- Western banks operating in Russia are preparing to lose huge sums as they pull out of the country.
- The FT reported that the banks are setting aside more than $10 billion in total to cover losses.
- Nearly 40,000 staff are also expected to exit the country, per the FT report.
Western banks that are still operating in Russia could lose huge sums as they prepare to pull out of the country.
The Financial Times first reported the story.
According to some FT calculations, banks that are planning to close their Russian operations, which collectively have $86 billion of exposure in Russia, are setting aside more than $10 billion in expected losses.
This comes amid international sanctions forcing businesses and banks to cease operation in Russia because of its invasion of Ukraine.
Banks that are still operating in Russia include Italian lender UniCredit, which set aside $1.3 billion (€1.3 billion) as it could face a loss of $5.5 billion (€5.3 billion). The FT reported that UniCredit has been doing business for 17 years and has 4,000 workers and 2 million Russian customers.
Two French banks, Société Générale and Crédit Agricole, have set aside $591 million (€561 million) and $410 million (€389 million) respectively. Société Générale announced last month the sale of its entire stake in Rosbank to an investment company founded by Vladimir Potanin.
Raiffeisen, an Austrian bank, reported having 4.2 million customers and 9,400 staff in Russia. The newspaper reported the bank set aside $24 million (€22.9 million).
Credit Suisse, which is being sued by a US law firm over claims related to Russian oligarchs, said it lost $211 million (CHF206 million) because of the invasion, while fellow lender UBS said it had cut its risk exposure by a third to $400 million.
US lenders, Citigroup, could face the biggest loss of all the banks as it disclosed the largest direct exposure to Russia with up to £3 billion in potential losses, the FT reported. However, the lenders set aside $1 billion last month.
JPMorgan said it had set aside around $300 million to cover potential losses, but CEO Jamie Dimon warned it could lose up to $1 billion. Goldman Sachs said it suffered a net loss of about $300 million on investments related to Russia and Ukraine. Both banks announced in early March they were unwinding businesses in Russia.
Insider reached out to all the banks for comment but did not immediately receive a response.