UniCredit wants to sell its Russian subsidiary to an investor from the Emirates

UniCredit SpA has signed a non-binding agreement with a private investor from the United Arab Emirates (UAE) for the sale of its Russian subsidiary, the Italian banking group announced yesterday, as it seeks to streamline its operations ahead of a planned takeover of German rival Commzerbank, DPA reports, according to Agerpres.

The transaction will take place in the first half of 2027 and is likely to reduce UniCredit's profit by 3-3.3 billion euros. The profit targets set by UniCredit chief Andrea Orcel for 2028-2030 would not be affected, the Italian bank said.

While a number of Western banks, such as Societe Generale and ING, have reached agreements to sell their Russian subsidiaries, but have had to accept much lower prices for their businesses, several financial institutions, such as UniCredit and Raiffeisen, have decided to stay and slowly reduce their operations.

UniCredit has continued its attempts to exit the Russian market, under pressure from the European Central Bank, which has asked the Italian group to accelerate its efforts, including by limiting deposits and transactions.

Also yesterday, UniCredit announced that it will focus mainly on international payments in euros and dollars for corporate clients in the West and Russia who are not affected by sanctions.

• Hostile takeover bid for Commerzbank

We recall that this week, UniCredit launched a hostile takeover bid for Commerzbank AG, worth 35 billion euros, which will run until June 16, according to ANSA. The Italian bank is offering 0.485 UniCredit shares for each Commerzbank share, a proposal considered unattractive by investors.

Andrea Orcel said after the offer was launched that the Italian bank's plans for Commerzbank would take time to materialize. "It will take time, but with a lot of patience and maintaining direction, we are extremely confident that the transaction will take place," Orcel told ANSA.

The 35 billion euro offer is intended to increase UniCredit's stake in Germany's second-largest bank to more than 30%. Under German takeover regulations, a stake of more than 30% would allow UniCredit to further increase its stake through open market acquisitions next year.

Commerzbank rejected the offer and has the support of the German government in its fight to remain independent.

Orcel, a veteran investment banker who has led the bank since 2021, has yet to pull off a merger despite several attempts. Instead, Orcel has built up stakes in rival institutions including Commerzbank, Greek group Alpha Bank and Italian insurer Generali.

The combined entity would post a net profit of around 21 billion euros in 2030, while revenue would be around 45 billion euros in 2030 and costs would be below 14.5 billion euros.