Russian court's hefty verdict jeopardizes Raiffeisen profits
The Bank of Russia has seized €1.87 billion (approx. £1.6 billion) from Raiffeisen's Russian account. This move follows a court ruling ordering the Russian branch of the Austrian bank to pay compensation to Rasperia, a company linked to Oleg Deripaska, an oligarch sanctioned by Western countries.
The Russian branch of RBI is considered by Moscow to be 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 (£750 million) in profits in the first three quarters.
This represents almost half of Raiffeisen Bank's total profits and is twice the amount earned in the two years leading up to the invasion. In the first nine months of 2024, Raiffeisen Bank International (RBI) paid a total of €277 million (£236 million) in taxes to the Russian state treasury. However, it now risks losing everything.
A Russian court has ordered the company to pay more than €2 billion (£1.7 billion) in compensation to Rasperia for a failed investment deal. Reuters reports this as one of the harshest judgements against a Western company still operating in Russia.
In 2023, RBI attempted to repurchase 24.1% of the 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 obscure ownership structures. Deripaska has consistently denied any such connections.
Oligarch prevails, bank in trouble
Rasperia filed a lawsuit demanding approximately 200 billion rubles (£1.9 billion) in compensation. In January, the court in Kaliningrad ruled in favour of the Russian side. The appeal concluded at the end of April with a rejection. Rasperia sought the assistance of the Bank of Russia to enforce the ruling, reports Reuters.
Raiffeisenbank has lost nearly half of the €4.4 billion (£3.7 billion) it accumulated in Russia since the beginning of the war. This profit cannot be transferred to Austria due to a capital flow ban imposed by Russia's central bank.
RBI has stated in a declaration that in addition to further appealing, it is also preparing a separate claim against Rasperia, which will be filed in Austria in the second quarter of this year.
