The aggravation of the conflict in Ukraine is forcing French banks present in Russia to harden their position. Monday evening, BNP Paribas, in a “statement” released to the Bloomberg agency, indicated that its Russian subsidiary, BNP Paribas ZAO, attached to the investment and financing bank (CIB), “is no longer able to process its customers’ transactions from the end of March”.
The group explains respect “strictly” all sanctions”, and having decided first to suspend all new financing, then all new projects. The banking group had already reduced its activities in Russia before the crisis, notably its retail banking activities in 2012 and its consumer credit activities in 2020.
Tuesday evening, it is the turn of Crédit Agricole to announce a suspension of all its activities in Russia. The cooperative group specifies that it “stopped all new financing for Russian companies” from the start of the conflict and “any commercial activity in the country”. The bank adds that it has contacted its international corporate clients “to determine with them the terms of suspension of the services provided to them locally, for implementation in the coming weeks”. She recalls, in passing, that she does not carry out retail banking activities in Russia but has 170 Russian employees.
On the other hand, the bank has a retail bank in Ukraine with 2,400 employees, which “ensure the continuity of essential services to their customers”. A solidarity fund of 10 million euros has been set up to help employees and their families, or civilian victims of war.
A challenge for 12,000 employees for Societe Generale
These announcements, but also each passing day of conflict, put pressure on Societe Generale, by far the French bank most exposed to Russia. Above all, it has, with Rosbank, a major retail bank in Russia, the largest foreign bank in the country, and therefore the responsibility of some 12,000 employees. But suspending the activity of a retail bank amounts in fact to ensuring massive withdrawals from its individual or business customers, if not closing it, or even selling it in haste, at a derisory price.
A scenario that the bank did not completely rule out from the start of the conflict in communicating the first on its detailed exposition on Russia. In the end, if the bank is now depreciated in the bank’s accounts, a possible “expropriation” could result in a depreciation of assets of around 1.8 billion euros. However, Rosbank is well capitalized and operates in a ” autonomous “ in terms of liquidity (without the financial assistance of the group), enough to hold on. But how long will the La Défense group be able to maintain this cautious wait-and-see attitude while preserving its reputation? Even TotalEnergies is starting to let go…