The worsening of the conflict in Ukraine is forcing the French banks present in Russia to harden their position. On Monday night, BNP Paribas, in a “communiqué” delivered to the Bloomberg agency, indicated that its Russian subsidiary, BNP Paribas ZAO, attached to the investment and financing bank (CIB), “you can no longer process your customers’ transactions since 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, in particular its retail banking activities in 2012 and its lending activities to the consumption in 2020.
On Tuesday night, it is Crédit Agricole’s turn to announce the suspension of all its activities in Russia. The cooperative group specifies that “it stopped all new financing to Russian companies” from the beginning 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”. He recalls, in passing, that he 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 “guarantee the continuity of essential services to its customers”. A solidarity fund of 10 million euros has been created to help employees and their families, or civilian victims of the war.
A challenge for 12,000 employees for Société Générale
These announcements, but also each passing day of conflict, put pressure on Société Générale, 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 thus the responsibility for some 12,000 employees. But suspending the activity of a retail bank is in fact equivalent to ensuring massive withdrawals from its individual or commercial clients, if not closing it, or even selling it hastily, at a ridiculous price.
A scenario that the bank did not completely rule out from the start of the conflict in reporting the former on his detailed exposition on Russia. In the end, if the bank is now depreciated in the bank’s accounts, a possible “expropriation” could result in an asset depreciation of around €1.8 billion. However, Rosbank is well capitalized and operates on a “autonomous” in terms of liquidity (without the financial help of the group), enough to endure. But how long can the La Défense group maintain this cautious wait-and-see attitude while preserving its reputation? Even TotalEnergies is starting to get carried away…