Russian Court Orders Seizure of UniCredit, Deutsche Bank and Commerzbank Assets Worth $700 Million

UniCredit, Deutsche Bank and Commerzbank

A St Petersburg court has ordered the seizure of assets worth over €700mn from three western banks — UniCredit, Deutsche Bank, and Commerzbank — according to court documents.

This seizure represents one of the most significant actions against western banks since Moscow’s full-scale invasion of Ukraine, which prompted most international lenders to either withdraw or scale down their operations in Russia.

The move follows the European Central Bank’s directive to Eurozone banks operating in Russia to expedite their exit plans.

The action stems from a claim made by Ruskhimalliance, a subsidiary of Gazprom, the Russian oil and gas giant with a monopoly on pipeline gas exports.

The court has seized assets worth €463mn belonging to Italy’s UniCredit, approximately 4.5 per cent of its assets in Russia, as per the latest financial statement from its main Russian subsidiary.

The frozen assets include shares in UniCredit subsidiaries in Russia, as well as stocks and funds owned by the bank, according to the court decision dated May 16 and published in the Russian registrar on Friday.

Deutsche Bank

In a separate decision also dated May 16, the court ordered the seizure of €238.6mn in assets belonging to Deutsche Bank, including property and holdings in its Russian accounts.

Additionally, the court ruled that Deutsche Bank cannot sell its business in Russia without the approval of Vladimir Putin, as the bank was allegedly taking actions to divest its property in Russia, according to Ruskhimalliance.

Details regarding the seizure of assets from Commerzbank have not yet been made public as of Friday, although the court has decided to seize its assets. Ruskhimalliance requested the court to freeze up to €94.9mn of Commerzbank’s assets.

The conflict with these western banks began in August 2023 when Ruskhimalliance filed a claim in an arbitration court in St Petersburg demanding payment of bank guarantees under a contract with the German engineering company Linde.

Ruskhimalliance operates a gas processing plant and liquefied natural gas production facilities in Ust-Luga near St Petersburg. In July 2021, it signed a contract with Linde for the design, equipment supply, and construction of the complex. However, a year later, Linde suspended work due to EU sanctions.

Subsequently, Ruskhimalliance sought payment from the guarantor banks, which refused, citing concerns that paying the Russian company could violate European sanctions.

UniCredit stated it was aware of the filing and assured that only assets relevant to the case would be affected.

Deutsche Bank claimed to be fully protected by a client indemnification and had made provisions of about €260mn alongside a corresponding reimbursement asset in its accounts to cover the Russian lawsuit.

Russian Court Orders Seizure

Bayerische Landesbank and Landesbank Baden-Württemberg, also listed as guarantors, declined to comment. Commerzbank did not respond immediately to requests for comment.

Italy’s foreign minister has called a meeting on Monday to address the seizures affecting UniCredit, according to sources familiar with the matter. UniCredit, one of the largest European lenders in Russia, employs over 3,000 people through its subsidiary in the country. In the first quarter of this year, its Russian business reported a net profit of €213mn, up from €99mn a year earlier.

The European Central Bank recently pressured Eurozone banks with operations in Russia to provide detailed exit strategies amid escalating tensions between Moscow and the west.

Legal battles over assets held by western banks have complicated their efforts to withdraw from Russia. Last month, a Russian court ordered the seizure of over $400mn from JPMorgan Chase following a legal challenge by the Kremlin-run lender VTB. However, part of the planned seizure was subsequently canceled by the court.

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.