7 months ago
34
Freezing hundreds of billions of dollars in lenders’ assets was part of dispute over gas project halted by sanctions.
Published On 18 May 2024
A Russian court has ordered the seizure of the assets, accounts, property and shares of Deutsche Bank and Commerzbank in the country as part of a lawsuit involving the German banks, court documents showed.
The banks are among the guarantor lenders under a contract for the construction of a gas processing plant in Russia with the German company Linde. The project was terminated due to Western sanctions.
European banks have largely exited Russia after Moscow launched its offensive on Ukraine in 2022.
A court in St Petersburg ruled in favour of seizing 239 million euros ($260m) from Deutsche Bank, documents dated May 16 showed.
Deutsche Bank in Frankfurt said it had already provisioned about 260 million euros ($283m) for the case.
“We will need to see how this claim is implemented by the Russian courts and assess the immediate operational impact in Russia,” the bank added in a statement.
The court also seized the assets of Commerzbank, another German financial institution, worth 93.7 million euros ($101.85m) as well as securities and the bank’s building in central Moscow.
The bank is yet to comment on the case.
In a parallel lawsuit on Friday, the Russian court also ordered UniCredit’s assets, accounts and property, as well as shares in two subsidiaries, to be seized. The ruling covered 462.7 million euros ($503m) in assets.
UniCredit said it “has been made aware” of the decision and was “reviewing” the situation in detail. The bank was one of the most exposed European banks when Moscow launched its invasion of Ukraine, with a large local subsidiary operating in Russia.
It began preliminary discussions on a sale last year, but the talks have not advanced. Chief executive Andrea Orcel said UniCredit wants to leave Russia, but added that gifting an operation worth three billion euros ($3.3bn) was not a good way to respect the spirit of Western sanctions on Moscow over the conflict.
Russia has faced heavy Western sanctions, including on its banking sector, since the start of the war in Ukraine. Dozens of US and European companies have also stopped doing business in the country.
