© Reuters.
By Geoffrey Smith
Investing.com — Shares of Raiffeisen Bank International (VIE:) tumbled in early trading in Vienna on Monday, hit by a report that it may be in trouble with US authorities over its operations in Russia.
The Austrian bank confirmed on Friday that the US Office of Foreign Assets Control, an arm of the US Treasury responsible for enforcing US sanctions, had sent it a letter in January requesting information.
At 04:05 ET (0905 GMT), shares in Raiffeisen were down 7.9%, hitting a two-month low.
“The questions raised by OFAC are of a general nature and seek to clarify the payments business and related processes maintained by RBI in light of recent events involving Russia and Ukraine,” the bank said in a statement released after the close of business. Friday. He added that the request “[was not] caused by any specific transaction or commercial activity”.
Raiffeisen’s long engagement in Russia has turned a sleepy network of Austrian cooperative banks into Russia’s largest international foreign bank, taking a sizeable share of the retail market among the country’s middle class in particular.
However, it has repeatedly attracted the interest of regulators with its business there, in particular with its involvement in a controversial deal for shipping from Turkmenistan to Ukraine through intermediaries connected to the regime of former President Viktor Yanukovych.
Unlike its main local rivals UniCredit (BIT:) and Société Générale (BIT:), which quickly and expensively exited their Russian businesses last year, Raiffeisen has continued to operate in Russia more or less as normal, albeit without contributing capital. or liquidity to its Russian operations.
The bank posted a record profit of 3.63 billion euros (1 euro = $1.0696) last year as higher interest rates boosted its core business in all its key markets in central and eastern Europe. Russian financial regulations prevented it from repatriating any profits from its operations in the country and the bank recorded a relatively modest impairment of 490 million euros related to its business in Russia and Belarus.
RBI said in its statement that it “is fully cooperating with OFAC in connection with your request and is confident that the information provided to OFAC will satisfy your request.”