Andrea Orcel says Ukraine breakthrough could unlock sale of UniCredit’s Russia unit

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UniCredit could accelerate its exit from Russia if there is a breakthrough on the Ukraine war, its chief executive Andrea Orcel has said, with the Italian bank one of the few large western lenders to have remained in the country.

He said an end to hostilities could allow UniCredit to secure better terms after refusing to offload its Russian unit other than for a “fair price” amid regulatory and legal difficulties following Moscow’s full-scale invasion of Ukraine in February 2022.

“If the politics change, our ability to sell [the Russian subsidiary] at a more attractive set of terms improves, because, for everybody on both sides, it becomes more normalised,” Orcel told the Financial Times in an interview. “Therefore our way to get out is accelerated and the numbers look much better.”

His comments came after top US and Russian officials held talks in Saudi Arabia this week about ending the conflict, alarming Ukraine and its European allies that were not invited to the discussions.

While European lenders such as Société Générale and ING have struck deals to leave Russia, taking a significant financial hit in the process, a handful have stayed and slowly wound down their operations.

The exit process has been complicated by some western banks needing transactions to be personally approved by Russian President Vladimir Putin. However, UniCredit has continued to operate in Russia despite pressure from regulators and politicians to speed up its departure.

Orcel said UniCredit’s “commitment to exit our Russia business is absolutely clear”.

“We’re in flight and we will complete at this point,” he said. “We can’t go back.”

The bank had engaged “seriously over the last three years with a significant number of counterparties in exploring all options” for its Russia business, he added, “but given the varying complexities and sanctions, we have not been able to move forward”.

Russia was an important market for the Italian lender, with its unit there contributing about 5 per cent of the group’s total income last year. Revenues at its business in the country jumped 9 per cent to €1.3bn in 2024, according to its latest full-year results. The unit contributed €577mn in net profits for the year.

However, UniCredit has also significantly reduced loans and deposits in the country and said it was compliant with demands from the European Central Bank to scale back. It expects profits from the Russian business to be “marginal” by 2027.

“Unless I am forced to, I won’t be selling Russia for one euro or for anything that is not a fair price,” Orcel said last week.

He also told the FT the potential boost to the European economy from an end to the Ukraine war was being underestimated.

“At the end of the war, which I hope is done at the right terms, I guarantee you that by eliminating the geopolitical uncertainty [and] the disruption, the level of investment, the level of bounce, is going to be very significant,” he said. “We have ignored that but we will have it.”

Despite its failure to strike a deal for its Russian business, UniCredit has been at the centre of attempted takeovers in the European banking industry in recent months. The group has taken a 28 per cent holding in Germany’s Commerzbank and launched an unsolicited bid for domestic rival Banco BPM.

However, UniCredit this week threatened to walk away from BPM, while its stake-building in Commerzbank has been left in limbo amid federal elections in Germany. The proposed deals have angered politicians in Italy and Germany, respectively.

“The two transactions have degenerated into political debates . . . that should not be there, and to a certain extent — maybe to a large extent — personal attacks,” Orcel told the FT.

“Notwithstanding that they are two in-market deals, they have triggered a debate that is about Europe, the European Union, banking union, capital markets union. Given all the debate there is about how Europe needs to stand up on its two feet and get together in order to create the value that it was born to create, the debate around [the deals] is quite disruptive to that concept.”

Asked about the increasingly fraught relations between Washington and European countries since Donald Trump returned to the White House last month, Orcel said the US was telling Europe that it needed to “stand on its own two feet”, which he described as a “positive wake-up call”.

“I think we are realising something that should have been clear: that if we want to be able to defend our ideals, our beliefs, our democracy, we need to be an economic bloc that is strong enough to defend them,” Orcel said, adding he was “optimistic” about Europe’s future.