Lenders reportedly need to provide the regulator with an exit strategy as early as June over fears of US sanctions

The European Central Bank is pressuring Eurozone banks still working in Russia to speed up their exits due to the risk of US sanctions, the Financial Times has reported, citing several people familiar with the matter.

The Frankfurt-based regulator has reportedly sent letters to lenders with a request for an "action plan" for their business in Russia as early as next month.

A number of EU banks - including Austria's Raiffeisen Bank International (RBI), Italy's UniCredit, Dutch lender ING, Germany's Commerzbank and Deutsche Bank, Hungary's OTP Bank, Italy's Intesa SanPaolo, and Sweden's SEB - maintain a presence on the Russian market despite Western sanctions imposed over the Ukraine conflict.

Earlier this month, Reuters reported that UniCredit and RBI, which have been operating in Russia for more than 30 years, have recently come under scrutiny from financial authorities in the US. The latter has reportedly faced threats of being cut off from the American financial system.

Last week, the Vienna-based RBI abandoned a deal to swap assets in Russia for ones in the EU. The agreement was expected to involve the holdings of sanctions-hit Russian billionaire Oleg Deripaska, but failed due to pressure from US authorities.

Washington's interference has led to mounting concern at the EU regulator that Raiffeisen and other banks could become targets for potential crackdowns, putting the bloc's entire banking system at risk of serious damage, a person familiar with the ECB's position told the FT.

"The ECB's response to the US interventions shows the big dependency of Europe on the US," an adviser to the banks with Russian units told the newspaper. "We are more followers than leaders on judgments involving European companies."

The regulator's notes have been prepared with different levels of strictness depending on how advanced each bank is in pulling out of Russia and the size of the lender's exposure in the country, FT sources claimed.

The combined profit generated by EU banks in Russia amounted to more than €3 billion ($3.2 billion) last year, marking a threefold surge compared to 2021, the FT reported in April. The increased income resulted in the banks paying about €800 million ($857 million) in Russian taxes, up from €200 million in 2021, the newspaper calculated.

(RT.com)