ECB Is Ready To Slam Fine On UniCredit For Its Business Dealings With Russia
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The European Central Bank has once again shown that it’s not taking its sanctions against Russia lightly. The European banking regulator has ordered UniCredit to stop its business relations with Russia as the sanctions against the country for invading Ukraine continue. The ECB is also pushing similar demands with Austria’s Raiffeisen Bank International (RBI).
UniCredit And ECB Declined To Comment
The RBI stated that the ECB has approached the bank regarding its business dealings with Russia. According to the bank, the ECB ordered that the bank cut payments within a set timeframe. The bank was also ordered to cut its lending in Russia.
The ECB has been following UniCredit’s dealings with Russia, the second-largest bank in the country. Now, the European banking regulator is stepping up its actions to put more pressure to cut down UniCredit’s Russian business. It will be the last step the ECB will take before imposing penalties for lack of compliance.
The warning is an opportunity for UniCredit to make necessary amendments to its dealings with Russia. Otherwise, the bank will be receiving a series of sanctions that could hurt its overall business.
European bodies are still imposing fines against Russia and Russian entities two years after it invaded Ukraine. The conflict between the two countries has shown no sign of ending, even after the series of fines slammed on the Russian government and other related entities.
UniCredit’s Shares Fell By 0.5% Shortly After The ECB Issued The Warning
The European governing body has also gone after Russia’s lenders as it bids to stop any inflows that will uphold Russia’s fight in Ukraine. The Group of Seven industrial democracies is now looking for ways to use Russia’s frozen assets from the sanctions to help Ukraine in the conflict against Russia.
However, two of the region’s biggest lenders, UniCredit and RBI, are still doing business in Russia. Their activities have drawn criticism from the U.S. and other nations who are against Russia’s invasion of Ukraine.
Both banks are among the oldest in the new Russia, which is over three decades after the collapse of the Soviet Union.
Shortly after the report of impending sanctions against UniCredit, should they fail to comply, the bank’s shares have dropped slightly. It initially fell by 0.5% before bouncing slightly back to a 0.3% loss. Investors in the bank will be monitoring the situation keenly to know their next move.
