- SocGen says it could lose Russian business in “extreme scenario”
- He says he has a $ 20 billion exposure to Russia, but he can handle it
- Intesa Sanpaolo is reviewing its presence in Russia
- The regulators are preparing for the possible closure of VTB Europe – sources
- Russia’s investment in the Norwegian Wealth Fund is useless – CEO
PARIS / FRANKFURT, March 3 – Societe Generale (SOGN.PA) warned on Thursday that Russia could deprive the bank of its local operations, in one of the most serious warnings so far from a Western company about the potential impact of the war in Ukraine.
The French bank, whose $ 20 billion exposure to Russia is one of the largest among foreign creditors, said it was working to reduce risks in the country as European banks reviewed business there amid escalating sanctions against the West.
“The group has more than enough buffer to deal with the consequences of a potential extreme scenario in which the group will be deprived of ownership of its banking assets in Russia,” Societe Generale said. Read more
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Meanwhile, Italy’s largest bank, Intesa Sanpaolo (ISP.MI), is conducting a strategic review of its presence in Russia following Moscow’s invasion of Ukraine, a spokesman said. read more Citigroup also warned of losses.
Bank stocks have been shattered in recent days amid fears of possible write-offs, lower incomes, weaker economies and the effects of sanctions. Their shares traded mostly lower on Thursday.
Regulators are also preparing for the possible closure of Russia’s branch of Russia’s second-largest bank, VTB Bank (VTBR.MM), amid growing concerns about the impact of Western sanctions on the bank, according to two sources familiar with the matter. Read more
If regulators decide to close VTB in Europe, it will mean the second bankruptcy of a major Russian bank in the region as sanctions put pressure on the country’s creditors. Sberbank, Russia’s largest bank, said earlier this week that it was closing most of its European operations. Read more
Many investors in recent days are trying to sell their Russian investments.
Russia’s assets of the $ 1.3 trillion Norwegian wealth fund, the world’s largest, have become useless and will take time to sell, according to government instructions, the fund’s chief executive said on Thursday. Read more
Fitch and Moody’s downgraded Russia’s rating by six notches to “junk” status, saying Western sanctions called into question its ability to service its debt and weaken its economy. Read more
A Societe Generale sign is visible in front of a bank building in Paris, France, August 1, 2021. REUTERS / Sarah Meyssonnier
The index of shares of leading European banks (.SX7P) fell 0.2% in afternoon trading, after small gains on Wednesday, which led only to a small depression in the sharp losses earlier in the week.
The trade took place on Thursday, when the invasion of Ukraine entered its second week and a day after Moscow said it had taken over the Black Sea port of Kherson. Russia calls its actions in Ukraine a “special operation.” Read more
Societe Generale, which earns nearly 3% of its profits in Russia, was one of the banks under pressure as the conflict escalated. Its shares are trading at 1.7% higher, but have fallen by about 20% since the beginning of the year. Read more
“The group conducts its business in Russia with the utmost caution and selectivity, while supporting its historic customers,” the statement said. Read more
The priorities are “to reduce risks and maintain the liquidity of its subsidiary by maintaining a diversified collection of deposits,” he added.
Citigroup Inc (CN) could face billions of dollars in losses in its Russian business and is helping some of its 200 employees in Ukraine leave the country after the Russian invasion, executives said on Wednesday. Read more
The bank’s total exposure to Russia was nearly $ 10 billion at the end of last year, she said on Monday, far higher than previously reported.
The London Stock Exchange Group said the imposition of financial sanctions on Russia would have only a minor impact on its business as it stopped more Russian listings. Read more
LSEG CEO David Schwimmer said the stock exchange had stopped trading 28 listings of Russian companies on Thursday, including energy giants Rosneft and Gazprom, as well as the country’s largest lender, Sberbank.
German bank Helaba said on Thursday that it would refrain from a specific profit forecast for the year, given the uncertainty caused by the situation in Russia.
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Report by Tom Sims, Tasilo Hummel, Gianluca Semeraro, Valentina Za, Frank Siebelt, Hugh Jones and Gwladis Fouche; edited by Mark Potter
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