3 yıl önce

UniCredit joins growing list of financial firms seeking to exit Russia

UniCredit, Italy's second largest bank, may face losses worth billions of dollars if it quits business in Russia.

Reuters

UniCredit is one of Europe's banks most exposed to Russia.

UniCredit is urgently reviewing its Russian business and could decide on a costly exit of the country after Russia's incursion into Ukraine.

A growing list of financial firms are looking to exit Russia, with Deutsche Bank, Goldman Sachs and JPMorgan Chase winding down business there.

Unicredit Chief Executive Andrea Orcel said on Tuesday the economic environment had changed because of the Ukraine crisis and the bank was now assuming there would be stagflation - or a combination of low growth and high inflation.

Italy's second-biggest bank last week said a full write-off of its Russian business, including cross-border exposure, would cost around $8.1 billion, leaving its plans to distribute capital to shareholders hanging by a thread.

Its shares fell 3.2 per cent, and an index of European banking stocks was down 1.8 per cent.

Russia has $117 million in payments due on Wednesday on two dollar-denominated Eurobonds. Its finance ministry has said it will make the payments in roubles if sanctions prevent it from paying in dollars - a move markets would view as a default.

Russian default worries

A default would add further pain to Russia's economy and financial system, making it harder for Moscow to find new lending sources and raising future borrowing costs, a US Treasury official said late on Monday.

The official told Reuters the Treasury believes there are limited direct exposures in the US financial system to Russian sovereign bonds and the main impact would fall on a Russian economy already reeling under the weight of Western sanctions.

Russia is subject to stringent sanctions and has introduced countermeasures following the incursion into Ukraine, which it calls a "special operation."

In a sign of the pressure, the Russian central bank said it would suspend the buying of gold from banks from Tuesday to meet increased demand for the precious metal from households.