Bank / Credit Union

Russia aims to prevent foreign banks from leaving

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September 6, 2023

Russia aims to prevent foreign banks from leaving the market easily unless they unfreeze Russian assets. Since Russia invaded Ukraine in February 2022, Western nations and others have frozen more than $300 billion in Russian central bank assets, according to a report by Business Insider.

"We have stated our position, and it stands — we will be tough in letting foreign banks go, it will depend on the decision to unfreeze Russian assets," Alexei Moiseev, Russia's deputy finance minister, said at a forum.

Although 1,000 companies said they were going to cut operations in Russia, only 535 have been able to leave cleanly. More than 2,000 companies have tried to gain approval to exit the market, but have also struggled. Russia charges exiting companies an exit fee of at least 10% of the sale value and sellers from "unfriendly countries" must donate at least 10% of proceeds to the Russian government budget.

Raiffeisen Bank has been working on a sale or spin off for its business there, but has struggled to accomplish this due to constant changes in laws and regulations.

Meanwhile, Chinese banks are picking up the slack by lending of billions of dollars to Russia.