Written by Giuseppe Fonte and Valentina Za
STRESA, Italy (Reuters) – Italian banks should halt their activities in Russia because staying in the country also brings a “reputation problem,” European Central Bank policymaker Fabio Panetta said on Saturday.
After Austria's Raiffeisen Bank International, UniCredit is the European bank with the most exposure to Russia, while Intesa Sanpaolo Bank (OTC:) is divesting from its business in the country.
“From there (Russia) you have to get out,” Panetta told reporters during the press conference after the end of the G7 financial meeting in Stresa, northern Italy.
Panetta, World Bank, added: “There are objective difficulties because exiting Russia is complicated. You have to find a buyer and you know that you are forced. It can be expensive, but you have to exit because there is a reputational problem.” Governor of Italy.
The Russian arm of UniCredit Bank was affected this month by the seizure of assets worth 463 million euros ($502.12 million) in connection with an aborted gas project for which the banking group provided guarantees.
Both Intesa and UniCredit have repeatedly said Western sanctions have reduced the number of potential buyers, making it more difficult to leave.
Last year Intesa obtained the necessary presidential decree for a foreign bank to divest its Russian business.
However, Italy's largest bank has not finalized its exit, awaiting the green light from the Russian Central Bank and Italian authorities.
UniCredit CEO Andrea Ursel has always said the bank's goal is to reduce exposure to Russia while minimizing damage to the lender.
Orcel said it would not be “morally correct… to write off and write off” the group's Russian unit.
A person familiar with the matter said that European banking supervisors and the US authorities responsible for enforcing sanctions are closely monitoring the activity of Western banks in Russia and the progress they are making in exit plans.
In addition to the green light required from Russian President Vladimir Putin and the Russian Central Bank, any transaction must be approved by the European Central Bank.
To avoid the risk of post-deal sanctions, the US Treasury Department's Office of Foreign Assets Control should also provide a letter of comfort once it is informed of the identity of the potential buyer, the source said. ($1 = 0.9221 euros)
(Reporting by Valentina Za in Milan; Editing by Keith Weir)