* Turkey, Russia and Poland are growth engines
* Core includes Slovakia, Czech, Bulgaria and Croatia
* Risk/reward in Baltics, Ukraine and Kazakhstan
By Michael Shields
VIENNA, Feb 8 Italy's UniCredit SpA (CRDI.MI), emerging Europe's leading lender, is taking a three-pronged approach to doing business in the region, shunning growth for growth's sake, its head of central and eastern Europe said.
Its "engines for growth" category that will get the most attention includes Turkey, Russia, Poland and to some extent Romania, Gianni Papa told reporters late on Monday.
Its "core countries" category of Slovakia, the Czech Republic, Bulgaria and Croatia groups places where it wants to defend its franchise.
"For the so-called core countries we do have a strong presence and we want to keep our market share, which means to keep on serving the segments as we are serving them today as a universal bank," he explained.
Its "risk/reward" grouping features the Baltics, Ukraine and Kazakhstan.
"Clearly it is very much a choice (of business activity there) depending on the amount of risk that we want to take, risk/reward, and the capital associated with that," he said.
This group of countries was of interest to major UniCredit clients in Germany, Austria and Italy, he said.
Papa reiterated UniCredit had no plans to exit any emerging European markets, was not considering a sale of its operations in Kazakhstan and did not envision significant acquisitions. [ID:nLDE70H27W]
UniCredit is reviewing its operations to find tailor-made business models for each country in the region, the group's clear profitability leader.
The region contributed nearly a quarter of group revenue and 56 percent of pretax profit in the first nine months of 2010, the bank has said.
This is crucial given tough conditions in Italy, where UniCredit lost money in 2010, according to one newspaper report. [ID:nLDE7170BN]
The group's strategic review will take into consideration post-crisis conditions in which capital is scarce and dear, funding costs are up and liquidity is no longer abundant, Papa said.
"The model of growth for (the sake of) growth that was in a sense present in every banking group in central and eastern Europe is no (longer) there," he said.
Papa, who took up his position in December, said the group would allocate more capital to his region and saw room to grow in retail, where customer deposits made it important for funding. (Editing by David Holmes)