CHINA’S biggest banks are extending billions of dollars to Russia as sanctions pressure Western lenders to exit the country, according to a Financial Times (FT) report.

Since Moscow’s invasion of Ukraine in February 2022, Western regulators have cracked down on Russia by imposing sanctions and urging banking institutions to pull back on operations in the country. Chinese lenders are now filling the gap, the newspaper said.

The four biggest banks in China have quadrupled their exposure to Russia’s banking sector since the war in Ukraine began, according to data analysed for the FT by the Kyiv School of Economics.

Bank of China, Industrial & Commercial Bank of China, China Construction Bank and Agricultural Bank of China had a combined exposure of US$2.2 billion at the start of 2022. This increased to almost US$10 billion in the 14 months to the end of March this year, the report stated, citing Russian central bank data. The lenders declined to comment to the FT.

“The loans by Chinese banks to Russian banks and credit institutions, which are for the most part a case of the yuan taking the place of dollars and euros, show the sanctions are doing their job,” Andrii Onopriienko, deputy development director at the Kyiv School of Economics, who compiled the data, told the newspaper. BLOOMBERG