La Russia imposes a ban on capital trading 45 foreign-owned banks. As the war on the ground continues, the Kremlin confirms its hard line on foreign banks. After the decree that in August heralded a temporary ban on the sale of Western financial assets, in recent days Moscow has published the list of 45 institutions involved in the provision. In addition to northern European groups such as Bnp Paribas, Deutsche Bank, Credit Agricole and Credit Suisse, the list available on the government website includes the Russian assets of Italian Unicredit e Intesa Sanpaolo.
August decree: Putin blocks the sale of foreign assets
The list comes after the 5th of August the Russian President Vladimir Putin has issued an order prohibiting the sale of shares in entities operating in the energy and financial sectors owned by subjects of "hostile" countries, unless special approval is granted.
Since the beginning of the conflict, Western countries and their allies have imposed financial restrictions on Russia. Moscow has responded by obstructing Western firms and their allies leaving Russia and, in some cases, seizing their assets.
It is no coincidence that almost all foreign institutes present in Russia have continued to operate in the country for now. The only exception is the French bank Société Générale which, immediately after the outbreak of the war in Ukraine, sold its entire stake in Rosbank and its insurance subsidiaries to Interros Capital, collecting a loss of over three billion, but allowing the deconsolidation of 15 billion of receivables. The SocGen group was in fact one of the most exposed in Europe to the risk of Russia.
Intesa and Unicredit are also among the groups involved
Published on October 26, the list of 45 banks includes the assets of Goldman Sachs, JP Morgan, American Express Bank, HSBC, Citibank, ubs, Natixis, First Investment Bank, Ing, Raiffeisen Bank, Sumitomo Mitsui, Toyota Bank, Mercedes-Benz Bank, BMW bank, Volkswagen Bank e PayPal.
Citi, Russia's largest Wall Street bank with $8 billion exposure, plans to shut down nearly all institutional banking as it is unable to sell the business due to recent laws on sanctions.
What will happen now?
Western banks will need special permission from the government to exit Russia. This means that Putin will have the last word. Furthermore, the decree has a deadline of December 31, but could always be extended. In fact, the document explained that "The term of validity of the restrictions established by this decree can be repeatedly extended by the President of the Russian Federation".
