Raiffeisen shares tumble after short-seller alleges Russia sanctions evasion

Shares of Raiffeisen Bank International ↗ 5.63% fell as much as 9% in Vienna on Thursday after U.S. short-seller Grizzly Research disclosed a short position and alleged the Austrian lender has served as a key channel for circumventing Western sanctions on Russia, with customs records linking its Russian subsidiary to $1.19 billion in trade involving restricted goods.reuters+1

The report, published on Grizzly's website, claims the trade included $106.75 million worth of goods used in Russian weaponry — rifle scopes, battle tank components, and machine tools of the kind used to build nuclear warheads and ballistic missiles. It also documented what Grizzly called $49 million in trade involving at least 33 entities already under sanctions by the U.S., EU, UK, or Ukraine.finance.liga+1

RBI Pushes Back

Raiffeisen rejected the allegations. "We stand by the strength of our compliance systems, which have been reviewed many times — both prior to and since the start of the full-scale invasion," the bank said Thursday, adding that an initial review had found "a number of factually wrong and misleading statements" in the report.cnbc+1

The bank, which has more than 18 million customers from Vienna to Moscow, has said for years it is trying to exit Russia but has failed to complete a sale. Russian officials have opposed a divestiture, wanting to preserve economic ties with Europe. When the Trump administration pursued a rapprochement with Moscow in 2025, Raiffeisen even paused attempts to sell its Russian unit, according to the Financial Times.reuters+1

Trapped Cash and Undercover Claims

Grizzly also challenged RBI's disclosures around cash stuck in Russia. While the bank highlights roughly €700 million in legally restricted funds, Grizzly said more than €12.6 billion is actually trapped in the country, leaving shareholders without an accurate picture of the bank's exposure.investing+1

In an undercover investigation, Grizzly said one Raiffeisenbank manager agreed to a proposed arrangement to trade with Iran in circumvention of U.S. export controls, and several employees indicated that a fund raising money for military drones could open an account. Grizzly called this evidence of "a gap between RBI's public sanctions assurances and the guidance its staff gave prospective clients".grizzlyreports+1

Broader Scrutiny

The report lands amid long-running pressure on Raiffeisen over its Russian operations. In 2024, U.S. authorities warned the bank it could lose access to the dollar system over its Russia dealings, though they never followed through. Grizzly further flagged RBI's sale of Belarusian lender Priorbank to an Abu Dhabi shell company at roughly 60% below book value, calling the deal one that "bears the hallmarks of sanctions circumvention and corruption".reuters+1

Grizzly had previously targeted Italian tire maker Pirelli in June with allegations of concealed ties to Russia, sending that company's stock down more than 13%.finance.liga