Austria's Raiffeisen Bank to Scale Back Russian Business as It Weighs Exit

By Mauro Orru

Raiffeisen Bank International AG said it would reduce its business activities in Russia as it weighs options to exit the country altogether, a pivotal moment for the Austrian bank that, unlike countless Western companies, opted to maintain operations in Russia after the invasion of Ukraine.

The lender said Thursday that it would continue to reduce loans to customers as well as the volume of foreign-currency transactions, thus shrinking its payments business. The bank said it was considering leaving Russia in March last year, just weeks after Moscow launched a full-scale invasion of Ukraine.

It reduced loans to customers and ringfenced Raiffeisenbank Russia's capital, but never left Russia, in stark contrast with many Western firms from all sorts of industries.

"The RBI Group will continue to progress potential transactions which would result in the sale or spin-off of Raiffeisenbank Russia and deconsolidation of Raiffeisenbank Russia from the RBI Group, in full compliance with local and international laws and regulation and in consultation with the relevant competent authorities," the bank said.

Raiffeisen entered the Russian market in 1996 and didn't shrink its business after the Crimea annexation in 2014, unlike many global banking peers. It is one of the European banks with the largest exposure to Russia, with more than 9,500 employees there at the end of 2022, according to the bank's annual report.

However, Raiffeisen said its capital-buffer ratio, known as core equity tier 1, or CET1, would remain robust even if the bank were to deconsolidate its Russian business.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

(END) Dow Jones Newswires

March 30, 2023 09:21 ET (13:21 GMT)

Raiffeisen Bank (PK) (USOTC:RAIFY)
Historical Stock Chart
From Mar 2024 to Apr 2024