Citibank has confirmed it has more exposure to Russia than was first thought, adding to concerns over the level of write-offs western banks might have to take.
The US bank said yesterday it has nearly US$10bn of assets and funding commitments in Russia, with the country ranking 21 out of its top 25 countries where it has exposure.
This included US$1bn of cash held with the Bank of Russia, and US$3.4bn of other counterparties in addition to loans and commitments of US$5.4bn, said the bank.
Analysts were speculating that all or nearly all of this might have to be written off due to the new sanctions imposed on Russia after its invasion of Ukraine.
In a statement, the bank said: "Citi continues to monitor the current Russia–Ukraine geopolitical situation and economic conditions and will mitigate its exposures and risks as appropriate."
Shares in European banks took a tumble yesterday as investors fretted about the repercussions of the sanctions, which saw some Russian banks lose access to the SWIFT international payment system and the closing of the Moscow Stock Exchange.
Analysts said banks in Italy, Austria and France were the most vulnerable among European lenders with a combined exposure of around US$50bn.
France’s Societe Generale, Italy’s UniCredit and Austria’s Raiffeisen in particular had all notably continued to do business even after Russia annexed Crimea in 2014.
JPMorgan has estimated the total exposure of western banks to Russia at US$90bn, with Italian banks accounting for around US$25bn and Austrian US$18bn while UK banks were on the hook for a relatively modest US$3bn.
Austrian bank Raiffeisen has seen its share price almost halve in just over a fortnight as the situation in Ukraine has deteriorated.