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Austrian lender Raiffeisen Bank will continue its Russian operations despite the deteriorating geopolitical situation since the launch of military assault against Ukraine, Financial Times reported citing the lender’s CEO Johann Strobl.
Raiffeisen Bank is among the few international lenders with significant exposure to Russia, which is facing severe sanctions over the Ukraine crisis.
“It is very important that you understand, we are not walking away,” Strobl was quoted by the publication as saying.
Speaking to investors and analysts, Strobl said that Raiffeisen Bank’s Russian business had €354m exposure to financial entities that are facing sanctions and €119m to other sanctioned firms.
The US and its allies have targeted several Russian banks with sanctions including VTB Bank.
Most recently, the European Union has agreed to cut off seven Russian lenders from SWIFT, a global payment messaging system used by banks across the world.
According to European Bank Authority’s data, apart from Raiffeisen Bank, France’s Societe Generale and Italy’s UniCredit are those with exposure to the Russian market.
Raiffeisen Bank’s shares have slumped 40% since Russia launched an operation against Ukraine, Societe Generale’s shares have fallen 26% over the past week and UniCredit’s shares have slumped 23%.
Raiffeisen has been present in Russia since the fall of the Soviet Union and its Russian business accounted for nearly a third of its profits.
As part of the measures, the lender has decided to suspend its per-share dividend of €1.15 as it assesses the impact of the crisis on its operation in Ukraine and Russia.
Strobl noted that in the past eight years, the bank’s Russian operations had a 20% return on equity.
Even “in a worst-case scenario, I think the bank in Russia still could make a profit”, he added.