Raiffeisen Banks customers consist of firms providing the Russian military as it continues to wage war on Ukraine, Bloomberg reported Monday, citing bank declarations and other documents it obtained.The Austrian bank, which operates the biggest Western-owned banking branch still active in Russia since the intrusion of Ukraine, is effectively stuck in the country despite pressure from the United States and the European Central Bank to withdraw.According to Bloomberg, Raiffeisens Russian system got over 62 million rubles ($620,000) last year for its services from chemical business Unichim, which provided the approved firm Rawenstvo with materials needed to produce military systems.It is almost particular that Raiffeisen has other customers supplying the Russian military-industrial complex, Bloomberg pointed out confidential European authorities acquainted with the documents as stating, as President Vladimir Putin has actually placed the nations economy on a war footing.According to the United States Treasury Department, Rawenstvo develops and manufactures navigational radar systems.
It belongs to the approved state-run Concern Granit-Electron, which produces key elements of rocket systems for the Russian Navy.The United States Treasury likewise says that Granit-Electron is connected to the Tactical Missiles Corporation, one of Russias biggest weapons manufacturers.Granit-Electrons site states that it was awarded a commendation by the Russian president for its excellent contribution to the creation of new unique devices, reinforcing the countrys defense ability and high performance in production activities.An RBI spokesperson informed Bloomberg that the bank adheres to all EU, United States and U.K.
sanctions on Russian entities.Although Raiffeisen cut its Russian loan book by almost 25% in the third quarter of 2024 following an order from the European Central Bank, it can not prevent handling customers that, in a wartime economy, are connected in one method or another to the defense industry.Russia just enables accounts to be closed in certain scenarios and does not recognize sanctions imposed on its business.
Furthermore, Raiffeisens Russian unit is controlled by the Central Bank and subject to Russian law.Since the start of the war in Ukraine, Raiffeisens Russian unit, which remains one of the couple of in the country that continues to make foreign currency payments, has actually become Raiffeisen Bank Internationals most rewarding subsidiary.
In the first three quarters of 2024, Raiffeisens Russian unit generated over $1 billion in after-tax profit, paying 227 million euros in Russian taxes.However, Russian capital controls avoid Raiffeisen from withdrawing its profits, which have actually grown to 4.4 billion euros, from the country.If Raiffeisen is licensed to sell its Russian business, it can just do so at a 60% discount rate of its real valuation.
It would likewise be forced to make a voluntary contribution of 35% of the deal to the Russian state.