UniCredit CEO Sees No Writedowns Due to Russia

Italy's UniCredit , one of Europe's banks with the greatest exposure to Russia, said on Tuesday it would not book any writedowns in the fourth quarter of 2014 or in 2015 because of the financial and economic crisis in the country.

 

UniCredit CEO Federico Ghizzoni said its Russian unit had strong fundamentals, ample liquidity while the quality of its loan portfolio was very good. The bank was a net lender to the group for 1 billion euros, he said.

 

"The 2014 results (of UniCredit in Russia) are in line with our expectations, if not slightly better," Ghizzoni told reporters.

 

He said UniCredit hedged against foreign exchange risk at the beginning of the year and the unit's assets were half in roubles and half in dollars, so the impact of the steep fall in the rouble was relatively limited.

 

"Costs are almost all in roubles, as are provisions, so for those the impact is positive. Because of the hedging we are not expecting writedowns at the end of this year or in 2015," Ghizzoni said.

 

He added that because of the crisis UniCredit in Russia had already strongly reduced its lending towards retail customers, who account for 20 percent of the total, and had also reviewed exposure towards corporate clients. But he said there was "no plan B" should the situation deteriorate.

 

UniCredit also said it had bought small Polish regional lender Skok for around 30 million euros.