Healthy pre-provision income and strong capital levels will allow banks to manage their remaining exposure to Russian counterparties.

Banks in the European Union have been cautious on counterparty exposures in Russia ever since the annexation of Crimea in 2014, while some Nordic banks have run off their books or exited the country as part of broader de-risking. Currently, major banks in France, Italy and the Netherlands hold most of the exposure to Russian counterparties, but that remains modest at less than 1% of their total lending and largely comprises short-dated lending facilities ...