Credit Suisse Joins UBS in Cutting Lending Against Russian Debt

Credit Suisse Joins UBS in Cutting Lending Against Russian Debt

Credit Suisse Group AG joined UBS Group AG and Pictet in slashing the amount it will loan private banking clients against Russian debt as the U.S. ramps up sanctions after the Ukraine invasion.

The Swiss bank has assigned a zero lending value for some Russian bonds, effectively meaning that Credit Suisse no longer accepts the debt as collateral, according to people familiar with the matter. Securities of sanctioned banks Sberbank and VTB Bank are among those that have been cut to zero, the people said. 

A spokesperson for the Zurich-based bank declined to comment.

Russia’s sovereign bonds plummeted Thursday, taking some to distressed levels, as President Vladimir Putin’s decision to order a military attack on Ukraine cast a pall on global markets. While some of the sovereign bonds rose on Friday, they still remain at depressed levels.

U.S. president Joe Biden announced that the U.S. would sanction Sberbank -- Russia’s largest lender -- and four other financial institutions that represent an estimated $1 trillion in assets, as well as a broad swath of Russian elites and their family members as part of a package of measures to punish Russia after the invasion.

European Union leaders also backed a broad sanctions package late Thursday that they said will limit Russia’s access to Europe’s financial sector and restrict key technologies. 

UBS has triggered margin calls on some wealth management clients that use Russian bonds as collateral for their portfolios, after marking down the value of debt issued by the country and its corporations. 

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