BCP: “No cause for concern” on credit risk over Ukraine crisis

Millennium bcp (Banco Comercial Portugues), which holds a 50% stake in Polish bank Bank Millennium), says it is only facing “immaterial non-credit exposure” from regional instability over the war in Ukraine.  It holds €2Bn in Polish government bonds.
According to Jornal Económico the sanctions in Europe against Moscow will inevitably have some affect on two Portuguese banks, either because of their exposure to debt of those in neighbouring countries (Polish debt in the case of BCP), or because one, Novobanco, holds Russian corporate bonds (€20 million in Gazprom bonds). The cost of servicing Finnish debt has already gone up because of the conflict.
The CEO of BCP assured that, “from a credit risk point of view, there is no cause for concern”. Miguel Maya explained that the institution has no Russian or Ukrainian sovereign debt, nor debt related to companies, and the exposure is “immaterial”. The bank also has no Swedish or Finnish debt – countries already targeted by Russia in the wake of the conflict in Ukraine. “We are in a comfortable situation”, he assured, ruling out possible specific “impacts” on BCP’s operation, since the bank does not have a “direct” and “material” exposure. And he reiterated that there were no “relevant relations” between the bank and Ukraine or Russia. Even so, the bank has already implemented 100 measures to restrict activity with Russia, including restrictions on relations with Russian banks.
Theoretically, portfolios of bonds are European Central Bank redeemable, although at this stage it is not known how the sanctions will exactly work and effect bond-holders.More than half of Russian Central Bank reserves are blocked as part of the new EU sanctions against Moscow. More than half of Russian central bank reserves are blocked as part of the new EU sanctions against Moscow.