Deutsche Bank Admits It Has Very Limited Net Loss Exposure To Russia

Deutsche Bank has admitted that it does not have a significant net loss exposure to Russian investments. The bank said in the Frankfurt court on Monday, “in order for us to limit our risk of further capital losses and related legal risks, we need to initiate proceedings against these counterparties,” Deutsche Bank added.

Deutsche Bank has admitted that it has very limited net loss exposure to Russia. This is because the bank does not have any operations in Russia.

Deutsche Bank AG, situated in Germany, indicated that it had relatively little exposure to Russian-linked investments. When collateral and guarantees were taken into account, the bank’s loan exposure was reduced to less than $700 million. The loans amounted for barely 0.3 percent of the worldwide bank’s total loan book, according to the company. This does not include its wealth management division, which has outstanding debts to Russian counterparties.

The Exposures Are Thoroughly Examined

Both local subsidiaries of global corporations and Russian companies with worldwide operations may use Deutsche Bank’s services.

“Our direct exposures are now extremely small and well managed,” said Stuart Lewis, Chief Risk Officer of Deutsche Bank.

He emphasized that the organization has been closely monitoring and evaluating the present circumstances, including cybersecurity concerns and sanctions. Apart from the minor exposure to the Russian loan portfolio, the bank claims to be covered by a number of risk mitigation procedures in the event that things go wrong. Financial guarantees and offshore collateral are among the strategies.

In addition, Deutsche Bank claims that Russian employees make up 5% of its internal and external technical personnel. According to the bank, it presently employs 1,500 people in the nation.

According to Lewis, the corporation is ensuring that risks associated with a prospective suspension of its operations in the nation are minimized. To compensate for its activities in Russia, the bank is now aiming to expand to other locations, notably Asia.

Other Investment Banks Have Been Affected by the Ukraine Conflict

The Russian-Ukrainian conflict has already impacted European bank stocks, notably Deutsche Bank’s. Furthermore, investors are becoming increasingly anxious that if the war continues, it will have a significant impact on them.

Due to its investment in Russia, Deutsche Bank has been severely harmed in the past. After a money laundering scandal involving Russian customers, the bank was forced to shut down its investment banking activities in the nation in 2015.

It reached settlements in the United Kingdom and the United States in 2017 as a result of so-called “mirror transactions,” in which the bank moved $10 billion from Russian customers out of the country. While the bank’s employees remained in place, its stock-trading and investment-banking operations were relocated to other locations.

However, this time the situation is different, since the geopolitical turmoil is affecting other businesses as well.

Deutsche Bank has admitted that it has very limited net loss exposure to Russia. The bank also mentioned that the government of Russia is in a position to make sure that any losses are covered by the state. Reference: deutsche bank investor relations.