Raiffeisen Bank Shares Fall After Short-Seller Alleges Russia Sanctions Violations

Raiffeisen Bank International (RBI) on Thursday pushed back against allegations from activist short-seller Grizzly Research that the Austrian lender is a conduit for more than $1 billion in Russian trade that bypasses Western sanctions. The bank's shares fell after the report was released, which RBI labeled as misleading and containing factual errors.

The Short-Seller's Claims

Grizzly Research, which disclosed it holds a short position in RBI's stock, alleged the bank has become a key channel for circumventing international sanctions imposed on Russia. The report claimed this activity involves trade exceeding $1 billion, including some goods allegedly used in Russian weaponry.

In its response, Raiffeisen stated it stands by its compliance systems, which it said have undergone multiple reviews. The bank firmly rejected the short-seller's accusations.

Context of RBI's Russia Operations

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Raiffeisen's Russian subsidiary is the largest foreign-owned lender still operating in the country and is not subject to the same sanctions as major Russian banks. This has made it a critical financial link for payments, including for European gas imports, as other Russian institutions are largely isolated from the global financial system.

The Vienna-based bank has been under scrutiny for its continued presence in Russia. It has made several unsuccessful attempts to sell its Russian arm and has reduced, but not ceased, its operations there. Moscow has reportedly blocked the repatriation of billions of euros in profits earned by the bank since the full-scale invasion of Ukraine, and Russian officials have opposed a sale to preserve economic ties with Europe.

Previous Scrutiny

The allegations come after years of pressure on the bank over its Russian business. In 2024, U.S. authorities cautioned RBI that its dealings in Russia could risk its access to the U.S. dollar-based financial system, according to the source material, though this warning was not ultimately acted upon. Raiffeisen serves over 18 million customers across Austria and Eastern Europe.