Raiffeisen Bank International Reports Increase in Profit in Russia
According to the results from the first half of the year, the profit of Raiffeisen Bank International (RBI) in Russia has increased by 2.8% on an annual basis to 705 million euros, with Russian business still accounting for half of the group’s profit. The company stated that it has “significantly reduced” its operations in Russia. “Raiffeisenbank” will continue to work with only a limited list of clients. The bank’s pre-tax profit in Russia has increased by 2.9% to 892 million euros, as reported. The bank’s operating profit for the reporting period has decreased by 22.2%.
Raiffeisen Bank International reports increase in profits
Raiffeisen Bank International has announced a consolidated profit of 1.32 billion euros, marking a 7.3% increase compared to the previous year. The group is continuing its efforts to sell off its Russian subsidiary, “Raiffeisenbank”, but the process is still pending approval from Russian and European authorities.
The bank remains optimistic about the potential sale, stating that its capital reserves are sufficient to cover all expenses even in the event of complete deconsolidation of the Russian bank. However, the timeline for finalizing the deal remains uncertain due to regulatory hurdles.
Raiffeisen Bank International notes significant decrease in business operations in Russia
Raiffeisen Bank International has reported a significant decrease in business operations in Russia, particularly noting a nearly 60% decrease in the credit portfolio since the beginning of the conflict in Ukraine. Clearing, settlement, and payment business have also decreased. With the exception of Raiffeisenbank, all correspondent relationships with Russian banks have been terminated.
Raiffeisen Bank International will further reduce its business with Russian Raiffeisenbank in accordance with the requirements of the European Central Bank, highlighting the impact of geopolitical tensions on financial institutions.
The European Central Bank’s request to Raiffeisen Bank International
In March 2023, the European Central Bank requested Raiffeisen Bank International to close its business in Russia. The United States threatened Raiffeisen Bank International with exclusion from the American financial system. According to Reuters, the ECB and Austria are increasing pressure on Raiffeisen Bank International. Raiffeisen’s CEO, Johann Strobl, promised that the company will begin to reduce its business in Russia in the third quarter of this year. However, experts are confident that Raiffeisenbank is not aiming to leave the Russian Federation.
