by Giuseppe Gagliano –
The situation of UniCredit in Russia, with a 21.4% increase in profits from operations in this country in the first half of 2024, shows a complex picture of political challenges and opportunities. Despite geopolitical tensions between Europe and Russia, UniCredit has increased its profits, which may reflect strong demand for financial services from Russian clients or effective management of local operations. However, the significant decrease in the loan portfolio to Russian clients by 46%, and an 18% decrease in deposits from Russian clients, shows the bank’s strategic understanding of being open to the market of the Russia. This could be seen as a move to limit risks related to international sanctions or economic and political instability in Russia.
Politically, UniCredit’s continued and profitable presence in Russia could be explained in different ways. On the one hand, it could attract criticism from those sectors that see economic ties with Russia as a problem, especially as a result of international sanctions and geopolitical tensions. On the other hand, financial success could be seen as an example of economic pragmatism, where commercial interests prevail over political pressures.
UniCredit must navigate carefully between the expectations of European stakeholders, who may be concerned about the ethical and political implications of doing business with Russia, and the reality of a Russian market that ‘ continue to offer significant profit opportunities. The bank’s ability to manage these aspects will largely determine its future reputation and stability in the current geopolitical environment.
Following the seizure in May of 463 million euros in properties by the Russian government as a measure compatible with European sanctions actions, the senior management of Unicredit decided to maintain its presence in Russia to the extent of submit an application to the European Court of Justice against the pressure put forward by Brussels and the US which aimed to get the institution out of the country.
