FRANKFURT (Reuters) – Shares in some European banks, which tumbled this week because of their exposure to Russia, recovered some ground on Tuesday but the sector remained volatile with fighting in Ukraine grinding on.
Shares of Austria’s Raiffeisen Bank International traded 2.7% higher early, partly making up for a 14% drop on Monday. Shares of Italy’s UniCredit rose 2.1%, after Monday’s 9.5% fall.
The European Central Bank has put banks with close ties to Russia, such as Raiffeisen and the European arm of VTB, under close observation following sweeping financial sanctions by the West that have already pushed one lender over the edge, two sources told Reuters.
Tuesday’s share price swings came as Russia faced increasing isolation over its invasion of Ukraine, with resistance on the ground denying President Vladimir Putin decisive early gains despite heavy shelling and a huge military convoy outside Kyiv.
Shares of leading banks slipped with the European banking sector down 0.1%, after a 4.5% fall on Monday.
The London Stock Exchange said on Tuesday it would stop trading in two global depository receipts (GDRs) for Russia’s VTB Bank after Britain’s financial regulator suspended them in response to sanctions.
Amid wild swings in bank shares, bankers have sought to reassure investors and the public, saying they are well capitalised in the region and that their footprints in Russia are relatively small.
Deutsche Bank Chief Executive Officer Christian Sewing told the Bild newspaper that it would be wrong to assume a quick resolution to the crisis following the exclusion of Russian banks from the SWIFT payment system.
“That would be the wrong expectation,” Sewing said.
(Reporting by Tom Sims and Huw Jones; Editing by Miranda Murray and Edmund Blair)
