LONDON, Jan 28 (Reuters) - Dutch bank ING Groep announced on Tuesday that it reached an agreement to sell its business in Russia to local company Global Development JSC. This move will leave the bank with an exposure of 1 billion euros ($1.04 billion).
As of now, only a few Western banks still operate in Russia, nearly three years after the conflict in Ukraine began. The agreement entails that the Russian firm, controlled by a financial investor in Moscow, will acquire all shares of ING Bank (Eurasia) JSC and operate under a new brand to serve customers in the country, as stated by ING in a release. Financial specifics of the transaction were not disclosed.
According to the bank, the deal is anticipated to negatively impact ING's post-tax results by approximately 700 million euros. The trend of Western banks withdrawing from Russia started after Moscow's involvement in the Ukraine crisis led to economic sanctions being imposed on the country.
Austria's Raiffeisen remains the largest Western bank with a presence in Russia. It has profited significantly over the past few years by facilitating payments for Russia's middle class and companies to the West.
Italian bank UniCredit also maintains a substantial business presence in Russia but faces pressure from U.S. and European officials to expedite its departure.
Approval from Russian authorities is mandatory for banks to sell assets, making it challenging for them to exit the market. The CEO of Italy's Intesa Sanpaolo noted last year that reducing exposure to Russia completely was difficult due to regulatory constraints.
The sale of ING's Russian operations, subject to regulatory clearances, is expected to finalize in the third quarter of 2025. Meanwhile, the bank plans to further reduce its exposure to Russian clients.
Since the conflict in Ukraine, ING has halted new business with Russian companies, scaled down operations in the country, and initiated the separation of Russian operations from its broader network, resulting in over a 75% reduction in total lending exposure to Russian clients.
($1 = 0.9594 euros)