A fully consolidated Russian affiliate of Austria’s Raiffeisen Bank International (RBI) continues to hold and promote investments in numerous sanctioned Russian state and private entities, an investigation by BankTrack and B4Ukraine has revealed.
Financial documents seen by BankTrack and B4Ukraine indicate that Raiffeisen Capital, a Russia-domiciled asset manager wholly owned by RBI’s Russian subsidiary AO Raiffeisenbank, continues to actively trade securities issued by the Russian government, state-owned energy giant Gazprom, and state-owned financial institution Sberbank, among others.
The documents further suggest that Raiffeisen Capital holds several Russian Ministry of Finance-issued bonds which were issued after 9 March 2022 – the cutoff issuance date from which the European Union’s sanctions legislation prohibits dealing with Russian government-issued securities.
Investing in Russia’s war economy
Evidence of the contentious investments were found on Raiffeisen Capital’s Russian-language website, on which the asset manager continues to offer a comprehensive range of investing services to its clients more than three years into Russia’s full-scale invasion of Ukraine.
Raiffeisen Capital maintains 10 stock and bond-focused mutual funds, through which it invests clients’ money in curated portfolios of Russian and international securities. Several of its flagship funds include investments in key entities underpinning Russia’s war of aggression on Ukraine, according to financial reports available on the asset manager’s website.
Across its ten funds, the asset manager reported a total value of ca. 70.9bn roubles (US$720m) in January 2025. Of these assets, some 31.7bn roubles (US$322m) were invested in Russian entities that have been subject to US or EU sanctions for their involvement in the war on Ukraine.
Raiffeisen Capital reported about 1.6bn roubles ($16m) of shares in Russian state-owned bank Sberbank, which has been subject to EU sanctions and restrictions since 2022 for its role in “financially supporting and benefitting from the Government of the Russian Federation.”
The asset manager’s other investments include some 2.2bn roubles (US$22m) worth of shares in state-owned gas enterprise Gazprom. Gazprom is a key target of US sanctions, and international observers have noted that the company remains a linchpin of Russia’s wartime economy and plays a crucial role in sustaining the war on Ukraine.
Most notably, financial filings indicate that Raiffeisen Capital maintains a series of investments in bonds issued by Russia’s Ministry of Finance. Russian state-operated ministries have been subject to sanctions by the US and EU as part of efforts to restrict the Russian government from raising additional funds for its war of aggression against Ukraine, with the European Union prohibiting trade in any transferable securities issued by the Russian government after 9 March 2022.
The asset manager reported ca. 16.6bn roubles (US$168m) of holdings in Russian state-issued bonds in October 2024, including ca. 2.7bn roubles (US$27m) of holdings in bonds issued after 9 March 2022.
In August 2024, the asset manager reported the closure of four Exchange-Traded Funds (ETFs), but its flagship mutual fund products remain active as of March 2025 and continue to invest clients’ money into a host of Russian securities.
BankTrack and B4Ukraine’s findings indicate that Raiffeisen remains entangled with the increasingly sanctioned Russian economy and stand in contradiction with the banking group’s repeated claims that it is quickening its wind-down of Russian activities.
Potential sanctions risks
Since March 2022, Raiffeisen has repeatedly come under fire for failing to live up to these claims. The bank has often stressed that it seeks to exit Russia via a sale of its Russian unit and aims to shrink its Russian activities in the interim. But the bank has fallen short of committing to a full wind-down of its Russian activities, and its profits exceeded those of all other international banks in Russia put together in Q1-Q3 2024, as BankTrack and B4Ukraine highlighted in a recent briefing. RBI has come under regulatory pressure for continuing to provide payment and lending services in Russia, but its asset management activities had previously not been subject to similar scrutiny.
Raiffeisen Capital’s purchase of recently issued Russian Ministry of Finance bonds, in particular, may prove concerning for sanctions authorities. The European Commission’s complex guidance on its sanctions legislation places prohibitions on dealing with transferable securities issued by Russia and its government after 9 March 2022, “irrespective of whether the instruments are traded on secondary or primary market.” Raiffeisen Capital’s investments in more recent Russian government-issued bonds may therefore put the Austrian banking conglomerate at risk of falling foul of European sanctions regulations, which stipulate that EU companies must make “best efforts” to ensure their non-EU subsidiaries do not violate European sanction regimes.
In response to questions from BankTrack, a spokesman at Raiffeisen Bank International stated: “RBI has clearly stated that RBI wants to exit the Russian market with the sale of its Russian subsidiary AO Raiffeisenbank, including Raiffeisen Capital Russia. While working on the exit, RBI is reducing the Russian business in accordance with the requirements of the Austrian and European banking supervision. Further, please note that RBI maintains policies and procedures to be in compliance with all applicable EU, US and UK sanctions.”
Max Hammer, a Human Rights Campaigner at BankTrack, said: “We must call these investments what they are: war profiteering with reckless disregard for the Ukrainian people and for European efforts to sanction the Russian war machine. It is outrageous, but not surprising, that RBI’s Russian subsidiary advertises its financial links to key drivers of Russia’s war of aggression despite the potential sanctions risks involved. RBI must address and be made to answer for these violations, and it must provide detailed information on its financial links to the Russian war machine. If it fails to do so, European authorities should not hesitate to respond appropriately.”
Nezir Sinani, Executive Director at B4Ukraine, said: “Little is known about the precise details of RBI’s activities in Russia, but every time any details are revealed, they add to a mountain of evidence for the bank’s financial complicity in the war on Ukraine. RBI has previously claimed that its Russian business is subject to rigorous due diligence and sanctions compliance checks, but these due diligence procedures have clearly not been enough to prevent the bank from investing in key sponsors of Russia’s war of aggression. The time for RBI to decisively sever its relationship with Russia’s wartime economy is long overdue.”