In Russia, assets of Deutsche Bank and Commerzbank are confiscated following a court order. The background is the originally planned construction of a gas processing plant by the Linde Group in the Baltic Sea port of Ust-Luga, in whose financing both institutes wanted to participate. Contracts for this were signed in the summer of 2021, before the start of the war. However, Linde had given up work on the project because of Western sanctions against Russia.
According to the news agency Reuters According to documents from the court in St. Petersburg, up to 238 million euros in securities, real estate and assets of the credit institution and its Russian subsidiary are affected at Deutsche Bank. Deutsche Bank had given a down payment guarantee for the gas processing plant. Linde’s client was the company RusChemAlliance, half of which is owned by the state-owned Gazprom Group. RusChemAlliance sued for the payment of around 238 million euros, which Deutsche Bank had refused citing the sanctions. At Commerzbank, the court ordered the seizure of assets worth 93.7 million euros, as well as securities and the bank’s building in the center of Moscow.
The major Italian bank Unicredit is also affected
The Italian Unicredit is also affected by the collapsed Linde project. The judges in Saint Petersburg had her assets and property worth around 460 million euros confiscated.
Deutsche Bank said it had set aside provisions of 260 million euros for the case. However, this sum is fully secured by a compensation agreement with a customer. “It remains to be seen how this decision will be implemented by the Russian courts and what consequences this will have on our operations in Russia,” the bank said.
The confiscation is likely to be one of the toughest measures against European banks since the start of the war. It could be related to one Letter from the European Central Bank to the banks it supervises from mid-May. The ECB’s banking supervisors had demanded that the financial institutions hurry up with their withdrawal plans, otherwise tougher measures from the Americans could be expected.
The US government is closely monitoring European banks’ remaining operations in Russia. The Austrian Raiffeisen Bank International (RBI) in particular has recently come under increasing pressure. Unlike other European credit institutions, the second largest Austrian bank is still making no move to withdraw from Russia. It was said last week according to the news agency Reuters In fact, the US sanctions agency Office of Foreign Assets Control (OFAC) has expressed concern about RBI’s alleged expansion in Russia in a new letter to the bank. The expansion contradicts the bank’s promise to reduce its Russian activities. In the May 6 letter, Deputy Treasury Secretary Wally Adeyemo warned that he could not rule out restricting the bank’s access to the US financial system.
Many Western banks have long since shut down their business
After the Russian attack on Ukraine, most Western banks have shut down their operations in Russia and taken some of their employees out of the country. Since then, Deutsche Bank has no longer done any new business there, for example, it has not granted any new loans. Risk positions in Russia recently fell from 3.5 billion in 2021 to 1.7 in 2022, the bank said at its general meeting this week. In 2023, the bank also paid 16 million euros in income taxes in Russia. Before the war of aggression, it employed around 1,700 people in Russia, primarily in the IT sector; today, according to the annual report, there are only 180 employees.
Before the attack on Ukraine, however, German banks had also helped for years to strengthen Putin’s power and the Russian fossil fuel economy on which it is based. Deutsche Bank, for example, was according to the Urgewald organization ranked fourth among the European banks that had supported the four leading Russian oil and gas companies Gazprom, Lukoil, Rosneft and Novatek with syndicated loans in the last five years before the start of the war. The Russian troops were already on the Ukrainian border at the end of 2021 when Deutsche Bank, together with other financial institutions, had granted an $870 million loan to an oil company in Irkutsk. At the time, the bank proudly referred to the “long history of supporting important infrastructure projects in Russia.” A few days earlier, the financial institution had opened new offices in Moscow, which was also a sign that it was fully committed to the Russian market.
A few years earlier it had emerged that Deutsche Bank had helped oligarchs get around ten billion dollars out of the country with the help of stock mirroring transactions. Since then, the Americans in particular have viewed the institute’s involvement there with a hawk’s eyes, and they had to partially shut down their investment banking in Moscow. Finally, the US Congress even tried to find out whether President Vladimir Putin had possibly influenced the US presidential election in 2016, possibly even through Deutsche Bank. There was never any evidence for this, but the theory still holds true today. The imagination was fired by the mere fact that Trump was a major customer of Deutsche Bank.