MILAN — The newest wave of sanctions on Russia over its Ukraine invasion has thrown the worldwide banking trade deeper into turmoil, as Western international locations attempt to squeeze Moscow’s entry to money for its economic system and international commerce.
Some Russian banks shall be excluded from the SWIFT international funds system and, crucially, different sanctions goal the nation’s central financial institution to cease it from utilizing its overseas reserves.
The strikes goal to undermine Moscow’s capacity to climate the broader financial sanctions however in addition they impression Western banks which are exposed to Russia’s economic system.
The European arm of Sberbank, Russia’s largest lender, faces failure, the European Central Financial institution has mentioned, after a run on its deposits sparked by the disaster.
In Europe, Italian and French banks have the most important Russian publicity, representing simply over $25 billion every on the finish of September, adopted by Austrian banks with $17.5 billion, knowledge by the Bank of International Settlements (BIS) present.
The publicity of US banks totals $14.7 billion, in accordance to BIS knowledge.
Following are among the banks with vital Russian publicity.
The US financial institution on Monday mentioned its whole publicity to Russia amounted to almost $10 billion.
Citigroup listed Russia as 21 amongst its prime 25 nation exposures with $5.4 billion of loans, securities and funding commitments at end-2021 — 0.3% of general exposures primarily based on a regulatory submitting.
On Monday, Citigroup gave extra particulars, taking the depend for “total third-party exposure” to $8.2 billion. That features $1.0 billion in money on the Financial institution of Russia and different monetary establishments and $1.8 billion of reverse repos.
Citigroup additionally mentioned it has $1.6 billion of exposures to further Russian counterparties exterior of its Russian subsidiary that are not included in that $8.2 billion.
As a comparability, Goldman Sachs Group Inc reported in a submitting final month $293 million in internet publicity to Russia, in addition to a complete of $414 million of market publicity as of December 2021.
RAIFFEISEN BANK INTERNATIONAL (RBI)
The Austrian lender’s Russian enterprise ranks because the nation’s ninth largest bank by loans. With general belongings of 15.8 billion euros, it employs round 8,700 workers to serve greater than 4.5 million prospects.
Its fairness of two.4 billion euros represents 18% of consolidated fairness.
RBI has operated in Russia because the collapse of the Soviet Union and its enterprise there contributed nearly a 3rd to the group’s internet revenue of 1.5 billion euros ($1.66 billion) final 12 months.
RBI’s Russian publicity totalled 22.85 billion euros, greater than half relating to the company non-public sector, it mentioned in its 2021 outcomes presentation.
Russia’s central financial institution accounts for 8% of RBI’s publicity to the nation, sovereign entities for 4% and Russian banks for two%, primarily based on the presentation.
The general determine includes 11.6 billion euros in buyer loans (or 11.5% of the group), greater than 80% of which are in Russian rubles.
Cross-border publicity to Russia is only one.6 billion euros with no mum or dad funding from Vienna. Raiffeisen additionally holds 2.2 billion euros in loans to Ukrainian prospects.
Provisions towards losses cowl 64.3% of RBI’s impaired exposures in Russia.
RBI Chief Government Johann Strobl instructed Reuters this week that the group’s Russian subsidiary “had a very strong liquidity position and [was] recording inflows.”
Societe Generale began doing enterprise in Russia in 1872 then left the nation in 1917, the 12 months of the Bolshevik revolution, to return in 1973. It has 1.5 million native prospects.
Societe Generale, which controls Russian financial institution Rosbank, had 18 billion euros of general publicity to Russia on the finish of final 12 months – or 1.7% of the group whole.
That features each on- and off-balance sheet gadgets (for instance a credit score line that has not but been tapped).
Of SocGen’s Russian publicity, 39% is to the company sector and 36% to retail. Sovereign entities account for 21%, monetary establishments for 4%.
Precise loans grew 13.3% final 12 months to 10.5 billion euros.
Its Russian retail enterprise — to which 1.05 billion euros of capital was allotted on common final 12 months — produced 115 million euros in 2021 internet earnings, up from 37 million euros in 2020. Together with monetary companies, internet earnings at SG Russia was 152 million euros, versus 76 million in 2020.
The financial institution mentioned it had applied measures to adapt to the brand new sanctions and that Rosbank continued to function in a “safe manner.”
The Italian financial institution’s Russian subsidiary ranks because the nation’s 14th largest financial institution. UniCredit Russia’s 2.3 billion euros in fairness accounts for 3.7% of the group’s whole.
UniCredit’s “exposure at default” relating to Russia totaled 14.2 billion euros as of mid-2021.
Of that, round 8 billion euros are loans prolonged by the Russian arm and regionally funded.
The remaining contains off-balance sheet gadgets and cross-border loans primarily granted by UniCredit SpA in direction of massive corporates exterior of Russia.
UniCredit mentioned final week its Russian franchise accounted for less than round 3% of group revenues and provisions coated 84% of its non-performing exposures.
Italy’s largest financial institution has financed main funding initiatives in Russia, such because the Blue Stream fuel pipeline and the sale of a stake in oil producer Rosneft. It handles greater than half of all industrial transactions between Italy and Russia.
Intesa’s mortgage publicity to Russia was 5.57 billion euros on the finish of 2021, or 1.1% of the entire.
Its subsidiaries in Russia and Ukraine have belongings, respectively, of 1 billion euros and 300 million euros, which collectively signify simply 0.1% of the group’s whole belongings.
The Dutch financial institution has round 4.5 billion euros in excellent loans with Russian shoppers and round 600 million euros with shoppers in Ukraine, out of a complete mortgage e-book value greater than 600 billion euros.
ING mentioned many sanctions towards Russia had been in place since 2014. — Valentina Za/Reuters