UniCredit plans to leave Russia, Credit Suisse describes Russian wealthy clients

  • According to Credit Suisse, 4% of wealth management assets are Russian
  • TP ICAP stops all transactions with Russian banks
  • Russia has $117 million in payments due Wednesday on two-dollar Eurobonds
  • EU bans rating agencies from rating Russian debt
  • Lloyd’s of London pushes for sanctions via cyber insurance

MILAN/ZURICH/LONDON, March 15 (Reuters) – UniCredit (CRDI.MI) could decide on a costly exit from Russia after its invasion of Ukraine, the Italian bank’s CEO said on Tuesday, as revealed Credit Suisse (CSGN.S) 4% of its wealth management assets are managed for Russian clients.

A growing list of financial firms are seeking to exit Russia, with Deutsche Bank (DBKGn.DE), Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N) ending their operations there. Others are under pressure from investors to detail their financial exposure to Russia. Read more

UniCredit chief executive Andrea Orcel said the bank was urgently reviewing its business in Russia, but needed to find a solution for its 4,000 local employees and the European businesses it serves, which are also trying to leave. Read more

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Orcel also said the economic environment has changed due to the Ukraine crisis and the bank now assumes there will be stagflation – or a combination of low growth and high inflation.

UniCredit’s Russian unit has about 8 billion euros ($8.8 billion) in loans, funded locally by deposits.

The loss by abandoning the activity would be a maximum of 1.9 billion euros. Cross-border exposure and derivatives add another €5.5 billion to the bill, however.

UniCredit is one of the European banks most exposed to Russia. Read more

TP ICAP (TCAPI.L), the world’s largest inter-dealer broker, also announced on Tuesday that it has halted all business transactions with Russian banks.

Credit Suisse last week detailed a gross credit exposure of 1.569 billion Swiss francs ($1.69 billion) to Russia at the end of 2021, which Chief Executive Thomas Gottstein said had been “significantly reduced” by the end of February. . Read more

Gottstein told the Morgan Stanley conference in London on Tuesday that the bank had “about 4% of our assets under management in wealth management with Russian clients, (either) domiciled in Russia or Russian nationals living in the West.”

The bank had not previously detailed the amount of assets it manages for Russian clients. Read more

Russia is under severe sanctions and has introduced countermeasures following the invasion of Ukraine, which it calls a “special operation”.

In a sign of the pressure, the Russian central bank announced that it would suspend gold purchases from banks from Tuesday to meet increased household demand for the precious metal. Read more

Russia’s second-largest bank VTB (VTBR.MM) is closing its London-based investment banking unit VTB Capital, it announced. Read more

Russia has $117 million in payments due Wednesday on two dollar-denominated Eurobonds. Its finance ministry said it would make payments in rubles if sanctions prevented it from paying in dollars.

However, payment due on Wednesday must be made in dollars and the use of other currencies could constitute a default. Read more

Russia’s economic crisis is likely to make credit default but euro zone banks’ exposure to the country is contained, said Andrea Enria, the European Central Bank’s top supervisor, adding that no blanket ban on dividends will was planned.

Western governments continue to ratchet up the pressure as three European prime ministers boarded the train for Kyiv on Tuesday, the first visit by foreign leaders to the Ukrainian capital since Russia launched its invasion. Read more

The European Union has banned major credit rating agencies from rating Russia’s sovereign debt and the country’s companies as part of its latest sanctions package, the European Commission has said. Read more

Britain imposed sanctions on hundreds of Russian individuals and entities, banned the export of luxury goods to Russia and said it had ended all export financing backed by the government to Russia and Belarus. Read more

Commercial insurance market Lloyd’s of London (SOLYD.UL) said it was looking to apply sanctions to Russia through the cyber, aerospace and political risk insurance markets. Read more

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Additional reporting by Francesco Canepa, Balazs Koranyi, Sinchita Mitra, Karin Strohecker and Lawrence White; Writing by Carolyn Cohn Editing by Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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