UniCredit, BNP Paribas reassure investors despite hefty Russia exposures By Reuters

By Valentina Za and Iain Withers

MILAN/LONDON (Reuters) – Italy’s UniCredit and France’s BNP Paribas (OTC:) reassured anxious buyers on Wednesday over their respective Russian exposures, regardless of detailing billions of euros in potential prices from the monetary shockwaves of Moscow’s invasion of Ukraine.

Banks, insurers and asset managers have been scrambling to distance themselves from Russia and assess their exposures after Moscow was hit with heavy sanctions by the West within the wake of the invasion of its neighbour which started final month.

UniCredit stated late on Tuesday {that a} full write-off of its Russian enterprise would price round 7.4 billion euros ($8.1 billion), casting a shadow over the capital distribution plans of Italy’s second-biggest financial institution.

In the meantime, BNP Paribas stated it had a complete publicity of round 3 billion euros ($3.3 billion) to Russia and Ukraine, which it stated was comparatively restricted, and caught to its beforehand introduced 2025 monetary targets.

Shares in Europe’s main monetary companies have fallen sharply since Russia’s invasion of Ukraine, as buyers took fright on the hyperlinks of some to closely sanctioned Russia and braced for a possible broader financial slowdown.

UniCredit stated a worst-case situation would knock two proportion factors off its capital ratio, however nonetheless confirmed its money dividends and plans for a share buyback, reassuring buyers.

Shares in each banks leapt by greater than 9% in early buying and selling, with the broader STOXX index of European banks up 5% on the day, staging a partial rebound after current falls.

The European financial institution index had beforehand fallen greater than 1 / 4 since Russia invaded on Feb. 24, towards solely a ten% fall within the benchmark STOXX index.

Amongst European banks, Austria’s Raiffeisen Financial institution Worldwide and France’s Societe Generale (OTC:) have the biggest Russian publicity. Shares in Raiffeisen leapt 14%, whereas SocGen was up 8%.

Two of the world’s largest insurers Prudential and Authorized & Normal stated on Wednesday that they had very small exposures to Russia and no plans to extend holdings, despite blistering sell-offs which have attracted the eye of some opportunistic patrons.

($1 = 0.9123 euros)