European Central Bank pressures Raiffeisen to leave Russia

(Patria) - The European Central Bank (ECB) is pressuring Austria's Raiffeisen bank to close its highly profitable operations in Russia, five informed sources confirmed to Reuters.

The pressure comes after a senior US sanctions official expressed concern about Raiffeisen's operations in Russia during a visit to Vienna last month, said a second person familiar with the matter, who asked not to be named due to sensitivity.

The pressure from Washington and the ECB increases the risk for Austria and its second-largest bank, which plays a key role in the Russian economy, but is also increasingly controversial as there is no end in sight to the war in Ukraine. Many Western companies, including French bank Societe Generale, have already left Russia.

Although the ECB is not asking Raiffeisen to leave the country immediately, it wants a plan to reduce operations, two sources said. One person said such a plan could include selling or closing the Russian subsidiary.

- We have asked banks to closely monitor their operations in Russia, and ideally to reduce them as much as possible - an ECB spokesman stressed.

Raiffeisen, however, does not yet intend to present such a plan, sources claim, and some Austrian government officials see this pressure as unjustified foreign interference.

Raiffeisen is now the most important Western bank in Russia, handling about a quarter of euro transfers to the country, although other banks, such as Italy's UniCredit, are still present, Hina reports.

ECB officials are reluctant to pressure Raiffeisen to immediately sell its Russian subsidiary, fearing the financial shock this could cause after weeks of global banking turmoil, one source said.

A spokesman for the Austrian Finance Ministry said that, although there is no return to the status quo in relations with Russia, "the majority" of international companies, including banks, remain there.