Austrian banks particularly exposed to Russian risk – Fitch
Local Russian operations are most exposed.
There is greater exposure to Russia among European banks than among their US or Asian peers, and Austrian banks are the most exposed to Russian risk, according to Fitch Ratings.
“Austrian banks have the greatest exposures relative to equity given their expansion into central and eastern Europe,” according to the Fitch press release.
Austrian bank Raiffeisen is highlighted as having high exposure to Russian risk, particularly when Ukraine is included in the assessment. Reiffeisen has recently halted a planned sale of its Ukraine subsidiary.
In Europe as a whole most bank claims on Russia are held by local subsidiaries, and these are normally funded locally. Pressure will therefore fall on Russian operations rather than on parent banks. Fitch advises that more immediate risks will arise from “slower economic growth and pressure on the rouble.”
Fitch downgraded its assessment of sovereign default risk for Russia from stable to negative on March 21 and a few days later downgraded to negative its outlook for 15 Russian banks, 10 of which are state-controlled.
Photo courtesy of rbinternational.com
