(Finance) – The first quarter of UniCredit it was essentially characterized by two stories. The first concerns “the franchise that has achieved record resultsthanks to strong performance and a continuous momentum in the business, testifying to the strength of the core business and the commitment of the people “. The second important fact is” the € 2 billion reduction in exposure to Russiawith minimal costs. “This was stated by the CEO of the Italian banking group, Andrea Orcelin the call with the agencies that followed the publication of the first quarter results.
There bank solidity remains “best-in-class”, said the CEO, “while taking into account both the deduction of 1.6 billion euros for the repurchase of treasury shares for the year 2021, and the 0.4 billion euros of accrued dividends, and the reduction in exposure to Russia “. “Our plan is working and it is working well, with the changes we are implementing – he added – And we are confident that we can confirm the returns to shareholders for the current year. We need to be careful in a volatile world, but our focus is on executing the plan. “
“We must not underestimate Russia, but this must not overshadow the performance achieved by the work of our people. It was an unprecedented quarterbut he illustrated and underlined the intrinsic values of our business and that the December plan is right and we can make it happen “, he pointed out.
When asked about the future of the group in Russia, he replied: “We have to look at the substance and not words and signals. The exit from Russia is complicated. To date, we have provisions that allow us to consider all options without other impacts on capital. On this basis, we can consider the best options without capital pressure or stress from not being able to absorb. We are clear about what the stakeholders want us to do and we are going in that direction, and we will communicate it when things are done. “Orcel did not deny having identified the solution, but he did not want to elaborate.” We are clear about our position and as we are a western bank we have a clear idea of what the stakeholders want. We evaluate our possibilities rationally, “she added.
The “Unicredit’s position on M&A has not changed“, Orcel said, reiterating that they must be” an accelerator of our strategy, and we will do operations of this type if they bring added value, in the best interests of the shareholders “.
The banker then provided some indications on how UniCredit has risked its exposure to Russia. “The reduction was carried out within the sanctions framework, primarily through the asset swapping with unsanctioned Russian organizations; in addition, a number of Italian and German companies, for example, had plans for expansion in Russia, but now the credit they had imagined is no longer needed and we deleted it; finally, we have renegotiated some positions with the counterparties. “Orcel also clarified that thepositive effect of the hedge against the ruble is overas the currency returned to strengthen compared to the first days of the conflict, with “the expiration which reduced the net benefits on exposure”, amounting to 400 million euros.
The CEO said the group could continue to reduce its exposure to Russia, but the window to do so is narrowing. “The reduction may continue to some extent, but the sanctions evolve and more companies and transactions are sanctioned. So the window for trading positions becomes narrower. Basically, it can continue, but only under certain circumstances. Also, doing these things requires time, and I believe that there will be additional benefits, but not at the same pace as the past two months“.