Unicredit’s exit from the Russian market, announced in recent days by CEO Andrea Orcel, could prove to be more complicated than expected. And a hitch could come from a disposal decided as early as last November, when the bank exercised the option to sell 10% of ABH Holdings, a group that controls Alpha Bank. The deal was supposed to be closed by March according to official documentation. But the imposition of sanctions on Moscow for the invasion of Ukraine has complicated the situation. According to sources close to the institute cited by Bloomberg, it is probable that the operation will not go through as long as uncertainty remains about the geopolitical context.
The detail of the operation
The stake is inherited from the sale of its Ukrainian subsidiary JSCB Ukrsotsbank which was sold in 2016 to ABH Holdings itself in exchange for a minority stake in the same holding. The agreement was that, after five years, Unicredit would have the possibility to return this same share to the same holding. But precisely the sanctions launched by Europe and the United States against Russian banks and several businessmen who appear in the Alpha Bank shareholding (such as its founder: the oligarch Mikhail Fridman) have frozen everything.
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Exhibition in Russia
The financial impact of the non-sale will not be dramatic ($ 137 million). Yet it is indicative of the difficulties that the institute could face by completely exiting the Russian market as announced in recent days by the CEO Andrea Orcel. “It’s not an operation that will be possible overnight,” Orcel admitted. The most extreme scenario, that of the total elimination of its exposure in Russia, would involve a reduction of 200 points in its capital ratios for 7.4 billion euros of capital.
The other institutes
UniCredit, which represents the 14th bank in Russia, is not an isolated case. Other international banks are considering abandoning Moscow, from the Italian Intesa Sanpaolo (which does not have a retail business in the country but an exposure on the corporate front) to Goldman Sachs and JpMorgan Chase, up to Deutsche Bank and Credit Suisse. One thing in truth is the closure of activities and the voluntary and immediate abandonment of Moscow, as announced by BP with the dry exit from Rosneft in the aftermath of the outbreak of the war. Another thing, on the other hand, is represented by the plan to prepare for a farewell which, given the current tensions, could sooner or later arrive perhaps more by choice of Moscow (and for lack of a buyer) than otherwise: in the case of UniCredit it seems be more this the scenario, at least to date. Unicredit has 4 thousand local collaborators, 1,500 corporate customers and about 1,250 European companies that do business in Moscow through it.
