Italy’s Intesa places $6.3 bln of Russia, Ukraine loans underneath microscope

Intesa Sanpaolo skyscraper, designed by Italian architect Renzo Piano, is seen in Turin April 10, 2015. REUTERS/Giorgio Perrottino/File Picture

MILAN, March 16 (Reuters) – Intesa Sanpaolo stated on Wednesday that its loans to Russian and Ukrainian purchasers amounted to five.1 billion euros internet of ensures from credit score export companies, which is round 1% of the full for Italy’s greatest financial institution.

Intesa (ISP.MI) added in a press release it was analysing its publicity to Russia and Ukraine to know the best way to higher deal with dangers in mild of the European Union’s determination to section out Russian fossil fuels by 2027.

Of the general mortgage determine, some 4 billion euros are cross-border, with oil and fuel companies accounting for half of the full.

Taking into consideration off-balance sheet gadgets, Intesa’s complete internet publicity to the 2 international locations is 5.7 billion euros ($6.3 billion), Reuters calculations based mostly on Intesa’s figures present.

Nearly all the loans expire by 2027, Intesa stated, giving it time to work out an answer earlier than the EU-set deadline.

“Over two-thirds of loans to Russian prospects discuss with top-notch industrial teams,” it stated, including these had “long-established business relationships with prospects which might be a part of main worldwide worth chains, with a good portion of their proceeds coming from commodities.”

Intesa’s native subsidiaries in Russia and Ukraine account for simply 1.1 billion euros in loans to prospects and sums due from banks, it added.

Some 200 million euros are loans to entities which have been hit by worldwide sanctions towards Russia since its invasion of Ukraine, it stated.

Like different main worldwide banks, together with home rival UniCredit (CRDI.MI), Intesa has stated it’s reviewing its presence in Russia, the place it serves company purchasers with a employees of round 980 folks throughout 28 branches.

UniCredit on Tuesday stated it was contemplating pulling out of Russia. learn extra

Analysts at dealer Autonomous calculated a core capital hit of round 75 foundation factors, decrease than its preliminary estimate of 90 foundation factors, assuming a 60% loss on cross border exposures.

Intesa, which used to deal with greater than half of economic transactions between Italy and Russia, has financed main funding Russian tasks, such because the Blue Stream fuel pipeline and the sale of a stake in oil group Rosneft (ROSN.MM).

It additionally employs 780 employees in Ukraine, the place its Pravex Financial institution unit has 45 branches.

Intesa has stated it was persevering with to offer important banking companies at Pravex branches at any time when it was secure to take action, whereas serving to to evacuate workers underneath menace.

The financial institution stated its native subsidiaries’ off-balance sheet publicity amounted to 300 million euros.

For the remainder of the group exposures deriving, for instance, from untapped credit score strains had been 1.1 billion euros and coated by 800 million euros in ensures.

($1 = 0.9093 euros)

Reporting by Valentina Za; Modifying by Keith Weir and Alexander Smith

Our Requirements: The Thomson Reuters Belief Ideas.