Media: Raiffeisen delays exit from Russia

Austrian group Raiffeisen Bank International (RBI) is postponing plans to leave Russia amid Vienna’s reluctance to sever its long-standing ties with Moscow, writes Reuters.

Back in May, RBI CEO Johann Strobl announced plans to complete the separation of the Russian bank from the group by the end of the third quarter of 2023, the media wrote earlier. According to agency sources, Austria and the RBI itself “resist” this step, as they hope for a speedy end to the conflict in Ukraine.

The RBI has yet to lay out its spinoff plan to the European Central Bank (ECB), Reuters notes, making it “unlikely” to spin off at the announced timeline. In doing so, the group will wait for the plan to be approved by the regulator before asking for approval from its shareholders, which “could take months.”

In addition, the permission of the Kremlin, the Central Bank and the Ministry of Finance of Russia will also be required. Moscow, on the other hand, according to the agency’s sources, made it clear to RBI that it does not want it to leave the Russian Federation, since the bank’s business in the country allows international payments to be made.

Senior Austrian officials, in turn, “redoubled their efforts” to counter pressure on the RBI, including from the United States, Reuters notes. In particular, Austrian Finance Minister Magnus Brunner discussed this issue in June with a senior US Treasury official.

Earlier, at the end of March, the ECB demanded that RBI leave the Russian market. At the same time, RBI announced its intention to minimize its presence in Russia, as well as the study of two scenarios for curtailing business – the sale of a “daughter” or the withdrawal of an asset from the group. In May, RBI announced the reduction of relations with Belarusian banks.

Since February 1, 2023, Raiffeisenbank ATMs have stopped accepting dollars and euros. This step in the bank was associated with a change in the needs of customers, cash can be deposited at bank branches. From April 3, 2023, outgoing transfers in US dollars to other banks are available only for customers with premium service packages. From June 20, the bank introduced a limiting commission of 50% but not more than $500 for crediting funds in dollars from other banks.

In June, ECB Supervisory Board Chairman Andrea Enria urged all eurozone banks that have retained business in Russia should leave the country as soon as possible. The ECB, he said, takes into account the difficulties associated with the termination of operations in Russia by banks, but insists on the need for such action, since the continuation of work in Russia is associated with “enormous reputational risk.”