The highest European court is set to “assist” one of the continent’s largest banks in exiting the Russian market. Lawyers for UniCredit SpA have filed a lawsuit, seeking to assess the legality of the central regulator’s decision, which mandates the bank to continue reducing its presence in Russia’s economy.
UniCredit SpA explained that they agree with the European Central Bank’s (ECB) stance on the necessity of decreasing operations with Russian businesses. However, the private institution has concerns regarding the conditions of this reduction.
While the statement is being reviewed—a process that could take several months — the Italian creditor has requested a temporary suspension of the relevant ECB decision. This request came after the European regulator increased pressure on several banks this year, urging them to withdraw from Russia due to their significant business interests there.
Nonetheless, the Kremlin has complicated the departure of international companies from the market, putting creditors in a difficult position. Given these challenges and the lack of a harmonized regulatory framework, UniCredit SpA expressed concerns in their statement that implementing some of the ECB’s conditions could have “serious unforeseen consequences” affecting the entire system.
This concern is understandable, considering UniCredit’s share of operations in Russia. UniCredit is not alone in this matter; Raiffeisen, another major Western bank, also remains active in Russia.
Austrian bank Raiffeisen has faced intense pressure from the United States due to its operations in Russia and transactions with Russian businessman Oleg Deripaska, Reuters reports.
The first warnings from Washington came in May, when the bank was found to have financial arrangements with Deripaska. Despite terminating the deal, the American government continues to increase its pressure.
The U.S. threatens to cut off Raiffeisen from the dollar, fully aware of the significant impact that being excluded from the international currency could have on the bank.
Raiffeisen has already reduced the volume of loans and payments in Russia and plans to take steps to reduce deposits, which currently amount to €14 billion.
Since the start of the war, Russia has accounted for about half of the bank’s profits, a trend that continues to this day.
