Raiffeisen Bank International AG (RBI) is seeking to exit the Russian market, but the process is stalled due to complex geopolitical and regulatory hurdles involving Moscow, Brussels, and Washington.
“I understand that trying to withdraw from russia is a process we can work on, but the final decision does not belong to us. There are too many decision makers involved,” RBI CEO Johann Strobl stated during a Bloomberg event in Vienna.
Russia Exit Proves Elusive for Raiffeisen
The Russian government maintains strict control over the exit of Western companies, presenting a significant obstacle.
RBI has been attempting to sell its Russian division for over three years, but finding a solution acceptable to both Moscow and Western authorities has proven extremely arduous.Russia requires government approvals and can impose “exit” fees of up to 50% of the asset value.
Caught Between East and West
The European Central bank (ECB) has urged Raiffeisen to significantly reduce its exposure to Russia, a request the bank says it has been addressing: “We did what we could, especially after the ECB asked us to reduce the operations considerably.”
U.S. regulatory authorities are also applying pressure on Raiffeisen to curtail its financial ties with Russia.
Raiffeisen continues to operate in both Russia and Ukraine, where it is indeed a major foreign creditor and a key financier of the agricultural sector. The bank is simultaneously focusing on expanding its presence in more stable Eastern european markets to improve profitability.