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its list of “systemically important” credit organizations. These may include Austria’s Raiffeisenbank, which has been heavily criticized for continuing its operations in Russia amid the war in Ukraine. A Central Bank source told newspaper Vedomosti that the bank was doing less business in Russia, which meant it was less important to the country’s banking system.
Raiffeisen Bank will continue to reduce its business in Russia.
Raiffeisen Bank International said it will continue to cut its large and profitable Russian business operations under an agreement with the European Central Bank. Consumer loans decreased by almost 60% from their peak in the second quarter of 2022 to €5.8bn, broad restrictions on payments from the Russian Federation were introduced, and measures were taken to reduce consumer deposits further.
Bank of China, one of China's largest state-owned banks, has pulled out of cooperation with the Moscow Exchange following the imposition of US sanctions, Ukrayinska Pravda reported on July 24.
On June 24, Bank of China's Russian subsidiary suspended all transactions with Russian banks due to the US sanctions. The suspension underscores the growing impact of international sanctions on financial activities involving Russian entities.
The subsidiary of Bank of China, JSC, previously served as a yuan clearing bank, facilitating all transactions in Chinese currency on the Moscow Exchange.
The Bank of China exit is only the latest exit as several Chinese and Turkish banks have pulled out earlier this year that are increasingly hurting Russia’s ability to settle mutual trade deals. Chinese bank Chouzhou Commercial Bank pulled out of Russia in February following the imposition of the new sanctions and the Central Bank of Russia (CBR) halted trading in dollars in June after the US slapped sanctions on the Moscow Exchange (MOEX) as part of its new “strangulation sanctions.”
Currently, ICBC Bank, another major Chinese state-owned financial institution, is managing yuan transactions. However, its operations are also at risk. The US Treasury's licence, allowing ICBC to conduct transactions with the sanctioned exchange, is set to expire in mid-August. If not renewed, this could lead to sanctions on Chinese banks involved in these transactions and potentially halt yuan trading in Russia.
While China has committed itself to a “no-limits” partnership with Russia, Chinese banks are not willing to risk US secondary sanctions that would prevent them from doing business with America; China did more than half a billion dollars a year worth of trade with the US in 2023 and a similar amount
168 RUSSIA Country Report August 2024 www.intellinews.com