukraine began in 2022. Despite record profits in the Russian unit, capital constraints impede access to these funds, and the operations are at risk of running afoul of US and European sanctions.
Attempts to repatriate approximately EUR 1.5 billion (USD 1.6 billion) in profits through a complex share deal failed in May after warnings from US and European regulators. The bank has been trying to sell or divest its stake for two years without success. Johann Strobl said the efforts would continue.
For the second quarter, Raiffeisen registered a net profit of EUR 661 million, well above the average analyst forecast of EUR 484 million, according to a Bloomberg survey. The bank also raised its 2024 net interest income forecast for its key markets, excluding Russia and Belarus, to about EUR 4.1 billion from about EUR 3.8 billion.
Recall
Back in March of this year, the US Treasury Department demandedthat the Austrian bank Raiffeisen Bank International leave the Russian market.
Ukraine, in turn, refused to remove the Austrian Raiffeisen Bank from the list of companies sponsoring the war, as Kyiv doubts that the bank really plans to leave Russia.