These banks are among the few Western lenders that have a significant presence in Russia. Moscow’s invasion of Ukraine and subsequent international sanctions forced foreign bank officials to think about turning their backs on the country. According to an analysis by the Financial Times last week, Western banks have already made provisions for an expected loss of more than $10 billion.
UniCredit has received several offers from Russian financial institutions to buy out its local branch since the bank’s CEO, Andrea Orcel, announced in March that the bank was considering exiting the country. One of the offers came from the Interros Group, an investment company owned by Vladimir Potanin, one of Russia’s richest men and oligarchs, and not endorsed by the United States, the United Kingdom or the European Union. However, UniCredit reportedly turned down the offer abruptly. The Italian banking group is still negotiating the sale of its Russia business with a few non-sanctioned financial institutions. He said it would cost 5.3 billion euros to close and write off its Russia operations without selling.
Interros has already acquired several companies, including an agreement to buy a subsidiary of French Société Générale called Rosbank (the French bank will give up 3.1 billion euros) and a 35 percent stake in TCS fintech from Russian entrepreneur Oleg Tinkov.
Meanwhile, VTB, Russia’s second largest bank, received support from the Central Bank for the purchase of the state-owned Otkritie and the RNCB. All three are subject to Western sanctions.
Citi would rather sell to a non-sanctioned organization than exchange assets. According to a person familiar with the case, he is conducting “several negotiations” with medium-sized Russian banks to sell part of his consumer and corporate banking operations in the country.
According to the Financial Times, Western banks have also negotiated with regulators that, as a last resort, they can get special waivers to do business with sanctioned individuals and companies.
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