A closer look: which international banks are exposed to Russia?

MILAN (Reuters) – The latest wave of sanctions against Russia over its invasion of Ukraine has deepened turmoil in the global banking sector, as Western countries try to pressure Moscow’s access to liquidity for its economy and international trade.

Some Russian banks will be excluded from the international payments system SWIFT, and most importantly, other sanctions target the country’s central bank to prevent it from using its foreign reserves. Read more

These moves are aimed at undermining Moscow’s ability to bypass broader economic sanctions but they also affect Western banks exposed to the Russian economy.

The European arm of Sberbank (SBER.MM)The European Central Bank, Russia’s largest bank, said it was facing failure, after its deposits were jostled by the crisis. Read more

In Europe, Italian and French banks have the largest Russian exposure, each accounting for just over $25 billion at the end of September, followed by Austrian banks with $17.5 billion, according to data from Bank for International Settlements Presentation (BIS).

The total exposure of US banks reached $14.7 billion, according to data from the Bank for International Settlements.

Below are some of the banks with significant Russian exposure.

US banks

CITIGROUP INC (CN)

On Monday, the US bank said its total exposure to Russia was nearly $10 billion.

Citigroup ranks Russia 21st among the 25 most exposed countries with $5.4 billion in loans, securities and financing commitments at the end of 2021 – 0.3% of total exposures based on regulatory filing.

On Monday, Citigroup provided more details, bringing the number of “total third-party exposure” to $8.2 billion. This includes $1.0 billion in cash at the Bank of Russia and other financial institutions and $1.8 billion in reverse repurchase agreements.

Citigroup also said it had $1.6 billion in exposures to additional Russian parties outside its Russian subsidiary that were not included in that $8.2 billion. Read more

For comparison, Goldman Sachs Group Inc (GS.N) It mentioned in a report last month $293 million in net exposure to Russia, in addition to a total of $414 million in market exposure as of December 2021.

European banks

RAIFFEISEN INTERNATIONAL (RBI) Bank (RBIV.VI)

The Russian business of the Austrian lender is considered as the state The ninth largest bank in terms of loans. It has total assets of 15.8 billion euros, and employs about 8,700 employees to serve more than 4.5 million customers.

Equity of €2.4 billion represents 18% of consolidated equity.

The Reserve Bank of India has operated in Russia since the collapse of the Soviet Union, and its business there contributed about a third of the group’s 1.5 billion euros ($1.66 billion) net profit last year. Read more

The company said in the results of its 2021 presentation that the total exposure of the Reserve Bank of India in Russia amounted to 22.85 billion euros, more than half related to the corporate private sector.

Russia’s central bank accounts for 8% of the country’s RBI’s exposure, sovereigns at 4% and Russian banks at 2%, based on presentation.

The total figure includes 11.6 billion euros in loans to customers (or 11.5% of the pool), more than 80% of which are in Russian rubles.

The exposure to Russia across the border is only 1.6 billion euros without funding from Vienna. Raiffeisen also holds 2.2 billion euros in loans to Ukrainian clients.

The provisions for losses cover 64.3% of the deteriorating RBI exposures in Russia.

Reserve Bank of India CEO Johan Strobel told Reuters this week that the Russian subgroup “has a very strong liquidity position and (was) recording inflows.”

General Assembly (SOGN.PA)

Société Générale began doing business in Russia in 1872 and then left the country in 1917, the year of the Bolshevik Revolution, and returned in 1973. It has 1.5 million domestic customers.

Societe Generale, which controls Russia’s Rosbank, had 18 billion euros Of the total exposure to Russia at the end of last year – or 1.7% of the total group.

This includes both on- and off-balance sheet items (for example, a credit line that has not yet been exploited).

Of Societe Generale’s exposure in Russia, 39% to the corporate sector and 36% to retail. Sovereign entities represent 21% and financial institutions 4%.

Actual loans grew 13.3% last year to €10.5 billion.

Russia’s retail business – to which on average €1.05 billion of capital was allocated last year – generated €115 million in net income in 2021, up from €37 million in 2020. Including financial services, net income in SG Russia 152 million euros, compared to 76 million in 2020.

The bank said it had implemented measures to adapt to the new sanctions and that Rosbank had continued to operate in a “safe manner”.

Unicredit (CRDI.MI)

The Russian branch of the Italian bank ranks 14th among the largest banks in the country. UniCredit’s Russian equity of 2.3 billion euros represents 3.7% of the total pool.

UniCredit’s total exposure in default with respect to Russia was €14.2 billion as of mid-2021.

Of this amount, there are about 8 billion euros in loans provided by the Russian arm and financed locally.

The rest includes off-balance sheet items and cross-border loans granted primarily by UniCredit SpA towards large companies outside Russia.

UniCredit said last week that its franchise in Russia accounts for only about 3% of group revenue and provisions cover 84% of non-operating exposures.

INTESA SANPAOLO (ISP.MI)

Italy’s largest bank has financed major investment projects in Russia, such as the Blue Stream gas pipeline and the sale of a stake in oil producer Rosneft. (ROSB.MM). It handles more than half of all commercial transactions between Italy and Russia.

Intesa loan exposure to Russia was 5.57 billion euros by the end of 2021or 1.1% of the total.

Its subsidiaries in Russia and Ukraine have assets, respectively, of 1 billion euros and 300 million euros, which together represent only 0.1% of the group’s total assets.

Action (INGA.AS)

The Dutch bank has about 4.5 billion euros in outstanding loans with Russian clients and about 600 million euros with customers in Ukraine, out of a total loan book of more than 600 billion euros.

ING said several sanctions against Russia have been in place since 2014.

(1 dollar = 0.9016 euros)

Additional reporting by Brianna Hughes Negawe in Zurich, Toby Sterling in Amsterdam, Alexandra Schwarz-Gurlich in Vienna and Elizabeth Dilts in New York; Editing by John O’Donnell, Andrew Heavens and Jane Merriman

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