LONDON: Italy’s UniCredit on Tuesday reported a rise in revenues last year from its Russia business but said it had reduced loans and deposits in the country and was compliant with the European Central Bank’s demands to scale back.
The bank said in a presentation to investors alongside its fourth-quarter results that it had already “exceeded” three of four self-set targets for 2025.
UniCredit and other European lenders have been under growing pressure from the ECB to reduce Russian operations since Moscow’s invasion of Ukraine in 2022.
Authorities in Europe and the U.S. want to sever European financial ties to Moscow, and have been unhappy about some banks’ progress. The ECB last year ordered UniCredit, the second biggest Western bank still operating in Russia behind Austria’s Raiffeisen, to scale back faster and imposed several restrictions.
UniCredit said on Tuesday that in the fourth-quarter, deposits in Russia shrank by 51% from the third quarter to under 1 billion, and its loans to clients fell by 38%, both below its 2025 targets.
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However, cross-border payments reached 9.8 billion euros, exceeding the target of less than 8.5 billion euros. UniCredit said that without “one-off” items including debt repayments from Western companies, that number would have been below the 2025 target.
Overall, UniCredit reported a 9% rise in full-year revenues from its Russian units to 1.29 billion euros. The bank said on a constant currency basis the rise was 21%.
“Unless I am forced to, I won’t be selling Russia for one euro or for anything that is not a fair price,” CEO Andrea Orcel told analysts.
Last year, the ECB prohibited UniCredit from granting new loans or rolling over existing loans and imposed a ban on taking new term deposits from June 1, Reuters reported.
UniCredit on Tuesday did not explicitly say whether this measure had been put in place.
The Milan-based lender said it had “significantly reduced” its retail business and was “aiming for full exit”.
“Where we go from there will depend on a number of scenarios, but selling for zero is not on the cards,” Orcel said.
Russia has been a key market for UniCredit, contributing 5% of the group’s total income last year. The bank expects profits from the Russian business to be “marginal” by 2027.
UniCredit is challenging the ECB’s restrictions on loan, deposit, payments, and cross-border lending at the European Union’s General Court, saying the demands go against Russian rules. In November, the court rejected UniCredit’s request to suspend the ECB’s order. The proceedings on the merits of the case continue.
Dutch bank ING said last month it would take a 700-million-euro hit after striking a deal to sell its Russian business to a local company.
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