“Is there a permit?”
Raiffeisen Bank is sneaking its farewell to Russia
October 20, 2023, 5:42 p.m
When Russia attacks Ukraine, many Western companies leave the country. Not so with the Austrian Raiffeisen Bank. 20 months after the start of the war, the credit institution is still looking for the right strategy. There is no end in sight to the search for direction.
Raiffeisen Bank International (RBI) continues to work on a possible sale of its Russian subsidiary bank to an interested party. However, a possible sale would be a lengthy and complicated process, said head of risk Hannes Mösenbacher in front of numerous small shareholders at the “profit fair”. “Right now we are in the phase: Is there a permit or is there no permit?”
RBI is the largest Western bank operating in Russia. Unlike many other companies, the Austrians are still examining their options for exiting Russia 20 months after the start of the war in February 2022. The bank has been concentrating on selling or spinning off the business for some time.
However, it remains unclear until a solution is found. In the summer, bank boss Johann Strobl said that RBI was aiming for a possible spin-off by the end of December. A sale will be prioritized over a spin-off, explained risk boss Mösenbacher on the sidelines of the event. “If the prospect were to get approval, that would be the preferred route,” he said. The manager did not want to say who the interested party was.
Selling despite discounts?
A sale of the highly profitable Russian business is controversial among the bank’s owners, the majority of which are the Raiffeisenlandesbanken. Due to Russian requirements, the RBI would have to accept high discounts on a sale. A small shareholder from the audience therefore asked the risk manager whether the bank would not be wasting shareholder assets with a sale: “Aren’t you, as a board member, afraid that you will be charged with criminal breach of trust if you give it away so cheaply?”
“That is a very important question,” replied Mösenbacher. “But we still believe that the path we have taken is the right one, that we see that a separation can occur.”
In addition to the RBI, the Italian UniCredit and American banks, among others, are also active in Russia. However, the RBI is the only foreign bank on the list of 13 systemically important credit institutions. However, since the outbreak of the war in Ukraine, the loan portfolio there has been reduced by 50 percent.