Valentina Za. Carolyn Cohn. Marc Jones

MILAN/LONDON – UniCredit urgently reviews its Russian business, and may make a decision on a high-cost exit after the Ukraine invasion, UniCredit’s CEO stated on Tuesday. Markets are watching for a payment to Russian sovereign debt.

A rising number of financial companies are seeking to leave Russia. Deutsche Bank (DE:), Goldman Sachs, (NYSE) and JPMorgan Chase are closing down their businesses there.

Andrea Orcel (Unicredit MI:) chief executive of Unicredit stated the economic climate had changed due to the Ukraine crisis. She also indicated that Unicredit was now expecting stagflation, or a mixture of high growth and low inflation.

Last week, Italy’s second largest bank announced that a complete write-off of Russian operations, which includes cross-border exposures, would run to around 7.4 billion Euros ($8.1 billion). This leaves its plans for capital distribution to shareholders in limbo.

UniCredit, one of Europe’s most vulnerable banks to Russia is UniCredit.

Shares fell 3.2% while an index of European bank stocks went down 1.8%.

Russia will pay $117 Million in Eurobond payments on Wednesday, on Eurobonds that are dollar-denominated. The Russian finance ministry said that the country will pay its obligations in roubles in case sanctions prohibit it from making payments in dollars. This would be considered a default by markets.

A default will cause more pain for Russia’s economy. It would make it difficult for Moscow find new sources of financing and increase borrowing costs.

According to the official, the Treasury thinks there are very few direct exposures within the U.S financial system to Russian sovereign debts. The main effect would be on a Russian economy that is already struggling under the pressure of Western sanctions.

Russia is under strict sanctions. Russia also has countermeasures in place following its invasion of Ukraine.

To meet the demand of households for gold, the Russian central banking announced it will stop buying gold from banks as a result of increasing pressure.

According to Deputy Prime Minister Iryna Vershchuk, Ukraine plans to open nine corridors Tuesday in order to rescue civilians held by Russian forces. It will also try to transport humanitarian aid to Mariupol’s besieged port.

Western governments are continuing to increase the pressure.

According to the European Commission, Tuesday’s announcement by the Commission revealed that the European Union had banned credit rating companies from rating Russia’s sovereign and its businesses.

Britain claimed it has stopped any government-backed export financing to Russia or Belarus.

According to industry sources, private trade credit insurance companies are not providing coverage for Russia or Ukraine. This makes it more difficult to export these countries.

Lloyd’s of London, a commercial insurance marketplace, stated that it is looking at applying sanctions to Russia via the cyber and aerospace insurance markets.

($1 = 0.9088 euros)