Raiffeisen halts sale of Russian bank amid warming US-Russia relations - FT
Photo: Raiffeisen will operate in Russia (Getty Images)
Raiffeisen Bank International - the largest Western bank still doing business in Russia, has suspended attempts to sell its subsidiary amid the warming relations between Washington and Moscow, Financial Times reports.
After Russia's full-scale invasion of Ukraine in 2022, Raiffeisen came under pressure from regulatory bodies and foreign governments, including the EU and the US, to force it to sell its Russian business.
But in February, RBI made the decision to temporarily halt the sale as Moscow and Washington began to restore political engagement, according to two people familiar with the course of the negotiations.
One of the sources said the reason for the suspension was global uncertainty, as well as the changing relationship between the US and Russia. "This is necessary to assess the situation and understand whether the US position might change," they said.
A third person said that for now, serious attempts to sell have been "put on hold," but the internal situation could change again. They refused to say whether the pause was driven by geopolitical events or a court case.
Warming relations between Washington and Moscow
The pause in the sale process occurred against the backdrop of the US - which had warned the Austrian bank about the risk of restricted access to the American financial system due to its ties to Russia - showing serious interest in restoring economic cooperation with Moscow.
Steve Witkoff, Trump's Special Envoy, stated that the US and Russia were discussing "very attractive commercial opportunities" after he met with Putin last week for the third time in a year.
Legal proceedings
Last year, the European Central Bank ordered RBI and other European banks still operating in Russia to speed up efforts to reduce their business in the country if they could not sell it.
RBI made efforts to scale down lending activity in Russia and stop onboarding new clients but maintained a larger business there than its competitors.
An already complicated sale process became even more difficult in September 2024, when a Russian court froze the shares of Raiffeisen Bank's Russian subsidiary, and in January held the bank liable for €2 billion in damages. At the time, RBI stated that the legal proceedings imposed a prohibition on transferring any ownership rights to the shares of its Russian unit.
In its statement, RBI reported that the sale process is "ongoing," but added that the court case has halted the execution of any deal.
However, the litigation has affected its earnings. In the fourth quarter of 2024, RBI posted a net loss of $926 million - its first quarterly net loss in the past nine years - due to large impairment charges related to the Russian court's decision.
