Russia Contagion Spreads To European Banks : French SocGen, Austrian Raiffeisen Plummet

Tyler Durden's picture


We recently noted the rise of counterparty risks in the financial system due to oil prices dropping (and leveraged derivative exposures) but as the Russia situation has deteriorated so dramatically this week, a renewed focus on bank exposures has sent stocks reeling (and credit risk soaring) among many European (and US) banks. As Bloomberg reports, Raiffeisen Bank International and Societe Generale, the European banks with most at stake in Russia, led European lenders lower. Raiffeisen fell as much as 10.3% to 11.40 euros in Vienna, the lowest level since it went public in 2005. Societe Generale dropped as much as 7.3% to 31.85 euros, hitting the lowest intraday level since August 2013. CDS markets for both also exploded with Raffeisen risk at 27 month highs. As one analyst noted, "There remains a huge amount of uncertainty at this juncture, but the key point is that there are no benign scenarios." While not on the same scale, US bank risk has also widened signicantly in recent weeks (despite equity strength).

Credity risk is surging...



As Bloomberg continues,

“More fundamental concerns are building over the outlook for Russia’s economy and the likely policy response,” Neil Shearing, an economist at Capital Economics in London, wrote in a note to clients. “There remains a huge amount of uncertainty at this juncture, but the key point is that there are no benign scenarios. Even if the ruble does stabilize over the coming weeks, the economic crisis facing Russia has much further to run.”


Societe Generale is the bank that has the biggest absolute exposure to Russia, at 25 billion euros ($31 billion), according to Citigroup Inc. analysts led by Kinner Lakhani. That’s equivalent to 62 percent of the Paris-based bank’s tangible equity. Raiffeisen has 15 billion euros at risk in Russia, almost twice its tangible equity, and it also has the biggest exposure to Ukraine, with 4.9 billion euros, according to Citigroup.


UniCredit, the third European bank strongly invested in the former Soviet Union, has 18 billion euros at stake in Russia, or 40 percent of its tangible book value, Citigroup said.

And while European banks are starting to show real cracks, US financial institutions are also seeing spreads widen notably since oil prices peaked...


Charts: Bloomberg

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Tue, 12/16/2014 - 13:04 | 5558799 JRobby
JRobby's picture


The oligarchs play their hand. Decades in the making.

And I thought Christmas/New year's was going to be the same old yawn?

Tue, 12/16/2014 - 13:05 | 5558815 bigdumbnugly
bigdumbnugly's picture
Russia Contagion Spreads To European Banks : French SocGen, Austrian Raiffeisen Plummet


but curiously the world caviar and grey poupon market remains unfazed.

Tue, 12/16/2014 - 13:07 | 5558823 kliguy38
kliguy38's picture

It came out of nowhere

Tue, 12/16/2014 - 13:08 | 5558827 froze25
froze25's picture

Just bought a 10oz bar of the .9999 pure silver today.  First phys purchase I have ever made.  I guess I popped my cherry so to say.

Tue, 12/16/2014 - 13:11 | 5558841 JRobby
JRobby's picture

Do you have a safe welded to anchor studs poured into your foundation and some guns and ammo?

Tue, 12/16/2014 - 13:15 | 5558863 FieldingMellish
FieldingMellish's picture

A pair of pliers can take care of that.... molars have the deepest roots and index fingernails are the most sensitive.

Tue, 12/16/2014 - 13:20 | 5558888 El Oregonian
El Oregonian's picture

Just like our Markets, our 72 Million Dollar boy genius was nothing but a fake.

Tue, 12/16/2014 - 13:33 | 5558942 MalteseFalcon
MalteseFalcon's picture

So who the fuck wants to live forever?  Pass the victory gin, bitch.

Hey was that hoofbeats?

Thu, 12/18/2014 - 22:28 | 5571136 7.62x54r
7.62x54r's picture

OK, he bought enough silver for 10 weeks worth of beans and rice.

A start, I suppose.

Do talk less about personal purchases.

Tue, 12/16/2014 - 13:24 | 5558903 Bunghole
Bunghole's picture


I dont care how much you spend on a safe.  Once someone holds a gun to your son's/daughter's head, you'll squeal that safe combo like a little blathering pig.

Save your money on a safe and buy some guns and ammo.

Tue, 12/16/2014 - 15:51 | 5559634 JRobby
JRobby's picture

Sorry, I meant booby trapped safe. The silver bar is on the shelf in the garage behind some junk along with the bottle of Jack Daniels.

Tue, 12/16/2014 - 13:44 | 5559012 froze25
froze25's picture

"Do you have a safe welded to anchor studs poured into your foundation and some guns and ammo?" I got some good stash spots and I am a strong supporter of the 2nd admendment.

Tue, 12/16/2014 - 13:27 | 5558911 Bunghole
Bunghole's picture


No need to post your whopping $170 purchase in every thread here on the hedge.

Most of us like to keep our purchases on the down low.  You'd be wise to keep your trap shut.

Tue, 12/16/2014 - 15:20 | 5559480 Dame Ednas Possum
Dame Ednas Possum's picture

First rule of fight club is?

Tue, 12/16/2014 - 13:30 | 5558928 sleigher
sleigher's picture

Please be sure to take it with you next time you are boating on the lake.

Tue, 12/16/2014 - 13:12 | 5558853 Atticus Finch
Atticus Finch's picture

No! more to Christmas and New Years, read this,


Tue, 12/16/2014 - 15:45 | 5559603 JRobby
JRobby's picture

"Counting bodies like sheep to the rhythm of the war drums"


Tue, 12/16/2014 - 13:04 | 5558800 That_shits_broken
That_shits_broken's picture

Get to work Mr. Bullard!

Tue, 12/16/2014 - 13:05 | 5558804 Haus-Targaryen
Haus-Targaryen's picture

If soc Gen has to write that off -- France just because another casualty and the EUR just entered a massive shit storm.

Tue, 12/16/2014 - 13:07 | 5558824 Ghordius
Ghordius's picture

question is... why should SocGen write that off? Is this exposure in Ruble or EUR? Isn't Russia a net exporter? European customers will want to buy NatGas this winter, won't they?

Tue, 12/16/2014 - 13:15 | 5558864 KnuckleDragger-X
KnuckleDragger-X's picture

That's the thing, the game runs in both directions but the EU et al are used to getting their way and can't understand that Russia may be playing a different game.

Tue, 12/16/2014 - 13:16 | 5558866 Haus-Targaryen
Haus-Targaryen's picture

I assume that the exposure is predominately exposure to Russian enterprise not private individuals and is in a basket of currencies. Rpl,EUR,usd and maybe another couple for good measure.

But if things really start to heat up -- due to much Russian enterprise being controlled by Moscow -- all Putin needs to direct is all enterprise default on western held notes.

Government doesn't default -- it creates fires alp over the world in EURland that unless put out could quickly expand to consume the entire system.

Instead of screwing with Putin our banker overlords will be preoccupied with their own issues a Putin prepares return fire.

Tue, 12/16/2014 - 13:06 | 5558825 Old Man River
Old Man River's picture

Undo, UNDO!!!!!! Where is the UNDO button!

Tue, 12/16/2014 - 13:03 | 5558805 TruthInSunshine
TruthInSunshine's picture

Stop allowing trading in anything that's falling & re-jigger all equity indexes (kicking out losers & replacing them with winners).

So simple..FFS

Tue, 12/16/2014 - 13:06 | 5558806 Freddie
Freddie's picture

F the EU! 

The Ukraine - the gift that keeps giving to Europe thanks to Zio.

I wonder if Europe will give Yats and the evil junta in Kiev $18 billion?   LOL!  They should tell him to go F himself.

Tue, 12/16/2014 - 13:10 | 5558842 buzzsaw99
buzzsaw99's picture

Oh, exactly!

Tue, 12/16/2014 - 13:15 | 5558862 Ghordius
Ghordius's picture

LOL. I think I have to do a bit of trolling, today: Remind me, folks, which country did the "evil junta" governing Ukraine invade, recently? Which province did they... annex?

bah. don't bother with a recap of nazi stories. just vote, I'll look into it tomorrow. goodnight

Tue, 12/16/2014 - 15:24 | 5559498 Dame Ednas Possum
Dame Ednas Possum's picture

A: Ukraine...except for the bit that was protected from genocide by it's historical owners.

Silly rabbit.

Tue, 12/16/2014 - 13:05 | 5558808 BandGap
BandGap's picture

Looking at those Russian brides on sale. Stock up on a few wives for the winter.

Tue, 12/16/2014 - 13:04 | 5558811 no more banksters
no more banksters's picture

Things on the path as Putin planned:

"As BRICS are in the processes to decouple economies from the Western neoliberal monetary monopoly, they could bring back the gold standard as a base for their transactions, which is much more steady than the paper money unstable financial bubbles. They are ready, because they are emerging economies with billions of potencial consumer tanks and can attract other countries too being victims of the international financial mafia, like Argentina and Greece."

The battle will be hard.

Tue, 12/16/2014 - 13:06 | 5558819 disabledvet
disabledvet's picture

Time to start moving the flags around on the gold holdings again!

Tue, 12/16/2014 - 13:06 | 5558821 bob_stl
bob_stl's picture

Buck Murdock: What do you make of this data, Lt.

Lt. Pervis: It looks like a bunch of squigly lines, sir.

Buck Murdock: Well, get them to stop squigling.

Tue, 12/16/2014 - 13:11 | 5558840 reader2010
reader2010's picture

You are either with us or fucked by us. 

Tue, 12/16/2014 - 13:13 | 5558855 Dr. Engali
Dr. Engali's picture

Meh, just print it. The steeple will pay for it through inflation. They won't mind as long as they have a teevee to help them forget.

Tue, 12/16/2014 - 13:19 | 5558885 Tsar Pointless
Tsar Pointless's picture

And religions, to make them believe there is a "better place" and that what happens here on Earth, stays here on Earth and doesn't matter.

Tue, 12/16/2014 - 15:05 | 5559410 TheReplacement
TheReplacement's picture

And why exactly would anything that happens here on earth not stay here on earth and somehow matter?  You are going to die.  Everyone is going to die.  Get over it.


Tue, 12/16/2014 - 13:15 | 5558857 Atticus Finch
Atticus Finch's picture

And how many times have these banks rehypothicated their assets?

Tue, 12/16/2014 - 13:59 | 5559095 sandhillexit
sandhillexit's picture

Austria has only one "industry,"  on-selling US technology to RUS.  Nobody more exposed on this trade than CSCO.  I keep thinking those two taken together are enough.  

Tue, 12/16/2014 - 13:17 | 5558875 T-NUTZ
T-NUTZ's picture

something big is going on beneath the surface.  i suspect this is a hit by Russia to USD dominated world markets.  they know with the kind of leverage lurking they are inflicting heavy damage on someone.  now who is the weak link?  and who are they daisy chained to?

don't think Russia would employ a stealth scorched earth policy?  hehehe

I told you not to fuck with the Bear...

Tue, 12/16/2014 - 13:20 | 5558879 Quinvarius
Quinvarius's picture

All the paper currency, debt and contracts in world collapsing into the USD--Which you can then use all of to buy an egg or a sandwich.

Tue, 12/16/2014 - 15:47 | 5559616 JRobby
JRobby's picture

But not an egg sandwich.

Tue, 12/16/2014 - 13:19 | 5558880 savagegoose
savagegoose's picture

wow i was hoping a for a happy xmas, :) thank you god

Tue, 12/16/2014 - 13:24 | 5558901 madbraz
madbraz's picture

SSS  on the x day of christmas my true love send to me...

one broken currency

two percent thirty bond yields

three large banks in deep sh*t

four idiotic central bankers

forty dollar oil

fifty percent stock market correction

and the dudley lamenting the collapse of the trillion dollar derivatives tree   SSS

Tue, 12/16/2014 - 13:24 | 5558905 Sutton
Sutton's picture

Isn't SocGen always in the middle of any financial fiasco?

And Citibank.

Merrill too, but they're  B of A now.

Tue, 12/16/2014 - 15:06 | 5559419 TheReplacement
TheReplacement's picture

There's a BofA behind the sofa and a jertain behind the curtain.

Tue, 12/16/2014 - 13:32 | 5558925 fuu
fuu's picture

Meanwhile the Fed started doing small RRP agreements that push out past 12/31/14. $50B/week for 4 weeks.

Tue, 12/16/2014 - 13:49 | 5559041 Sandmann
Sandmann's picture

Raffeisen is a basket case anyway and not just with Russian lending, they have been undercutting German banks in Germany so are well stuffed with interesting risk portfolios

Tue, 12/16/2014 - 14:10 | 5559169 1stepcloser
1stepcloser's picture

looks like I picked the wrong week (to quit sniffing glue) to go long oil and rub

Tue, 12/16/2014 - 14:21 | 5559211 crazytechnician
crazytechnician's picture

Cheaper to sniff unleaded or butane gas. Much better trip as well.

Tue, 12/16/2014 - 14:39 | 5559298 lakecity55
lakecity55's picture

There is something Big happening, we just do not see it-yet.

By the end of the week, things may be out of control.


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