Explainer-The size of global banks’ Russian exposure by Reuters

© . The skyline with its office buildings and banking district are photographed during sunset as the spread of the coronavirus disease (COVID-19) continues and the German government plans new pandemic control measures in Frankfurt, Germany, Nov. 18 By Valentina Za MILAN () – European Banking Shares have lost a fifth of their value in the past month during the crisis in Ukraine. Western sanctions against Russia after the invasion of Ukraine have rocked the financial sector, but the biggest blow to banks are threats to the global economic outlook and the prospect of higher interest rates. Investors worry that banks will have to increase loan loss provisions again, which had declined after the pandemic-induced peak in 2020. The crisis is also reducing the likelihood of higher interest rates, which would have boosted lending income. However, some banks are also directly exposed. Italian and French banks have the largest exposure to Russia, each representing just over $25 billion at the end of September, followed by Austrian banks with $17.5 billion, Bank of International Settlements https://stats.bis.org/statx/ srs/table/b4? c=RU&f=pdf show data. Exposure to US banks totals $14.7 billion, data from BIS shows. Following are some banks with significant exposure to Russia. EUROPEAN BANKS UNICREDIT Italy’s second-largest bank said a full write-down of its Russian operations, including cross-border and derivatives exposure, would cost about 7.4 billion euros ($8.1 billion), raising its core capital ratio of 15.03%. would rise to about 13% . UniCredit said it would still pay cash dividends for 2021 in the worst-case scenario where it would zero its exposure, while plans for a €2.6 billion share buyback depend on a core capital ratio remaining above 13%. UniCredit said its Russian client’s cross-border exposure amounted to EUR 4.5 billion, net of guarantees of approximately EUR 1 billion. It also has a direct exposure of EUR 1.9 billion (net of currency hedges) to UniCredit Bank Russia, its local arm and Russia’s 14th largest lender. UniCredit could also potentially lose up to 1 billion euros on derivatives if the value of the ruble fell to zero. RAIFFEISEN BANK INTERNATIONAL (RBI) RBI has been operating in Russia since the collapse of the Soviet Union, and its operations there contributed nearly a third to net profit of EUR 1.5 billion last year. RBI’s Russian operations have EUR 2.4 billion in capital, or 18% of consolidated shareholders’ equity. Russia’s tenth largest bank by assets, employs approximately 8,700 people. RBIs said its total Russian exposure was EUR 22.85 billion file:///C:/Users/u8018106/OneDrive%20-%20Thomson%20%20Incorporated/Desktop/2022-02-02%20Presentation%20RBI.pdf to at the end of last year, more than half related to the private business sector. The total amount includes 11.6 billion euros in customer loans (or 11.5% of the group), more than 80% in rubles. Cross-border exposure to Russia is only 1.6 billion euros without parent funding from Vienna. RBI also has 2.2 billion euros in loans to Ukrainian customers. SOCIETE GENERALE Societe Generale (OTC:), which controls Rosbank, had 18.6 billion euros https://www.societegenerale.com/sites/default/files/documents/2022-02/Q4-21-Financial-Results-Presentation .pdf of the total exposure to Russia at the end of last year – or 1.7% of the group total. More than 80%, or 15.4 billion euros, is locally owned by Rosbank, while the cross-border exposure amounts to 3.2 billion euros, including 600 million euros off balance sheet items. The French bank, which started doing business in Russia in 1872, left in 1917 and returned in 1973, said its Russian operations represented 2.7% of the group’s net income in 2021. Last week, it said it would withstand an extreme scenario where its Russian operations would be confiscated, which would save just half a percentage point from its core capital. Of SocGen’s Russian exposure, 41% is retail and 31% corporates. The exposure to Russian sovereign entities amounts to 3.7 billion euros. CREDIT AGRICOLE The French bank said its total exposure to Russia, including both onshore and offshore items, amounted to 6.7 billion euros, or 0.6% of its total commercial loan portfolio as of December 31. That includes 2.9 billion euros in offshore exposure to 15 major Russian companies, mainly producers and exporters of raw materials. Credit Agricole (OTC:) operates in Ukraine and Russia through two wholly owned subsidiaries. Crédit Agricole Ukraine has 226 million euros in equity. That of the Russian branch CACIB AO, a subsidiary of Crédit Agricole CIB, stands at 150 million euros. Credit Agricole said it was closely monitoring its exposure to Russia but would not have an impact on its 2021 dividends. BNP PARIBAS The French bank made a total exposure of around 3 billion euros ($3.3 billion) on Wednesday. announced to Russia and Ukraine, sticking to its previously announced financial targets for 2025. INTESA SANPAOLO Italy’s largest bank has financed major investment projects in Russia, such as the Blue Stream gas pipeline. It handles more than half of all commercial transactions between Italy and Russia. Intesa’s credit exposure to Russia amounted to 5.57 billion euros at the end of 2021, or 1.1% of the total. Its subsidiaries in Russia and Ukraine have assets of EUR 1 billion and EUR 300 million respectively, which together represent only 0.1% of the group total. Intesa has said it is conducting a strategic review of its Russian presence. ING The Dutch bank has approximately EUR 4.5 billion in outstanding loans from Russian customers and approximately EUR 600 million from customers in Ukraine, out of a total loan portfolio of more than EUR 600 billion. UBS The Swiss bank said Monday that its direct country risk exposure to Russia accounted for $634 million of its total emerging markets exposure of $20.9 billion at the end of 2021. US BANKS CITIGROUP Citi said last week that its aggregate exposure to Russia was close to $10. billion and that it was in the process of phasing it out. That includes third party exposure worth $8.2 billion, of which $1.0 billion in cash with the Bank of Russia and other financial institutions and $1.8 billion in reverse repos. Citi also has $1.6 billion in exposures to additional Russian counterparties outside of its Russian subsidiary that are not included in that $8.2 billion. In comparison, Goldman Sachs (NYSE:) reported $293 million in net exposure to Russia last month, as well as a total of $414 million in market exposure as of December 2021. ($1 = 0.9016 euros)

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