Updates from June 4, 2024

Russia’s two largest banks expect to open branches and offices in July in the regions of Ukraine that Moscow claimed to have annexed in 2022, the heads of Sberbank and VTB said on Tuesday.

Russian President Vladimir Putin moved to annex Ukraine’s Donetsk, Luhansk, Kherson and Zaporizhzhia regions in September 2022, following what Ukraine said were sham referendums. The move was condemned by many countries as illegal.

Russian forces only partly control the four regions.

State-owned Promsvyazbank, which has focused on state employees and the defence sector since it was bailed out by the central bank in 2017, has already been opening branches in the four regions, as Russia aims to provide civilians and soldiers with cheap credit and banking services.

“Within one and a half months our first 16 branches should open there,” Sberbank CEO German Gref said in Russia’s upper house of parliament on Tuesday. “So we will be present throughout the whole country’s territory.”

No. 2 lender VTB will open two offices in Luhansk in July and plans to start servicing clients in Donetsk and the port city of Mariupol in the Donetsk region by the end of the year, CEO Andrei Kostin said on Tuesday.

VTB’s branches there will serve retail clients and small and medium-sized businesses.

— Reuters

Photos published via Getty Images on Tuesday showed Ukrainian servicemen and civilians decorating an installation in the western Ukrainian region of Lviv to commemorate children killed during Russia’s war in Ukraine.

The United Nations recognizes June 4 as the International Day of Innocent Children Victims of Aggression.

Ukrainian first lady Olena Zelenska said Tuesday that 550 children have been killed in Ukraine since the beginning of Russia’s full-scale invasion.

“I once again appeal to the international community: help us save our children. We cannot measure the value of their lives by the cost of air defense systems. Therefore, I appeal to everyone here: our children need to be saved,” Zelenska said in a statement.

Other photos showed residents working to remove debris following an overnight missile strike in Dnipro, Ukraine.

Ukrainian President Volodymyr Zelenskyy’s chief of staff said Tuesday that using Western weapons to strike Russian territory could change the course of the war.

“Permission to use Western weapons on the territory of the Russian Federation is an extremely important decision,” Andriy Yermak said on Telegram.

“Russian tactical aviation will not be able to be safe on the long approaches to the Ukrainian border,” he said, adding that “this will affect the conduct of the war, the planning of counteroffensive actions, and will also impair the Russians’ ability to use forces in the border area.”

Yermak’s comments come amid an apparent relaxation among Ukraine’s international allies over the use of Western weapons to strike targets within the Russian Federation. Several countries, including the U.K. and U.S., have recently given their blessing for Ukraine to use the weapons in such a way, within reason.

Last week, U.S. President Joe Biden gave Ukraine permission to use American-supplied weapons to strike targets in Russia, but only near the northeastern Kharkiv border region where a Russian offensive is in full swing.

— Holly Ellyatt

The Kremlin said countries that were not planning on attending a forthcoming Ukraine peace summit in Switzerland did not want to “waste time” doing so.

Kremlin Press Secretary Dmitry Peskov told reporters Tuesday that the reluctance of a number of countries to participate in the Swiss conference on Ukraine was “understandable.”

“As for the non-participation of a number of countries, this is an absolutely understandable position. Countries do not want to take part in an event in which there is no goal setting,” Peskov told reporters, news agency RIA Novosti reported. He then described the summit as “a completely absurd activity, such an idle pastime.”

Russia is not attending the summit on June 15-16 in the Swiss resort of Bürgenstock, having repeatedly said it would not attend even if it was invited. The summit’s Swiss organizers said they did not invite Russia due to Moscow saying it would not attend. Moscow has said the event is meaningless and futile without its participation, while significant global players such as China are not attending because Russia is not involved. Ukraine has accused China of trying to sabotage the summit, which it denies.

Russia and Ukraine remain miles apart on how peace might be achieved. Kyiv says it will not hold talks with Russia while its forces remain on Ukrainian territory, while Russia now claims four Ukrainian regions that are partially occupied as part of the Russian Federation.

Earlier Tuesday, a Russian Foreign Ministry official derided Ukraine’s invitation to other former Soviet republics to attend the summit, saying the invitations had “gone unanswered.”

— Holly Ellyatt

China denied allegations by Ukraine’s president that Beijing is pressuring other countries not to attend an upcoming Ukraine peace summit, with the foreign ministry claiming that Beijing’s position on the matter remains “fair and just.”

Ukrainian President Volodymyr Zelenskky had levied the charge during the Shangri-La Dialogue in Singapore on Sunday, claiming Russia was using Beijing’s influence in Asia to disrupt the peace talks in June.

The Kremlin denied an allegation that it is waging a disinformation campaign against France, its president and the 2024 Olympic Games in Paris.

The Microsoft Threat Analysis Center (MTAC) said on Sunday that “Russia is ramping up malign disinformation campaigns against France, French President Emmanuel Macron, the International Olympic Committee (IOC), and this summer’s Olympic Games in Paris.”

The MTAC said it had observed “old tactics blending with artificial intelligence (AI) in malign activity that may intensify as the 2024 Paris Opening Ceremony approaches.” It said the operations had two principal aims, to “denigrate the reputation of the IOC” and to “create the expectation of violence breaking out in Paris at the Games.”

On Tuesday, Kremlin Press Secretary Dmitry Peskov characterized the MTAC’s accusations against Russia as sweeping criticism and slander, news agency RIA Novosti reported.

Russia has frequently lambasted the Olympic Games after Russian and Belarusian athletes were banned from participating in the competition under the Russian or Belarusian flags.

They are able to compete as “neutral” competitors. The IOC has said that athletes who actively support the war, or who are contracted to the Russian or Belarusian military or national security agencies, cannot compete.

— Holly Ellyatt

Sixteen high-rise buildings, 31 houses, a school and a hospital were among the buildings damaged in a Russian missile attack on the central Ukrainian city of Dnipro Tuesday morning, according to the city’s mayor.

“As of 09.00, more than 10 houses of the housing and utility sector were damaged. Nearly 300 windows. Six buildings of homeowners’ association. Approximately 100 windows. A hospital and a clinic. Approximately 70 windows. A school. 31 private houses,” Dnipro Mayor Borys Filatov said in a post on Telegram.

Local officials said earlier that the missile attack had injured seven people, including two children. CNBC was unable to immediately verify the reports.

— Holly Ellyatt

Russia has poured scorn on Ukraine’s attempts to invite its former Soviet allies to a forthcoming peace summit in Switzerland, saying the invitation had been rejected by its neighbors.

Russia’s Deputy Foreign Minister Mikhail Galuzin told Russian news agency Tass that Ukrainian President Volodymyr Zelenskyy and his Western allies had “begged” the leaders of the countries of the Commonwealth of Independent States (CIS), an intergovernmental organization of Russia and former Soviet republics, to attend the conference in Switzerland, but claimed the invitation was refused.

“Heavy artillery was used: Zelenskyy and his Western “friends” began to personally call and beg the leaders of the Commonwealth states to take part in this “gathering”. We know that none of them succumbed to such persuasion,” the deputy minister said in excerpts of an interview due to be published in full on Wednesday.

“Kyiv and its Western handlers actively sought to attract representatives from the countries of the global South and East. Of course, they did not ignore our partners in the CIS. We know for sure that they were regularly sent invitations that remained unanswered,” Galuzin said. CNBC was unable to verify the claim.

Russia jealously guards its influence over the CIS, which includes Russia, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Meanwhile, Western countries have tried to strengthen their relations with several member countries of CIS, much to Russia’s disdain.

Galuzin claimed that the summit, which Russia has refused to attend (and has not been invited as a result) was “an attempt to hastily put together an anti-Russian coalition and present an ultimatum to Russia, to create the appearance of global support for the impractical ‘Zelenskyy [peace] formula’,” he said, repeating Moscow’s statement that the peace summit was doomed to fail without Russia’s participation.

Russia is sensitive over what it sees as Western encroachment on its own backyard, particularly as the CIS’ membership has dwindled in recent years. The Baltic States chose not to participate in the organization when it was founded after the collapse of the Soviet Union in 1991.

Georgia withdrew its participation after a short-lived war with Russia in 2008, and Moldova suspended its involvement after Russia’s invasion of Ukraine in February 2022. Kyiv formally ended its participation in the CIS in 2018.

— Holly Ellyatt

Russia signaled Tuesday that it could completely end the adoption of Russian children by foreigners amid deeply troubled relations with Western countries.

“It appears that the emerging international situation and the resulting significant changes in bilateral relations with Western countries will ultimately lead to a complete cessation of foreign adoption of Russian children in the near foreseeable future,” Maria Lvova-Belova, Russia’s commissioner for children’s rights, said in an annual report published by Russian media outlet Tass.

The report showed the share of children adopted by foreigners continues to decline. In 2023, foreign citizens adopted only six out of the 2,243 total number of children placed for adoption. In 2022, the year Russia invaded Ukraine, 57 children were adopted by foreigners.

In 2023, citizens of only two countries adopted children from the Russian Federation: Italy (five children) and France (one child), Tass reported.

It’s not the first time that adoption has been a battleground between Russia and the West, with Moscow previously restricting or suspending the adoption of Russian children by foreigners. Russia banned U.S. citizens from adopting Russian children back in 2013.

Russian air defenses intercepted 20 Ukrainian drones in the Russian border region of Kursk on Monday, the region’s acting governor said.

Alexei Smirnov accused Ukrainian forces of attacking nine villages in the southern border region but said no one was hurt in what he described as an attack using drones and explosives dropped from helicopters.

“20 Ukrainian drones in border areas were eliminated and rendered harmless by means of electronic warfare,” Smirnov said on Telegram. CNBC could not independently verify the reports and Ukraine has not commented on the attack, one of the latest in a long line of strikes on Russian border regions.

Such attacks prompted Russian forces to launch a new offensive in the northeast Kharkiv region of Ukraine last month as they look to create what Russian President Vladimir Putin described as a “buffer zone” to protect Russian border regions from attack.

— Holly Ellyatt

A Russian missile attack on the central city of Dnipro injured seven people, including two children, and damaged civilian infrastructure in early hours of Tuesday, local authorities said.

The Ukrainian air force said it shot down two Iskander-K cruise missiles over the region. The missile debris damaged civilian infrastructure, causing a fire and injuring residents, according to Serhiy Lysak, the regional governor.

Two boys were among those injured, in addition to five adults, based on preliminary information from the governor.

The attack damaged cars and knocked windows out in residential buildings and a hospital, Lysak wrote via Telegram messaging app.

Russian forces also launched four drones in the overnight attack — Ukrainian air force said it shot down two of them over the northern region of Chernihiv.

— Reuters

Russian Deputy Foreign Minister Sergei Ryabkov on Monday warned the U.S. against the potential “fatal consequences” of allowing Kyiv to deploy U.S.-supplied weapons against targets inside Russia.

“I would like to warn American leaders against miscalculations that could have fatal consequences. For some unknown reason, they underestimate the seriousness of the rebuff they may receive,” Ryabkov said, according to Google-translated comments carried by Russian state news agency Tass.

He noted that Russian President Vladimir Putin had repeatedly addressed the topic, giving “a very significant warning, and it must be taken seriously, with the utmost seriousness.”

Last week, U.S. Secretary of State Antony Blinken said the White House had approved a Ukrainian request to deploy U.S.-supplied weapons against targets in Russian territory, on the border near Ukrainian city Kharkiv. This use was authorized for the limited purpose of defending Kharkiv.

Read more here

— Ruxandra Iordache