MILAN, March 1 – The latest wave of sanctions against Russia over its invasion of Ukraine has plunged the global banking industry even deeper into turmoil as Western countries try to squeeze Moscow’s access to money for its economy and international trade.

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

The moves are intended to undermine Moscow’s ability to withstand broader economic sanctions, but also affect Western banks that are exposed to the Russian economy.

Sberbank’s European arm (SBER.MM), Russia’s largest lender, is facing failure, the European Central Bank said after a reduction in deposits caused by the crisis. Read more

In Europe, Italian and French banks have the largest exposures in Russia, with just over $ 25 billion each at the end of September, followed by Austrian banks with $ 17.5 billion, according to the Bank of International Settlements (BIS).

The exposure of American banks amounts to 14.7 billion dollars, according to BIS.

Here are some of the banks with significant Russian exposure.

US BANKS

CITIGROUP INC (CN)

The US bank said on Monday that its total exposure to Russia was close to $ 10 billion.

Citigroup ranked Russia as 21 among its 25 largest exposures in countries with $ 5.4 billion in loans, securities and financing commitments at the end of 2021 – 0.3% of total exposures based on regulatory documentation.

On Monday, Citigroup gave more details, counting “total third-country 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 repo transactions.

Citigroup also said it has $ 1.6 billion in exposures to additional Russian counterparties outside its Russian subsidiary that are not included in the $ 8.2 billion. Read more

By comparison, Goldman Sachs Group Inc (GS.N) 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.

EUROPEAN BANKS

RAIFFEISEN BANK INTERNATIONAL (RBI) (RBIV.VI)

The Austrian lender’s Russian business ranks as the country’s ninth largest bank in terms of loans. With total assets of 15.8 billion euros, it employs about 8,700 employees to serve more than 4.5 million customers.

Its equity of € 2.4 billion represents 18% of consolidated capital.

RBI has been operating in Russia since the collapse of the Soviet Union, and its business there contributed nearly a third of the group’s net profit of 1.5 billion euros ($ 1.66 billion) last year. Read more

RBI’s exposure in Russia totals 22.85 billion euros, more than half of which is related to the corporate private sector, according to a presentation of its 2021 results.

Russia’s central bank accounts for 8% of RBI’s exposure to the country, government entities 4% and Russian banks 2%, according to the performance.

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

The cross-border exposure to Russia is only 1.6 billion euros without parental funding from Vienna. Raiffeisen also holds 2.2 billion euros in loans to Ukrainian customers.

Provisions against losses cover 64.3% of RBI’s impaired exposures in Russia.

RBI CEO Johann Strobl told Reuters this week that the group’s Russian subsidiary “has a very strong liquidity position and (was) registering inflows”.

SOCIETE GENERALE (SOGN.PA)

Societe Generale began doing business in Russia in 1872, then left the country in 1917, the year of the Bolshevik Revolution, to return in 1973. It has 1.5 million local customers.

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

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

Of SocGen’s Russian exposure, 39% is to the corporate sector and 36% to retail. Sovereign entities represent 21%, financial institutions – 4%.

Real loans rose 13.3% last year to 10.5 billion euros.

Its Russian retail business – for which an average of € 1.05 billion in capital was allocated last year – generated € 115 million in net profit in 2021, compared to € 37 million in 2020. Including financial services, the net profit of SG Russia was 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 continued to operate in a “safe manner”.

UNICREDIT (CRDI.MI)

The Russian subsidiary of the Italian bank ranks as the 14th largest bank in the country. UniCredit Russia’s equity of € 2.3 billion represents 3.7% of the group’s total volume.

UniCredit’s default exposure related to Russia totaled € 14.2 billion by mid-2021

Of these, about 8 billion euros are loans granted by Russian hands and financed at the local level.

The rest includes off-balance sheet positions and cross-border loans, granted mainly by UniCredit SpA to large corporations outside Russia.

UniCredit said last week that its Russian franchise accounts for only about 3% of the group’s revenue, and provisions cover 84% of its non-performing exposures.

INTESA SANPAOLO (ISP.MI)

Italy’s largest bank is financing 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 trade transactions between Italy and Russia.

Intesa’s loan exposure to Russia is 5.57 billion euros at the end of 2021, or 1.1% of the total.

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

ING (INGA.AS)

The Dutch bank has about 4.5 billion euros in outstanding loans with Russian customers and about 600 million euros with customers in Ukraine, from a total credit book worth more than 600 billion euros.

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

(1 dollar = 0.9016 euros)

Additional reports by Brena Hughes Negavy in Zurich, Toby Stirling in Amsterdam, Alexandra Schwartz-Görlich in Vienna, Elizabeth Dilts in New York; edited by John O’Donnell, Andrew Havens and Jane Merriman

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US stocks plummeted on Tuesday to mark another volatile day on Wall Street as investors assessed intensifying Russian attacks on Ukraine and the attack on new Western sanctions against the possibility of geopolitical uncertainty to divert the Federal Reserve from its aggressive first strike. rates.

The S&P 500 fell 1.7% to its lowest session value of 4,299.97, and the Dow Jones Industrial Average fell 2.1% to 33,166.98. The Nasdaq Composite also fell 1.6% to 13,525.98. The 10-year US public finance index fell to 1.7%. The last trading day in February on Monday marked the worst start of the year for the Dow and S&P 500 since 2020. The Nasdaq, which has now fallen 12.1% since the beginning of the year, recorded its worst January and February of 2009 this year.

WTI crude, meanwhile, jumped 10 percent to a high of $ 105 a barrel, marking its highest price since 2014 amid worries about a collapse in the energy sector.

Russia’s economy was in the spotlight on Monday as tougher sanctions by the United States and European allies on its invasion of Ukraine shook the country’s financial system and led to a 30 percent drop in the ruble.

US and European measures, including a move to block some Russian banks from the SWIFT payment network and sanctions against Russia’s central bank, have already dealt a heavier-than-expected blow to the country’s economy, testing decades of efforts by President Vladimir Putin to to make the system resistant to sanctions.

The United States, the European Commission, France, Germany, Italy, the United Kingdom and Canada issued a joint statement Saturday launching selected Russian banks from SWIFT, a network that works to facilitate trillions of dollars in global transactions.

On Monday, the United States also banned Americans from doing business with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation. Western financial institutions are expected to follow suit, with HSBC limiting its dealings with a number of Russian banks, including the second-largest VTB.

The story continues

The crisis between Russia and Ukraine “will create great pain and damage the Russian economy,” Virginia Sen. Mark Warner told Yahoo Finance Live on Monday. “This is a much bigger economic blow than Putin expected.”

As investors watch the escalation of the crisis abroad in the United States, they turn their attention back to the Federal Reserve and its plan to raise interest rates this month.

Sky-high inflation footprints on a monthly basis have raised fears among market participants that central bank employees will raise short-term borrowing costs more aggressively than expected to mitigate rising prices, even fueling the possibility of doubled interest rates by 50 basis points. mid-March. But with uncertainty about how the Russia-Ukraine turmoil will unfold, Fed observers expect the central bank to take a slight rise in interest rates.

“Given the current conflict in Ukraine, significant short-term uncertainty remains with the central bank’s intentions,” LPL financial strategists Lawrence Gillam and Ryan Detrick said in a note, adding that pressure to raise oil and other commodity prices and sanctions against Russia could have wider economic consequences. “As such, inflationary pressures may remain high, especially when it comes to gas prices.

And yet, like many Fed observers, the LPL has raised its price for the first time from 25 basis points this month – so far.

“As long as there is some kind of deal or the violence does not subside in Ukraine, the markets will remain at increased risk and Powell will look to be a little more careful,” Sputting Rock Asset Management chief strategist Rhys Williams told Yahoo Finance Live.

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12:05 ET: Shares are declining as the conflict between Russia and Ukraine rages

These were the main movements of the markets during the lunch trade

• S&P 500 futures (ES = F): -72.70 points (-1.66%), to 4301.24

• Dow futures (YM = F): -696.50 points (-2.06%), to 33,196.10

• Nasdaq futures (NQ = F): -201.44 points (-1.44%) to 13,549.96

• raw (CL = F): + $ 10.54 (+ 11.01%) to $ 1106.26 per barrel

• gold (GC = F): + $ 34.50 (+ 1.82%) to $ 1935.20 per ounce

• 10-year treasury (^ TNX): -14.44 bps to 1.695% yield

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11:25 a.m. ET: Construction jumps in January despite higher costs

Construction costs in the United States jumped in January amid high costs for single-family housing and private non-residential structures.

The Ministry of Trade reported a 1.3% increase in construction and revision costs on December data, which reflected that construction costs rose by 0.8% instead of the originally reported 0.2%.

Bloomberg’s consensus data show that economists expect 0.1% cost recovery.

Housing construction remains under pressure from higher construction material costs despite the jump in January. The National Association of Home Builders said last month that failures in the production of building materials inflated construction prices and delayed projects.

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10:25 a.m. ET: US manufacturing resumes

Production activity in the United States rose more than expected in February as COVID-19 infections declined. However, factory employment has slowed, exacerbated supply chain disruptions and put upward pressure on commodity prices.

The latest footprint of the Institute of Supply Management (ISM) for its national factory index rose to 58.6 last month from 57.6 in January, the lowest figure since November 2020.

A figure above 50 indicates an expansion in production, which represents 11.9% of the US economy. Economists polled by Bloomberg expected a footprint of 58.0.

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10:00 a.m. ET: Kohls rises better than expected

Kohl’s Corp. (KSS) missed analysts’ forecasts for the fourth quarter, but reported an optimistic revenue outlook for 2022 and said it would “reward its momentum” this year.

The company recorded a 13% drop in fourth-quarter net profit to $ 299 million for the quarter ended January 29, 2022, from $ 343 million in the same period a year ago.

Although declining on a quarterly basis, net annual income jumped to $ 938 million, compared to a loss of $ 163 million in 2020 due to the pandemic. Earnings per share reached a record high of $ 7.33 in 2021.

Meanwhile, the company said it was committed to unsolicited bidders. Kohls is under pressure from activist investors, including Macellum Advisors and Engine Capital, to increase shareholder value and improve its financial performance, and also called for the company to be split into separate online and ordinary businesses, the retailer said. rejected.

Shares of Kohls rose 4.48% to $ 58.11 per share at 9:59 a.m. ET.

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9:47 am ET: Target jumps at the beginning of trading after rising profits

Shares of Target (TGT) jumped 14% at opening, after the company reported better-than-expected prospects for its annual adjusted earnings per share.

The retailer shattered analysts’ fourth-quarter profit forecasts as consumers sought clothing and food deals amid rising inflation.

“The quarter was driven by traffic. This means that users voted with their feet and clicks and chose Target more often. So this is an incredibly healthy sign for our business, “said Target CFO Michael Fidelke at Yahoo Finance Live.

The target rose 11.42% to $ 222.59 per share at 9:47 a.m. ET.

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9:30 a.m. ET: US stocks hold steady as investors continue to watch Russia, Ukraine

Here’s how the markets opened for Tuesday’s trading session:

• S&P 500 futures (ES = F): -11.34 points (-0.26%), to 4,362.60

• Dow futures (YM = F): -169.64 points (-0.50%), to 33,722.96

• Nasdaq futures (NQ = F): -46.40 points (-0.34%) to 13,705.00

• raw (CL = F): +5.39 dollars (+ 5.63%) to 101.11 dollars per barrel

• gold (GC = F): + $ 19.50 (+ 1.03%) to $ 1920.20 per ounce

• 10-year treasury (^ TNX): -6.0 bps to 1.779% yield

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7:00 AM ET: Futures fall as Russia’s attack on Ukraine enters its sixth day

Here’s how the Wall Street key performance contracts presented themselves before Tuesday’s opening:

• S&P 500 futures (ES = F): -38.00 points (-0.87%), to 4330.00

• Dow futures (YM = F): -258.00 points (-0.76%), to 33,582.00

• Nasdaq futures (NQ = F): -132.25 points (-0.93%) to 14,095.75

• raw (CL = F): +3.75 dollars (+ 3.92%) to 99.47 dollars per barrel

• gold (GC = F): + $ 22.70 (+ 1.19%) to $ 1923.40 per ounce

• 10-year treasury (^ TNX): 0.00 bps to receive 1.839%

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18:05 ET Monday: Equity futures stable as investors watch Russia-Ukraine crisis

Here are the main movements in the markets before overnight trading on Monday:

• S&P 500 futures (ES = F): +3.75 points (+ 0.09%), to 4371.75

• Dow futures (YM = F): +20.00 points (+ 0.06%), up to 33,860.00

• Nasdaq futures (NQ = F): -9.50 points (-0.07%) to 14,218.50

• raw (CL = F): + $ 0.16 (+ 0.17%) to $ 95.88 per barrel

• gold (GC = F): + $ 8.80 (+ 0.46%) to $ 1909.50 per ounce

• 10-year treasury (^ TNX): -14.7 bps to 1.822% yield

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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