Citigroup Said Its Total Russian Exposure Is $10B – Cryptovibes.com – Daily Cryptocurrency and FX News
https://ift.tt/zFdnHkP
Following questions over whether it will have to set aside funds to cover potential losses, Citigroup Inc (C.N) said on February 28 that the total exposure to Russia amounts to nearly $10 billion, higher than previously communicated.
Among Citigroup’s top 25 country exposures, Russia was listed 21 with $5.4 billion in securities, loans, and funding commitments at the end of December, compared with $5.5 billion at the end of September. According to a regulatory filing, that represents 0.3% of the bank’s exposures in 2021.
Also, details of further exposures not previously disclosed were given by Citigroup.
After Russia’s invasion of Ukraine, Britain, the United States, Canada, and Europe announced new sanctions on Russia on Saturday – including blocking certain banks’ access to the SWIFT international payment system. The value of Russian assets could affect those sanctions set by international banks.
Its other exposures include $1.8 billion of reverse repos with various counterparties and $1.0 billion in cash at the Bank of Russia and other financial institutions, taking the count for “total third-party exposure” to $8.2 billion.
Though not included in the $8.2 billion, Citigroup has $1.6 billion of exposure to additional Russian counterparties outside of its Russian subsidiary. To cover possible losses on nearly $3 billion of funded loans included in that amount, analyst Mike Mayo of Wells Fargo said in a research note on Monday, before the regulatory filing came out, that Citigroup will likely have to add $300 million of reserves.
Previous 2022 profit estimates, which Mayo had made before Western nations imposed new sanctions on Russia, were reduced by the analyst for the cost of the reserves. Analysts’ consensus estimates are 20% to 25% too high, according to Mayo.
Due to the escalated pressure between the West and Russia, following its invasion of Ukraine, Citigroup warned generally of a potential hit to its business.
In the filing, the bank said:
“Citi continues to monitor the current Russia–Ukraine geopolitical situation and economic conditions and will mitigate its exposures and risks as appropriate.”
Cryptocurrency
