Raiffeisen Bank International (RBI), the most exposed Western bank left in Russia, is moving ahead with divesting its Russian assets and is preparing to spin them off and hand them over to its shareholders, Reuters reported, citing unnamed sources.
As covered in detail by bne IntelliNews, RBI came under heavy regulatory pressure to come up with an exit plan from Russia, the country where it made 60% of its net profit last year.
RBI has scaled down its Russian business and is reportedly considering the sale of the business as a whole, or the splitting off of the Russian business into a separate entity, as well as a controversial swap of its loans for those of Russia’s Sberbank that are trapped in Europe by sanctions.
Reportedly, while a spin-off option has wide support among the Austrian authorities, it faces hurdles such as securing the European Central Bank (ECB) approval and scrutiny by the US regulators over sanctions busting.
In case of the spin-off, the Russian division of RBI would reportedly be controlled by RBI's owners, led by Austrian community banks, with one share for each they now own, according to Reuters. Reuters notes that it remains unclear whether the entity would be truly independent of RBI.
The degree to which the spun-off bank was independent of RBI would determine whether the ECB would oversee it, sources said. The US authorities reportedly expressed concern over future money laundering supervision of the new entity.
RBI is the 10th largest bank by assets in Russia, and – alongside Italy’s UniCredit – is the only one to be categorised as systematically important. It has become the largest facilitator of financial transfers into Russia over the Swift network, accounting for up to 40% of all payments in and out of the country