UNICREDIT CEO SAYS REDUCING RUSSIA EXPOSURE AS LOCAL PROFIT JUMPS

MILAN (Reuters) -UniCredit will accelerate the reduction of its local Russia exposure, the Italian bank's chief executive said, as profit at the Russian unit doubled in the first quarter.

UniCredit Russia reported a first quarter net profit of 213 million euros ($229 million) on Tuesday, up from 99 million a year ago.

After Austria's Raiffeisen Bank International, UniCredit is the European bank with the largest exposure to Russia, where it runs a commercial bank.

It also has cross-border exposure due to loans its non-Russian business extended to Russian clients.

"The cross border exposure that remains will be dealt with or reimbursed by the end of 2025," CEO Andrea Orcel told analysts on a call, adding the bank had already reduced it by 91% over the past two years, losing only "single digits" on it.

With interest rates rising and international sanctions crippling the activity of Russian banks, Western lenders in Russia have seen profits rise since the Ukraine war started.

The European Central Bank has recently written to euro zone banks operating in Russia demanding they cut back on their business there, or risk fines under a disciplinary proceeding that can potentially culminate in the banking licence being revoked, sources have told Reuters.

"With respect to the local exposure, it's down 67% over the last two years or so and we're continuing to compress decisively, and you should expect an accelerated decline," Orcel said.

($1 = 0.9295 euros)

(Reporting by Valentina Za; Editing by Cristina Carlevaro and Emelia Sithole-Matarise)

2024-05-07T11:00:49Z dg43tfdfdgfd