25 Feb, 2022
European bank stocks drop; Russian banks sanctioned amid Russia-Ukraine conflict
S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week.
European bank stocks slumped amid a global equities sell-off Feb. 24 after Russia launched military operations in Ukraine.
Data from S&P Global Market Intelligence shows that Austria's Raiffeisen Bank International AG, which has almost 30% of its branches in Russia and Ukraine, suffered the biggest decline, with its shares down 25% near close of trading.
A spokesperson for RBI told Market Intelligence it would be premature as of now to assess the economic impact of the situation, but its operations in both countries are "well-capitalized and self-financing." RBI has already made provisions, increased its Russian ruble hedge and set up a Ukrainian hryvnia hedge as part of its forward-looking risk policy, the spokesperson said.
Russia-Ukraine geopolitical tensions
* In response to the geopolitical tensions, the EU has imposed sanctions on Russia's Bank Rossiya, Promsvyazbank PJSC and VEB.RF. European Commission President Ursula von der Leyen also said on Twitter the bloc's new sanctions will target 70% of the Russian banking market and key state-owned companies. Meanwhile, the U.S. barred Sberbank of Russia and VTB Bank PJSC from processing payments through the country's financial system, following initial sanctions imposed on VEB.RF and Promsvyazbank, along with their subsidiaries. The British government will freeze the assets of Russian banks and will prevent Russian companies from raising funds in the U.K.
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Credit Suisse leaks
* Credit Suisse Group AG said it "strongly rejects" allegations of wrongdoing by a consortium of media organizations, including The New York Times and The Guardian, that pored over data on more than 18,000 bank accounts dating as far back as the 1940s that an individual leaked to German newspaper Süddeutsche Zeitung.
* In the wake of allegations against Credit Suisse, the European People's Party, which holds the most seats in the European Parliament according to Reuters, has called on the European Commission to consider adding Switzerland to the EU's list of high-risk countries for money laundering. The Swiss Financial Market Supervisory Authority, or FINMA, said it is in touch with the Swiss bank following the reports, the news wire reported.
Organizational revamp
* Banco Santander SA revamped its organizational structure to accelerate its digital transformation initiatives, with Executive Chair Ana Botín set to supervise its tech units PagoNxt and Digital Consumer Bank and CEO José Antonio Álvarez set to report exclusively to the board. Additionally, the Spanish lender will pay a final cash dividend of €5.15 per share in respect of its 2021 earnings and carry out a further share buyback of roughly €865 million, taking the total amount of capital distributed to shareholders to about €3.4 billion.
* UniCredit SpA will place under one roof all businesses, from those with a turnover of €1 million to large multinationals, as part of changes to its services model, MF, Il Sole 24 Ore and Il Messaggero wrote. Massimiliano Mastalia, head of corporate Italy, will head the new business team, Reuters noted.
In other news
* Swiss bank UBS Group AG will cut 2021 bonuses for traders by roughly 10% on average following the $861 million hit its markets unit took from the Archegos collapse, sources told Bloomberg News.
* BPER Banca SpA confirmed exclusive negotiations with Nexi SpA over the potential sale of its payments services business.
* Deutsche Bank AG warned its staff against deleting messages on WhatsApp as part of the German lender's efforts to clamp down on staff's usage of private communication channels amid a U.S. crackdown, sources told Bloomberg News.
Featured during the week on S&P Capital IQ Pro:
Russian, EU bank stocks hit by volatility as tensions over Ukraine escalate: Bank stocks with exposure to Russia have been hit by significant volatility as the first sanctions against the country were announced in response to its latest actions in Ukraine.
Russia's VTB Bank delays dividend decision, 2022 outlook amid Ukraine crisis: Russian lender VTB Bank PJSC opted not to disclose its 2021 dividend plans and financial outlook for 2022 amid tensions between Russia and Ukraine.
Nordea, Danske to continue reducing staff amid digitalization push: Nordic lenders Nordea Bank Abp and Danske Bank A/S will continue to reduce staff in the coming years as they further digitalize their operations.