The EU and US sanctions which are being applied in the wake of Russia's unacknowledged support for separatists in Ukraine's civil war are designed to target selected economic activities, especially in the banking and credit sector.
The European banks with the biggest exposure to Russian loans include Austria's Raiffeisen, Italy's Unicredit (which also has a majority holding in Bank Austria), as well as Commerzbank, Société Générale, Nordea and ING.
The Russian market provided around half of Raiffeisen's profits in 2013. Default on these loans could significantly impact the bank's profitability in future.
The report also noted a decline in Raiffeisen's share price, which it attributed to a decline in Russia's ruble exchange rate.
“Tier 1 capital dropped 3% (€0.3bn) in 2013 mostly because of the depreciation of the Russian currency” Berenberg’s note says.
But Berenberg suggests that the picture is not entirely bleak for Raiffeisen. It says that the bank could could legally walk away from Russia and write down its investments, although this would occur a loss of €3 billion.
Photo: Berenberg Bank