Raiffeisen Bank in Russia – ECB puts pressure on – economy

– According to insiders, the Austrian bank Raiffeisen Bank International (RBI) is getting more and more pressure from the European Central Bank (ECB) because of its business in Russia. While the ECB is not asking the bank to withdraw from the country immediately, it is insisting on a plan to unbank there and manage the risks, five people familiar with the matter told Reuters. One of the insiders said the plan could involve selling or closing the subsidiary bank in Moscow. The bank has not yet complied with the ECB’s request and shows no intention of doing so, the insiders said.

“We have asked the banks to continue to monitor business in Russia closely and ideally to reduce and wind down as much as possible,” an ECB spokeswoman told Reuters. The ECB did this to all affected institutions after the start of the war in Ukraine, she added.

The fact that the bank has been targeted by the US sanctions authority OFAC has recently caused nervousness among investors. As Reuters exclusively reported, the agency has launched an investigation into RBI and sent the bank a letter with a series of questions, including about its business in Russia. The RBI share then slipped more than eight percent on the Vienna Stock Exchange. OFAC is a department of the US Treasury Department responsible for overseeing and enforcing sanctions against Russia. While the bank said the questions were of a general nature, two people familiar with the situation said they were about potential violations of key sanctions.

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