'How Austria’s Raiffeisen got stuck in Russia — while making record profits', Financial Times, 26 February 2023

For years, Austria’s Raiffeisen Bank vaunted its staying power in Russia as western rivals came and went...

[But] one year into Russia’s bloody invasion of Ukraine, as western companies flee the country, fearful of the reputational and legal risk of continuing to do business there, Raiffeisen finds itself stuck. The bank’s huge Russian subsidiary is trapped in the grip of Vladimir Putin’s regime, the policies of which allow it to rack up unprecedented profits, while barring those gains from leaving Russian territory.

Earlier this month, Raiffeisen — a bank dating back to the days of the Austro-Hungarian empire, with a virtually ubiquitous presence across eastern Europe — reported it had made €3.6bn in profit in 2022, compared with €1.4bn in 2021. Of that, €2.2bn, more than 60 per cent, was attributable to businesses in Russia and Belarus, up fourfold from 2021...

Raiffeisen is not alone. Many western businesses remain in Russia. Banks such as HSBC and Bank of America are among them. But Raiffeisen stands out both for the size of commercial activities and its role at the centre of other, remaining businesses’ operations: Raiffeisen, a senior executive at the bank told the Financial Times, now handles 40-50 per cent of all the money flows between Russia and the rest of the world...

A spokesperson for Raiffeisen stressed that the bank was fully complying with EU and US sanctions against Russia, but declined to comment further on its ongoing business in Russia...

Raiffeisen has severed relationships with about three dozen big Russian clients — oligarchs and businesses — since the invasion began. In the last year it has reduced its lending to Russian businesses by 30 per cent, which management believes is a remarkable achievement...

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