December 8, 2023 (NO COMMENTS)

Lender forced to capitalise FX risk from Russian operations after ECB withdraws key exemption

UniCredit absorbed €2.2 billion ($2.4 billion) in new market risk charges in the third quarter, after it lost permission to ignore how the ruble’s volatility affects the net value of its Russian operations.

Standardised market risk-weighted assets (RWAs) surged 63% to €5.7 billion, the highest figure reported by the bank since at least Q3 2016, when comparable disclosures first became available.

UniCredit blamed the hike on the reversal of an exemption by the European Central Bank from risk