- Russia’s deputy finance minister said his country would not let foreign banks leave the market easily, according to Reuters.
- Russia’s decision to allow the banks to leave “will depend on the decision to release Russian assets”, he said.
- Russia imposes punitive measures on companies leaving the Russian market.
Russia Imposes Rising Costs for Corporate Breakups by Foreign Banks; it now requires them to unlock Russian assets if they want to exit the market.
“We have expressed our position, and it remains: we will be firm in letting foreign banks go, it will depend on the decision to release Russian assets,” said Alexei Moiseev, Russian Deputy Finance Minister, at a forum. on Friday, Reuters reported. .
Western countries and their allies have frozen more than $300 billion in Russian central bank assets abroad as part of their sanctions against Russia following its February 2022 invasion of Ukraine. not exactly how many of these Russian assets have been frozen by Western banks.
Moiseev’s comments come as President Vladimir Putin’s regime continues to impose escalating punitive measures on companies trying to exit the Russian market.
Although 1,000 companies announced that they were voluntarily reducing their activities just two months after the start of the war in Ukraine in February 2022, only 535 foreign companies have permanently broken with the country, according to an ongoing study by the University of Yale, last updated September. 3.
But it’s not for lack of effort: more than 2,000 companies were seeking permission to exit the Russian market, but progress has been slow due to, among other things, logistical delays.
Moscow also charges exiting companies an exit fee of at least 10% of the local company’s sale value. In addition, the Russian government has started requiring sellers from “hostile countries” to return at least 10% of sales proceeds to the Russian budget from March 2023.
Raiffeisen Bank — the largest Western bank still active in Russia and working on a sale or spin-off of its local business — said in its half-yearly report released Aug. 1 that “local and international laws and regulations governing the sale of businesses in Russia are subject to constant change. »
Moiseev told Friday’s forum that a foreign bank wanted to sell its assets in Russia, according to Reuters. He did not name the bank but added that Raiffeisen had not filed such a request.
China The big four banks lend billions of dollars to Russia
While Western banks have reduced or are working to reduce their exposure to the Russian market, Chinese banks are trying to take their place.
According to the Kyiv School of Economics, China’s big four banks – Bank of China, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China more than quadrupled their lending to Russia between February 2022. and March 2023. reported the Financial Times on Monday.
China’s big four banks had a combined exposure of $2.2 billion to the Russian banking sector at the start of February 2022. That figure rose to almost $10 billion at the end of March 2023, according to the FT.
Russia’s Finance Ministry, Kyiv School of Economics, Bank of China, Industrial and Commercial Bank of China, Construction Bank of China and Agricultural Bank of China did not immediately respond to requests for comment. from Insider. Chinese banks declined to comment on the FT.
businessinsider
