Sberbank: Russia-Indian Payments Ease. Implications for €IG Banks.

Headlines rolling from Sberbank management stating ease of Russia-Indian payments; largest Indian exposures in €IG banks index are StanChart, Citigroup and HSBC, we feel. We believe them all to be highly vigilant against such things these days but can never discount bad actors entirely.

• Sberbank’s Head of Indian Branch is quoted on BBG indicating that Russia-India money transfers are being processed within a day. The implication is clear – the India can be used to circumvent EU and US sanctions and to remit money to/from Russia.
• Danske Bank has been at the eye of an Estonian money laundering scandal whereby that state was used for a similar purpose – to the tune of near EUR1trn (yes, trillion) and has been fined and censured since.
• Standard Chartered (STANLN: A3/BBB+/A), Citigroup (C: A3/BBB+/A) and HSBC (HSBC: A3/A-/A+) are the €IG banks with the largest businesses in India, we estimate and therefore likely to be under some scrutiny following these remarks. STANLN has also been linked with Iranian sanctions-busting more recently with an alleged whistleblower’s case being reported in the FT only this week.
• We’d never infer wrongdoing by any of these firms – more likely their less-than-spotless records over the last decade now make them almost hyper-vigilant to such issues but these events can rarely be discounted entirely.