Factbox: Global banks are paying the price for Russia’s withdrawal

MILAN, May 24 (Reuters) – Major international banks with exposure to Russia built up more than 11 billion euros ($12 billion) in provisions in the first quarter to prepare for possible losses.

Here is the detail of the actions taken by the most exposed banks:

(data in millions of euros)

EUROPEAN BANKS

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RAIFFEISEN BANK INTERNATIONAL (RBI) (RBIV.VI)

RBI is gauging interest from potential buyers of its Russian unit – the country’s 10th largest bank. Options include a full or partial sale, as well as a spin-off, but any decision can take time. Read more

Impairment losses more than quadrupled in the first quarter due to 301 million euros in provisions on its activities in Russia and Ukraine. RBI has €2.3 billion exposure to Russia in equity and other capital. It also had a net cross-border exposure of 380 million euros as of April 29.

SOCIETE GENERALE (SOGN.PA)

The French bank has sold the Russian subsidiary Rosbank to Interros Capital, a company linked to Russian oligarch Vladimir Potanin. Read more

The sale, which results in a net loss of about 3.2 billion euros on the income statement but has a negligible impact on capital, rids SocGen of an exposure of 15.4 billion euros to Russia.

SocGen is reducing its cross-border exposure to Russia, which stood at 2.8 billion euros as of March 31. Provisions related to Russia amounted to 354 million euros in the first quarter.

Russia accounted for 2.7% of 2021 net income.

UNICREDIT (CRDI.MI)

The Italian bank reduced its exposure to Russia in the first quarter to 7 billion euros, including by swapping assets with unsanctioned Russian counterparts for operations in Europe.

Escalating international sanctions have thwarted attempts to swap its biggest local asset, AO UniCredit Bank, which is Russia’s 14th-largest bank, two people familiar with the matter said. Swap opportunities are now slim and UniCredit’s aim to generate value from a deal complicates its exit, the sources said.

With a provision of 1.2 billion euros in the first quarter, UniCredit has absorbed more than 70% of the capital affected by the Russian losses which it expects up to 5.2 billion euros in the worst case.

INTESA SANPAOLO (ISP.MI)

The Italian bank, which is conducting a strategic review of its Russian presence, has reserved 800 million euros to cover potential losses on its Russian and Ukrainian activities in the first quarter.

Intesa’s cross-border exposure to Russia before provisions amounted to €3.9 billion as of March 31, net of collateral. The local units Banca Intesa Russia and Pravex Bank Ukraine have additional exposure of €1.1 billion.

The overall exposure, including off-balance sheet items, which CEO Carlo Messina said presented “zero risk”, is 6.1 billion euros.

AGRICULTURAL CREDIT (CAGR.PA)

The French bank set aside 584 million euros against Russia and Ukraine in the first quarter.

It has reduced its exposure to Russia by 1.1 billion euros since the full-scale invasion of Ukraine. As of March 31, it had 3.8 billion euros of exposure to Russia, with an additional 600 million euros off-balance sheet, cross-border exposure.

ING (INGA.AS)

The Dutch bank recorded 834 million euros in Russia-related provisions in the first quarter. Its exposure to Russia amounted to 5.8 billion euros on April 30, against 6.7 billion on February 28. Some 3.3 billion euros are affected by the sanctions.

DEUTSCHE BANK (DBKGn.DE)

The German bank had reduced its overall exposure to Russian credit (including contingent risks) to 2.3 billion euros as of March 31, against 2.9 billion euros three months earlier. It also unwound all major derivative exposures to Russia.

COMMERZBANK (CBKG.DE)

The German lender reduced its net exposure to Russia by more than a third from mid-February to the end of April, bringing it below 1.2 billion euros. The impact of the war in Ukraine increased the provisions for the first quarter to 464 million euros.

CREDIT SUISSE (CSGN.S)

The Swiss bank recorded losses of 206 million Swiss francs ($213.4 million) related to the Russian invasion of Ukraine in the first quarter.

AMERICAN BANKS

CITIGROUP (CN)

Citi reduced its total exposure to Russia from $2 billion to $7.8 billion in the first quarter and said it would lose no more than $3 billion in an extremely adverse scenario, down from an initial estimate of nearly $5 billion.

Citi set aside $1.9 billion during the period against potential losses from direct exposures to Russia and the economic impact of the war. Read more

GOLDMAN SACHS (GS.N)

The overall direct financial impact of Russia and Ukraine related instruments on first quarter revenue was a net loss of approximately $300 million.

JPMORGAN (JPM.N)

The U.S. bank said provisions on individual names linked to Russia accounted for one-third of a total reserve accumulation of $900 million in the first quarter.

JAPANESE BANKS

MIZUHO FINANCIAL GROUP (8411.T), SUMITOMO MITSUI FINANCIAL GROUP (8316.T)

Two of Japan’s biggest banks have set aside $1.3 billion to cover potential losses from their exposure to Russia.

($1 = 0.9595 euros)

($1 = 0.9654 Swiss francs)

($1 = 0.9337 euros)

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Reporting by Valentina Za Editing by Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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