By Cristina Roca 
 

UniCredit SpA looked into combining its Russian business with that of Moscow-based Otkritie Bank, but scrapped the plan due to the current geopolitical situation as tensions rise in the region.

The Italian bank underwent early stages of the due diligence process on Russia's Otkritie, Chief Executive Officer Andrea Orcel said in an earnings conference call Friday.

UniCredit was considering merging its Russian activities--which represent about 5% of the group's business--with Otkritie in exchange for a stake in the combined entity, Mr. Orcel said. The Russian bank, which was bailed out and nationalized in 2017, has plans to go public.

The deal wouldn't significantly change the Italian bank's exposure in the country, Mr. Orcel said, stressing that this plan has now been called off due to the current situation in the region.

The U.S. has said it is prepared to impose sanctions on the Russian economy if Russian President Vladimir Putin orders an invasion of Ukraine amid a buildup of Russian military forces near the border between the two countries.

The list of potential sanctions is long, and could see certain Russian banks get barred from Swift, a global intermediary of financial transactions between banks, JPMorgan analysts said in a note this week.

UniCredit may have pulled out of the potential Otkritie deal, but the Italian bank remains committed to its presence in Russia, Mr. Orcel said Friday.

 

Write to Cristina Roca at cristina.roca@wsj.com

 

(END) Dow Jones Newswires

January 28, 2022 03:19 ET (08:19 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.
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