The Italian UniCredit became the latest foreign bank to announce it wanted to leave Ukraine. UniCredit hopes to wrap up the sale of its Ukrainian business early next year as Italy’s biggest bank by assets presses ahead with a series of disposals, its CEO said.
In August UniCredit started three months of exclusive talks to sell Ukrsotsbank to ABH Holdings, part of Russia’s Alfa Group.
“I confirm the exclusive talks with Alfa group … we hope to close the deal at the start of next year,” Federico Ghizzoni told reporters.
Ghizzoni said the bank might hike the capital of its Ukrainian unit in 2016 if conditions for a sale were unfavourable.
UniCredit, a market leader in central and eastern Europe, has long flagged the sale of Ukrsotsbank, but the process has been held back by the crisis in Ukraine.
Asked about Russia, Ghizzoni said he was pleased with the lender’s business there and did not intend to sell it.
The CEO, who confirmed the bank was not interested in acquisitions and was focused more on selling assets, said the deal to merge its Pioneer asset management business with that of Santander would be completed in the second quarter next year.
Italy is looking at possible ways to help its lenders shed non-performing loans. But on Wednesday a source said talks with the European Union on setting up a bad bank vehicle for domestic banks had got virtually nowhere.
“Either a solution is found by Dec. 31 or it’s pointless continuing talks over a bad bank with Brussels,” Ghizzoni said.
Meanwhile, the International Monetary Fund (IMF) has changed a rule that would have blocked its financial aid program to Ukraine in the event the country defaulted on its debt owed to Russia.
IMF spokesman Gerry Rice said the executive agreed on December 8 to “change the current policy on nontoleration of arrears to official creditors,” such as a government.
Russian Finance Minister Anton Siluanov criticized the decision as “hasty and biased,” saying it was taken “exclusively to the detriment of Russia.”
“We are preparing documents for a court appeal,” he added.
The move comes as cash-short Ukraine faces a December 20 deadline to repay Russia for a $3 billion loan.
Ukraine is restructuring its debts under an IMF-led $40 billion bailout program.
Defaulting on the Eurobond loan could have put the program at risk.