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- Forward to the past: foreign banks may reconsider their decision to leave the Russian Federation
Forward to the past: foreign banks may reconsider their decision to leave the Russian Federation
Foreign banks remain interested in doing business in Russia, Anatoly Aksakov, head of the State Duma Committee on the Financial Market, told Izvestia. This position was expressed by the players at a closed meeting of deputies with representatives of European business, which took place in April. The largest foreign banks that continue to operate in the Russian market now are Raiffeisen and Unicredit. At the same time, they officially declare that they are not curtailing their care plans. Why it is beneficial for foreigners to stay in the Russian Federation — in the Izvestia article.
The return of foreign banks to the Russian Federation
In April, a meeting of deputies with representatives of European businesses was held, at which foreign banks stated that they remained interested in working in Russia, Anatoly Aksakov, head of the State Duma Committee on the Financial Market, told Izvestia.
"All the foreign financiers participating in the meeting expressed their interest in working in the Russian market,— Anatoly Aksakov emphasized.
With the normalization of relations between the Russian Federation and the West, representatives of foreign businesses may begin to return to the Russian market, the deputy said.
Before the escalation of the Ukrainian conflict in February 2022, several subsidiaries of foreign banks operated in the Russian Federation. The largest of them were Raiffeisenbank (Austria), Rosbank (France), Unicredit Bank (Italy), Citibank (USA), Home Bank (Czech Republic) and OTP Bank (Hungary).
Some credit institutions, such as the French Societe Generale and the Czech PPF (the parent companies of Rosbank and Home Bank, respectively), sold their Russian assets back in 2022 at a large discount. For example, Rosbank was bought by Interros structures for less than a third of the capital. Citibank had already shut down its business servicing individuals in Russia.
As a result, the share of foreigners in the Russian financial market has decreased from 11% in early 2022 to 4-5% by 2025, estimated Natalia Milchakova, a leading analyst at Freedom Finance Global.
However, a number of players continue to operate in our country. Among them are Raiffeisenbank and Unicredit Bank, which are still included in the list of systemically important credit institutions formed by the Central Bank. At the same time, they have repeatedly officially announced plans to leave Russia, but this is a difficult process.
UniCredit has openly stated its intention to take advantage of the geopolitical thaw to profitably sell the Russian business.
At the same time, within the Austrian Raiffeisen Bank International (RBI), as reported by the media, opinions were divided regarding the exit strategy from the Russian market. Some of the management insists on selling the Russian subsidiary, while others suggest waiting for developments. If Western companies resume operations in Russia, Raiffeisen may see this as an opportunity to sell their assets and leave the country. Izvestia sent inquiries to Raiffeisen and Unicredit about whether these players had changed their plans to leave the Russian Federation.
Bloomberg sources reported that the Russian authorities would not allow them to sell assets to buyers from the Russian Federation, because then subsidiaries could fall under sanctions. At the same time, the opposition of Western countries precludes the possibility of selling the business to non-residents.
In addition, the minimum discount for transactions involving the sale of assets by foreigners in Russia is 60%, Russian Finance Minister Anton Siluanov said earlier. Companies will also have to pay a contribution to the budget in the amount of 35% of the market value of the asset — 25% immediately, another 5% during the year and another 5% in the next two years.
Will foreign banks really come to Russia
However, in recent months, the situation could change due to the warming of relations between the United States and Russia - against the background of negotiations on the settlement of the conflict in Ukraine, Washington signaled its readiness for economic cooperation with Moscow. In particular, US President Donald Trump's special envoy, Steve Witkoff, said that the parties were discussing "very promising commercial opportunities."
The warming is already noticeable: 108 blocked American stocks and 19 frozen funds of the international investment group FinEx have returned to over-the-counter trading on the Moscow Stock Exchange. The permission of the National Clearing Center to enter into over-the-counter transactions with them is valid from April 28. The changes are also reflected on the NCC portal and the securities pages on the Mosbirzha website. That is, the owners of these assets, who previously could not get out of them, now have the opportunity to make transactions with them again.
In April, the Financial Times reported that Raiffeisen Bank International (RBI) had suspended attempts to sell its Russian business amid a possible warming of relations between the United States and Russia. It turned out that this decision was made back in February, the sources of the publication clarified. A pause is needed to reassess the situation and understand whether the US position will change. However, the financial institution itself then officially denied this information.
De facto, Raiffeisen receives almost half of its profits in Russia after the departure of Western competitors and does everything to stay, despite pressure from the European authorities, said economist Alexey Krichevsky. The bank has chosen a "no war, no peace" strategy — formally fulfilling its plans to exit the market, it continues to make large profits in Russia and is waiting for a thaw in the country's relations with the EU, explained independent financial expert Andrey Barkhota.
"If Raiffeisen restores previously frozen credit limits, it will quickly regain its lost positions in the Russian market," the economist is confident.
Unicredit, in turn, is in a difficult situation, Barkhota said. It is shrinking much faster than Raiffeisenbank, and it may not have enough revenue to restore its previous efficiency.
Nevertheless, Unicredit is unlikely to face sanctions, as this would have a severe impact on the EU financial system, Natalia Milchakova believes. Business in the Italian financial sector: Many banks there are already experiencing problems due to the weakness of the eurozone economy, and restrictions against Unicredit could significantly damage the stability of the country's banking system.
The risks of introducing new restrictions from the United States are gradually decreasing after Donald Trump comes to power, who seeks to build a dialogue with the Russian Federation on the settlement of the Ukrainian conflict. Nevertheless, there is no real, not verbal, "warming" in relations between the two countries yet, so there are still sanctions risks for foreign banks in the Russian Federation, Natalia Milchakova clarified.
For the full-scale return of Western banks, it is necessary to remove restrictions from the Russian financial sector and restore payments via SWIFT, but the timing is unknown, the expert stated.
However, their role in the domestic Russian market is now small compared to the last decade. They were the ones who once set the standards of service, becoming beacons for local players, but now we have our own high-quality players, recalled Alexey Tarapovsky, founder of Anderida Financial Group.
Counting on the rapid arrival of foreign banks — even if it ends — is naive, restoring trust will take years, Alexey Krichevsky warned. The earning opportunities will be significant, but the risks will remain high. In the meantime, the remaining credit institutions in Russia are balancing between sanctions and the hope of change.
Переведено сервисом «Яндекс Переводчик»
