UniCredit says Russian arm self-funded, well covered
Reuters
Published Feb 24, 2022 11:14
Updated Feb 24, 2022 15:29
MILAN (Reuters) -UniCredit said its Russian arm had very high provisions against possible loan losses and was "very liquid and self-funded", as the Ukraine crisis sent shares in Italy's second largest bank diving on Thursday.
By 1500 GMT shares in UniCredit lost 12.7%, worse than the overall 8% sector drop in Europe.
UniCredit's Russian subsidiary is the country's 12th largest bank, with 7.8 billion euros in customer loans at the end of last year.
UniCredit's overall credit exposure to Russia totalled 14.21 billion euros in mid-2021, a figure which takes into account also 6.3 billion euros in loans that were not granted locally.
In a bid to reassure investors, UniCredit said that provisions against possible losses covered 84% of its Russian subsidiary's non-performing exposures.
"Our equity in the Russian subsidiary is less than 4% of the group's total equity and if you look at loans and total assets it's even less than that," UniCredit said, adding it was closely following the developments.
UniCredit in January dropped a potential deal that would have seen it exchange its local arm for a controlling stake in Russian lender Otkritie which the country's central bank is looking to list after rescuing it in 2017.
UniCredit CEO Andrea Orcel said at the time that geopolitical risks had made it impossible to proceed though the group was generally happy with its Russian business, whose returns had always covered its local cost of its capital.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.