UniCredit dropped plan for Russia deal due to geopolitical situation, says CEO
By Cristina Roca
UniCredit SpA considered combining its Russian operations with those of Moscow-based Otkritie Bank, but scrapped the plan due to the current geopolitical situation as tensions mount in the region.
The Italian bank has undergone the first stages of the due diligence process on Russian company Otkritie, chief executive Andrea Orcel said on an earnings conference call on Friday.
UniCredit was considering merging its Russian operations – which make up around 5% of the group’s business – with Otkritie in return for a stake in the combined entity, Mr Orcel said. The Russian bank, which was bailed out and nationalized in 2017, plans to go public.
The deal would not significantly change the Italian bank’s exposure in the country, Orcel said, noting that plan has now been canceled due to the current situation in the region.
The United States has said it is prepared to impose sanctions on the Russian economy if Russian President Vladimir Putin orders an invasion of Ukraine amid a buildup of Russian military forces near the border between the two country.
The list of potential sanctions is long and could see some Russian banks banned from Swift, a global intermediary for financial transactions between banks, JPMorgan analysts said in a note this week.
UniCredit may have pulled out of the potential deal with Otkritie, but the Italian bank remains committed to its presence in Russia, Mr Orcel said on Friday.
Write to Cristina Roca at [email protected]
(END) Dow Jones Newswire
January 28, 2022 03:19 ET (08:19 GMT)
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