Deutsche Bank - reports very limited Russia exposure

Deutsche Bank (XETRA: DBKGn.DB / NYSE: DB) today provided details of its limited and substantially mitigated risk exposures to Russia and Ukraine, including risks arising from its local operations.

Deutsche Bank has reduced its Russian exposure and local footprint significantly since 2014, with further reductions in the past two weeks. “Our direct exposures are currently very limited and tightly managed. Second- and third-order effects of the current situation, including sanctions and cybersecurity risk, are being carefully evaluated and monitored,” said Stuart Lewis, Chief Risk Officer and Member of the Management Board.

Credit exposures to Russia and Ukraine account for a very small portion of the bank’s overall loan portfolio and are protected by a number of risk mitigants. These include offshore collateral and financial guarantees, while market risk exposures have been significantly reduced prior and subsequent to Russia’s invasion of Ukraine.

As of December 31, 2021, the bank’s credit exposure to Russia and Ukraine was as follows:

• Net loan exposure to Russia of € 0.6 billion after taking account of guarantees and asset collateral. Gross loan exposure was € 1.4 billion, around 0.3% of the overall loan book. The bank’s net exposure comprises:
  • € 0.5 billion to large Russian companies with material operations and cashflow outside Russia (€ 1.1 billion gross), booked offshore and with de minimis onshore exposure
  • € 0.1 billion from loans to subsidiaries of large multinational companies (€ 0.3 billion gross), predominantly guaranteed by parent companies, of which around 50% booked offshore
• Net loan exposure to Ukraine of € 42 million (€ 0.6 billion gross)
• The vast majority of Deutsche Bank’s derivative exposure to Russia has been unwound. The remaining exposure presents no material credit risk as the bank has a net liability position
• Offshore loans to counterparties with a Russian connection by the wealth management business were adequately collateralised, and the collateral is not linked to Russia

Full press release