#Russia_Sanctions: Raiffeisen Bank is reflecting on what to do with its branch in Russia. There are two options: 1) Sell it to a Russian entity or one associated with a “friendly country”; or 2) to swap it with the assets of Sberbank Europe, which are frozen in the EU.⤵️
If the bank sells it, the price will be much lower than the market price. Signing a swap deal with Sberbank is also risky. Most likely, France or Italy will be against changing the sanctions regime, when their own banks have left Russia with huge losses. In this situation,⤵️
Raiffeisen Bank continues to absorb reputational costs by remaining in Russia, where its profits more than tripled in 2022 (€2.1 billion) compared to 2021 (€474 million). The bank ensures 25% of transactions from Europe to Russia and up to 30% in the opposite direction.⤵️
Raiffeisen Bank's main competitor is the Russian Gazprombank. However, operating in Russia is becoming more difficult: 1) The bank could be sanctioned by the US; OFAC has already begun looking into the bank's operations. If it were not for the eventual breach of⤵️
financial sanctions, the Raiffeisen Bank could be indirectly involved in supporting Russia's military actions against Ukraine (by offering favorable credit conditions for mobilized conscripts deployed in Ukraine); 2) Even if the bank makes money by having good positions⤵️
in the Russian banking market, it cannot transfer the dividends to Austria, without Putin's approval. Consequently, Raiffeisen Bank seems to be waiting for the right opportunity of exiting for its Russian branch,⤵️
which makes up 13% of its global portfolio. Doing so runs huge risks of “contamination” and bank-wide spillovers, if the US decides to sanction the bank.
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