China expands lending to sanctions-hit Russian banks

The news: China’s four biggest lenders have extended billions of dollars in loans to banks in Russia as Western banks pull out of the country, the Financial Times reported.

The numbers: The Industrial and Commercial Bank of China, Bank of China, China Construction Bank and Agricultural Bank of China increased their combined exposure to Russia from USD2.2 billion ($3.4 billion) to USD9.7 billion in the 14 months to March, according to Russian central bank data.

The context: Western banks have come under acute pressure from regulators and politicians in their home countries to exit Russia over Moscow’s invasion of Ukraine. Meanwhile, the moves by China’s biggest banks are part of Beijing’s efforts to promote the renminbi as an alternative global currency to the dollar, and also highlight Russia’s economic pivot to China since last year.