The most intense shocks from Russian invasion of Ukraine The banking sector in Europe accepted yesterday, with the index that includes the shares of the largest European financial institutions sinking by almost 7.30%.
One after another, the banks announced that they are taking measures for the financial consequences that the war will bring with it on European territories, but also for the economic sanctions that they have or will be imposed on Russia.
The biggest concern is for the banks that have a large exposure in Russia and despite the efforts of some to be complacent, their shares received a strong blow yesterday.
European banks have the largest exposure to Russia in the world, especially those in France, Italy and Spain, as opposed to US banks, which have the lowest exposure, according to the Bank for International Settlements.
Financial sanctions mean that financial institutions are automatically barred from doing business with the party to which they have been sanctioned and any transaction that is considered illegal.
In this case, the banks operating in Russia are forced to suspend international transactions until further notice.
One case is Unicredit, whose yesterday’s dip of more than 10% triggered the automatic suspension of trading of its share and while the bank assured that it has covered most of its exposure in Russia.
Allianz has already announced that it has frozen its exposure to Russian government bonds, while Britain’s Lloyds has said it is on high alert for possible cyber-attacks.
The share of Societe Generale plunged 11%, although it announced that its Russian branch Rosbank continues to operate without problems, while the share of the Austrian Raiffeisen Bank International reached close to -20%.
The Austrian bank said earlier in February that it had kept 115 million euros in forecasts for sanctions against Russia, while yesterday it said it was too early to make any estimates of the financial impact of the war in Ukraine.
On the other hand, there were banks that took care of the ground, such as Duetsche Bank and Allianz, stating that they are ready to comply with any form of sanctions.
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