© Katie Warren/Business InsiderSanctions wiped out billions from major lenders
The lenders have so far taken a hit of about $9.6 billion, led by Societe Generale and UniCredit. ING and Intesa Sanpaolo reported that Russian exposure had slashed their combined first-quarter net income by nearly $2 billion.
Several lenders have said their outlooks for the year would be scrapped if the drag of the Russia-Ukraine conflict on the global economy worsens. Intesa has reportedly cut its 2022 profit target, warning that a "very conservative" scenario envisions an even harder blow.
Faced with this extreme uncertainty, the chief risk officers of several European banking majors are holding meetings with regulators and among themselves to assess the reliability of their models and provisioning, people familiar with the matter told Bloomberg.
"Corporate insolvencies in our markets will probably rise" in 2022 amid surging energy prices, high inflation and supply-chain disruptions, according to Commerzbank Chief Executive Officer Manfred Knof, who was quoted by the agency.
UniCredit said it can absorb the latest macroeconomic knock-on effects in its wider business thanks to its "strong" capital levels, asset quality and prudent loan loss reserves. One of the European banks with the biggest presence in Russia, UniCredit reportedly took a $2 billion hit as it considers an exit strategy.
Meanwhile, French lender Societe Generale is expected to take a €3 billion loss from the sale of its stake in Russia's Rosbank.
Global energy watchdog warns against Russia sanctions
Western sanctions against Russia and Moscow's retaliatory measures will have big implications for the global energy market, Fatih Birol, Executive Director of the International Energy Agency (IEA), said in Vienna on Friday.
"I believe that we are in the middle of the first global energy crisis. In the 70s we saw the oil crisis, which had great consequences for the economy and inflation. But then it was only oil," he said.
"Let's remember that Russia ... is the world's number one oil and natural gas exporter, as well as a major player in the market for materials used by the energy sector," Birol added.
"Therefore, the sanctions that were imposed on Russia or political decisions from the Kremlin have and will have great consequences for the energy market."
According to Birol, it would be too optimistic to believe that the current volatility in the energy market could end soon and that the world could return to times of low prices and stable market conditions.
Russia should just turn off all energy, Fertilizer, Grain and other minerals it exports to all hostile nations and watch them all go crazy as they turn on one another like the Lapdogs that they are.
Now that's how I would run the war! Russia is being too kind to its enemies. I suppose that it is showing to the world that's its the only adult in the room. Pity no one is noticing.