ECB Pressures Banks to Speed Up Russia Exits

The logo of Raiffeisen Bank International (RBI) is seen on their headquarters in Vienna, Austria, March 14, 2023. REUTERS/Leonhard Foeger/File Photo
The logo of Raiffeisen Bank International (RBI) is seen on their headquarters in Vienna, Austria, March 14, 2023. REUTERS/Leonhard Foeger/File Photo
TT

ECB Pressures Banks to Speed Up Russia Exits

The logo of Raiffeisen Bank International (RBI) is seen on their headquarters in Vienna, Austria, March 14, 2023. REUTERS/Leonhard Foeger/File Photo
The logo of Raiffeisen Bank International (RBI) is seen on their headquarters in Vienna, Austria, March 14, 2023. REUTERS/Leonhard Foeger/File Photo

The European Central Bank has told all Eurozone lenders with operations in Russia to speed up their withdrawal plans because of fears they could be hit by US punitive measures.

The ECB has written to lenders in recent weeks asking for detailed plans on their exit strategies, according to several people with knowledge of the communication, the Financial Times wrote.

Lenders need to provide the regulator with an “action plan” for their Russian business as early as June, some of the people said.

Last week, Austria’s Raiffeisen Bank International was forced to abandon a deal to swap assets in Russia for ones in Europe after pressure from US authorities.

The US intervention has led to concern at the ECB that RBI and other lenders could be targeted in future crackdowns.

“This could lead to serious damage to the banking system if the US authorities take sanctions,” said a person briefed on the ECB’s position.

The letters underline the increasing pressure from Washington over European groups that might support Russia’s war in Ukraine more than two years after the invasion.

“The ECB’s response to the US interventions shows the big dependency of Europe on the US,” said an adviser to the banks with Russian subsidiaries.

“We are more followers than leaders on judgments involving European companies.”

The US Treasury did not immediately respond to a request for comment.

The person briefed on the ECB’s position said supervisors there wanted to avoid European banks facing a similar fate as ABLV, a Latvian bank that was shut down after the US Treasury department accused it of “institutionalized money laundering” as well as breaches of North Korean sanctions and cut off its access to the US financial system in 2018.

The central bank has been calling on Eurozone banks to look for an exit from Russia since Moscow launched its full-scale invasion of Ukraine in February 2022.

At one extreme, RBI, which has the biggest exposure to Russia among the European lenders, has been told to reduce its lending in the country by two-thirds from its current level by 2026.

The bank, which faces potential fines by the ECB if it fails to comply, has already shrunk its Russian loan book by 56% since the war began.

Meanwhile, other banks including Italy’s UniCredit — the lender with the second-biggest exposure — have been asked to provide the ECB with a detailed breakdown of their plans for their operations. UniCredit has been given a deadline of June 1 to respond.

Last Thursday, a Russian court ordered that UniCredit's assets, accounts and property, as well as shares in two subsidiaries, be seized as part of a lawsuit over an aborted gas project involving the Italian bank, court documents showed.
UniCredit and OTP — the Hungarian bank that is not under direct supervision of the ECB — have in the past year started to repatriate profits from their Russian subsidiaries in the form of quarterly dividend payments.



Saudi's flynas Strikes Deal for Additional Airbus A320neos, 15 A330s

Saudi's flynas strikes deal for additional Airbus A320neos, 15 A330s (flynas)
Saudi's flynas strikes deal for additional Airbus A320neos, 15 A330s (flynas)
TT

Saudi's flynas Strikes Deal for Additional Airbus A320neos, 15 A330s

Saudi's flynas strikes deal for additional Airbus A320neos, 15 A330s (flynas)
Saudi's flynas strikes deal for additional Airbus A320neos, 15 A330s (flynas)

flynas, Saudi Arabia’s leading low-cost carrier, has signed a Memorandum of Understanding (MoU) with Airbus for 75 A320neo family aircraft and 15 A330-900. This strategic agreement will expand the airline's capacity, range and enhance its overall fleet capabilities.
Signed during Farnborough International Airshow in the presence of President of the General Authority of Civil Aviation (GACA) of Saudi Arabia, Abdulaziz bin Abdullah Al-Duailej, Chairman of the Board of NAS Holding Ayed Al Jeaid, flynas Chief Executive Officer & Managing Director Bandar Almohanna, and Airbus Chief Executive Officer, Commercial Aircraft, Christian Scherer, Airbus said on its website.
The new aircraft will join the carrier’s all Airbus fleet serving international, domestic and regional routes. The new A330-900 aircraft will boast a two-class configuration, accommodating up to 400 passengers.
"We are excited to further strengthen our long-standing partnership with Airbus," said Bander Almohanna, CEO and Managing Director of flynas. "The A320neo Family provides exceptional operational performance and environmental benefits, allowing us to offer unique, low-cost travel experiences. Additionally, the A330neowill enhance our long-haul capabilities with its advanced technology and efficiency while supporting our growth plans and Saudi Arabia’s pilgrim program."
Airbus Chief Executive Officer, Commercial Aircraft, Christian Scherer said, "We are delighted to expand our partnership with flynas through this significant milestone for both A320neo and A330-900 aircraft. The A330neo will allow flynas to further grow into widebody markets by building on the A320, benefiting from Airbus’ unique commonality. Both aircraft types offer flynas the perfect versatility and economics to expand into new markets while offering their passengers the latest cabin experience and comfort. We look forward to continuing our successful collaboration with flynas as they embark on this exciting new chapter."
The addition of the A330-900 aircraft will support flynas' ambitious growth plans. The airline anticipates significant operational efficiency gains by combining the new widebody aircraft with its existing A320neo fleet. The A330-900 offers increased capacity and range at unrivaled seat costs, ensuring flynas can compete effectively in the growing regional market, a key focus area for the airline.
The A330neo delivers unbeatable operating economics, powered by the latest-generation Rolls-Royce Trent 7000 engines, featuring new wings and a range of aerodynamic innovations resulting in a 25 percent reduction in fuel consumption and CO₂ emissions compared to previous generation competitor aircraft. The A330neo is capable of flying 8,150 nm / 15,094 km non-stop, providing ultimate comfort with more passenger space, a new lighting system, latest in-flight entertainment systems and full connectivity throughout the cabin.
As with all Airbus aircraft, the A330 family is already able to operate with up to 50% Sustainable Aviation Fuel (SAF). The manufacturer is targeting to have its aircraft up to 100% SAF capable by 2030.