Raiffeisen and Deripaska skirt Russia sanctions with €1.5bn deal

Stay informed with free updates

Simply sign up to the Russian business & finance myFT Digest — delivered directly to your inbox.

Austria’s Raiffeisen Bank International has concluded a complex asset swap arrangement with Oleg Deripaska that skirts EU sanctions restrictions to hand the Russian oligarch roubles worth €1.5bn.

In a statement on Tuesday, RBI said its Russian subsidiary would make the cash payment to Deripaska in exchange for his 28 per cent shareholding in Austria’s Strabag, one of the largest construction companies in Europe.

Deripaska’s stake in Strabag — held through his company Rasperia — was frozen last year by the EU in response to what the bloc said was his complicity in Russia’s brutal war of aggression in Ukraine.

“In pursuing this transaction, RBI has diligently abided by and will continue to diligently abide by all sanction requirements,” the bank said in a statement.

It noted that closing of the acquisition was subject to conditions including regulatory approval and “satisfactory completion of the sanctions compliance due diligence by RBI”.

Deripaska did not respond to a request for comment.

RBI’s Russian subsidiary will transfer Rasperia’s holding in Strabag to its parent company via a dividend in kind, the bank added. That will require the subsidiary securing special approval from the Kremlin.

RBI has raked in vast profits since Russia’s war in Ukraine began, thanks to its position as the biggest European lender remaining in Russia.

In the first nine months of this year, more than half of the bank’s profits came from its Russian division. The bank is one of the biggest lenders in central and eastern Europe.

Moscow’s increasingly onerous restrictions on foreign businesses operating in its territory have meant that until now all of RBI’s earnings there have been marooned in the country.

RBI has come under mounting pressure to scale back its operations but has insisted it has few viable options for doing so without unnecessarily harming its shareholders.

The bank has previously explored complicated asset swaps with Russian entities under sanctions. The Financial Times reported in March that RBI had begun work on a possible €400mn deal with Sberbank’s frozen European holdings. The deal fell through after the state-owned Russian bank sold its assets to another party.

Deripaska was one of very few oligarchs in Russia to publicly criticise Russia’s war in Ukraine during its early phases — albeit indirectly. As Vladimir Putin’s domestic crackdown on dissent has grown in strength, however, Deripaska has become less vocal.

In an interview with the FT, in September, he said European sanctions against Russia were failing in their goals.

“I always doubted this Wunderwaffe [wonder-weapon], as Germans used to say, of the sanctions — weaponising the financial system as a kind of tool to negotiate,” he said.

The billionaire, who made his money through the aluminium smelter Rusal and energy company EN+, has long had strong business connections in Austria.

A crucial ally in the country is Siegfried “Sigi” Wolf, who served as chair of Deripaska’s engineering conglomerate Russian Machines. Wolf was also a long-serving former board member of Strabag and of the European subsidiary of Sberbank, which was headquartered in Vienna.

Wolf has also been a strong critic of sanctions against Russian businesses by Europe. He wrote a personal letter to Putin in April offering to use his experience as a member of the supervisory board of the Porsche Group to help rebuild Russia’s car industry, if the government would give him a big enough loan.

Additional reporting by Max Seddon