MILAN/LONDON: Italy's UniCredit and France's BNP Paribas were the latest banks to set out their Russian exposures, warning of billions of euros in potential costs from the financial fallout from Moscow's invasion of Ukraine.
Banks, insurers and asset managers have been scrambling to distance themselves from Russia and assess their exposures after Moscow was hit with heavy sanctions by the West in the wake of the invasion of Ukraine that began last month.
Russia calls its actions in Ukraine a “special operation”.
BNP Paribas has also cut off its Russia-based workforce from its internal computer systems as it seeks to bolster its defences against any potential cyberattack, a source with direct knowledge of the matter told Reuters.
The French lender is believed to be the first major bank to have excluded staff in Moscow from its IT networks.
Citigroup Inc said yesterday it is operating its Russian consumer business on a more limited basis following the country's invasion of Ukraine, while sticking with its previous plans to divest the franchise.
Deutsche Bank, meanwhile, said yesterday its exposure to financial markets in Russia and Ukraine was very limited. Deutsche Bank has reduced its Russian exposure and local footprint significantly since 2014, with further reductions in the past two weeks, the bank added.
The European Union agreed new sanctions against Russia and its ally Belarus on Wednesday that blacklist 14 more oligarchs and freeze relations with Belarus' central bank and three top lenders there.
Financial information provider S&P Global added to the growing list of companies to suspend commercial operations in Russia, a day after Britain's London Stock Exchange Group stopped some services in the country.
Italy's second-biggest bank, UniCredit, said late on Tuesday that a full write-off of its Russian business would cost it around €7.4 billion (RM33.9 billion).
BNP Paribas said it had a total exposure of around €7.3 billion to Russia and Ukraine, which it said was relatively limited.
Shares in Europe's major financial firms have fallen sharply since Russia's invasion of Ukraine, as investors took fright at some institutions' exposure to Russia and braced for a potential broader economic slowdown.
UniCredit said a worst-case scenario would knock 2 percentage points off its capital ratio, but nonetheless stuck with its dividends and share buyback plans.
Shares in UniCredit rebounded 11.68% and BNP Paribas 9.95%, with the wider Stoxx index of European banks up 7.49% on the day, staging a partial rebound after recent falls.
Among European banks, Austria's Raiffeisen Bank International and France's Societe Generale have the largest Russian exposure. – Reuters
