Italian insurer Generali plans to pull back from Russia

Milan  — Leading Italian insurer Generali is set to pull out of its operations in Russia following Moscow’s invasion of Ukraine, a source close to the situation said on Thursday.

Among a number of actions it will undertake, Generali will give up its seats on the board of one of Russia’s largest insurers Ingosstrakh, in which it holds a 38% stake, the source said.

The move comes as Western nations seek to distance themselves from Russian business after President Vladimir Putin ordered his troops into its neighbour.

Intesa Sanpaolo, Italy’s biggest bank, is conducting a strategic review of its presence in Russia while helping staff in Ukraine leave the country, a spokesperson said.

Intesa, which has 800 staff in Ukraine, said it was providing assistance to its employees on the ground by offering accommodation in the other countries where it operates.

In central and Eastern Europe, Intesa has subsidiaries also in Slovakia, Slovenia, Hungary and the Czech Republic.

“We fully condemn what is happening,” the spokesperson said.

Intesa has financed major investment projects in Russia, such as the Blue Stream gas pipeline and the sale of a stake in oil producer Rosneft. It handles more than half of all commercial transactions between Italy and Russia.

Its credit exposure to Russia was €5.57bn at the end of 2021, or 1.1% of its total.

Intesa’s subsidiaries in Russia and Ukraine have assets of €1bn and €300m, respectively, which together represent just 0.1% of the group’s total assets.

A UniCredit spokesperson declined to comment on whether Italy’s second-biggest bank could take similar action over its business in Russia, where it runs the country’s 14th largest bank with about 4,000 staff.

UniCredit, whose exposure to Russia totals €14bn, could easily absorb a full write-off of its Russian business given its ample capital reserves.

But that would still leave it with about €6bn in cross-border exposure, including loans to large corporates.

A full write-off of its Russian business would cost UniCredit just more than €1bn, sources said on Wednesday, shaving 35 basis points off the bank’s highest-quality capital ratio.

Reuters