UniCredit Awaits Court Decision on Russia Business Reduction Following ECB Order

UniCredit is still awaiting a court decision regarding whether it must immediately scale back its operations in Russia, in compliance with a European Central Bank (ECB) directive. The decision comes months after the bank filed an objection, sources familiar with the matter told Reuters.

The nearly four-month delay in the court ruling adds pressure on UniCredit to demonstrate that it is adhering to the ECB’s requests, as deadlines for compliance have already lapsed. The ECB, which serves as the lender’s primary regulator, issued instructions to UniCredit in late April, demanding that the Milan-based bank reduce its Russian business. These demands included a ban on new deposits and restrictions on payment processing.

In response, UniCredit sought relief from the European Union General Court in June, requesting that the court annul the ECB’s orders. Chief Executive Officer Andrea Orcel has argued that complying with the ECB’s requirements might violate Russian laws. UniCredit has also asked the court to suspend the ECB’s directives while legal proceedings continue, with the bank stating in July that a decision on the suspension was expected “in the coming months.”

Neither UniCredit nor representatives from the ECB or the European court have provided comments on the situation. However, UniCredit reiterated its stance in July, saying it "will continue to act on its commitment to significantly reduce its presence in Russia" and maintained its goal to downsize its business there by 2025.

According to court documents, which had not been previously reported, UniCredit has requested that the judge annul all of the ECB’s demands. Alternatively, the bank asked for an annulment of specific orders related to loans, deposits, and payment processing.

The ECB’s orders prohibit UniCredit from issuing new loans or renewing existing ones, and as of June 1, the bank has been banned from accepting new term deposits, according to the filings. Additionally, the ECB sought to limit payment transactions with Russian clients in certain foreign currencies starting on September 1, with the exception of clients on a "whitelisted" list.

Reuters was unable to determine which whitelist the ECB referred to or whether UniCredit has complied with the regulatory requests.

By fLEXI tEAM