ECB urges banks in Russia to leave quickly

-Euro zone banks in Russia should leave quickly, the bloc’s top supervisor said on Tuesday, making a rare explicit call on those lenders to wind down operations more than a year after Russia’s invasion of Ukraine.

“I think that it is important that banks remain very focused on reducing further their exposures and, ideally, exiting the market as soon as they can,” Andrea Enria, the European Central Bank’s chief supervisor, told a conference.

More than a year into the war in Ukraine, a handful of European banks, including Austria’s Raiffeisen Bank International and Italy’s UniCredit (LON:0RLS), are still making money in Russia.

Enria acknowledged that banks were no longer granting new loans in Russia and that it was difficult to sell due to pressure from Moscow, including a requirement for presidential approval. But he underscored the need for further action.

“This is a process that we not only praise, but we strongly pressurise banks to perform because there is a huge reputational risk (involved) in continuing to operate in Russia,” he said.

Raiffeisen and UniCredit, which both say are shrinking their businesses in Russia, play an important role for Russia’s economy, which is grappling with sweeping Western sanctions.

Raiffeisen, the most important Western bank in Russia, has said it is examining a spin-off or sale.