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Banks (Finance)

Canadian Banks and Investment Firms Held Hundreds of Millions in Russian Companies Hit by Sanctions

Strategic Insights

— 2 min read

Canada's banks and investment firms had hundreds of millions of dollars invested in Russian companies that were hit by the federal government's sanctions in response to the invasion of Ukraine last week. The Canadian financial institutions have seen their investments in the Russian companies plummet in value, with the total stock holdings dropping by more than half in the last month. The majority of the Russian shares were held by Quebec's pension plan, the Caisse de Dépôt et Placement, with more than $136 million in stock. Despite the significant losses, many of the institutions have yet to specify what they intend to do with their investments.

Key Takeaways:

  • Canadian banks and investment firms held almost $200 million in stock in seven sanctioned Russian companies, including Gazprom, Sberbank, and VTB Bank.
  • The value of the Canadian stock holdings has dropped by more than half in the last month, from $450 million to $200 million.
  • The majority of the Russian shares were held by Quebec's pension plan, the Caisse de Dépôt et Placement, with more than $136 million in stock.
  • DBPS Morningstar reported that global sanctions on Russia will have no impact on Canadian banks' ratings.
  • Several major institutions, including BMO and Manulife, have seen the value of their investments in sanctioned Russian companies drop significantly, with losses ranging from $4.8 million to $8.6 million.
  • The federal government officials did not respond to the Star's requests to specify how the sanctions restrict investor behavior.
  • Many of the institutions have yet to specify what they intend to do with their investments, with some saying they are still evaluating their options.

Statistics:

  • $200 million: The total value of Canadian stock holdings in seven sanctioned Russian companies as of last week.
  • $136 million: The amount of wealth held by Quebec's pension plan, the Caisse de Dépôt et Placement, in stock in sanctioned Russian companies.
  • 57%: The drop in value of the Caisse's holdings in the sanctioned companies over the last 30 days.
  • $450 million: The total value of Canadian stock holdings in seven sanctioned Russian companies at the end of January.
  • $7.8 billion: The net income of BMO in the 2021 fiscal year.
  • $25.5 million to $10.7 million: The value drop of BMO's investments in sanctioned Russian companies in the last month.
  • $8.6 million: The loss incurred by Manulife on Sberbank in the last month.

Sources:

  • The Star, "Canadian banks and investment firms had hundreds of millions in Russian companies hit by sanctions"
  • DBPS Morningstar, "Global sanctions on Russia will have no impact on Canadian banks' ratings"
  • Caisse de Dépôt et Placement, "Last public disclosure of financial data"
  • BMO, "Financial statements for 2021 fiscal year"
  • Manulife, "Statement on Sberbank investment"
  • Power Corp, "Statement on Russian securities"
  • IGM Financial, "Statement on Russian securities"
  • Fidelity Investments, "Statement on Russian securities"
  • HSBC, "Statement on Russian securities"
  • CIBC, "Statement on Russian securities"
  • Bridgehouse Asset Managers, "Statement on Russian securities"
  • Desjardins, "Statement on Russian securities"
  • Capital Group Canada, "Statement on Russian securities"
  • Massachusetts Financial Services, "Statement on Russian securities"

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