VIENNA: UniCredit Bank Austria sees little impact from Western sanctions against Russia this year but cannot predict the fallout in 2015, its head of central and eastern Europe (CEE) told an Austrian newspaper.
"We are strongly engaged in only certain market segments in Russia.
As far as sanctions go, we don't expect a big impact this year.
I cannot say anything yet for 2015," Gianni Franco Papa told the Salzburger Nachrichten in an interview printed on Thursday.
The European Union and United States have imposed sanctions on Moscow over its role in the Ukraine crisis.
Papa said it was clear the economy in Ukraine was suffering from the conflict, which was complicating efforts to sell UniCredit's Ukraine banking business.
He said sale talks continued but would take some time.
He said the Russia-Ukraine crisis had dragged the entire region more into the spotlight but economies there were not developing uniformly. Economic growth in the CEE region in 2015 would lag forecasts from early this year, he said, but added: "We are nevertheless optimistic and expect on average an increase of 1.5 to 2 percent.
Compared with what we are seeing in western Europe that is good, even if not the (growth) rates of the past." He said he was cautious about the outlook for non-performing loans in eastern Europe.
"We said every year we had hit the peak and then the next year it was more. But there are improvements in risk costs and gradually also for risk provisions for loans."
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