Raiffeisen faces 2.9 billion CAD loss amid Russian court ruling
The Bank of Russia confiscated €1.87 billion (2.9 billion CAD) from Raiffeisen's Russian account. This follows a court ruling that ordered the Russian branch of the Austrian bank to compensate Rasperia, a company linked to Oleg Deripaska, an oligarch sanctioned by Western countries.
The Russian branch of RBI is seen by Moscow as a key financial institution that provides Russia with access to foreign currencies. The banking group has earned substantial sums in the Russian market, facilitating the regime's transactions with foreign countries. Last year, the Russian branch of Raiffeisen generated over $1 billion USD (1.4 billion CAD) in profits in the first three quarters.
This amount is almost half of the total profits of the entire Raiffeisen bank and twice what it earned in the two years prior to the invasion. In the first nine months of 2024, Raiffeisen Bank International (RBI) paid a total of €277 million (434 million CAD) in taxes to the Russian state treasury. However, it now risks losing everything.
The Russian court ordered the company to pay more than €2 billion (3.1 billion CAD) in compensation to Rasperia for a failed investment deal. This is one of the harshest judgments against a Western company still operating in Russia, reports Reuters.
In 2023, RBI intended to buy back 24.1% of frozen shares of the Austrian construction company Strabag from Rasperia, which at the time was owned by Russian tycoon Oleg Deripaska. However, the group withdrew from the transaction under pressure from Washington. U.S. officials had long suspected that the sanctioned oligarch would benefit from the sale. After the deal fell through, the U.S. Treasury imposed sanctions on a network of Russian companies, alleging they were used to conceal ownership. Deripaska has repeatedly denied any connections.
Oligarch prevails, bank in trouble
Rasperia filed a lawsuit demanding compensation of 200 billion rubles (3.4 billion CAD). In January, the court in Kaliningrad sided with the Russian party. The appeal concluded at the end of April with a rejection. Rasperia turned to the Bank of Russia to enforce the ruling - reports Reuters.
Raiffeisenbank lost nearly half of the €4.4 billion (6.9 billion CAD) accumulated in Russia since the beginning of the war. This is a profit that the bank cannot transfer back to Austria due to the capital flow ban imposed by Russia's central bank.
RBI stated in a declaration that in addition to another appeal, it is also preparing a separate claim against Rasperia, which is expected to be filed in Austria in the second quarter of this year.
