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Austrian financial group Raiffeisen Bank International to sell or spin off Russian subsidiary

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One of Austria’s largest banking groups, Raiffeisen Bank International (RBI), has decided to get rid of its Russian subsidiary Raiffeisenbank, according to an announcement by the group’s CEO Johann Ströbl made during the firm’s annual shareholder meeting. The decision to leave the Russian market was discussed amid pressure from the European Central Bank (ECB) and US authorities, who demanded the Austrian group reduce its presence in Russia.

The Austrian holding company is currently considering two options: either the sale of Raiffeisenbank Russia, or a spin-off of the company outside of the financial group. Strobl noted that all transactions will be carried out “in full compliance with local and international laws and regulation and in consultation with the relevant competent authorities”:

“The RBI Group will continue to progress potential transactions which would result in the sale or spin-off of Raiffeisenbank Russia and deconsolidation of Raiffeisenbank Russia from the RBI Group, in full compliance with local and international laws and regulation and in consultation with the relevant competent authorities.
We are committing to further reducing business activity in Russia whilst we continue to progress such potential transactions.
Raiffeisenbank will maintain some banking operations in Russia to meet the conditions of its banking license, and support customers including those impacted by the reduction in business activity in Russia. We have a duty of care to employees in all markets where RBI operates. The RBI Group has a responsibility to preserve the integrity of local operations in Russia, employing over 9,000 people.”

The Financial Times noted that there are currently two contenders for Raiffeisen’s Russian assets. One of them is likely to be Sberbank, which, according to the Austrian media, has been negotiating a potential asset swap. Sberbank has apparently offered the Austrian bank its European business, which was headquartered in Vienna.

Raiffeisenbank currently remains the largest bank in Russia that is not subject to Western sanctions and is not disconnected from the international SWIFT messaging network. Close to 50 percent of all international transactions from Russia are currently made through the bank.

Another bank, Unicredit, which belongs to the eponymous Italian financial group, is in a similar position, but Western pressure has so far evaded the institution. The US suspects the Austrian group of helping Russians bypass sanctions, while the ECB recently demanded that Raiffeisen present a plan for withdrawal or at least a plan to fundamentally reduce its Russian business.

Despite its intentions, the Austrian group is unlikely to be able to quickly leave the Russian market – a decree signed by Vladimir Putin in 2022 ruled that all deals with foreign companies after the start of the war in Ukraine must be approved by a special government commission. Without its approval, Raiffeisen will not be able to close the deal.

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