Raiffeisen Bank’s clients include firms that supply materials to the Russian military-industrial complex. For example, the bank’s Russian branch received 62 million rubles ($620,000) from Unichim, a chemical company linked to Rawenstvo, which produces materials for military systems.

Raiffeisen continues to operate in Russia due to strict regulatory controls and capital restrictions, making its exit from the country challenging. It is subject to Russian law, and Russia’s refusal to recognize international sanctions complicates its operations.

Raiffeisen Bank asserts that it complies with all EU, U.S., and U.K. sanctions on Russian entities. However, the bank must still deal with clients connected to Russia’s defense industry due to the country’s wartime economy.

Raiffeisen’s Russian unit has been highly profitable, generating over $1 billion in after-tax profit during the first three quarters of 2024. It is the most profitable subsidiary of Raiffeisen Bank International.

Due to Russian capital controls, Raiffeisen is unable to transfer its accumulated profits (4.4 billion euros) out of the country. These controls restrict the outflow of funds from Russian operations.

If Raiffeisen is allowed to sell its Russian operations, the sale would be heavily discounted (up to 60% of its actual value), and the bank would be required to make a 35% voluntary contribution of the sale proceeds to the Russian state.

Raiffeisen faces significant challenges due to Russian laws, which do not recognize sanctions and have strict regulations on account closures. These factors complicate any potential exit from the Russian market.

Yes, Raiffeisen has reduced its Russian loan book by almost 25% in 2024 following pressure from the European Central Bank, but its operations in Russia remain ongoing due to the legal and regulatory environment.