By Anthony Marcus, correspondent. Eurasia Business News, July 31, 2024. Article n°1129.

In the first half of the year, Raiffeisen Bank International’s (RBI) profit in Russia after tax increased by 2.8% year-on-year to €705 million. The RBI said it had “significantly reduced” operations in the Russian Federation. Raiffeisenbank will place liquidity in the Central Bank and will continue to work only with a limited list of customers.

The bank’s pre-tax profit in Russia increased by 2.9% to €892 million. RBI’s net interest income increased by 6.8% to €745 million.

The total consolidated profit of the RBI group increased by 7.3% year-on-year, to €1.324 billion, profit after tax increased by 8.2%, to €1.436 billion. Net interest income increased by 5.3%, to €2.895 billion, follows from the statements.

The RBI assured that they continue to work on the sale and spin-off of the Russian Raiffeisenbank, but both options require approval from the Russian and European authorities, so it is difficult to name the timing of the completion of the transaction. According to RBI, its capital reserves can cover all expenses even in the event of a complete deconsolidation of the Russian bank at zero book value.

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The RBI notes that “business operations in Russia are significantly declining.” In particular, the loan portfolio has decreased by almost 60% since the beginning of the military operation in Ukraine, and clearing, settlement and payment businesses have also decreased. With the exception of Raiffeisenbank, all correspondent relations with Russian banks were terminated. “The RBI will further reduce the business of the Russian Raiffeisenbank in accordance with the requirements of the ECB,” the credit institution added.

In March 2023, the European Central Bank (ECB) demanded that the RBI close its business in Russia. The United States threatened Raiffeisen with disconnection from the American financial system. According to Reuters, the ECB and Austria are increasing pressure on the RBI. Raiffeisen CEO Johann Strobl promised that the company would begin to reduce business in Russia in the third quarter of this year. However, experts are confident that Raiffeisenbank does not seek to leave the Russian Federation.

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© Copyright 2024 – Eurasia Business News. Article No. 1129.