After failing to repay a loan to a sanctioned bank, Credit Suisse, Switzerland’s second-largest bank, has been banned from disposing of shares in its Russian unit. In addition, a Moscow court seized EUR 10 million from the bank.
According to Reuters, an arbitration court in Moscow ruled in favor of private bank Transcapitalbank (TCB) in a dispute over a EUR 10 million loan that prevented Credit Suisse from disposing of its shares in two Russian subsidiaries.
A one-month appeal period has been given to Credit Suisse, according to the ruling. Credit Suisse acted as an agent for Uzbekistan-based Uzauto Motors in a syndication deal last year.
The Moscow arbitration court says Credit Suisse failed to transfer the loan repayment from Uzauto Motors to TCB by April 19, when the agreement was due. The US Treasury sanctioned TCB, saying it was “at the center of sanctions evasion” and had been touting its ability to avoid sanctions on Russia’s financial sector in order to win business in China and the Middle East.
The TCB had asked the court to force the recovery of the 10-million-EUR loan, claiming that sanctions against Russia and Credit Suisse’s winding down of its operations in Russia made getting the funds more difficult.
Raiffeisen, UniCredit and Citi are still exploring their options despite some foreign banks, such as Societe Generale, selling their assets in Russia. As a response to Western sanctions against its financial sector, Russian officials plan to block foreign banks from selling their Russian units.
Assets Frozen
In May, Credit Suisse froze CHF 10.4 billion of wealthy clients’ assets in the first quarter of 2022 under sanctions imposed in connection with Russia’s invasion of Ukraine. The bank’s financial report stated that the freezing of assets due to sanctions had an impact of CHF 10.4 billion on its wealth management assets.
Moreover, less than 4% of the assets under management at the bank’s wealth management businesses are managed by Russians.
