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Austria’s Raiffeisen International Bank recently posted dozens of job advertisements in Russia indicating ambitious plans to grow in the country, in apparent contradiction to its official pledge to exit the market.
The Financial Times found the offers among more than 2,400 job advertisements posted in Russia by the Austrian bank since December, of which almost 1,500 are for sales and customer service management positions.
One of the job postings, posted by the bank’s mid-market unit in Russia, said its “key objectives are a multiple expansion of the active client base and stable double-digit revenue growth.”
Raiffeisen is “looking for a client manager who can attract clients,” reads another offer from the division targeting small businesses in Russia. Another notes that the company is “actively expanding its corporate client base” for payroll services.
The announcements appear to contradict Raiffeisen’s repeated statements that it intends to downsize and sell its business in Russia following President Vladimir Putin’s decision to launch a full-scale invasion of Ukraine in February 2022. Two years later, the bank is the Western lender with the largest operations in Russia. It is under scrutiny from U.S. Treasury Department officials and has come under pressure from the European Central Bank to pull out of Russia.
When contacted for comment, Raiffeisen said the FT’s findings prompted chief executive Johann Strobl to order an immediate investigation.
According to a report provided to Strobl by the board of directors of the bank’s Russian subsidiary, the ads had been published using standard information about the bank and its ambitions in Russia that had, mistakenly, not been updated since before the invasion of Ukraine began.
Raiffeisen said in a statement: “The winding down of the Russian business will continue in 2024. Raiffeisen continued to work on a possible transaction, a sale or a spin-off, which would result in the deconsolidation of Raiffeisenbank Russia from the group.”
“These (announcements) do not reflect the measures taken by the RBI to wind down its business in Russia, nor do they correspond to future plans for the Russian business,” he added.
A senior Raiffeisen executive in Austria said the ads were “very embarrassing” and had triggered a panic response to have them removed and urgently rewritten.
Raiffeisen executives stressed that they were in a precarious but unavoidable situation: profits made in Russia cannot be repatriated and any sale of its business would need Kremlin approval. At the same time, the bank needs to keep its Russian business running to attract a buyer, without openly supporting the Russian economy in wartime.
Raiffeisen has reduced its lending in Russia and intends to continue doing so: its loan portfolio has decreased by 56 percent since the beginning of 2022. It has also terminated all correspondent relationships with other Russian banks.
But among European banks still operating in Russia and disclosing staff figures, Raiffeisen is the only one to have increased its local headcount over the same period – by 6.6 percent to 9,942 employees as of December 2023. By comparison, UniCredit, Russia’s second-largest Western bank, employed 3,171 people at the end of 2023, compared with 4,383 two years earlier.
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A senior executive at a rival European bank operating in Russia said Raiffeisen had been recruiting staff in the country for a variety of functions and business lines.
Several job advertisements posted online state that the bank is pursuing a growth strategy in Russia. “To continue growing, we need a strong and united team,” reads one job advertisement for a branch manager.
Another, for a position on a regional retail team, says it needs someone to “expand customer base, attract new customers; increase customer flow,” while another indicates a plan to “grow active customer base in core capital markets product areas.”
A report on the fight against money laundering outlines “ambitious goals to grow business with financial institutions, as well as with foreign banks.”
Raiffeisen said the high volume of ads was due to employee retention problems. The bank has to pay outsized salaries and bonuses to retain sales staff who are currently under-employed but who it says are needed to be able to sell the business. The market for such staff in Russia was competitive, it said.
The Vienna-based bank also said the staff increase over the past two years was mainly due to an expansion of the local subsidiary’s IT department, which was working to create an independent IT architecture for the bank ahead of a possible sale. The number of staff working in sales has shrunk since Russia launched its war on Ukraine and will continue to do so, the bank said.
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