UniCredit's main priority is to prevent the possible nationalization of its Russian unit, which would lead to the transfer of approximately €3.8 billion in capital to the Russian state.
The enormous problems that the West's retaliatory sanctions against Russia have caused to European banks, as well as the fact that they are impossible to comply with, were highlighted by UniCredit CEO Andrea Orcel.
Orcel stated on Thursday that the Italian bank, which is also a major shareholder in Alpha Bank, is trying to balance between compliance with international sanctions and avoiding the nationalization of its Russian subsidiary by Moscow.
"Intergalactic compliance effort"
Speaking at the ECB forum on banking supervision, Orcel described the process of adhering to sanctions against Russia as an "intergalactic compliance effort," stressing that it is almost impossible to have absolute certainty of full compliance with all rules.
"No one can be absolutely sure that they are 100% compliant with sanctions," Orcel warned, pointing out the complexity of overlapping international regulations.
Risk of nationalization
The Italian bank remains one of the few large European banks with a significant presence in Russia.
Orcel emphasized that UniCredit's main priority is to prevent the possible nationalization of its Russian unit, which would lead to the transfer of approximately €3.8 billion in capital to the Russian state. He further added that, in the event of nationalization, UniCredit would retain approximately €1.5 billion in Russian deposits, which are currently held in Milan, Italy.
Continuing pressure from regulators
Orcel's statements come at a time of tension between Western regulators, who seek stricter enforcement of sanctions, and European banks, which are trying to manage their continued presence in the Russian market without violating rules or losing their assets.
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