What will happen to Eni, Generali, Intesa Sanpaolo, Unicredit and Sace in Russia
As a result of the sanctions on Russia, Generali said it will close its office in Moscow and leave the Ingosstrakh insurance company. While Intesa Sanpaolo and Unicredit …
What are the consequences for large Italian companies such as Eni, Intesa Sanpaolo, Unicredit, Assicurazioni Generali, Sace and not only in Russia for the war in Ukraine?
Here is the point of the situation.
GENERALI'S DECISION ON UKRAINE
As a result of the heavy international sanctions imposed on Russia after the invasion of Ukraine, the insurance company Assicurazioni Generali announced on Friday 4 March the closure of its office in Moscow and the exit from the board of Ingosstrakh, one of the main insurance companies of the country, of which it owns a minority stake of 38.5 per cent.
Europ Assistance, a French company of the Generali group, will also terminate its activity in Russia.
ABANDONED PLANS
Just a year ago, Generali was considering entering the RESO-Garantia insurance company, with an operation estimated at 2 billion euros. The idea was then definitively abandoned – wrote Il Sole 24 Ore – in March 2021 due to the opposition of the shareholders Francesco Gaetano Caltagirone and Romolo Bardin.
Generali, in a press release, affirms that it has a "marginal" exposure on the Russian market, as well as "in compliance with all the sanctions that could be applied".
WHAT GENERALI DOES FOR UKRAINE
Generali has announced the donation of 3 million euros to support the reception programs of Ukrainian refugees fleeing the war: a part of the sum will be allocated to UNHCR, the United Nations refugee agency. The employees of the group have also started a fundraiser, in which the company will also participate with a sum equal to that raised: the proceeds will be donated to UNICEF.
WHAT ENI HAS DONE
On Monday, Eni announced that it intends to sell its stake in the equal joint venture with the Russian state-owned gas company Gazprom on the Blue Stream gas pipeline, which transports fuel from Russia to Turkey.
WHAT (NOT) UNICREDIT AND INTESA SANPAOLO DO
On the other hand, UniCredit and Intesa Sanpaolo are waiting: the former, according to a Credit Suisse study , is the Italian bank most exposed to Russia, and third at European level (after Raiffeisen Bank International and Société générale); the second alone manages more than half of the trade relations between Russia and Italy.
The total exposure of the two institutions to Russia amounts to more than 20 billion euros. As Repubblica explains, Intesa Sanpaolo and UniCredit must "find a balance between total closure, given the figures at stake, and a permanence, which, however, is poorly justified in the face of public opinion, institutions and the market that requires strong intervention ".
NUMBERS AND ASSETS OF INTESA SANPAOLO
Intesa Sanpaolo owns 1 billion euro of assets in Russia. Its subsidiary in the country, Banca Intesa Russia, has twenty-eight branches. It is chaired by Antonio Fallico, who – also president of the Conoscere Eurasia Association, and defined " the most powerful Italian in Moscow " – had recently said that he thought that business between Italy and Russia should "take place regularly", despite the tensions on Ukraine.
Furthermore, Intesa Sanpaolo is part of an equal joint venture with the Russian bank Gazprombank, the third largest in the country and not (yet?) Excluded from the SWIFT system: the partnership concerns the private equity fund Mir Capital.
INTESA SANPAOLO IN UKRAINE
Intesa Sanpaolo is the only Italian bank present in Ukraine, where it controls the Pravex bank: it has forty-five branches and 780 workers. "Our subsidiary banks located in the countries bordering Ukraine", said Marco Elio Rottigni, head of Intesa's International Subsidiary Banks division.
Sanpaolo, "they are promoting and collecting donations to help those arriving from Ukraine".
Between Russia and Ukraine, Intesa Sanpaolo's exposure as loans amounts to € 5.5 billion.
THE PRESENCE OF UNICREDIT IN RUSSIA
UniCredit's presence in Russia is worth 14 billion; its subsidiary in the country is AO UniCredit Bank: it is the fourteenth largest bank in the country, with four thousand employees. It is worth about 3 per cent of the revenues and 4 per cent of the group's total net assets.
In short, the weight of the exposure in Russia is limited, compared to the total, but yesterday the UniCredit stock on the stock exchange still lost more than 10 per cent.
THE MOVES OF SACE AND CDP
SACE, the state-owned company that deals with the insurance of Italian companies in foreign transactions, under the control of the Ministry of Economy and Finance, announced on Friday the temporary suspension of the assessment of the assumption of new risks for the business of export credit to Russia and Belarus.
SACE owns a portfolio of assets in Russia worth approximately € 3.2 billion.
A few days ago the Reuters agency wrote that Cassa Depositi e Prestiti was considering the suspension of a loan of 500 million euros (insured by SACE, and in which Intesa Sanpaolo participated) for the Arctic LNG 2 liquefied gas project, in Russian Arctic, developed by Novatek. Saipem is involved in the project as a contractor.
HOW THE SACE RISK MAP CHANGES
Alessandro Terzulli, chief economist of SACE, on the occasion of the presentation of the risk map updated to 2022 , made it known that "the heavy military escalation and the heavy sanctions imposed by various countries on Russia raise the credit risk, that is the risk of non-payment which, on average, in Russia goes from 62 to 70, on a score from 0 to 100 ″.
“Worse is for political risks”, he adds, “which for Russia goes from 51 to 76, where the risk of restrictions and transfer of currency convertibility increases. In economic terms this means that the Russian Central Bank has raised interest rates, the ruble has devalued by 50%, it is difficult to think that the Russian economy will not go into recession ”.
“The impact will also be on the euro area”, continues Terzulli: “we will have a slowdown in growth that we expected strong for this year but growth in the euro area and in Italy will remain. To date, it is difficult to think of a worsening of the recovery that was solid in 2021 ”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/intesa-sanpaolo-unicredit-assicurazioni-generali-russia/ on Sat, 05 Mar 2022 06:26:29 +0000.