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Financials

UniCredit would take 1 bln euro hit from Russia business write-off-sources

MILAN, March 2 (Reuters) - A full write-off of UniCredit’s Russian business would cost the Italian bank just over 1 billion euros ($1.1 billion) and shave 35 basis points off its best-quality capital ratio, two people close to the matter said.

UniCredit, Italy’s No.2 bank, has 2.3 billion euros in equity tied up in its Russian unit, or 3.7% of the group’s total.

However, a full write-off would also lower the bank’s risk-weighted assets, mitigating in part the hit to its capital ratios.

UniCredit’s Russian arm, AO UniCredit Bank, is the country’s 14th largest bank.

UniCredit, which has lost nearly a quarter of its value since Russia invaded Ukraine last week, also has cross-border exposure to the country.

Its overall ‘exposure at default’ to Russia was 14.2 billion euros as of mid-2021. That includes 8 billion euros in loans extended by the Russian arm and locally funded.

The rest comprises off-balance sheet items and cross-border loans mainly granted by UniCredit SpA towards large corporates outside of Russia. ($1 = 0.9009 euros) (Reporting by Valentina Za Editing by Keith Weir)

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