BlackRock funds just lost $17 billion due to Russian exposure. That’s just the tip of the iceberg, as Western banks are owed $121 billion by Russian entities

International banks are owed roughly $121 billion by Russia-linked entities, according to data from the Bank for International Settlements—and because of the recent decoupling of the West and Russia, clients may not get most of that money back.

BlackRock’s clients held around $18.2 billion in exposure to Russia-linked assets as of the end of January, the firm revealed. The world’s largest asset manager declined to break down its Russian assets for the Financial Times, but its largest Russian exchange-traded fund, the iShares MSCI Russia ETF, saw its value plummet from roughly $600 million at the end of 2021 to below $1 million this week.

In a LinkedIn post after the invasion of Ukraine began, chairman and CEO Larry Fink said BlackRock was suspending all purchases of Russian securities among its index funds.

In a statement to Fortune, a spokesperson from BlackRock noted that the total exposure of their clients to Russian securities represented just 0.18% of their total assets under management a month ago and has dropped to less than 0.01% of current client assets.

“Any client impact would also depend on their initial asset allocation and the timing of their allocations to or away from this market during the period,” the spokesperson said via email on Friday. “BlackRock will continue actively consulting with regulators, index providers, and other market participants to help ensure our clients can exit their positions in Russian securities, whenever and wherever regulatory and market conditions allow.”

Just the tip of the iceberg

BlackRock is far from alone when it comes to Western asset managers or banks with exposure to Russian assets and businesses. U.S. banks are owed a whopping $14.7 billion by Russian entities, per BIS data.

As banks across the U.S. are forced to divest from Russian firms amid regulatory and licensing restrictions brought about by strict Western sanctions, Russian President Vladimir Putin also gave his country’s financial institutions permission to seize assets left behind by Western companies.

“If foreign owners close the company unreasonably, then, in such cases, the government proposes to introduce external administration,” Russian Prime Minister Mikhail Mishustin said in a statement, according to the Kremlin. “Depending on the decision of the owner, it will determine the future fate of the enterprise.” 

Among U.S. banks with the largest exposure to Russia is Citigroup. The bank disclosed last week that it had roughly $10 billion in total exposure to Russia. In a statement on Wednesday, Citi said it was “continuing previously announced efforts to exit our consumer banking business in Russia” and operating its business in the country on a limited basis.  

Goldman Sachs said it was also winding down exposure to Russian businesses this month. The bank had credit exposure of $650 million in Russia as of December 2021 but said losses from the divestiture should be “immaterial.”

JPMorgan Chase, which has roughly 160 staff in Moscow, also said it was cutting ties to Russian businesses in compliance with regulatory requirements, noting that its exposure to the country was “limited.” JPMorgan—the largest bank in the U.S. in terms of total assets—didn’t list Russia as one of the top 20 countries in which it has the most exposure in its November 2021 quarterly SEC filing.

The investment management firm Pimco also held at least $1.5 billion of Russian sovereign debt, plus an additional $1.1 billion in exposure to Russia’s credit default swap market, before the war. Other investment managers with significant Russian debt exposure include Janus Henderson, Ashmore, and Western Asset, according to Morningstar.

European exposure

European banks have revealed even more substantial ties to Russian businesses in the weeks since the invasion of Ukraine. Banks around Europe held a total of $84 billion in claims from Russian entities as of late February, according to the Bank for International Settlements.

The French bank Société Générale had one of the largest ties to Russian businesses, with $21 billion in total exposure as of the end of last year. 

In a March 3 statement detailing its work to cut its Russian ties, the bank said that it “complies rigorously with legislation in force and diligently applies all necessary measures to strictly observe international sanctions as soon as they become public.”

BNP Paribas is dealing with $3 billion in Russia exposure, while Deutsche Bank said in a statement last week that it has “limited” dealings with Russian businesses, involving gross loan exposure of $1.5 billion.

Credit Suisse detailed $1.7 billion in exposure to Russia-linked entities. The Swiss bank was caught trying to shred evidence of its loans to Russian oligarchs backed by superyachts and private jets earlier this week.

Despite the losses, European Central Bank vice president Luis de Guindos said the financial system around Europe is not in danger of a liquidity crisis as damage to Europe’s banks remains limited.

“Russia is important in terms of energy markets, in terms of commodity prices, but in terms of the exposure of the financial sector, of the European financial sector, Russia is not very relevant,” de Guindos told CNN.

This article has been updated to clarify that BlackRock is an asset manager and include a statement from the firm.