MILAN, March 15 (Reuters) – UniCredit, Italy’s second-largest bank, has launched an urgent review of its operations in Russia and may decide to withdraw from the country due to the Russian invasion of Ukraine, the chief executive said on Tuesday. of the group, Andrea Orcel.
Speaking at the Morgan Stanley European Financials Conference, Orcel added that the decision was complex and could take time due to the need to support the bank’s local staff as well as European companies also trying to leave the country. .
“We are looking at an exit, but obviously we have to take into account the complexity and the consequences of what we are doing there,” he said as part of the London conference.
“The biggest impact is on the ground. It’s about 4,000 people who I consider colleagues (..) and 1,250 European companies who have kept quarters in the markets where we operate and who need our help. .”
Orcel also said the economic environment has changed due to the Ukraine crisis and the bank now assumes there will be stagflation.
“We’re going to have a shock,” he said.
The group leader said he still believed the bank could meet the cash distribution targets it set in December, but that depended on the general economic environment.
UniCredit said last week that a full write-off of its Russia business, including cross-border exposure, would cost around 7.4 billion euros ($8.1 billion).
It confirmed the payment of cash dividends in the worst case, but made its plan to buy back shares conditional on its basic equity remaining above 13%.
Orcel also warned that the crisis had raised the bar for merger and acquisition deals, as UniCredit would now have to use its excess capital in part to cushion the blow. (Report Valentina Za; French version Federica Mileo)