ECB to request Raiffeisenbank owner accelerate process to reduce presence in Russia

MOSCOW. April 18 (Interfax) - The European Central Bank (ECB) will send Raiffeisen Bank International AG (RBI), which owns Raiffeisenbank Russia, a request to accelerate the process of winding down its business in Russia.

RBI said in a statement that it expects to receive the regulatory order soon.

Current recommendations indicate that the loan portfolio must decrease substantially by 65% by 2026 from 6.3 billion euros in the third quarter of 2023. International payments originating in Russia must also decline.

RBI said that it has taken substantial measures since February 2022 to mitigate the risks deriving from its ownership of Raiffeisenbank. The group still plans to deconsolidate the asset, including by selling it.

"The ECB's draft requirements go far beyond RBI's own plans to reduce further the Russian business and may adversely impact RBI's options to sell JSC Raiffeisenbank," the Austrian group said.

RBI also said that it plans to continue implementing measures to wind down its Russian business in 2024, which is in line with its intention to sell the Russian subsidiary bank. RBI said that it expects the ECB to request that RBI further reduce its presence in Russia, and that RBI understands that the request is being implemented as part of the overall strategy that the ECB has announced in order to reduce the risks to European banks from Russia. RBI further said that it would carefully look into the request from the ECB.

The assets of RBI's Russian business dropped 23% to 20.7 billion euros, the Russian loan portfolio fell 34% to 5.97 billion euros, and customer funds dropped 27% to 14.6 billion euros in 2023.

RBI's Russian subsidiaries saw profits fall 35% to 1.341 billion euros in 2023.

Raiffeisenbank represents the RBI Group in Russia, as well as leasing, insurance, and management companies.