Title: European bank shares slide further; Russia's Sberbank exits Europe

Mar 02, 2022 03:50AM ET

By: AnalysisWatch

European banks weakened on Wednesday after two days of big losses as the crisis in Ukraine continued and the European branch of Russia's Sberbank was forced to close.

An index of leading European bank shares fell 2.2% early on Wednesday after dropping 5.6% on Tuesday and 4.5% on Monday, the lowest level since April and a 27% drop from last month's highs.

Wednesday's trading took place against a backdrop of Russia showing no intention of stopping its attack, with U.S. President Joe Biden warning Vladimir Putin that the Russian leader "has no idea what's coming." Russia describes its action in Ukraine as a "special operation".

Among the hardest hit bank stocks, this week was Austria's Raiffeisen Bank International, which two people familiar with the matter told Reuters it is also considering pulling out of Russia.

Raiffeisen shares were down 5.6% at the market opening.

ING also started the day down 4.8%, and Societe Generale lost 2.4%. Both companies have a presence in Russia.

According to Austria's financial market regulator, the European branch of Sberbank, Russia's biggest lender, was closed overnight on orders from the European Central Bank, which warned that the bank could collapse due to a run on deposits following Russia's invasion of Ukraine.

On Tuesday, Russia said it was temporarily imposing restrictions on foreigners seeking to withdraw from Russian assets to stem the outflow of investors triggered by crippling Western sanctions over the invasion of Ukraine.

A board member said a working group of Germany's Commerzbank, which has a subsidiary in Russia, was meeting several times a day.