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EBRD To Shut Five Russian Offices In 2018 Amid Ban On Lending

(illustrative photo)
(illustrative photo)

The European Bank for Reconstruction and Development (EBRD) says it will shut five of its seven offices in Russia next year, as the London-based lender pursues a ban on new investment loans in the country.

EBRD spokesman Jonathan Charles said on October 3 that the bank "will be closing five small regional offices in Yekaterinburg, Krasnoyarsk, Rostov-on-Don, Vladivostok, and Samara at the end of first quarter 2018."

However, the Moscow and St. Petersburg branches will remain open.

The EBRD imposed a freeze on lending in Russia after Moscow's illegal annexation of Ukraine's Crimean Peninsula in March 2014 and support for separatists in eastern Ukraine.

Moscow accused the EBRD of becoming a "tool" of western foreign policy in May after the board of governors of the lender rejected its call to overturn the ban.

Despite the ban, the bank is still managing more than 3 billion euro ($3.5 billion) worth of investments in the country.

The bank had around 160 personnel in its seven offices before the 2014 Ukraine crisis, according to the Reuters news agency. Since then, roughly half of those staff have either moved elsewhere in the bank or left it altogether.

"I deeply regret that the EBRD lost Russia, it's largest and most profitable market," said Russia's representative at the EBRD in London, Denis Morozov. "It's also very sad that the bank cannot any more deliver on its mandate and help to change Russia to a better place."

Created after the 1991 collapse of the Iron Curtain, the EBRD loaned billions of dollars to former Soviet republics and Eastern Bloc countries before expanding its reach outside of the region. It currently has investments and trade guarantees in more than 30 countries.

The EBRD's biggest shareholders are the members of the Group of Seven (G7) most industrialized nations -- Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

With reporting by Reuters and TASS
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