Deputy Secretary of the US Treasury Wally Adeyemo has reportedly warned Raiffeisen Bank International in writing that its access to the US financial system could be curbed because of its continuing presence in Russia, Reuters reports, citing unnamed sources.

In particular, RBI was reportedly warned over its controversial Strabag deal, since scrapped under heavy pressure. To double down on the threats, the Treasury has now sanctioned companies related to RBI's asset swap deal that allegedly involved sanctioned Russian oligach Oleg Deripaska.

RBI is under heavy regulatory pressure to come up with an exit plan from Russia, but the bank would take a massive hit, as Russia made up 38% of its net profits in 2023. RBI has been unable to access the profits it has made there because of Russian central bank restrictions.

It appears that in reality RBI is delaying plans to leave Russia, hoping that the full-scale military invasion of Ukraine will end before the bank will have to cave in to sanctions pressure and scrap its presence in the country. 

“The warning is the strongest yet to the biggest Western bank in Russia and follows months of pressure from Washington, which has been looking into RBI's business in the nation for more than a year,” Reuters notes.

"The US is losing patience. Enough is enough," a professor of economics at London Business School Richard Portes told Reuters, adding that Russian money flowing through Raiffeisen and other Western banks “clearly blunted the effectiveness of US sanctions”.

In his letter to RBI Adeyemo also made reportedly reference to the US President Joe Biden's executive order authorising US secondary sanctions on foreign financial institutions that conduct significant transactions involving Russia's military-industrial base.

In confirmation of the seriousness of its threats against RBI, the US imposed sanctions on three entities and an individual involved in the aborted Strabag asset-swap deal, the Financial Times reports.

The US Treasury sanctioned three companies with whom RBI organised the deal, and one individual involved with them, Dmitrii Beloglazov. The targeted parties had been involved in an “attempted sanctions evasion scheme” connected to Deripaska, although stopping short of calling out Raiffeisen directly.

“The United States is today designating one Russian individual and three Russia-based companies involved in an attempted sanctions evasion scheme connected to Russian oligarch Oleg Deripaska,” the press release said.

The treasury shamed RBI further by commenting that the “opaque and complex supposed divestment could have unfrozen more than $1.5bn worth of shares belonging” to Deripaska.

As covered by bne IntelliNews, RBI increased its net profit in Russia by 8.2% year on year to €326mn in 1Q24. The bank’s profit grew despite a 21.9% decline in assets in Russia, to €21.1bn, and a 28.2% decline in the loan portfolio to €5.8bn. Net fees and commissions in Russia also fell € 287mn.

RBI’s return on equity (ROE) in Russia in 1Q24 was 29.1%, which is higher than that of Russia’s two largest state-controlled banks Sberbank and VTB (24.2% and 22.1% respectively). Domestic analysts noted that RBI maintains a significant role in the market of international settlements. 

The European Central Bank is expected to step up pressure on foreign banks to exit Russia, with a binding order for UniCredit and RBI to cut back their business in the country.