UniCredit to Split Russian Business and Sell Part to UAE Investor
Italian group UniCredit has announced a plan to carve out part of its Russian business into a new legal entity and subsequently sell it to a private investor from the UAE; the deal is expected in 2027
The Italian group's plan to sell part of its Russian business to a private investor from the UAE is not just a "market exit" but a complex surgical operation designed to turn a "toxic" asset for the Western balance sheet into a working bridge for international payments. Orcel has found a way to retain control over the most lucrative piece—transactional traffic—while shedding sanctions risks and ECB regulatory pressure.
The Essence: What Is Really Happening
UniCredit is not leaving Russia in the classic sense. The group is structuring the deal to split its Russian business into two parts: "New Bank" (100% will remain with the Italian group) and "Remaining Bank," which will be sold to a UAE investor.
The key detail often missed on a superficial read: "New Bank," remaining under UniCredit's control, will focus specifically on international payments in euros and dollars for corporate clients. This means the Italians will keep the most profitable segment—servicing foreign trade flows that generate stable fee income. The UAE buyer gets the retail and local corporate portfolio—assets with higher sanctions risk but also a significantly lower valuation.
Timeline and Context
Since 2022, UniCredit has been under immense pressure from the European Central Bank, which demands European banks wind down their Russian operations. However, unlike many competitors, Andrea Orcel's group has chosen a strategy of prolonged defense. In 2023, the bank already restricted some operations, and in 2025, it suspended cross-border transfers for retail clients and stopped accepting new users.
Nevertheless, the Russian business continued to generate profit. As of end-2025, Russia accounted for about 4.5% of the group's revenue. A full exit would mean not only losing this income but also a massive one-time loss.
On May 7, 2026, UniCredit announced the signing of a non-binding agreement (term-sheet). The deal closing is scheduled for the first half of 2027. The announced total negative impact on the profit and loss statement is between EUR 3.0 and 3.3 billion, of which EUR 1.6-1.8 billion is a non-cash loss from the write-off of the currency reserve.
Who Wins and Who Loses
UniCredit as a group wins. The deal structure allows reducing the residual extreme loss indicator from 93 basis points to 30-40 basis points. The total capital gain will be about 35 basis points, considering the compensation of the negative effect at closing of 20-25 basis points. The group retains the profitable payment business and escapes sanctions pressure.
The UAE buyer wins. They get a functioning bank with a license, client base, and infrastructure. The sale price is undisclosed, but given the regulatory pressure on the seller, the discount to fair value should be at least 40-50%. This is a classic buyer's market situation.
Corporate clients win. For companies engaged in foreign trade, access to international settlements through UniCredit's "New Bank" is preserved. The scheme is specifically designed so that clients using the bank's payment solutions "maintain access to the current set of operations" throughout the restructuring process.
The retail segment loses. The "Remaining Bank," which goes to the buyer, will likely face serious restrictions in correspondent relationships and access to currency. Service quality for retail clients and small businesses will inevitably decline.
What the Media Is Not Saying
The first non-obvious insight concerns the nature of the losses. The announced loss of EUR 3.0-3.3 billion looks catastrophic in headlines, but in reality, a significant portion—about EUR 1.6-1.8 billion—is a non-cash effect from "recycling" the currency reserve through the P&L. In other words, it is an accounting write-off that does not affect cash flow or capital. The group's actual cash losses are significantly lower than the figure in the press release.
The second insight: Orcel's stated goal is to protect net profit targets for 2028-2030 and keep shareholder payouts unchanged. This indicates that the deal is deeply integrated into the UniCredit Unlimited strategic plan. By selling the "Remaining Bank" now, the group books a loss but simultaneously eliminates the biggest uncertainty factor for future periods. Investors should read this as a signal: management is confident it can compensate for the losses through other business lines.
The third point is the choice of the buyer's jurisdiction. The UAE remains one of the few hubs maintaining constructive relations with both the West and Russia. This reduces the risk of the deal being blocked by regulators. Moreover, the phrase "well-established private investor with long standing ties to the local institutional and business community" points to a person close to the emirates' ruling circles, providing additional political guarantees.
Forecast: Next 30 Days and 90 Days
Next 30 days (by June 7, 2026). We will see the deal structure concretized. The key question is how exactly the assets will be split between "New Bank" and "Remaining Bank." The parties will start due diligence and prepare binding documentation. UniCredit shares on the Milan Stock Exchange may see a short-term rise of 3-5% as the market positively perceives the removal of "Russian uncertainty." Shares of Russian competitors, on the contrary, will remain under pressure: the precedent of a low-price sale weighs on the valuations of the entire sector.
Next 90 days (by August 7, 2026). The process of obtaining regulatory approvals will begin. Here, the main intrigue arises: will the Central Bank of the Russian Federation and the government commission on foreign investments approve the deal? With high probability, yes, as the Russian regulator is interested in preserving the channel for international settlements. In parallel, technical work on carving out "New Bank" will start. I expect that by the end of summer, we will learn the name of the specific UAE buyer and the deal amount. If it exceeds EUR 1 billion, it will be a positive signal for the market.
Strategically, this deal is a template for other European banks still maintaining a presence in Russia. Orcel has shown how to cut the Gordian knot without losing face before the ECB and without destroying shareholder value by a full market exit. In 2027, we will likely see similar structures from other players.
— Editorial Team
