UniCredit expects resolution of Ukrainian conflict will help it leave Russia faster, more lucratively
MOSCOW. Feb 20 (Interfax) - Italy's UniCredit Group could accelerate its exit from Russia if the military conflict in Ukraine ends, the Financial Times reported group CEO Andrea Orcel as saying.
UniCredit is among the European banks with the greatest risk exposure to Russia, along with Austria's Raiffeisen Bank International. The group has been trying to leave Russia since 2022.
Orcel said the group is seeing interest in its Russian Unicredit Bank from countries that have not imposed sanctions against Russia. However, the group does not intend to sell the bank at any price. Selling the bank is complicated by the fact that it is included in a list of lenders subject to a ban on transactions with stakes and shares, as well as contributions to charter capital, without special permission for such transactions.
Orcel said the group remains committed to leaving the Russian market. "We can't go back," he said.
A resolution on Ukraine could enable UniCredit to secure better terms for the sale of its Russian division, he said. "If the politics change, our ability to sell [the Russian subsidiary] at a more attractive set of terms improves, because, for everybody on both sides, it becomes more normalized," Orcel said, adding that this would also accelerate the group's exit from Russia.
The European Central Bank (ECB) demanded in April 2024 that a number of European banks accelerate the process of winding down their business in Russia.
UniCredit planned to reduce its local loan portfolio, not including loans to Russian subsidiaries of international groups, to less than 1 billion euros in 2025, its deposit portfolio to less than 2 billion euros, risks structured outside of Russia to almost zero and cross-border payments to less than 8.5 billion euros. The group achieved three of these four goals by the end of 2024, as the loan portfolio shrank to 1 billion euros, the deposits dropped to 0.9 billion euros and cross-border risks decreased to 0.3 billion euros. Cross-border payments, however, grew to 9.8 billion euros from 9.1 billion euros in the fourth quarter.
UniCredit reduced its retail business in Russia, by number of clients, by more than 50% and will seek to completely wind down this business, the group said in a presentation on its financial statements for 2024.
UniCredit's Russian business saw its net profit fall 13.4% to 577 million euros in 2024, while the group's total profit for the year was 9.3 billion euros. The Russian business's share of the group's net profit is expected to be negligible by 2027.
UniCredit Bank was the 20th largest lender in Russia by assets at the end of 2024, after having reduced its assets by almost 30% to 799.5 billion rubles to Russian Accounting Standards. The bank's net profit fell 30% to 40.8 billion rubles last year.
