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A court in St. Petersburg has seized assets worth 700 million euros belonging to three Western banks: UniCredit, Deutsche Bank and Commerzbank, according to court documents.
The seizure was one of the biggest moves against Western lenders since the Russian government's full-scale invasion of Ukraine, which prompted most international lenders to exit or scale back their operations in Russia. This comes after the European Central Bank told eurozone financial institutions operating in the country to accelerate their withdrawal plans.
The move is based on the insistence of Laskimarians, a subsidiary of Russian oil and gas giant Gazprom, which has exclusive rights to pipeline gas exports.
The court has seized 463 million euros worth of assets belonging to Italy's UniCredit, according to the latest financial reports of the bank's main Russian subsidiary. This corresponds to approximately 4.5% of domestic assets.
According to a May 16 court ruling published in Russia's Registrar on Friday, the frozen assets include shares in Russia's UniCredit subsidiary and shares and funds owned by the company.
According to a separate ruling dated the same date, the court seized 238.6 million euros worth of Deutsche Bank's assets, including assets and account holdings in Russia.
The court also ruled that the bank could not sell its Russian operations. Doing so would already require approval from President Vladimir Putin. The court agreed with Lukimol that this step was necessary because the bank was “taking steps aimed at distancing its assets from Russia.”
On Friday, a court decided to seize Commerzbank's assets, but the value of the seizure is unclear as details of the decision have not yet been made public. Laskimarians asked the court to freeze the lender's assets worth up to 94.9 million euros.
The dispute with Western banks began in August 2023, when Raskimarians went to the St. Petersburg Arbitration Court seeking payment of bank guarantees under a contract with German engineering firm Linde.
Ruskhimalliance operates a gas processing plant and liquefied natural gas production facility in Ustiluga, near St. Petersburg. In July 2021, we signed a contract with Linde for the design, equipment supply, and construction of the complex. A year later, Linde suspended her work due to EU sanctions.
Raskimarians then turned to its guarantor bank, which refused to honor its obligations on the grounds that “payments to Russian companies could violate European sanctions,” the company said in a court filing. stated in the submission.
The list of guarantors also includes the State Bank of Bavaria and the State Bank of Baden-Württemberg, and Raskimarians has filed a lawsuit in a St. Petersburg court.
UniCredit said it was aware of the lawsuit and that “only assets that are worth the lawsuit will be subject to interim measures.”
Deutsche Bank said it was “fully protected by indemnifications from customers” and had posted a provision of around 260 million euros in its accounts together with “corresponding redeemable assets” to cover the Russian lawsuit. He said he did.
“We need to see how this claim will be enforced in Russian courts and assess the immediate operational implications in Russia,” it added.
Both Bavarian State Bank and Baden-Württemberg State Bank declined to comment. Commerzbank did not respond to a request for comment.
Italy's foreign minister convened a meeting on Monday to discuss the seizure affecting UniCredit, two people familiar with the plans told the Financial Times.
UniCredit is one of Russia's largest European lenders, employing more than 3,000 people through its Russian subsidiaries. Bank of Italy this month reported first-quarter net profit from its Russian operations of 213 million euros, up from 99 million euros a year earlier.
It has made provisions of more than 800 million euros and significantly reduced its loan portfolio. Chief Executive Andrea Orcel said this month that the company “continues to de-risk” its Russian operations, but that a complete exit from the country would be complicated.
The European Central Bank has asked eurozone financial institutions operating in the country for detailed plans on their exit strategies, the FT reported on Friday, amid rising tensions between Moscow and the West.
Efforts to rescue them are complicated by legal challenges over assets held by Western banks. Last month, a Russian court ordered the seizure of more than $400 million in funds from JPMorgan Chase & Co. following a legal challenge by Kremlin-run lender VTB. The court later canceled some of the planned seizures, Reuters reported.
Additional reporting by Martin Arnold in Frankfurt
