Russian court confiscates assets valued at €700mn from UniCredit, Deutsche Bank, and Commerzbank

A St Petersburg court has made a bold move by seizing over €700 million worth of assets belonging to three western banks – UniCredit, Deutsche Bank, and Commerzbank. This action marks one of the biggest crackdowns on western lenders since Moscow’s invasion of Ukraine, which led to most international banks withdrawing or winding down their operations in Russia.

The European Central Bank had previously instructed Eurozone lenders with operations in Russia to expedite their exit plans, further escalating the situation. The seizure of assets came after a claim from Ruskhimalliance, a subsidiary of Gazprom, the Russian oil and gas giant with a monopoly on pipeline gas exports.

The court seized €463 million worth of assets from Italy’s UniCredit, equivalent to about 4.5% of its assets in Russia. Assets frozen include shares in UniCredit subsidiaries in Russia, as well as stocks and funds owned by the bank. Deutsche Bank had €238.6 million worth of assets seized, including property and holdings in its Russian accounts.

Commerzbank also had its assets seized, although the details of the decision have not been made public yet. The dispute with the western banks began in August 2023 when Ruskhimalliance demanded payment of bank guarantees under a contract with the German engineering company Linde.

Italy’s foreign minister has called a meeting to discuss the seizures affecting UniCredit. The situation highlights the challenges faced by western banks operating in Russia amid escalating tensions between Moscow and the west. The European Central Bank has requested detailed exit strategies from Eurozone lenders in Russia as legal challenges over assets continue to complicate their efforts to extricate themselves from the country.