Austria’s Raiffeisen Bank International (RBI) has faced challenges in its efforts to withdraw from the Russian market following the outbreak of war. Despite initial plans to step back from the lucrative market, the bank’s efforts have been impeded by the existence of sanctions.
The complications surrounding a recent deal intended to transfer blocked profits from Russia to Vienna, through RBI’s acquisition of shares in Strabag, have thwarted the bank’s plans. The transaction was met with controversy due to concerns raised by relevant authorities regarding Deripaska’s status as a confidant of Vladimir Putin and his connections to Western sanctions.
Despite initial assertions that the transaction was permissible, RBI’s decision to withdraw from the agreement underscores the bank’s challenges in navigating the complex regulatory environment in Russia. The pressure on RBI to exit the Russian market has intensified as it remains a major player in the country’s financial landscape and generates significant profits through its Russian subsidiary.
RBI has taken steps to reduce its loan volume in Russia and has indicated intentions to deconsolidate its Russian subsidiary, but concerns remain about its continued presence in the country amidst geopolitical tensions and regulatory complexities. The recent decision to walk away from the Strabag deal highlights these challenges and uncertainties facing RBI as it tries to disentangle itself from the Russian market.
