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- A Russian court has recently taken a drastic step by blocking any potential sale of Raiffeisen Bank International’s subsidiary in Russia. This unexpected move has put a freeze on the transfer of ownership shares, leaving the largest western lender still operating within Russia in a state of uncertainty. While Vienna-headquartered RBI is seeking to sell a controlling stake in its Russian arm, the court’s decision has complicated the sales process, leading to inevitable delays.
- The injunction issued by the Russian court comes amidst a civil case brought forth by companies associated with the oligarch Oleg Deripaska, involving a substantial $2.2bn claim for “non-fulfilment of financial obligations.” The situation has echoes of similar efforts by powerful Russian businessmen close to the Kremlin to exercise control over western businesses within the country’s borders.
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Despite operating with relative freedom in Russia, RBI has faced mounting pressure from western governments and regulators to scale back and divest its business in the region. Western security officials and politicians are urging RBI, and other European lenders still operating in Russia, to accelerate efforts to wind down their businesses there if unable to sell them.
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Even though RBI’s Russian subsidiary contributed significantly to the banking group’s profits in the first half of this year, talks of potential sales have been hindered by punitive restrictions on ownership changes and dividend payments imposed by the Kremlin. The Austrian bank’s executives find themselves caught between the threat of western sanctions due to their involvement in supporting the Russian economy and the Kremlin’s restrictive regulations.
In conclusion, the situation facing Raiffeisen Bank International in Russia underscores the complex interplay between global financial institutions and regional powers. As the bank navigates through legal challenges and geopolitical pressures, it remains to be seen how the situation will unfold. Stay tuned for further updates on this evolving story.
