Raiffeisen Bank, the largest Western lender still operating in Russia, continues to rely heavily on its Russian operations, which have generated nearly half of its profits this year. Despite ongoing efforts to scale back its business in the country, including a 30% reduction in lending since January, the bank remains deeply intertwined with the Russian market.
On Friday, Raiffeisen revealed that its Russian business contributed just over €1 billion to its post-tax profits over the past nine months. This significant contribution comes amid a broader group profit of €2.1 billion. However, the bank faces difficulties repatriating these profits due to capital controls imposed by the Kremlin.
Raiffeisen has reduced its Russian loan book to €6.3 billion and has also scaled back its payments business, ending relationships with local banks. Chief Executive Johann Strobl emphasized that while the bank is actively pursuing options to deconsolidate its Russian operations, the process is slow and heavily reliant on regulatory approvals from both Russian and European authorities.
Efforts to exit the Russian market have encountered obstacles. Talks with potential buyers have stalled, and earlier creative solutions, such as an asset swap, have not materialized. The increased restrictions on Western businesses by the Russian government have further complicated the situation, with substantial profits from Western firms still trapped within the country.
Raiffeisen’s profitable presence in Russia has a long history, with the bank previously navigating several political and economic crises. In 2022, the bank reported a group profit of €3.6 billion, with more than 60% of that amount derived from its Russian and Belarusian operations.
As Raiffeisen continues to explore a strategic exit, it remains under scrutiny. In February, the US Treasury launched an inquiry into Raiffeisen’s Russian activities. While there is no indication of wrongdoing, the bank has pledged full cooperation with the investigation, describing it as a routine compliance check.
