MILAN (Reuters) -Italy’s UniCredit is trying to comply with international sanctions in relation to its Russian unit while also avoiding moves that could prompt Moscow to seize the business, CEO Andrea Orcel said on Thursday.
Speaking at a European Central Bank Forum on bank supervision, Orcel said that trying not to breach Western sanctions on Russia required a “galactic” effort, and that nobody could be certain of complying with them in full.
“The issue with Russia for us is navigating the sanctions … Russia has 15,000 sanctions … and they’re all different, so managing that is a galactic effort of compliance … that is a big challenge,” Orcel said.
“The second challenge, at least for us, is to not be nationalised,” he added.
UNICREDIT COULD KEEP SOME RUSSIAN DEPOSITS IN ITALY
“The Russians want you to make mistakes to be justified in nationalising. We’re very careful not to make those mistakes because we would be handing over on a silver platter 3.8 billion euros of capital … I’m not going to do that,” Orcel said, adding that money was all in cash.
In the event of a nationalisation, UniCredit would offset part of the hit by keeping in Italy 1.5 billion euros in corporate deposits from its Russian unit that it was managing in Milan when the Ukraine war started and has not repatriated.
“If (the nationalisation) happened, goodbye the deposits because I’m going to try to keep my 1.5 billion,” Orcel said.
He said that the Russian unit had stopped issuing new loans but was obligated by local laws to take deposits, which it parks with the central bank.
In stopping UniCredit’s takeover bid for Banco BPM, the Italian government argued that the bank’s Russian presence posed a threat to national security, a statement that Orcel on Wednesday said was “unacceptable”.
(Reporting by Valentina Za. Editing by Alvise Armellini and Mark Potter)
