According to the rating agency Scope, Western banks still operating in Russia must prepare for a possible confiscation of assets there. The risk of this is increasing, write the Berlin-based credit watchdog.
Business transactions that cannot be completed due to international sanctions expose banks to a greater risk of such court rulings.
A Russian court recently awarded Commerzbank assets to a Russian company as compensation. Assets belonging to Deutsche Bank and the Italian UniCredit have also been confiscated by court ruling there.
For the banks concerned, separating from their Russian subsidiaries is a challenge in view of local laws and the need for multi-stage approvals, explained Scope analyst Milya Safiullin. Recently announced reduction plans are constructive, but they do not fully meet the demands of the supervisory authorities for an accelerated exit from the country. “An open dialogue with supervisors and financial authorities is an important cornerstone for constructive decisions by banks that are seeking an orderly withdrawal from their Russian business.”
Russia is now increasingly responding with retaliatory measures to the sanctions imposed by Western countries because of Russia’s war of aggression against Ukraine.
Many companies operating there have already had to accept the confiscation or seizure of assets. Companies that want to withdraw from Russia have to sell their businesses to Russian companies, sometimes at significant discounts. The European Central Bank (ECB) has been putting pressure on banks still operating in Russia to reduce their exposure there for some time. Among other things, it has called on institutions with significant exposure there to speed up the reduction of risks.
This includes Raiffeisen Bank International. From the beginning of September, it will no longer offer euro transfers from Russia to other countries for private customers. This will further limit the range of services offered in Russia.
