By Steve Goldstein
A Russian invasion of Ukraine could trigger sanctions from the U.S. and Europe, and there’s one Western bank particularly exposed.
According to an analysis from JPMorgan Cazeonve, Austria’s Raiffeisen /zigman2/quotes/209055420/delayed AT:RBI +0.67% earned 35% of 2021 pretax profits from Russia.
OTP HU:OTP -4.50% earned 7% of profits from Russia, with Unicredit /zigman2/quotes/200769686/delayed IT:UCG +0.20% earning 6% and Societe Generale /zigman2/quotes/206663756/delayed FR:GLE +1.92% earning 4%, according to the JPMorgan estimates.
The analysts said an exclusion from the SWIFT bank messaging system and disallowing conversions of ruble to hard currency could drive material further downside. Although Russia has developed an alternative payment system, the initial shock to the Russian economy would be large, the analysts said.
By market share, Citi /zigman2/quotes/207741460/composite C +0.93% is the only American bank with a sizeable presence, at 0.6% of the Russian market by assets.
Financials stocks more broadly helped European equities recover Tuesday in a choppy trading session.
The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +1.26% rose 0.6% to 459.18, with Ericsson /zigman2/quotes/207544813/delayed SE:ERIC.B +0.03% and Logitech /zigman2/quotes/204771595/delayed CH:LOGN +1.16% rallying after well-received results.
Of the major regional indexes, the German DAX /zigman2/quotes/210597999/delayed DX:DAX +1.35% gained 0.4%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.89% increased 0.9% and the U.K. FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +1.64% increased 0.9%.
Orpea /zigman2/quotes/204431094/delayed FR:ORP -0.08% shares slumped for a second day, losing 19% after a 16% slide on Monday. Le Monde published extracts from a book alleging negligent practices at nursing homes run by the company, allegations the company denies.