The need to write down assets as well as setting aside cash to shield against the expected economic ramifications of anti-Russia sanctions has resulted in billions of euro in losses for European banks.
The lenders have so far taken a hit of about $9.6 billion, led by Societe Generale and UniCredit. ING and Intesa Sanpaolo reported that Russian exposure had slashed their combined first-quarter net income by nearly $2 billion.
Several lenders have said their outlooks for the year would be scrapped if the drag of the Russia-Ukraine conflict on the global economy worsens. Intesa has reportedly cut its 2022 profit target, warning that a “very conservative” scenario envisions an even harder blow.
Faced with this extreme uncertainty, the chief risk officers of several European banking majors are holding meetings with regulators and among themselves to assess the reliability of their models and provisioning, people familiar with the matter told Bloomberg.