War in Ukraine: Coface particularly shaken on the stock market

The title is less visible than Societe Generale, but it is as shaken by the consequences of the war in Ukraine as the Banque de la Défense. Coface fell more than 12% on the stock market on Monday, widening the collapse of the French credit insurer to nearly 33% since the start of the Russian invasion on February 24.

Coface’s business consists of insuring companies against the risk of default by their customers. Typically, when a company exports to Russia, it covers itself with a credit insurer against the risk of non-payment.

Coface, which has just published good financial results for its 2021 financial year, has not officially communicated on its exposure, unlike the banks which have tried to be transparent to calm the panic on the markets.


According to sources close to the group, the former subsidiary of Natixis has exposure to Russia “well below 1%” of its total exposure, which amounted to 588 billion euros at the end of 2021, i.e. exposure ” much lower” at 5.88 billion euros.

Compared to the valuation of Coface on the stock market, 1.3 billion euros, the face value of the exposures can indeed scare the markets. But the potential losses are limited, tempers an analyst.

Some of it, roughly half of the exposure, would be Russian customers in Russia. The ruble having lost 45% of its value since the beginning of the year, the risks have fallen by the same amount. The other half would be more problematic and relate to exports to Russia.

“If a Russian buyer or his bank is hit by the sanctions, he can no longer pay, explains an analyst. Coface must then intervene. But like any insurer, the group is itself insured by a reinsurer.

In the case of a theoretical loss on a large customer, with an overdue invoice of 400 million euros for example, 350 million would be charged to the reinsurer and only 50 million to Coface, explains this analyst.

Eastern Europe

However, the group is exposed to a risk that goes beyond Russia and also includes the countries of Eastern Europe, which could also be drawn into the conflict. For American investors, in particular, it is more or less the same risk.

Finally, being by nature exposed to the economy in general, Coface is affected by the secondary effects of the crisis, starting with the explosion in oil and gas prices.

“The escalation of the conflict increases the likelihood that prices will remain high for much longer,” the credit insurer warned on Monday. This in turn intensifies the threat of long-lasting high inflation, increasing the risks of stagflation and social unrest in advanced and emerging economies. »

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