UniCredit presence in Russia poses sanctions risk, Italy Finance Minister says

ROME (Reuters) -UniCredit's investments in Russian sovereign bonds through its local unit expose the group to the risk of possible international sanctions, Economy Minister Giancarlo Giorgetti said on Wednesday.

He added that the Italian government had acted to defend the national interest by imposing tough conditions on UniCredit's failed bid for Banco BPM through so-called "golden powers" aimed at shielding key assets.

"UniCredit's Russian unit has made substantial investments in Russian sovereign debt that expose it to the risk of international sanctions," Giorgetti said during a Q&A session in parliament.

Earlier this month, UniCredit withdrew its takeover bid for smaller rival Banco BPM, blaming government intervention for scuppering the 15 billion-euro ($17 billion) deal.

Among several conditions, Italy told UniCredit it had to halt activities in Russia, except for payments to Western companies, by early 2026, to prevent savings collected by Banco BPM from benefiting Moscow's economy as it continues its war against Ukraine.

Following supervisory demands, UniCredit has sharply cut its exposure to Russia, but it needs approval from Russian authorities to leave the country.

Giorgetti mentioned sanctions adopted in stages by the European Union against Moscow since Russia invaded Ukraine in February 2022.

The sanctions have targeted Russia's energy revenues, banks, and military industry, and frozen hundreds of billions of its central bank's reserves.

Italy also backed a stance agreed by the G7 major democracies stating that firms that have helped Russia fund its war on Ukraine by doing business with the country should be excluded from profiting from Ukraine's reconstruction.

(Reporting by Giuseppe Fonte, editing Alvise Armellini/Keith Weir)