Dozens of banks from “unfriendly” nations are still unable to leave the Russian market due to Vladimir Putin’s special order forbidding any such agreements without special approval from the government. It was reported by The Bell, which cited a list of 45 such banks.
Raiffeisen, Italy’s UniCredit, and Citi are the most significant “locked” banks in terms of assets.
Reportedly, negotiations on pulling out of Russia are hampered, and the exiting banks fear that their subsidiaries would be bought over at discount prices by “influential Russians with close ties to the Kremlin.”
The only bank that immediately pulled out of Russia was French Societe Generale, which sold its fully-owned Rosbank to tycoon Vladimir Potanin. Potanin went unpunished for four months after Russia invaded Ukraine. He was eager to use the cash available to buy cheap undervalued assets in Russia and restore his financial business empire.
The Rosbank transaction vaulted Potanin to the top of Forbes’ ranking of Russian oligarchs with the highest reliance on liquidated Western assets.
Even though Societe Generale had to write off €3.3 billion on the departure, “even our competitors praised us on a fast and orderly disposal,” a SocGen management told the Financial Times.
According to the Financial Times, HSBC, which rushed to complete the sale of its Russian unit to Igor Kim’s Expobank just before Putin’s decree was signed, entrusted negotiations with the government to the buyer.
Citi is winding down the business of its UniCredit Bank and is exploring options but does not want to “just give the asset away.” So far, the bank has been able to sell its loan book to the local UralSib bank. Raiffeisen’s true intentions are still unknown.
According to people involved in drafting the exit deals questioned by the Financial Times, the Kremlin expects an immediate ban on some of them and a demand for at least a 50% discount on others. A request for a least 50% discount on fleeing Russia is consistent with previous financial and real estate transactions, as well as public declarations on the subject.
“There are mighty Russians with links in the Kremlin who are attempting to use their influence to capture the assets of departing foreigners,” the Financial Times reported, citing anonymous sources.