European Bank Shares Continue to be Volatile Affected by The Ukrainian Crisis

Shares in some European banks regained some of their gains on Tuesday after falling this week due to their links to dealings with Russia, but the sector remained volatile as the fighting in Ukraine continued.

Shares of Austrian bank Raiffeisen rose 2.7 percent in early trading, partly offsetting a 14 percent drop on Monday. Shares of Italian bank UniCredit rose 2.1 percent, after falling 9.5 percent on Monday.

Two sources told Reuters that the European Central Bank had put banks with close ties to Russia, such as Raiffeisen and the European branch of VTB Bank, under close scrutiny in the wake of sweeping financial sanctions imposed by the West that pushed one bank to the brink.

Tuesday’s volatility in stock prices came as Russia faced increasing isolation over its invasion of Ukraine as resistance on the ground denied President Vladimir Putin early gains despite heavy bombing and a massive military convoy outside Kyiv.

Leading banking stocks fell, with the European banking sector slipping 0.1 percent, after falling 4.5 percent on Monday.