Fri. Jul 1st, 2022

UniCredit chief executive Andrea Orcel has said he would like the bank to pull out of Russia and is conducting an “urgent” review of how such a complicated exit would work.

Banks have been one of the last sectors to announce they are pulling out of Russia since its invasion of Ukraine last month, but JPMorgan, Goldman Sachs and Deutsche Bank have each announced in recent days they are winding down their operations.

UniCredit is one of a handful of western lenders with a far larger presence in Russia, owing to its retail and commercial banking businesses.

The bank warned last week it faced losses of more than € 7bn in an “extreme scenario” whereby its entire Russian business was wiped out.

Speaking at the Morgan Stanley European Financials Conference on Tuesday morning, Orcel said no decision had been made about whether the group would exit Russia.

“It would be quite easy for me to say that we’re leaving Russia – it’s what we all want to do, and it’s what our minds and bodies demand,” Orcel said. “However, UniCredit has about 4,000 people in Russia. We cover 1,500 corporates, of which 1,250 are Europeans that are trying to disentangle themselves from the country. ”

He added: “We are completing an urgent review on the country. And we are considering exit. But obviously, we need to seriously consider the impact consequences and the complexity of this untangling a full bank from the country. ”

The lender last week said it had loans of about € 7.8bn in its Russian consumer unit and net cross-border exposure to companies of € 4.5bn, of which about 5 per cent had been hit by western sanctions after the invasion of Ukraine.

UniCredit also revealed a net derivative exposure to Russian banks of about € 300mn and said “the maximum potential loss in the event that the ruble would tend to zero is around € 1bn”.

Alongside France’s Société Générale and Austria’s Raiffeisen Bank, UniCredit has the largest exposure to Russia among international lenders. Orcel had been examining an acquisition of Russian government-owned lender Otkritie before the invasion but has since scrapped those plans.

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