Raiffeisen, the largest European bank in Russia, is going bankrupt after an “embarrassing mistake”. The bank would slowly leave Russia, but dozens of job advertisements talk about “new customers” and “double-digit growth” in that country.
More than two years after the invasion of Russian troops in Ukraine, a handful of European banks are still making money in Russia. In particular, the presence of two of Europe’s largest banks, the Austrian Raiffeisen Bank and the Italian UniCredit, already attracted criticism last year and also attracted the attention of supervisors at the European Central Bank (ECB).
Under pressure from the ECB and the United States, Raiffeisen Bank pledged to sell its activities in Russia as quickly as possible. But for the time being, little seems to have come of that promise. On the contrary, dozens of job advertisements for local office directors and sales managers recently published suggest that Raiffeisen Bank is just expanding its commercial activities in Russia.
Aggressive hiring
Various online job vacancies obtained by the Financial Times clearly show that the Austrian banking giant is still pursuing a growth strategy in Russia. Local slogans such as “multiple expansion of the active customer base” or “stable double-digit income growth” are in stark contrast to Raiffeisen’s repeated statements that the bank would downsize and sell its operations in Russia.
In fact, rival bank executives in Russia anonymously complain about the aggressive hiring policies of Raiffeisen’s Russian banking subsidiary, and public data shows that the bank has expanded its workforce in Russia by more than 600 employees to almost 10,000 since the start of the war. By comparison: at the European number two in Russia, the Italian UniCredit, more than 1,200 Russian bank employees have disappeared since the start of the war.
Confronted with the content of the Russian job advertisements, the Austrian bank publicly reacted on Tuesday. A Raiffeisen director in Austria admitted to the Financial Times that the ads were “very embarrassing” and had caused a panic reaction among the bank’s top management. Russian staff were immediately asked to have them removed and rewritten.
An internal investigation ordered by Raiffeisen CEO Johann Strobl found that the job ads had been created using outdated standard information about the Austrian bank and its ambitions in Russia. It concerns sentences that were still in an old database of Raiffeisen’s Russian banking subsidiary, which “was wrongly not updated after the invasion of Ukraine”.
Balancing act
In a statement, the Austrian banking giant explicitly emphasizes that it is continuing its exit plans from Russia. “Raiffeisen continues to work on a possible transaction, sale or spin-off, which will result in the deconsolidation of Raiffeisen Bank Russia from the group,” the statement said. Since the start of the war, Raiffeisen has cut lending in Russia by more than half and says it has ended all relationships with other Russian correspondent banks.
According to the bank’s top management, an exit from Russia is a delicate balancing act. Profits made in Russia cannot be repatriated and any sale of a Western company requires Kremlin approval. At the same time, the Austrian bank must keep its activities in Russia going to attract a buyer, without openly supporting the Russian war economy.
