The bumpy exit of Raiffeisen Bank International AG (RBI) from Russia continues to drag on. It is now said that nothing will happen without compensation – the bank has already built up to six billion euros in equity in the warlike country.
Initially, despite the war of aggression against Ukraine, they did not want to withdraw from Russia, then they did so, then a possible takeover of the local subsidiary failed and then they also ended up in the crosshairs of the American secret services; Now the farewell could be postponed even further, the Handelsblatt reported.
An immediate departure would damage the bank
“I understand that the cancellation of a dividend and the negative impact on the group must be taken into account, and that is what we are doing,” the newspaper quoted bank boss Johann Strobl during a conference call with analysts. However, we are “not yet at the point where we can get out without any compensation.”
Still the largest Western bank in Russia
Doing business in Russia is still very lucrative for RBI, as it is still the largest Western bank in the country. The Russian subsidiary continues to make strong profits from quarter to quarter. However, the sanctions have left them stuck on the spot – according to Strobl, this now amounts to five to six billion euros in equity.
In the short term, it is also impossible to estimate that money will flow west. According to Strobl, there was discussion about requesting a distribution, but no dividend is still being paid to Vienna.
‘Suppose the ECB agrees to this’
“Nevertheless, the bank continues to work on the exit from Russia, as demanded by the European Central Bank (ECB). In the third quarter, deposits from local customers shrank by at least 26 percent, Strobl told Handelsblatt. However, it will take years before the entire loan portfolio expires.
“It will take some time before we get to zero,” Strobl said. However, he assumes that “the ECB currently agrees that we implement what we have so far.”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
