ANKARA

Large western European banks face risks from their exposure to Russia and their asset quality will be pressured by the war in Ukraine, Fitch Ratings said Wednesday. 

European banks face materially increased operational risk, the global rating agency said in a statement, adding their exposures are mainly held through corporate and investment banking operations and investment portfolios.

"They must ensure their operations are compliant with international sanctions against Russia, and their ability to manage Russian exposures, including in their trading books, will be affected by the sanctions," it added.

Western European banks had around $91 billion total claims on Russian counterparties by the end of September, according to the Bank for International Settlements (BIS).

And $41 billion of the total are related to local positions in local currencies, mainly exposures held by Russian subsidiaries of foreign banks, said Fitch.

Italian and French banks had the largest exposure to Russian counterparties, with $15 billion and $10 billion, respectively, according to BIS data. Other western European banks had an exposure of about $17 billion.