The European Central Bank (ECB) is in conflict with the Italian bank UniCredit over its dividend payment policy and ongoing operations in Russia, reports the London business newspaper Financial Times (FT).
The central monetary authority in the eurozone has criticized the Italian owner of Zagrebačka banka for announcing a payment of 16 billion euros in dividends to shareholders by 2024, FT reported on Sunday, citing informed sources.
The announcement contradicts official guidelines that ‘banks should not determine their dividend policy in absolute amounts,’ the newspaper reports, citing unnamed sources. Furthermore, the report highlights that relations between the ECB and UniCredit are strained because the bank has not severed ties with Russia. The ECB considers the presence of the Italian bank in Russia an undesirable source of risk and urges it to exit the Russian market.
Neither the ECB nor UniCredit immediately responded to Reuters’ request for comment on the FT report.
In its business report for the third quarter, published at the end of October, UniCredit noted that it had reduced its exposure in Russia by 50 percent, to 3.1 billion euros.
Its Russian branch increased total revenue by 76 percent from July to September, to 357 million euros. Net interest income surged by 56.1 percent, and fee and commission income rose by 21.9 percent, the report shows.
When excluding Russia, the bank’s total revenue increased by 4.5 percent in the third quarter, amounting to 4.5 billion euros. Net interest income grew by 4.8 percent, totaling 2.2 billion euros.
