Russian court freezes Raiffeisen shares in local bank, blocks sale By Reuters

FRANKFURT (Reuters) – A Russian court has frozen shares in the local branch of Raiffeisen Bank International, Russia’s largest Western bank said on Thursday, ruling out a sale of the company for the time being.

The Austria-based RBI had promised to spin off its Russian business, which provides a payment line to hundreds of companies there, after coming under pressure from international regulators. But more than two years after the start of the war between Russia and Ukraine, little has changed.

The move, the largest bank freeze in Russia, marks an escalation in the standoff between Moscow and the West.

A bank spokesman said the Russian court’s decision ruled out a sale of the bank. However, the spokesman said it would not affect the Russian bank’s operations or the measures to reduce its activities demanded by the European Central Bank.

“We can still appoint management and give instructions to the Russians, but we cannot sell the bank,” they said.

The RBI will seek to overturn the court order, the statement said.

Russian authorities have made it clear to the RBI, which has about 2,600 corporate clients, 4 million local account holders and 10,000 staff, that they want the service to continue because it facilitates international payments, a source told Reuters.

RBI is a vital financial lifeline for millions of Russian customers who want to send euros or dollars abroad. Western regulators want that to change. The European Central Bank is demanding that the bank scale back its Russian operations.

With extensive industrial interests, more than 18 million customers from Vienna to Moscow and 44,000 employees, Raiffeisen is a financial hub for Austria and much of Eastern Europe.

Russia has become an even bigger source of money for the bank since the start of the war in Ukraine in 2022. About half of the group’s profit in the first three months of this year was generated by Russia, while the cost of making payments abroad has risen.