(Corrects name of CFO to Peter Juhas in paragraph 4 and paragraph 9)

By Conor Humphries and Tim Hepher

DUBLIN -The world’s top aircraft lessor AerCap has submitted a $3.5 billion insurance claim for more than 100 jets stuck in Russia following its invasion of Ukraine, setting the stage for a lengthy legal wrangle between lessors and insurers.

Dublin-based AerCap had the largest exposure of any lessor when European Union sanctions forced the termination of Russian leases, accounting for 5% of its fleet by value.

Not only is its insurance claim expected to be the biggest among lessors seeking compensation for the hundreds of planes worth a total of up to $10 billion which remain in Russia, it is also one of the largest single claims ever submitted.

“Last week we submitted an insurance claim for approximately $3.5 billion with respect to our aircraft and engines remaining in Russia,” Chief Financial Officer Peter Juhas told investors following the publication of financial results for the final three months of 2021.

“In this case we expect them to be contested, just given the large sums involved across the industry,” he added.

Lessors had until Monday to wind up current rental contracts in Russia under sanctions imposed by the European Union.

Analysts have said that the unprecedented nature and scale of the potential losses will likely mean years of litigation between lessors and insurers before any decisions on payouts are taken.

One industry executive predicted an “ugly battle” between the leasing and insurance companies.

AerCap said it may book an impairment in the first quarter of its financial year but it had not yet determined how big that might be. Juhas estimated AerCap’s net Russia exposure at around $2.5 billion.

AerCap had 135 aircraft and 14 engines on lease to Russia but has repossessed and removed 22 aircraft and three engines, it said in financial results for the fourth quarter of the year.

Its shares were 4% lower at 1415 GMT, and down 18% since the start of the year.

AerCap, by far the largest aircraft lessor in the world after its acquisition last year of rival GECAS, had 3,701 aircraft, engines and helicopters on its books at the end of December, it said.

(Writing by Conor Humphries; Additional reporting by Tim Hepher and Carolyn Cohn; editing by Elaine Hardcastle, Kirsten Donovan)

By Chris Thomas and Nupur Anand

MUMBAI -Indian private lender Axis Bank has decided to bulk up its credit card and retail businesses with a $1.6-billion purchase of Citigroup Inc’s local consumer banking arm.

The deal announced https://www.bseindia.com/xml-data/corpfiling/AttachLive/83190dcd-4ae6-45f4-b3fa-8d39d91a4aa6.pdf on Wednesday is Axis Bank’s largest by far and would expand its credit card customer base by 31%, narrowing the gap with the third-biggest player ICICI Bank.

“The acquisition strengthens our market position, reduces gap in key segments with peers and provides opportunity to accelerate retail business growth,” Amitabh Chaudhry, managing director and CEO of Axis Bank, said at a press conference.

Citi was among the first international lenders to introduce credit cards in India in 1987, but its market share, according to Macquarie, has dwindled to 4% from 13% a decade ago.

The sale advances Citi Chief Executive Jane Fraser’s plan to overhaul the bank by exiting retail banking operations in 13 countries where it does not have the necessary scale to compete.

‘SWEET DEAL’

Axis Bank, India’s third-largest private lender, will also gain access to Citi’s local wealth management arm in the deal. The lender expects the purchase to increase its deposit base and loan book by 7% and 4%, respectively, while reducing its capital adequacy ratio by 180 basis points to 13%.

“It looks like a sweet deal for Axis,” said Anand Dama, a banking analyst with Emkay Global Financial Services. “While the assets have good value, I think they got an even better deal on the liability side.”

Apart from the $1.6 billion being paid in cash, Axis will also need to set aside around 35 billion rupees ($461.07 million) for loan provisions and other regulatory requirements related to the deal.

The purchase is expected to close in the first half of next year and excludes Citi’s Indian institutional client businesses.

Axis Bank’s Chaudhry said technology integration after the acquisition remains a key challenge and could take several quarters.

($1 = 75.8840 Indian rupees)

(Reporting by Chris Thomas in Bengaluru and Nupur Anand in Mumbai; Editing by Aditya Soni)

By Guy Faulconbridge

LONDON – The Kremlin indicated on Wednesday that all of Russia’s energy and commodity exports could be priced in roubles, toughening President Vladimir Putin’s attempt to make the West feel the pain of the sanctions it imposed for the invasion of Ukraine.

With Russia’s economy facing its gravest crisis since the 1991 collapse of the Soviet Union, Putin on March 23 hit back at the West, ordering that Russian gas exports should be paid for in roubles.

That move forced Germany, Europe’s biggest economy, to declare on Wednesday an “early warning” that it could be heading for a supply emergency. Germany imported 55% of its gas from Russia last year.

In the strongest signal yet that Russia could be preparing an even tougher response to the West’s sanctions, Russia’s top lawmaker suggested on Wednesday that almost Russia’s entire energy and commodity exports could soon be priced in roubles.

Asked about the comments by parliament speaker Vyacheslav Volodin, Kremlin spokesman Dmitry Peskov said: “This is an idea that should definitely be worked on.”

“It may well be worked out,” Peskov said of the proposal.

Peskov said that the U.S. dollar’s role as a global reserve currency had already taken a hit, and that a move to pricing Russia’s biggest exports in roubles would be “in our interests and the interests of our partners.”

Europe, which imports about 40% of its gas from Russia and pays mostly in euros, says Russia’s state-controlled gas giant Gazprom is not entitled to redraw contracts.

“If you want gas, find roubles,” Volodin said in a post on Telegram. “Moreover, it would be right – where it is beneficial for our country – to widen the list of export products priced in roubles to include: fertiliser, grain, food oil, oil, coal, metals, timber etc.”

ROUBLE GAMBLE

Russia exports several hundred billion dollars worth of natural gas to Europe each year. Euros account for 58% of Gazprom exports, U.S. dollars 39% and sterling around 3%, according to the company.

Peskov said Russia will give buyers time to switch to roubles.

Still, the exact way in which payments could be made remained unclear as of Wednesday. Russia is trying to both bolster the rouble and, in the longer run, chip away at the dominance of the dollar in pricing global energy and commodities.

To have any hope of achieving that, Russia would need help from China, the world’s second-largest economy.

“China is willing to work with Russia to take China-Russian ties to a higher level in a new era under the guidance of the consensus reached by the heads of state,” Chinese Foreign Minister Wang Yi said.

Russian Foreign Minister Sergei Lavrov says that Russia’s relations with China are at their strongest level ever.

SANCTIONS ‘BOOMERANG’

Russian officials have repeatedly said the West’s attempt to isolate one of the world’s biggest producers of natural resources is an irrational act of self harm that will lead to soaring prices for consumers and tip Europe and the United States into recession.

Russia says the sanctions – and in particular the freezing of about $300 billion in Russian central bank reserves – amount to a declaration of economic war.

Former President Dmitry Medvedev said the sanctions had “boomeranged” back to undermine European and North America economies, driving up prices for fuel and heating and eroding confidence in the dollar and euro.

“The world is waking up: confidence in reserve currencies is melting like a morning fog,” Medvedev said. “Abandoning the dollar and the euro as the world’s main reserves no longer looks like a fantasy.”

Medvedev said “crazy politicians” in the West had sacrificed the interests of their taxpayers on the altar of an unknown victory in Ukraine. “The era of regional currencies is coming.”

Russia has long sought to reduce dependence on the U.S. currency, though its main exports – oil, gas and metals – are priced in dollars on global markets.

Globally, the dollar is by far the most traded currency, followed by the euro, yen and British pound.

(Reporting by Guy Faulconbridge; Editing by Conor Humphries, Frank Jack Daniel and Tomasz Janowski)

By Silke Koltrowitz and Mimosa Spencer

GENEVA -Cartier and other labels of the Richemont group have stepped down from the Responsible Jewellery Council (RJC) after the industry body failed to cut ties with Russia, executives from the group told reporters at the Watches and Wonders watchmakers industry fair on Wednesday.

“It is not part of our Richemont values to be part of an organization in which some members are supporting conflicts and wars,” said Cyrille Vigneron, president and chief executive officer of Cartier.

Jewellery maker Pandora PNDORA.CO also said on Wednesday it was cutting ties with the RJC, which sets ethical standards for the jewellery and watch industry.

The membership of Russia’s state-owned Alrosa in the RJC has drawn scrutiny, even though the company stepped down voluntarily from the RJC’s board earlier this month.

The Russian diamond producer — the world’s largest — was added to a UK sanctions list last week and Washington has targeted both the company and its CEO Sergei Ivanov, who, the U.S. Treasury said, is reportedly one of Russian President Vladimir Putin’s closest allies.

In an emailed statement to Reuters Wednesday, RJC chair David A. Bouffard, said a third-party legal assessment of Alrosa’s membership status, kicked off at the start of the war, would be concluded “imminently”, noting the organization “appreciates that the pace of this process may be frustrating.”

“We’re not trying to make a statement per se, we’re trying to uphold the very high standards we’ve been shaping over last 15 years. If RJC cannot uphold highest of standards, then we cannot be part of that. That’s why we stepped down,” Richemont chief financial officer Burkhart Grund said of the luxury group’s decision to leave the RJC.

Grund added that the luxury group would look into how to certify its labels in order to reassure consumers.

Richemont, which has suspended activities including e-commerce in Russia, also said it has stopped sourcing diamonds from the country since Feb. 24.

(Reporting by Silke Koltrowitz and Mimosa Spencer, writing by Mimosa Spencer, Editing by Louise Heavens, William Maclean)

BRASILIA – Brazil’s federal public debt increased 2.03% in February from the month before to 5.73 trillion reais ($1.21 trillion), the Treasury said on Wednesday, while issuance costs kept rising amid high inflation and interest rates.

The total domestic debt stock climbed 2.3% in the period to 5.49 trillion reais, according to the Treasury.

The average interest rate on the domestic federal debt increased to 9.5% in January from 8.9% in January, while the average rate on the new domestic debt issued in the 12 months to February rose to 9.25% from 8.92%.

The Treasury said in a statement that average issuance rates started the month at a lower level, but rose again from the second week onwards, in a period marked by inflationary pressures amid Russia’s invasion of Ukraine.

Risk aversion continued through March, but the Treasury highlighted a recent easing in the yield curve, helped by the stronger currency performance and the central bank’s signals that it should end its aggressive monetary tightening cycle to tame inflation.

Brazil’s benchmark interest rate has already risen to 11.75% from its record low of 2% last March and the central bank’s chief Roberto Campos Neto indicated that a final 100-basis-point hike should wrap up the cycle in May.

“From the point of view of debt management, we observe the resilience of the Brazilian market. Interest rates, exchange rates, CDS had a very good reaction despite the conflict that occurs (in Eastern Europe),” said deputy general coordinator of Public Debt Operations Roberto Lobarinhas.

($1 = 4.7508 reais)

(Reporting by Marcela Ayres; editing by Chizu Nomiyama and Jonathan Oatis)