Ukraine to Consider Replacing Management at Banks Still Operating in Russia

The National Bank of Ukraine (NBU) is reportedly considering a plan that could force international banks with subsidiaries in both Ukraine and Russia to divest from Russia.

According to a report, the NBU has developed a mechanism that would pressure these banks to abandon their Russian operations. If a foreign bank fails to shut down its Russian business, the NBU could potentially take control of its Ukrainian subsidiary.

The NBU’s letter outlines that if a bank is found to have a “flawed business reputation,” the foreign shareholder could be stripped of voting rights at meetings, effectively dismissing the management.

The document lists nine foreign banks with subsidiaries in both Ukraine and Russia: Austria’s Raiffeisen Bank International (RBI), Hungary’s OTP Bank, France’s BNP Paribas and Credit Agricole, Sweden’s SEB, US Citi Group, Italy’s Intesa Sanpaolo, Dutch lender ING, and Germany’s Deutsche Bank. These banks have maintained their presence in Russia despite Western sanctions.

To avoid penalties in Ukraine, a foreign bank operating in Russia would need to initiate the process of withdrawing from the country, according to the report. The NBU would require a detailed withdrawal plan with specific timelines. The regulator has reserved the right to “take action” if deadlines are not met.

Ukraine has previously pressured foreign companies operating in Russia by adding them to a list of “international sponsors of war.” However, this list was abandoned following objections from other countries.