Market Analysis

Raiffeisen Bank International received a written warning from the U.S. Treasury regarding its dealings with Russia, as disclosed by a source familiar with the correspondence. 

Deputy Secretary of the Treasury Wally Adeyemo penned a letter dated May 6 to RBI, expressing apprehension about the bank's expansion efforts in Russia, as well as its involvement in a $1.5 billion deal with a sanctioned Russian individual, which RBI subsequently abandoned. Despite the cancellation of the deal associated with Oleg Deripaska, concerns from the U.S. Treasury regarding RBI's Russian ventures persist.

This warning represents the most significant cautionary note yet to the largest Western bank operating in Russia, marking the culmination of months of scrutiny from Washington into the Austrian bank's activities in the region. Although a Raiffeisen spokesperson clarified that the bank had withdrawn from the Strabag deal and had not engaged in similar transactions, the U.S. Treasury's concerns regarding RBI's Russian operations remain steadfast.

The spokesperson emphasized that RBI has taken substantial steps to reduce its presence in Russia and mitigate potential risks arising from sanctions. They stated RBI's commitment to continue efforts toward the disassociation of its Russian subsidiary. In the letter, Adeyemo expressed concern that RBI's expansion contradicted prior assurances given to the Treasury about winding down its Russian operations. He cautioned that such actions heightened the risk of potential restrictions on RBI's access to the U.S. financial system, citing concerns over national security implications.

Paraphrasing text from "Reuters" all rights reserved by the original author.