Credit Agricole Has $7 Billion of Russia, Ukraine Exposure
Credit Agricole Has $7 Billion of Russia, Ukraine Exposure
(Bloomberg) --
Credit Agricole SA joined other European lenders detailing loans and commitments to Russia and Ukraine, saying that it has an exposure of about 6.4 billion euros ($7 billion) to the two countries as the war increasingly hits local businesses and markets.
The French bank’s total exposure represents about 0.6% of its overall commercial lending portfolio and includes about 4.9 billion euros relating to Russia, according to a statement on Monday. Commercial lending commitments for Ukraine are equal to about 1.5 billion euros, the bank said.
The Russia situation will not have any consequence on the distribution of its dividend for 2021. Last week, Raiffeisen Bank International AG announced it was halting the payment of its dividend, as the lender, which derives 30% of its pretax profit from Russia, assesses the impact of economic sanctions.
An increasing number of European banks are seeking to assuage investor concerns about their exposure to Russia and Ukraine as President Vladimir Putin reiterated over the weekend that the war will continue until Ukraine accepts his demands, dimming hopes for a negotiated settlement. The invasion has sent the Russian currency and markets into a tailspin, raising concerns that companies will be unable to pay back loans to European banks or that lenders will be forced to pull out.
Credit Agricole fell as much as 10% in early Paris trading and was down 9% as of 9:48 a.m. amid fears of an inflation shock as crude oil prices soared and worries for global growth. Societe Generale SA lost as much a 12%, Unicredit SpA 12% while Raiffeisen’s shares slid 12.8%, to its lowest level since June 2016.
Raiffeisen and SocGen and UniCredit are among the European banks most exposed to Russia.
Credit Agricole says that no new financings have been granted to Russian clients since the beginning of the conflict. In Ukraine, where the lender employs about 2,300 people, it closed most of its 148 local branches at the onset of the war.
Dutch lender ING Groep NV said late last week that its Russia-related exposure amounts to a total of 6.7 billion euros, with the metals and mining industry accounting for more than a third of that amount.
SocGen has 18.6 billion euros ($20.6 billion) in exposure to counterparties in Russia, of which 15.4 billion euros are at its subsidiary Rosbank. In an extreme scenario in which it was stripped of property rights to its banking assets in the country, the Paris-based bank would see a hit of 50 basis points to its capital buffers, it said on Thursday.
Credit Agricole’s off-shore balance sheet in the country consists of fifteen large corporates, mainly involved in heavy industries and the energy sector, and is mostly in U.S. dollars and euros.
©2022 Bloomberg L.P.