Russia Freezes 2 European Bank Assets

A Russian court has ordered the seizure of assets, accounts, and properties of Germany's Deutsche Bank within Russia.

This action is part of a legal dispute involving the bank, as detailed in court documents.

Deutsche Bank was one of the guarantor lenders under a contract for constructing a gas processing plant in Russia with the German company Linde, which was terminated due to Western sanctions.

The lawsuit was filed by Roschem Alliance, a St. Petersburg-based joint venture in which the Russian gas giant Gazprom holds a 50% stake. Roschem Alliance manages the gas processing project.

The St. Petersburg Arbitration Court has prohibited Deutsche Bank from disposing of its 100% stake in its Russian subsidiary, as well as the Deutsche Bank Technology Center.

Additionally, the court has ordered the seizure of assets valued at up to €238.6 million ($259 million) from Deutsche Bank, including securities, real estate, and bank accounts. This includes assets of the bank's Russian subsidiary and the Deutsche Bank Technology Center.

Deutsche Bank in Frankfurt stated that it had already allocated approximately $260 million for this issue. The bank added that it needs to assess how the Russian courts will implement the claim and evaluate the immediate operational impact in Russia.

On Friday, the Russian court also ordered the seizure of assets, accounts, and properties of UniCredit Bank, along with shares in two of its subsidiaries.

The St. Petersburg and Leningrad Region Arbitration Court decided to freeze UniCredit's assets in Russia, following a €462.7 million ($503 million) lawsuit filed by a subsidiary of Gazprom.

Court documents dated May 16 indicate that the court froze assets of UniCredit Bank registered in Munich, Germany, and UniCredit Bank AO, based in Moscow. Shares in two other Russia-based companies linked to the banks, as well as bank accounts and real estate assets, were also frozen.

Bloomberg News reported that Gazprom and Ros Gaz Dobycha filed lawsuits totaling over $1 billion against several European banks that had supported a major natural gas project in Russia, which was affected by Western sanctions imposed following Russia's invasion of Ukraine in February 2022.

UniCredit, headquartered in Milan, operates in Russia through a branch network of about 3,100 employees and more than 50 branches.

The bank stated it had allocated over €800 million to cover its potential losses in Russia since 2022 and has reduced its loan portfolio there by about two-thirds.

Earlier this month, UniCredit CEO Andrea Orcel said the bank would continue operations in Russia while complying with Western sanctions, noting the difficulty of completely exiting the Russian market at present. 

According to the Russian court, the lawsuit against UniCredit was paused due to ongoing legal proceedings between the parties in the UK.