Euro zone banks plunge, erasing 2022 gains as Russia invades Ukraine

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FILE PHOTO: General view shows the headquarters of Swiss Raiffeisen bank in St. Gallen

By Joice Alves

LONDON – Shares in euro zone banks plunged on Thursday after Russian forces launched a full-scale invasion of Ukraine and European Union officials said they would impose new sanctions on Russia.

The euro zone banks index was set for its worst day since the COVID-19 market crash of March 2020, falling as much as 8.6% by 1240 GMT, erasing all its 2022 gains.

Italian, Austrian and French banks are the world’s most exposed to Russia, and for weeks have been on high alert on fear governments would impose sanctions against the country.

Italian banks index sank more than 9%, with Russia-exposed UniCredit, leading the losses in Italy with a 11.4% fall.

Other European banks with notable exposure to Russia include Austria’s Raiffeisen, France’s Societe Generale and ING of the Netherlands.

Their shares tumbled between 8% and 20% on Thursday.

European Union leaders will impose new sanctions on Russia, freezing its assets, halting its banks’ access to European financial markets and targeting “Kremlin interests” over its “barbaric attack” on Ukraine, senior officials said on Thursday.

(Reporting by Joice Alves; Editing by Julien Ponthus)