MILAN (Reuters) – UniCredit’s Russian subsidiary final 12 months sued the Italian financial institution’s personal German arm as a part of a court docket case relating to ensure funds in Russia which UniCredit couldn’t honour due to sanctions, the lender’s annual report confirmed.
The case, which dates again to 2023, highlights the dangers linked to its ongoing presence in Russia, which UniCredit didn’t terminate when the Ukraine conflict broke out as a result of CEO Andrea Orcel mentioned he needed a good worth to half with the enterprise.
Following European Central Financial institution calls for it hastens its exit, UniCredit is now working to carry the revenue contribution from its Russian enterprise near zero in 2027.
UniCredit has sued the ECB over its calls for, saying it overstepped its remit, and has set its personal exit targets.
The case prompted UniCredit to ebook 554 million euros ($580 million) in provisions towards authorized dangers final 12 months, up from 68 million in 2023. Prices to completely cowl dangers from the case totalled 0.3 billion euros within the fourth quarter alone.
The dispute stems from a assure package deal UniCredit Germany issued for certainly one of its purchasers, German firm Linde, which as a consequence of sanctions needed to halt work on a fuel processing plant it was constructing for St Petersburg-based RusChemAlliance.
When the challenge was halted, Gazprom-backed RusChem moved to attract down the ensures from UniCredit Germany, and had a Russian court docket implement the funds when UniCredit refused to honour them as a consequence of sanctions.
UniCredit mentioned in its annual report that its Russian subsidiary, AO Financial institution, had made the funds to RusChem below the ensures.
AO Financial institution then turned to UniCredit Germany to get the cash again, on the idea of counter assure agreements between the 2 models. UniCredit Germany couldn’t honour the counter ensures as a consequence of sanctions and was taken to court docket by AO Financial institution.
UniCredit mentioned a Russia court docket in October ordered its German unit to pay the assure quantities plus curiosity. In January 2025, UniCredit’s enchantment towards that ruling was rejected.
UniCredit Germany now has the best to enchantment additional when the complete resolution is printed, however the current ruling applies within the meantime, it mentioned. ($1 = 0.9553 euros)
(Reporting by Valentina Za; Enhancing by Keith Weir)
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