European banks reveal cost of Russia exit

European banks reveal cost of Russia exit

The need to write down assets as well as setting aside cash to shield against the expected economic ramifications of anti-Russia sanctions has resulted in billions of euro in losses for European banks.

The lenders have so far taken a hit of about $9.6 billion, led by Societe Generale and UniCredit. ING and Intesa Sanpaolo reported that Russian exposure had slashed their combined first-quarter net income by nearly $2 billion.

Several lenders have said their outlooks for the year would be scrapped if the drag of the Russia-Ukraine conflict on the global economy worsens. Intesa has reportedly cut its 2022 profit target, warning that a “very conservative” scenario envisions an even harder blow.

Faced with this extreme uncertainty, the chief risk officers of several European banking majors are holding meetings with regulators and among themselves to assess the reliability of their models and provisioning, people familiar with the matter told Bloomberg.

“Corporate insolvencies in our markets will probably rise” in 2022 amid surging energy prices, high inflation and supply-chain disruptions, according to Commerzbank Chief Executive Officer Manfred Knof, who was quoted by the agency.

UniCredit said it can absorb the latest macroeconomic knock-on effects in its wider business thanks to its “strong” capital levels, asset quality and prudent loan loss reserves. One of the European banks with the biggest presence in Russia, UniCredit reportedly took a $2 billion hit as it considers an exit strategy.

Meanwhile, French lender Societe Generale is expected to take a €3 billion loss from the sale of its stake in Russia’s Rosbank.

For more stories on economy & finance visit RT's business section

Source: www.rt.com

The last notes - Экономика

most read news

#Экономика

Electricity prices in Germany are expected to jump to record highs next year, the Neue Osnabrucker Zeitung newspaper reported on Friday, citing the country’s local public utilities association
подробнее...

Despite accelerated efforts by Western states to wean their economies off Russian oil and gas, it may take years to replace them, the head of the World Bank has warned.“Under current policies global
подробнее...

The Russian budget will be in deficit from 2023 to 2025, Prime Minister Mikhail Mishustin said at a government meeting on Thursday.“During the entire period, the budget will be in deficit, the main
подробнее...

Over 15,000 German stores are facing bankruptcy due to soaring energy costs, Der Spiegel reported on Friday, citing the German Retail Association (HDE).According to the report, the HDE wrote a letter
подробнее...

Japanese automaker Toyota has decided to shut down its plant in St. Petersburg, Russia's Ministry of Industry and Trade said in a statement on Friday.The company vowed to fulfill all of its social
подробнее...

The German government will take control of Securing Energy for Europe (SEFE), formerly Gazprom Germania, a subsidiary of Russian energy giant Gazprom, Der Spiegel reported on Thursday, citing its
подробнее...

The Central Bank of Russia (CBR) is considering creating a compensation fund for local investors whose assets have been frozen by Western nations, Governor Elvira Nabiullina said on Thursday during
подробнее...

Nicaragua is ready to explore the use of the Mir payment system, developed by Moscow in response to Western sanctions, and allow the use of Russian credit and debit cards in the country, its minister
подробнее...

The share of Russian gas in the European Union market has plummeted from 50% to 9% since the beginning of the current year, French President Emmanuel Macron said on Monday. Russian gas imports by EU
подробнее...

Tax cuts announced by the UK government last week should be reevaluated, International Monetary Fund (IMF) analysts have warned, saying the measure offers poor prospects for the Bank of England in the
подробнее...

One of Russia’s top banks, VTB has become the first lender in the country to launch money transfers to China in yuan, sidestepping the Western-controlled global financial messaging system SWIFT.“The
подробнее...

EU ambassadors may soften restrictions on some Russian products, Politico reported on Wednesday, citing senior officials and diplomats. The ambassadors are expected to discuss an eighth round of
подробнее...

The proposal by the EU to place a price cap on Russian natural gas imports is a foolish, non-market-oriented plan that has no future, Russian President Vladimir Putin said on Wednesday.“Faced with
подробнее...

Pressure in the Nord Stream 2 undersea gas pipeline, which was intended to pump gas from Russia to Germany, dropped from 300 to 7 bars overnight, a spokesperson for the pipeline's operator said on
подробнее...

The intense pressure placed on Russia by Western sanctions has forced the country to ramp up efforts to launch new factories and enterprises, according to Executive Director of the Russian-Chinese
подробнее...

The European Commission President Ursula von der Leyen proposed fresh anti-Russia sanctions on Wednesday. These included tighter trade restrictions, more individual blacklistings and an oil price cap
подробнее...

Major European ports have signaled their readiness to facilitate the export of Russian fertilizers, UN Secretary-General Antonio Guterres said in an interview with RIA Novosti, published on
подробнее...

The Moldovan government has launched a special website which will help citizens find firewood to heat their homes, authorities announced this week.“The site provides information about the nearest
подробнее...