ROUNDUP/Deutsche Bank and Credit Suisse: Russia risks manageable

FRANKFURT/ZURICH (dpa-AFX) – Deutsche Bank and its Swiss competitor Credit Suisse (Credit Suisse (CS)) consider their risks in business with Russia to be manageable in view of the Ukraine conflict. The commitment is “very limited and largely secured,” said Deutsche Bank on Wednesday evening in Frankfurt. The bank has significantly reduced its presence and exposure in Russia since 2014 and has reduced it again in the past two weeks. “Our direct risk positions are currently very limited and are tightly managed,” said Stuart Lewis, Chief Risk Officer.

However, the news did not provide a boost on the stock exchange. After the Deutsche Bank share price had recovered by 7.5 percent the day before after the slide since the beginning of the war, it was one of the biggest losers in the Dax (DAX 40) in early trading on Thursday with a discount of 3.8 percent. . Credit Suisse shares fell by around 1.8 percent in Zurich. This put it among the weakest values ​​in the leading Swiss index SMI.

Deutsche Bank valued its net credit exposure to Russia at 600 million euros after accounting for guarantees and collateral. The lion’s share is accounted for by large Russian companies with significant business and cash flows outside of Russia. The gross loan commitment is 1.4 billion euros, around 0.3 percent of the entire loan book. The exposure to Ukraine was therefore EUR 42 million net (EUR 0.6 billion gross).

Credit Suisse says it has also scaled back its business in Russia since the turn of the year. At the end of 2021, the institute’s exposure to loans in Russia amounted to a net 848 million Swiss francs (832 million euros), the money house announced on Thursday in Zurich. The Russian subsidiaries also held net assets of CHF 195 million. According to the information, the bank already had no significant credit risks in Ukraine and Belarus by the end of 2021.

With regard to Russia, the bank’s market risk positions were “not significant” as of March 9, it said. According to bank chief Thomas Gottstein, Credit Suisse has the appropriate systems in place to respond to risks related to Russia. However, the possible effects of the war on the world economy, the world markets and the willingness of customers to take risks cannot yet be fully assessed.

The rating agencies Fitch, Moody’s and S&P have recently downgraded Russia’s creditworthiness and are warning of a default. The German Institute for Economic Research considers a state bankruptcy in Russia to be very likely in the coming months due to western sanctions. German investors would also suffer from this, it said.

Deutsche Bank emphasized that operational risks from a possible closure of its technology center in Russia are also very limited. At the end of January, the bank employed around 1,500 people in this center. This is just one of several technology centers of the bank worldwide. It was checked that other locations could take over the development capacities.

Credit Suisse says it employs around 125 people in asset management and the investment bank in Moscow. “Your safety and protection are our top priority,” the bank said. She observes the situation every day and has already drawn up plans for possible scenarios./stw/als/mne/jha/