Raiffeisen Bank

Austria’s Raiffeisen Bank International (RBI) is reportedly planning a secret bank deal that involves a transaction between Russia and Austria. According to the Austrian magazine Falter, RBI’s “Project Red Bird” aims to take over the remaining assets of state-owned Russian bank, Sberbank Europe. The deal would involve RBI exchanging assets in Russia for Sberbank assets in Vienna. Falter claims that RBI has documents from a recent board meeting discussing the “transaction structure” for the project, marked as “strictly confidential”.

The potential deal would enable RBI to reduce its exposure to Russia, where the banking sector has faced regulatory and economic headwinds. However, due to sanctions against Russia, the proceeds from Sberbank Europe cannot be transferred to Sberbank Russia. The deal structure would reportedly involve Sberbank Russia receiving dividend claims and/or subordinated loans from RBI, or potentially the entire Belarusian Raiffeisen subsidiary, Priorbank.

RBI has confirmed that the possibility of such a transaction is a theoretical consideration, and that no concrete steps have been taken towards an asset swap implementation. The bank stated that any transactions would be coordinated with the relevant authorities and subject to their approval.

The potential deal comes as RBI reported a profit decline in 2021 due to higher provisions for non-performing loans in Russia and Ukraine. The bank has been attempting to reduce its exposure to these markets, with the sale of its Polish unit in 2020 and its wind-up of Sberbank Europe in 2021.

RBI’s CEO, Johann Strobl, has not commented on the reported deal. However, the bank’s spokesperson has confirmed that RBI “complies with all sanctions” and “has not violated any sanctions or export restrictions to date”.

The potential deal also raises questions about the impact on relations between Austria and Russia, as well as the geopolitical implications of financial transactions involving state-owned banks. The Austrian government has not commented on the matter.

It remains to be seen whether the potential deal will proceed and whether it will receive the necessary approvals from relevant authorities.