Raiffeisen Bank International, the largest Western bank in Russia, faces a Russian court ruling next week in a $2 billion case that has frozen its operations in the country, deepening the dispute with Moscow.
RBI has come under pressure from U.S. and European authorities to divest its operations in Russia following the war in Ukraine, part of an effort to isolate Russia through sanctions.
But the Russian court’s decision to freeze Raiffeisen’s local operations rules out any sale and makes it virtually impossible for the bank to unlock its billions in Russia.
The case casts a shadow over the Austrian bank, which still has to make provisions for damages that the court could impose on it.
The RBI declined to comment.
Raiffeisen has already announced its intention to challenge the court’s decision. The next court session is scheduled for December 25.
The bank is a long-standing player in the Russian financial system, providing a route to international currencies such as the euro and holding billions in deposits.
But it has been forced, mainly by the United States, to reduce its local activities.
This put it at odds with Moscow.
Raiffeisen has maintained its highly profitable Russian operations, but pressure from the United States on the Austrian creditor, which culminated in the threat to prevent it from using the dollar, has been relentless.
Earlier this year, Raiffeisen attempted to unlock some of its frozen Russian billions by buying a roughly $1.6 billion stake in Austrian carmaker Strabag, linked to Russian tycoon Oleg Deripaska.
But the United States put pressure on Raiffeisen to lower its offer. The failure of this sale is also at the origin of the legal action brought by Russia.
The legal action centers on a complaint filed by the Russian investment company Rasperia against the manufacturer Strabag, its Austrian shareholders and the Russian branch of Raiffeisen. Rasperia is seeking compensation of $2 billion.
RBI had sought to buy a stake in Vienna-based Strabag from Rasperia, which Strabag said is no longer controlled by Deripaska. But Washington identified Rasperia as part of a group of Russian companies still controlled by Deripaska when he imposed sanctions in May.
Mr. Deripaska has denied having links to Rasperia and rejected Western sanctions against him.
Raiffeisen has about 6 billion euros ($6.29 billion) in Russia, from international payments and billions of euros in Russian deposits, a person familiar with the matter said.
Raiffeisen, with myriad industrial holdings, more than 18 million customers from Vienna to Moscow and 44,000 employees, has become a financial anchor for Austria and much of Eastern Europe.
RBI has repeatedly stated that it wants to divest its operations in Russia. But almost three years after the start of the war between Russia and Ukraine, little has changed.
(1 dollar = 0.9536 euros)
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