Raiffeisen Bank's Russian profits under fire amid sanctions
Austrian Raiffeisen Bank International AG (RBI) has come under scrutiny after Bloomberg revealed that it benefited from activities supporting the Russian war industry in Ukraine. The company reportedly gained approximately CAD 830,000 in this way.
Austrian Raiffeisen Bank International AG (RBI) has been accused of profiting from activities supporting the Russian war industry.
According to Bloomberg, the bank obtained 62 million rubles (approximately CAD 830,000) from services provided to Russian chemical firms supplying products to the defence industry.
Profits and sanctions
In 2024, the Russian branch of Raiffeisen generated over CAD 1.34 billion in profits, accounting for nearly half of the bank's total profits. However, due to Russian regulations, the headquarters in Vienna does not have access to these funds.
Bloomberg emphasizes that the bank implemented monitoring systems to ensure compliance with sanctions.
Key role in Russia
Raiffeisen is one of the few Western banks remaining in Russia after Ukraine's invasion in 2022. The Russian bank branch is considered a key financial institution, which complicates its withdrawal from the market. The decision to leave Russia requires approval from a special commission and Vladimir Putin.
Bloomberg revealed that Raiffeisen handled transactions for Unichim, a company supplying chemicals to the sanctioned defence company Rawienstvo. Unichim also traded with Proletarskij Zavod, part of United Shipbuilding Corp., indicating connections with the Russian navy.
Chinese connections
In the first half of 2024, Raiffeisen provided 1.8 million Chinese yuan (approximately CAD 420,000) to Unichim, which may suggest interest in China. Bloomberg notes that bypassing sanctions, Russia increasingly relies on Chinese raw material suppliers.
Raiffeisen hopes that a ceasefire will relax sanctions, allowing it to transfer profits to its headquarters in Vienna. Bloomberg highlights that currently, these funds are frozen in Russia, subject to local regulations and sanctions.
