Moscow will reportedly block sales of Western banks to Russian firms, leaving them with no exit
Western lenders stuck in wartime Russia will now have an even more difficult time exiting the nation.
Russia’s government has signaled that it will block any efforts from Western banks to offload their local units to Russian-owned entities, according to Bloomberg, who cited people familiar with the matter. Among the biggest banks impacted are European lenders Raiffeisen and UniCredit. Russia is particularly worried about any such dealing opening them to further Western sanctions, Bloomberg found.
Given the fact that Russia has also prevented sales to foreign buyers, these Western banks appear to be stuck, with limited options available. Further complicating matters is the fact that Russia still sees Raiffeisen and UniCredit as vital payment intermediaries.
This latest development is an expansion of the Kremlin’s ongoing campaign to keep Western firms within its borders. Russia recently expanded its list of exit obstacles.
Western authorities are also adding to the challenge. Raiffeisen had previously been put on notice by the US Treasury due to its maintained presence in Russia, and the Austrian bank’s prior efforts to repatriate $1.6 billion in assets also triggered warnings from the US.
According to sources, the dealer has proposed multiple buyers over the past two years that failed win over Western regulators. Russia also declined one proposed deal, Bloomberg said.
The experience has been generally shared by UniCredit. Though Mubadala, the Abu Dhabi $300 billion sovereign wealth fund, showed a readiness to purchase UniCredit’s Russian unit, it abandoned the deal in 2023 due to potential US opposition, sources said.
According to a list maintained by the Yale School of Management, over 1,000 global firms have left Russia by some degree since Moscow’s 2022 invasion of Ukraine.
Given the hurdles set up by Russia’s government, these companies have taken on more than $100 billion in losses through March, Reuters reported.
