A UniCredit logo is sen in downtown Rome, May 10, 2016.
A UniCredit logo is sen in downtown Rome, May 10, 2016. Reuters / Tony Gentile

Italy's UniCredit and France's BNP Paribas reassured anxious investors on Wednesday over their respective Russian exposures, despite detailing billions of euros in potential costs from the financial shockwaves of Moscow's invasion of Ukraine.

Banks, insurers and asset managers have been scrambling to distance themselves from Russia and assess their exposures after Moscow was hit with heavy sanctions by the West in the wake of the invasion of its neighbour which began last month.

UniCredit said late on Tuesday that a full write-off of its Russian business would cost around 7.4 billion euros ($8.1 billion), casting a shadow over the capital distribution plans of Italy's second-biggest bank.

Meanwhile, BNP Paribas said it had a total exposure of around 3 billion euros ($3.3 billion) to Russia and Ukraine, which it said was relatively limited, and stuck to its previously announced 2025 financial targets.

Shares in Europe's major financial firms have fallen sharply since Russia's invasion of Ukraine, as investors took fright at the links of some to heavily sanctioned Russia and braced for a potential broader economic slowdown.

UniCredit said a worst-case scenario would knock two percentage points off its capital ratio, but nonetheless confirmed its cash dividends and plans for a share buyback, reassuring investors.

Shares in both banks leapt by more than 9% in early trading, with the wider STOXX index of European banks up 5% on the day, staging a partial rebound after recent falls.

The European bank index had previously fallen more than a quarter since Russia invaded on Feb. 24, against only a 10% fall in the benchmark STOXX index.

Among European banks, Austria's Raiffeisen Bank International and France's Societe Generale have the largest Russian exposure. Shares in Raiffeisen leapt 14%, while SocGen was up 8%.

Two of the world's largest insurers Prudential and Legal & General said on Wednesday they had very small exposures to Russia and no plans to increase holdings, in spite of blistering sell-offs that have attracted the attention of some opportunistic buyers.

($1 = 0.9123 euros)