(Bloomberg) — Profit at UniCredit SpA’s Russian unit got a boost from the ruble’s appreciation, Chief Executive Officer Andrea Orcel said in an interview, as the Italian lender has held off exiting that market following the invasion of Ukraine.
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Gazprom PJSC is expected Wednesday to halve natural gas supplies via its most important link to the European Union to about 20% of capacity, in a move that could test the bloc’s unity five months into the war.
EU member states agreed on Tuesday to cut their demand for gas by 15% over the next eight months, but some countries may be reluctant to make sacrifices for Germany, which failed to diversify energy sources while lecturing southern nations on putting their fiscal houses in order, according to a senior EU diplomat who asked not to be identified to discuss a confidential issue.
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Key Developments
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Ukraine’s Fight to Rebuild in Face of Unrelenting War
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Turkey Says Ukraine Grain Exports Could Start Within a Week
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Russian Gas Cuts Risk Reviving Old EU Divisions This Winter
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Europe Energy Prices Keep Soaring as Russia Turns the Screw
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Macron Is Trying to Push Back Against Russia Influence in Africa
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U.S. Senators Call for Sanctions on Russian Oil Sales to China
On the Ground
Ukraine continued its offensive in the south, striking the main bridge that connects the city of Kherson to Russian-occupied territory across the Dnipro River. The region’s Russian-installed authorities said the link was shut after the attack. Ukraine retook two villages in the area, its southern command said. Elsewhere, Russia shelled Dnipropetrovsk region overnight and hit Ukraine’s second-largest city of Kharkiv with missiles, according to local authorities. Ukraine’s military said fighting was ongoing in the Bakhmut district of the Donetsk region.
(All times CET)
Macron Pushes Back Against Russian Influence in Africa (11:00 a.m.)
French President Emmanuel Macron is ready to step up support to African countries facing food and security concerns in a bid to stem Russia’s growing sway in the region.
Macron is visiting Cameroon, Benin and Guinea Bissau this week while Russian Foreign Minister Sergei Lavrov tours other countries in the continent as Moscow seeks to strengthen its relations in Africa following its invasion of Ukraine.
Macron in Cameroon’s capital Yaounde blamed Russia for disrupting the global food supply and triggering shortages in Africa. He promoted his so-called FARM initiative with which France and allies pledge to help developing countries boost their own agricultural capacity.
UniCredit Gets Boost From Russian Unit’s Performance (10:40 a.m.)
UniCredit reduced its total Russia exposure by an additional 2.7 billion euros ($2.7 billion) since March, while profit at its local subsidiary rose to 346 million euros on higher revenues and a release of provisioning due to the shrinking loan portfolio, the bank reported.
It is still reviewing options on Russia, including a possible sale, while the bank is committed to progressively reducing risks in the country, Orcel said.
UniCredit, Raiffeisen Bank International AG and Societe Generale SA were the top European lenders in Russia before the war. SocGen sold its Rosbank unit to the investment firm of Russia’s richest man, Vladimir Potanin, while Raiffeisen has said it may sell its local subsidiary.
Chernihiv Highlights Challenges of Rebuilding Ukraine’s Economy (9:50 a.m.)
A push to rebuild Chernihiv, a city of 280,000 that was battered by a Russian siege early in the war, highlights the challenges Ukraine’s reconstruction efforts face even after Kremlin troops pulled back in mid-April.
Much of the city’s infrastructure, housing stock and businesses remains in ruins after Russian shelling. The highway to Kyiv, 80 miles away, relies on a makeshift floating bridge to cross the Desna, a major tributary to the Dnipro river that divides Ukraine’s east from west.
Yuriy Sinitsa, a local business owner, says his pet accessories company was at 50% of prewar output in June, up from 10% in April. Yet the city’s proximity to the Russian and Belarusian borders leave it exposed to further attacks. “The bombing could restart any day,” Sinitsa said.
Ukraine’s Naftogaz to Offer New Deal for Bondholders (9:45 a.m.)
Ukrainian state-run energy company NJSC Naftogaz Ukrainy will “urgently” present a new plan to delay debt payments after missing a final deadline on a foreign bond.
“Naftogaz is working with all interested parties to get bondholders’ approval,” the company said Wednesday in an emailed statement.
A grace period for Naftogaz to redeem $335 million of international bonds expired on Tuesday as the government blocked the payment. Bondholders rejected a restructuring proposal put forward earlier this month. Ukraine is seeking a two-year pause on its own foreign bond payments.
Turkey Says Grain Shipments Could Start Within a Week (8:00 a.m.)
The exact timing of when grain exports begin will be determined by logistical groundwork, Turkish President Recep Tayyip Erdogan’s spokesman, Ibrahim Kalin, said in an interview Tuesday.
Kalin dismissed concerns that a Russian missile strike on Odesa’s port after the deal was reached would undermine the agreement. Turkey is due to open a joint operations center with Ukraine, Russia and the United Nations on Wednesday to coordinate trade under the agreement.
As many as 100 vessels carrying grain and agricultural products were trapped in Ukrainian ports when war broke out.
Microsoft, Michelin Take Hits From Russia Pullbacks (6:30 a.m.)
Microsoft Corp. said its decision to scale back in Russia after the start of the war led to charges of $126 million. French tiremaker Michelin, which suspended operations in the country after the invasion, took a 202 million euro hit from its exit.
Over 1,000 companies have voluntarily curtailed or suspended operations in Russia beyond what is legally required since the invasion, according to economists at Yale University. McDonald’s Corp. announced a $1.2 billion charge this week after it sold its Russian business.
U.S. Senators Call for Sanctions on Russian Oil Sales to China (12:30 a.m.)
Republican Senators, including Marco Rubio and Rick Scott, introduced a bill to sanction China’s purchases of oil and other energy supplies from Russia in an effort to cut off funding for the Kremlin’s war against Ukraine.
The bill would impose penalties on any entity insuring or registering tankers that ship oil or liquefied natural gas to China from Russia, according to Rubio’s office.
China’s imports of Russian crude have surged this year as the world’s biggest energy consumer picked up discounted barrels that European buyers had shunned.
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