China's largest banks extend billions to Russia as Western lenders exit
1 min read 04 Sep 2023, 09:27 AM ISTChina's largest banks are increasing their exposure to Russia's banking sector, with loans totaling nearly $10 billion, as Western lenders exit the country due to sanctions.
PremiumChina's biggest banks are extending billions of dollars to Russia as sanctions pressure Western lenders to exit the country since Moscow's invasion of Ukraine in February 2022, according to a report published by the Financial Times.
As per data analyzed for the FT by the Kyiv School of Economics, the four biggest banks in China have quadrupled their exposure to Russia's banking sector since the war in the Ukraine region, Bloomberg reported.
The four Chinese banks are — Bank of China Ltd., Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., and Agricultural Bank of China Ltd. Together, they had a combined exposure of $2.2 billion at the start of 2022.
The report, citing Russian central bank data, stated that the number has now increased to almost $10 billion in the 14 months to the end of March this year, Bloomberg reported.
Speaking to FT, Andrii Onopriienko, deputy development director at the Kyiv School of Economics, who compiled the data said that the loans by Chinese banks to Russian financial institutions show the sanctions are doing their job.
It is pertinent to note that China is currently grappling with a slowdown that has rattled global markets, with the spotlight now firmly focused on troubled developer Country Garden's spiraling debt crisis in a sector that contributes to roughly a quarter of the economy.
The Chinese authorities have even rolled out a series of measures to spur the economy and revive the property market, with steps including the easing of some borrowing rules and a cut to the amount of forex banks must hold as reserves, Reuters reported.
Regulators including the housing ministry, central bank, and financial regulator in coming weeks will implement measures they have been working on over the past few months under State Council guidance, people aware of the matter said.
(With inputs from agencies)
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