Get free updates by signing up for the Russian business & finance myFT Digest. The largest western lender still operating in Russia, Raiffeisen Bank International, had any potential sale of its subsidiary in Russia blocked by a Russian court. The Vienna-headquartered RBI said a temporary injunction by a judge in Kaliningrad, Russia, froze the transfer of ownership shares in its Russian arm. The injunction was issued in relation to a civil case by companies connected to oligarch Oleg Deripaska, claiming “non-fulfilment of financial obligations.”
The move by the Russian court mirrors other recent attempts by powerful Russian businessmen with Kremlin ties to control or seize western businesses operating in Russia. For example, last year a Russian court froze German automaker Volkswagen’s assets as it tried to exit the country.
RBI, which has been under pressure to scale back its Russian operations, has faced challenges trying to sell its Russian subsidiary due to punitive restrictions by the Kremlin. Even though the bank’s profits from its Russian business have increased, western governments and regulators have urged RBI and other European lenders to wind down their operations in Russia if they can’t sell them.
Despite discussions with potential buyers in Russia, orders to reduce activities have affected negotiations. However, RBI’s Russian subsidiary accounted for more than half of the banking group’s profits in the first half of the year. The bank has reduced its lending in Russia, offering unattractive returns on savings, but still attracts Russian depositors seeking the safety of a western institution.
The court injunction was part of a lawsuit by Russian company Rasperia, associated with Deripaska, who attempted to swap its stake in an Austrian company for control of RBI’s Russian subsidiary earlier this year. The transaction was canceled under US government pressure, and Rasperia filed a complaint against various entities, including RBI’s affiliate in Lower Austria, in August.
Read More
New Mexico AG sues Snap for kids’ ‘sextortion’ by predators