UniCredit: Between Profits and Sanctions—Will the Bank Withdraw from the Russian Market?
10 April 16:45
The Italian bank UniCredit has abandoned plans to sell its Russian division.
Instead, the bank is considering liquidating the business and surrendering its banking license in Russia.
This was reported by the Russian propaganda outlet “Kommersant,” citing anonymous sources, according to "Komersant Ukrainian".
Why the strategy changed
Several factors influenced the decision:
- pressure from the European Central Bank, which warned as early as 2023 about the risks of operating in Russia;
- a requirement from the regulator to scale back operations in the country;
- political pressure from the Italian government;
- restrictions imposed by Russia that complicate the sale of assets.
In particular, Russian authorities can block deals with potential buyers subject to sanctions.
A financial paradox
Despite the reduction in operations, the bank’s Russian business remains profitable.
- The volume of loans has halved to €600 million;
- at the same time, net profit rose to €814 million (compared to €577 million previously).
This creates a dilemma for management: exiting the market could mean financial losses.
CEO Andrea Orsel previously stated that he does not want to leave Russia at a loss.
Why selling the asset is difficult
The sale of the Russian division is complicated by:
- Western sanctions following the start of Russia’s war against Ukraine;
- restrictions by the Russian government on the sale of foreign companies’ assets;
- the risk that the buyer could also fall under sanctions.
Previously, investors from the UAE offered to purchase the assets at a significant discount, but the deal did not go through.
UniCredit was among Russia’s largest banks before the start of the full-scale war in 2022.
The Russian regulator still considers it a systemically important institution for the Russian banking system.
Other European banks, including Raiffeisen Bank International, are facing similar difficulties in exiting the Russian market.
