Impacts and consequences of the war in Ukraine for banks and insurance companies

Tue 31 May 2022

The war in Ukraine, as well as the unprecedented sanctions imposed by the European Union, the United States and their partners against Russia have had major consequences for financial services institutions.

For foreign companies operating in Russia or Ukraine, the first concern was the safety of their staff. They had to make difficult choices to keep employees on site or to suspend business relations with Russia. This conflict has also generated a major refugee crisis with millions of people fleeing the war in Ukraine. In this context, the Council of the European Union has activated the exceptional temporary protection arrangements provided for in the Directive of 20 July 2001. In France, the conditions of implementation of this measure were specified in an instruction of 10 March 2022.

The impact of the shock on the European economy is unevenly distributed. Indeed, the rise in energy prices has a direct and global impact on all households and businesses, but some sectors depend more heavily on Russia.  For example, the stock of French Direct Investment (FDI) in Russia stood at €19 billion in 2020, or 1.5% of the stock of French FDI abroad, including €3 billion in financial and insurance services[1].

Mazars’ financial services experts present a concrete illustration of the impacts that actors in the banking and insurance sector must face. Download the full publication below.

[1] Source: Economic and Social Resilience Plan of 22 March 2022