*

CEO says talking to interested parties about Russian

subsidiary

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RBI has been under pressure from US, Europe to pare ties

to

Russia

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RBI's group profit falls 10.7% due to higher provisions

(Releads with profit in Russia, context, detail on RBI's

deposits in Russia and background)

By Alexandra Schwarz-Goerlich and John O'Donnell

VIENNA, May 6 (Reuters) - Austria's Raiffeisen Bank

International increased its profit in Russia in the

first quarter, driven by a stronger rouble, as the most

important Western bank in the country said it was paring back

its business.

Last year, RBI came under intense pressure from the United

States as well as European regulators to pare its ties to

Russia, something it is now doing.

The lender recorded profit before tax of 575 million euros

($651 million), up more than a quarter compared with a year

earlier, as Russia's high interest rates boosted interest earned

on billions stored at the central bank.

Raiffeisen had 10.7 billion euros of Russian deposits and

loans of 4.9 billion euros, a rise on the end of last year but

down from a year earlier, numbers the bank also said were skewed

by a stronger rouble.

During the year from March 2024 to March 2025, the rouble

rose about 12% against the euro, according to LSEG data.

Raiffeisen has been collecting several billions of euros in

profits in Russia, handling valuable international money

transfers and earning high interest on deposits, while paying

customers little.

"We keep working on a sale of our Russian subsidiary and are

talking to several interested parties," said Chief Executive

Johann Strobl, reiterating a message delivered repeatedly during

the more than three years since Russia's invasion of Ukraine.

"It remains to be seen whether geopolitical developments

will facilitate the exit from Russia," he added.

Should Western sanctions on Russia be scrapped as part of a

peace deal for Ukraine, Raiffeisen could potentially unlock the

billions now stranded in Russia.

Overall, RBI's group profit after tax fell 10.7%

to 318 million euros in the first quarter, due in part to higher

provisions for loan defaults and larger costs, including for

staff.

RBI, owned by a powerful Austrian industrial, agricultural

and banking network, has roughly 18 million customers from

Budapest to Moscow and more than 42,000 staff. It is a financial

anchor for Austria and much of eastern Europe.

RBI has repeatedly said it wanted to spin off its Russian

business, although it made little progress on this front.

While many Western governments have shunned Russia, some

Austrian politicians had long been reluctant to sever ties with

a country still thanked for allowing Austria's rehabilitation in

1955 following World War Two. In return, Austria committed to

remain neutral.

($1 = 0.8839 euros)