ECB urges European banks to exit the Russian market as soon as possible

The European Central Bank (ECB) has urged European banks operating in Russia to swiftly exit the Russian market. The regulator emphasized that continued operations in Russia pose a significant reputational risk, according to Reuters.

Andrea Enria, the Chair of the ECB's Supervisory Board, made this explicit call to banks during a press conference. He stressed the importance for banks to focus on further reducing risks and swiftly withdrawing from the Russian market. Enria stated that the ECB not only approves of this process but also strongly demands that banks undertake it, as operating in Russia is associated with significant reputational risks.

European banks have refrained from issuing new credits, and the sale of their Russian subsidiaries is complicated due to requirements from Russian authorities, including presidential approval. However, Enria believes that banks should take more proactive actions.

The ECB's call affects several banks, including Austria's Raiffeisen Bank International, Italy's UniCredit, and others that continue to generate profits in Russia despite sanctions and restrictions. These banks claim to be reducing their presence in the Russian market but argue that they play an important role in the Russian economy, as reported by Reuters.

It is worth noting that in early January, it was revealed that the Russian subsidiaries of foreign banks, including Raiffeisen Bank International, Citibank, Credit Europe Bank, and OTP Bank, were granting credit holidays to Russians involved in the conflict in Ukraine.

Since then, the National Bank of Ukraine has called on banks to fulfill their commitments and fully exit the aggressor country's market.

In March, the National Agency for Corruption Prevention (NAZK) included Austria's Raiffeisen Bank International in the list of international sponsors of the war. This was possible because, despite Russia's full-scale invasion of Ukraine, the bank continued its operations in Russia and officially recognized the so-called "DPR" and "LPR."

Raiffeisen Bank International has reduced its business activities in Russia but remains one of the primary financial channels to the aggressor country. In May, the bank began the process of separating its subsidiary in Russia.

In May, NAZK also added Hungary's OTP Bank to the list of international sponsors of the war, which caused dissatisfaction among the Hungarian government.