Weekly SmartPills #51
UNICREDIT HIT IN RUSSIA: €463 MILLION IN ASSETS SEIZED
Unicredit in the Crosshairs: Major Asset Seizure in Russia Worth €463 Million
Bad news from Russia for Unicredit. The Arbitration Court of St. Petersburg and the Leningrad Region has ordered the seizure of the Italian bank’s accounts and assets worth nearly €463 million.
This action stems from a dispute with Ruskhimalyans, a subsidiary of Gazprom, concerning a gas processing and liquefaction project in Ust-Luga.
Following international sanctions, Unicredit chose not to honor the bank guarantees tied to the project, triggering the legal battle with Ruskhimalyans.
Similar measures have been taken against other European banks, such as Deutsche Bank and Commerzbank, but the Russian court’s order specifically targets Unicredit Russia and Unicredit AG, the group’s German entity.
Jurisdictional Clash: London Blocks Moscow, Contract Points to France
Unicredit stated it is aware of the developments and that the court-ordered seizure concerns only certain specific assets, sufficient to cover Ruskhimalyans’ claims in case of a ruling in their favor. The bank is closely monitoring the situation and plans further legal assessments.
The legal case has become more complex with the intervention of a UK court, which issued an injunction preventing Ruskhimalyans from proceeding with the case in Russia.
According to the contract, any dispute should be submitted to arbitration in France. Ruskhimalyans’ appeal to the UK Supreme Court was rejected, making the case even more intricate and international.
ECB Pressure and Italian Diplomacy: Unicredit Pushed to Exit Russian Market
The Italian Ministry of Foreign Affairs is closely monitoring the situation. The case will be discussed during the upcoming "Russia Table" meeting convened by Minister Antonio Tajani, involving Italian companies and institutions operating in the Russian market.
The European Central Bank (ECB) has recently stepped up pressure on Unicredit to further reduce its business activities in Russia.
This is similar to what has been requested of Austria’s Raiffeisen Bank International, the Western bank with the largest presence in Moscow.
Due to rising reputational, legal, and financial risks, the ECB continues to urge banks to withdraw from the Russian market.
Over the past two years, Unicredit has reduced its exposure to Russia by about 66%, or €4.1 billion. This de-risking process has helped contain costs, but the ECB is pushing for an even faster exit.
Conclusion
The legal case in Russia represents a serious blow for Unicredit, already under pressure to reduce its operations in the country.
With the intervention of the Italian Ministry of Foreign Affairs and the demands of the ECB, the Italian banking group will have to carefully navigate these turbulent waters, balancing legal obligations with mounting international pressure.