St. Petersburg, Russia – A St. Petersburg court has made a significant move by seizing assets worth over €700 million from three western banks – UniCredit, Deutsche Bank, and Commerzbank. This action comes amidst escalating tensions between Moscow and the West, particularly since Russia’s full-scale invasion of Ukraine prompted many international lenders to pull out or scale down their operations in the country. The European Central Bank’s directive to Eurozone lenders with businesses in Russia to expedite their exit plans has further added to the pressure.
The seizure was a result of a claim made by Ruskhimalliance, a subsidiary of Gazprom, the Russian oil and gas giant that holds a monopoly on pipeline gas exports. The court seized assets amounting to €463 million from Italy’s UniCredit, representing approximately 4.5% of its assets in the country based on the latest financial statement from the bank’s primary Russian subsidiary. Assets including shares in UniCredit’s Russian subsidiaries, as well as stocks and funds owned by the bank, were frozen by the court decision dated May 16.
In a separate decision on the same date, the court seized assets worth €238.6 million from Deutsche Bank, including property and holdings in its accounts in Russia. The court also ruled that Deutsche Bank could not sell its business in Russia without the approval of Vladimir Putin, as it was deemed to be taking actions to alienate its property in the country. Commerzbank’s assets were also subject to seizure, although details of the decision were not yet made public at the time of reporting.
The dispute with the western banks originated in August 2023 when Ruskhimalliance sought payment of bank guarantees from the banks under a contract with the German engineering company Linde. This request was made after Linde suspended work due to EU sanctions. The guarantor banks, including UniCredit, Deutsche Bank, as well as Bayerische Landesbank and Landesbank Baden-Württemberg, declined to fulfil their obligations citing concerns that payments to the Russian company could violate European sanctions.
UniCredit indicated that only assets related to the case would be affected by the interim measure, while Deutsche Bank mentioned being fully protected by an indemnification from a client and had provisions set aside to cover the legal implications in Russia. Commerzbank did not comment immediately on the matter. Italy’s foreign minister has scheduled a meeting to address the seizures affecting UniCredit, which employs over 3,000 people in Russia through its subsidiary. The Italian bank reported a significant increase in net profit from its Russian business, despite ongoing challenges in the region.