Austria’s Raiffeisen Bank Suspends Dividend, Refuses to Leave Russia

The CEO of Austria’s Raiffeisen Bank, which has seen its market price halved in the last few weeks because it had a lot of exposure to Russia, doesn’t plan to pull out of the country in the wake of the recent war, Financial Times reported Tuesday (March 1).

However, it won’t be going ahead with a planned dividend. The bank is one of several international banks which have a big direct exposure to Russia and have been hit hard because of the country’s invasion of Ukraine last week.

Raiffeisen Bank CEO Johann Strobl said it’s “very important” that everyone understood they weren’t walking away.

According to the FT, Western allies have added several Russian domestic banks to sanction lists over the last few days. That includes the country’s second-largest lender, VTB Bank.

In addition, the European Union has proposed to remove the sanctioned lenders from the SWIFT global payments system.

The top three foreign banks that were exposed to the Russian market, aside from Raiffeisen, included Italy-based UniCredit and Société Générale from France. All of them have seen big falls in the past several days.

Strobl said the bank’s Russian business, which has €22.9 billion ($25.5 billion) in assets, had €354 million ($394 million) of exposure to sanctioned financial institutions. There was also €119 million ($132.4 million) for other sanctioned companies.

PYMNTS wrote recently that Visa and Mastercard have both separately announced that they’ll be blocking several Russian financial institutions from their global card payment networks.

Read more: Visa and Mastercard Ban Russian Banks, Pledge $2M Each in Aid

The action is intended to support sanctions from the West after the military action began to occur.

Both of those companies have separately pledged a donation of $2 million apiece for humanitarian aid. Mastercard said its $2 million would be distributed among the Red Cross, Save the Children and the company’s employee assistance funds.

Meanwhile, Visa said its contribution would go toward the U.S. Fund for UNICEF, to go toward supporting Ukraine, and it would double match any employee donations up to $1 million toward the Ukraine response funds of UNICEF and the Red Cross.