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Russia sanctions could hurt Unicredit's business - board member
June 27, 2014 / 6:46 AM / 3 years ago

Russia sanctions could hurt Unicredit's business - board member

FRANKFURT, June 27 (Reuters) - Harsher European Union sanctions against Russia could hurt UniCredit’s business, a board member of the Italian lender told a German newspaper.

“We respect the decisions of the EU and will comply with the decisions,” Gianni Franco Papa was quoted as saying in an interview with German daily Handelsblatt.

“But should there be harsher restrictions it would of course have an impact on our business, but also on all of Europe. Russia is a very important market.”

Bank Austria, UniCredit’s central and eastern European arm, posted a 26 percent jump in operating profit in Russia last year, to 783 million euros ($1.06 billion), buoyed by retail lending.

Western powers have stepped up pressure on Russia to take action to defuse a conflict in eastern Ukraine that erupted after protests in Kiev toppled Moscow-backed Ukrainian leader Viktor Yanukovich in February and Russia annexed the Crimean peninsula.

The European Union is preparing to discuss deeper sanctions against Russia at a Brussels summit on Friday, though Western diplomats said the EU and the United States were not poised to impose fresh restrictions on Russia.

Unicredit is trying to sell its business in Ukraine, which Papa said accounts for 0.4 percent of the group’s credit portfolio.

“The sales talks are ongoing,” Papa said, adding there was no fixed timeframe for a sale.

Asked whether he may have picked a bad time to seek a buyer for a Ukrainian lender, amid the ongoing crisis, Papa said the market there was already difficult before the conflict between Ukraine and Russia began, adding the election of new Ukrainian President Petro Poroshenko had led to some stabilisation.

$1 = 0.7359 Euros Reporting by Maria Sheahan; editing by Jason Neely

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