Putin grants approval for UniCredit Russia unit's reorganisation and sale

Putin Approves UniCredit Russia Unit Reorganisation and Sale Amid Sanctions

UniCredit's Russian Subsidiary: Reorganisation, Sale, and Sanctions Context

Presidential Approval and Legal Requirements

MOSCOW, Oct 5 (Reuters) - President Vladimir Putin has approved the reorganisation of the Russian subsidiary of Italy's UniCredit and the subsequent sale of the newly created unit, according to a decree published on the Russian government's website on Monday. 

The reorganisation and sale required presidential approval under Russia's restrictions on deals involving assets owned by investors from countries deemed "unfriendly" by Moscow.

UniCredit's Position and Planned Exit

Western Banks' Operations in Russia

UniCredit had long been one of the largest Western banks in Russia, along with Austria's Raiffeisen and Hungary's OTP, maintaining operations following the invasion of Ukraine despite pressure from European regulators to exit.

Details of the Sale Agreement

The bank said in May it had struck a non-binding deal to sell parts of its Russian bank to a "well-established private investor" in the United Arab Emirates, retaining only its payments business in Russia.

It said it would split its Russian business in two and keep full ownership of the payments arm, with the unidentified UAE buyer acquiring the rest. It did not disclose the deal value.

UniCredit said at the time that it expected to close the deal in the first half of 2027, subject to securing relevant authorisations.

A representative for UniCredit had no immediate comment.

Other Western Banks and Regulatory Oversight

Intesa Sanpaolo's Situation

Intesa Sanpaolo, another Italian bank active in Russia though only with a corporate business, secured in September 2023 a similar presidential decree, but it is yet to cut ties with Russia. UniCredit's Russian unit serves both retail and corporate clients.

Role of Russia's Central Bank and International Scrutiny

Russia's central bank must green light any exits, which are closely scrutinised also by Western authorities given international sanctions.

Sanctions and Recent Developments

EU Sanctions Exemption for UniCredit

In July, the EU approved a narrow sanctions exemption allowing UniCredit to complete a long-delayed transaction involving UniCredit's former Ukrainian unit and Russian businessmen Mikhail Fridman and Petr Aven.

Changes to the EU Sanctions List

Since then, Fridman and another Russian billionaire, Alisher Usmanov, have dropped off the EU's Russian sanctions list.

Reporting Credits

(Reporting by Anton KolodyazhnyyWriting by Maxim Rodionov and Gleb BryanskiEditing by Peter Graff and Deepa Babington)