UniCredit announced on Thursday that it has signed a non-binding term sheet to sell a portion of its Russian subsidiary to a private investor in the United Arab Emirates, a deal that marks a turning point in the Italian bank’s yearslong effort to disentangle itself from Russia.
Deal Structure
The transaction involves spinning off a portion of AO UniCredit Bank’s activities into a new, separate entity that UniCredit will retain full ownership of, followed by the sale of the remaining Russian bank and its assets to the UAE-based buyer, according to a company statement. The arrangement allows UniCredit to keep control of its international payments business in Russia, which processes transactions predominantly in euros and U.S. dollars for Western and non-sanctioned Russian corporate clients.
UniCredit said the deal will result in a cumulative negative earnings impact of approximately €3 billion to €3.3 billion, of which roughly €1.6 billion to €1.8 billion stems from recycling the foreign exchange reserve through the profit-and-loss statement. The bank said the transaction will not affect shareholder distributions or its profit targets through 2028 and 2030. On the capital side, the deal is expected to deliver an overall benefit of approximately 35 basis points, as an initial negative impact of 20 to 25 basis points at closing will be more than offset by a reduction in residual loss exposure under an extreme scenario — falling to roughly 30 to 40 basis points from around 93 basis points as of the first quarter of 2026. Completion is expected in the first half of 2027.
Long Road to Exit
The announcement caps a turbulent chapter for UniCredit’s Russian operations. The bank has faced mounting pressure from the European Central Bank and the Italian government to withdraw from Russia, where it has operated a commercial lender since before the full-scale invasion of Ukraine in 2022. UniCredit CEO Andrea Orcel told the Financial Times in November 2025 that the subsidiary would be “virtually eliminated” by the end of 2026. In April, Russian newspaper Kommersant reported that UniCredit had abandoned sale plans altogether and was considering liquidating the unit and surrendering its banking license — a claim UniCredit swiftly denied.
The deal comes just days after UniCredit posted record first-quarter 2026 results, with net profit rising 16% year-on-year to €3.2 billion. Russia’s contribution to the group has been shrinking rapidly; the division’s net profit fell 47% in the quarter at constant exchange rates, with total revenues down more than 40%.
Broader Context
UniCredit is one of the last major Western banks still operating in Russia. Citigroup completed its exit in February by selling its Russian unit to Renaissance Capital. Raiffeisen Bank International, another large European lender with Russian exposure, has also faced regulatory demands to reduce its footprint. UniCredit’s shares rose following Thursday’s announcement, which coincided with the bank’s ongoing €35 billion takeover bid for Commerzbank, whose acceptance period opened on May 5 and runs through June 16.
