The European Central Bank is calling on lenders to expedite their withdrawal from Russia due to the increased reputational, legal, and financial risks associated with conducting business in the country, announced supervisory chief Andrea Enria on Tuesday.
While Europe’s top supervisor has persistently expressed its hope that European financial institutions would sever ties with their Russian assets, the issue has become more significant after the recent 24-hour uprising by the Wagner militia, highlighting the political instability of the country.
In a letter to members of the European Parliament, Enria stated that his unit has “urged these banks to speed up their downsizing and exit strategies by adopting clear roadmaps and by regularly reporting to their management bodies and to ECB Banking Supervision on the execution of these plans”.
Austria’s Raiffeisen Bank International, one of the euro zone banks with significant relationships in Russia, has been intensifying efforts to transfer its Russian division to shareholders amid mounting pressure to do so, as reported by Reuters last month. CEO Johann Strobl has assured that he is working vigorously towards a resolution.
In a recent report on the European banks most exposed to Russia in light of the weekend’s events, JPMorgan also identified Hungary’s OTP Group and Italy’s UniCredit as having relatively large Russian operations among European banks.
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