By Jesús Aguado

MADRID, Reuters – Santander’s Spanish chairman (MC:), called on Friday for the European Union (EU) to determine what type of lending would be compatible with a net zero policy. This will help accelerate efforts to decrease dependence on Russian oil.

Since February’s invasion of Ukraine, the EU has stated that Russia will reduce its imports of Russian gas by 2/3 this year, and it will end Russian gas use by 2027.

Ana Botin stated, “Among other initiatives financial institutions must have the ability to finance the Energy Transition. And to this end, authorities must determine as soon as practicable what lending is considered consistent with our net Zero goals.”

Botin indicated that, although Santander had a negligible exposure to Russia of 80 million euro ($88.4million), there was a potential indirect impact on the Ukraine conflict due to higher inflation and slower economic growth.

She stated that the assessment by the bank’s internal foresaw “no further escalated and the war within Ukraine.”

Botin stressed the importance of changing global energy policies to accelerate renewable energy investments, so that “we can help people go green” and assist businesses in making the transition.

The process of integrating emerging economies would prove more difficult for smaller and mid-sized enterprises and for vulnerable populations.

Although the ECB indicated that the Russian direct exposure by eurozone banks was minimal, it warned that sanctions could still be reverberated through financial systems through volatile energy and commodity prices.

Botin assured shareholders that the bank had taken all necessary measures to meet financial sanctions and EU, UK, U.S. sanctions on Russia.

Jose Antonio Alvarez (Ceo of Santander) stated that the bank is strengthening its controls to prevent potential operational threats such as money laundering and cybersecurity.

The Spanish central bank estimates that their credit risk is just over 700 million euros. This means Spanish banks are generally less vulnerable to Russian credit.

Alvarez indicated that Santander believed the war would have a uneven impact on each region, with Europe most severely affected. He said that the impact on South America will be positive or neutral, since raw materials from South America are likely to be sold at higher prices, which would result in currency appreciation.

($1 = 0.9047 euros)