Lloyds withdraws from Rosneft-BP deal

3rd Jun 2014 22:40

Lloyds Banking Group has reportedly withdrawn from a $1.5-$2bn trade finance deal involving Russian oil company Rosneft.The part-government owned lender, as well as Deutsche Bank, HSBC and Bank of China, was a mandated lead arranger on the loan to finance BP's purchase of crude oil and refined products from Rosneft.The loan would be similar to previous such deals Rosneft had with BP or trading houses Glencore and Vitol, Reuters reported, citing banking sources close to the deal. However, Lloyds decided to walk away after several weeks of wrangling.The move highlights the unease among Western banks in funding Russian deals.Lloyds has repeatedly condemned Russia over its actions in Crimea and eastern Ukraine. Rosneft's Chief Igor Sechin was affected by US sanctions as part of a move to punish Russia for the annexation of Crimea."Lloyds' decision to leave the deal is because it does not want to embarrass the government, considering the current political situation with Russia," said one of the bankers. "I think it was scared of going upstairs to ask permission."BP, Rosneft and Lloyds all declined to comment.RD