Austria's Raiffeisen attempts last-ditch Russian spin-off - sources, 23 April 2023

Raiffeisen Bank International (RBI) is stepping up moves to hand its money-spinning Russian arm to shareholders, three people familiar with the matter said, amid mounting pressure to cut its ties to Moscow.

Austria's second-largest bank is making preparations for a spin-off after months of unsuccessfully trying to find a buyer to defuse a row over its Russian business, in order to avoid having to unwind it entirely.

But the last-ditch attempt faces hurdles, not least from international regulators, the people told Reuters...

A spokesperson said Raiffeisen would "continue to progress potential transactions which would result in the sale or spin-off of Raiffeisenbank Russia".

While a spin-off has wide support among Austrian authorities, it faces hurdles, including securing European Central Bank (ECB) approval, as well as the blessing of Washington, which is probing RBI's Russia links.

If the spin-off proceeds, it could make RBI's owners, led by Austrian community banks, shareholders in a new Vienna-listed entity, with one share for each they now own.

It remains unclear whether the entity would be truly independent of RBI, a decisive factor for whether it should be supervised by Austria or the ECB.

One person said that a spin-off was seen as better than a sale, while a second familiar with ECB thinking said that the degree to which the spun-off bank was independent of RBI would determine whether the central bank would oversee it.

If there are wide overlaps in staff or funding, the person added, it could be put under the ECB's watch, as part of RBI.

The ECB declined to comment...