“Raiffeisen Bank International Triples Profit in Russia Thanks to Higher Interest Income and Strong Ruble Exchange Rate”

The Austrian financial institution Raiffeisen Bank International (RBI) more than tripled its profit in Russia in the first quarter to 301 million euros (roughly seven billion CZK) from 96 million euros a year ago. Higher interest income and a stronger ruble exchange rate contributed to the profit growth, the bank said in a presentation of economic results on Friday. “It looks very simple from the outside, but that group in Russia employs thousands of people, and if they were to fire them, part of the male population would simply go to the front,” said Raiffeisenbank chief economist Helena Horská in interviewed for the Spotlight podcast.

The bank, which also operates in the Czech Republic, has been facing criticism for a long time due to its presence on the Russian market. Due to its continued business in Russia and the occupied east of Ukraine, Kyiv included Raiffeisen Bank on its list of “international sponsors of war”. Reuters sources recently reported that the European Central Bank (ECB) is trying to get the Austrian firm to divest itself of its profitable activities in Russia. In January, the RBI began investigating US sanctions authorities over activities in Russia.

Horská stated that the banking group employs thousands of people and if the bank were to lay off some of the male workers, they would go straight to the war front in Ukraine. “So it’s also about social responsibility. In addition, the owners also have a responsibility towards their shareholders,” says Horská, adding that the situation bothers her personally and she would like the bank to leave Russia.

“If I could decide on this, I personally would also be in favor of exiting the Russian market at the very beginning of the war. And we must not forget that our banking group is not only active in Russia, but also in Ukraine, where we personally helped Horská said in an interview for the Aktuálně.cz server.

@horska she is always wise in relation to politicians and as an expert she always knows perfectly what to do. Until it touches her herself…

— Patrik Nacher (@PatrikNacher)
May 12, 2023

Furthermore, the economist stated that, in addition to the Czech subsidiary, other banks are also putting pressure on the management in Vienna. “We all want a final decision to be made,” added Horská. The interview with the economist then began to spread massively on social networks and came under fire from critics. Even opposition MP and Prague representative Patrik Nacher (ANO) did not remain silent and added an ironic comment. “Horská is always wise in relation to politicians and as an expert she always knows perfectly what to do. Until the moment it touches her herself…” Nacher wrote on Twitter.

Former deputy Václav Votava added that he had never heard a more stupid excuse. “How does Helena Horská understand Russia’s social responsibility when it attacks and kills civilian targets in Ukraine? And how does Russia understand its social responsibility when it abducts Ukrainian children to Russia?” pointed out Votava.

RBI chief Johann Strobl stated at the general meeting of shareholders in Vienna at the end of March that the bank is working on exiting the Russian market. “The group will continue to pursue potential transactions that would lead to the sale or separation of the Raiffeisenbank Russia division,” the bank said in today’s presentation. She thus repeated her statement from the end of March. RBI is the tenth largest bank in Russia by assets, employing almost 10,000 people in the country at the end of the quarter.

Raiffeisen Bank International already announced on Thursday that the profit of the entire group in the first quarter increased by almost half year-on-year to 657 million euros (over 15 billion CZK). The bank operates on a number of markets in Central and Eastern Europe. It is the majority owner of the Czech financial institution Raiffeisenbank, which has been providing banking services in the Czech Republic since 1993.