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Austrian bank sees major fall in Russia profits

Raiffeisen is one of the only major Western lenders remaining in the sanctioned country

European banking group Raiffeisen’s profitability in Russia has continued to decline, falling 5.7% from January to September to just over $1 billion, the group’s latest report has shown.

According to the document, released this week, operating income was down 19.2% to €2.1 billion ($2.2 billion). The Austrian lender’s loan portfolio declined by two thirds over the nine-month period, to €6.3 billion.

For the third quarter, the bank’s profit in Russia after tax amounted to €339 million, which is 2.3 times less than in the same period of last year. Revenue was €331 million, while operating income stood at €574 million.

Raiffeisen is one of the last major Western lenders still operating in Russia. The bank is viewed as an important player in the Russian economy, providing a lifeline for euro and dollar payments to and from the country. It is one of only two foreign banks on the Russian central bank’s list of 13 systemically important credit institutions, the other being Italy’s UniCredit.

The Austrian lender announced in March its plans to spin off its Russian business by September, following mounting pressure from Western governments.

The RBI Group, which owns the bank, has been resisting demands from the US and EU to speed up its Russia exit. The European Central Bank (ECB) has also been pressuring the lender to quit the Russian market.

READ MORE: Major EU bank ‘postpones’ plan to leave Russia – Reuters

The bank had previously announced plans to sell the local unit or withdraw it from the group structure by September. However, in August, RBI Governor Johann Strobl said the company had postponed the process until the end of the year. In September, the bank filed an application to register a new logo in Russia, saying it wanted to expand the capabilities of the trademark.

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