On the surface, that change of ownership removed an obstacle to the swap. But Iliadis was founded only seven months ago, and its ultimate beneficiaries are unclear. Consequently, the swap — which was intended to be completed by the end of this month — is still pending.
“RBI will only execute the Strabag deal when it is sure that the people behind Iliadis are not sanctioned,” a spokesman told POLITICO on Friday. “To this end, it is conducting a comprehensive compliance process.”
RBI is an arm of Austria’s nationwide network of cooperative banks, with roots deep in the local economy and local and national politics; accordingly, it has enjoyed significant political cover from the government and the central bank. Vienna lobbied hard, and successfully, for Raiffeisen to be removed from a Ukrainian blacklist of perceived war sponsors before approving the EU’s 12th package of Russia sanctions in December.
“I am confident that they are working on it,” Austrian National Bank Governor Robert Holzmann told POLITICO a week before Morris’ visit, stressing the bank is “very much aware of opportunities and constraints” and is working hard behind the scenes to find a solution.
That solution has to balance several conditions.
“Number one is that you don’t want to have a solution that favors Putin,” he said. “Number two, it must not hurt their main owners that are ultimately village banks across Austria.”
According to Raiffeisen’s full-year report, even if it had to hand over its Russian operation for no compensation, it would still be left with more than enough capital to satisfy regulators. As such, the financial damage to those village banks would be painful, but limited.
“Whether and when they will find a solution, I cannot tell,” Holzmann said. “It is highly complicated.”
